Affirm, a prominent provider of buy now, pay later (BNPL) loans, recently announced its financial results for the past quarter, revealing a mixed performance. Despite exceeding profit expectations for the previous quarter, the company's revenue forecast for the current quarter fell short of analysts’ predictions, leading to an 8% decline in its stock during extended trading on Thursday. For the quarter that concluded, Affirm reported a gross merchandise volume (GMV) of $8.6 billion, surpassing the anticipated $8.2 billion as estimated by StreetAccount, a financial research firm. GMV is a critical indicator that represents the total value of goods transacted through Affirm’s platform, and the reported figure marked a 36% increase from the previous year, showcasing significant growth. Additionally, Affirm’s revenue for the quarter also grew by 36%, rising from $576 million a year ago. The company's key profitability metric, revenue less transaction costs (RLTC), was reported at 4.1%, slightly above its long-term target range of 3% to 4%. The company's adjusted operating margin stood at 22%, slightly higher than the 21.6% forecast by StreetAccount. Moreover, Affirm achieved a net income of $2.8 million, or one cent per share, a notable improvement from the $133.9 million loss, or 43 cents per share, recorded in the same period last year. However, looking ahead, Affirm projected revenue for the current quarter to fall between $815 million and $845 million, with a midpoint of $830 million. This projection is below the average estimate of $841 million as calculated by LSEG, a leading financial markets infrastructure and data provider. Affirm's business model is heavily reliant on consumer spending, as BNPL options have gained popularity among sellers of electronics, apparel, and travel services. The U.S. economy experienced a contraction in the first quarter of 2025 due to a surge in imports, attributed to businesses and consumers trying to mitigate the impact of tariffs imposed by President Donald Trump at the start of his second term. This economic backdrop presents challenges for Affirm, particularly as lower-income consumers are reportedly spending conservatively, focusing on essential purchases, while wealthier consumers continue to indulge in luxury items and experiences. Rob O’Hare, Affirm’s Chief Financial Officer, noted that the company is observing credit outcomes that align with expectations, with no apparent signs of financial distress among consumers. For the upcoming quarter, Affirm forecasts a GMV between $9.4 billion and $9.7 billion, with a midpoint of $9.55 billion, surpassing StreetAccount’s estimate of $9.2 billion. The company also anticipates an adjusted operating margin between 23% and 25%, in line with the 23.8% projection by StreetAccount. Affirm reaffirmed its objective to achieve profitability on a Generally Accepted Accounting Principles (GAAP) basis by the end of its fiscal fourth quarter in 2025. The company’s active consumer base expanded to 22 million, with 2 million new consumers joining in the recent quarter. Affirm's co-branded card, known as the Affirm Card, has been a significant growth driver, with its GMV increasing by 115% year-over-year and the number of active cardholders more than doubling. Partnerships with major companies like Apple, Amazon, and Shopify continue to be instrumental in Affirm’s growth strategy. In June, Affirm announced a collaboration with Apple, allowing U.S. Apple Pay users on iPhones and iPads to apply for loans directly through Affirm’s platform. This partnership is expected to enhance Affirm’s reach and consumer engagement. In a regulatory development, the Consumer Financial Protection Bureau (CFPB) decided to halt the enforcement of a rule from the Biden administration that complicated compliance for BNPL providers. This decision is regarded as a favorable outcome for lenders like Affirm, potentially easing some regulatory burdens. During the quarter, Affirm observed a significant increase in 0% interest loans, a tactic where merchants, and sometimes manufacturers, subsidize borrowing costs to stimulate sales. These loans saw a 44% rise from the previous year. According to O’Hare, 0% loans present merchants with an alternative to traditional discounts, offering a more appealing option than a straightforward 10% discount. Affirm's CEO, Max Levchin, expressed that 0% loans are effective in attracting higher-value customers. He explained that customers who