Affirm's Repeat Users: A Strong Signal for Sustainable BNPL Growth?

Affirm Holdings, Inc. AFRM has carved out a distinct position in the fast-growing Buy Now, Pay Later (BNPL) space, focusing on transparency, catering to high-ticket purchases and low-ticket purchases, and offering convenient financing options. The company is focused on more than just offering flexible checkout options. It focuses on building long-term trust with customers and encouraging them to repeat usage.

In the last reported quarter, AFRM also highlighted that most of the transactions came from repeat transactions. It showcases the trust and loyalty of its customers. In the third quarter of fiscal 2025, total transactions rose 45.6% year over year to 31.3 million on the back of a 94% repeat rate.

By turning one-time shoppers into repeat borrowers, the company builds stronger relationships with merchants who appreciate having reliable and engaged customers, which indeed helps in boosting its revenues. AFRM has an active merchant network of nearly 360,000 partners. In third-quarter fiscal 2025, its total revenues increased 36% year over year. It expects the metric to be in the range of $3.163-$3.193 billion in fiscal 2025.

However, the real challenge is turning repeat usage into a steady stream of profits, which depends on effective management of repayment rates and credit quality. If the company can keep up this momentum while managing risks, repeat users could become the backbone of long-term BNPL growth.

How Are Competitors Faring?

Some of AFRM’s competitors in the BNPL space are PayPal Holdings, Inc. PYPL and Sezzle Inc. SEZL.

PayPal’s net revenues increased 5% year over year in the second quarter of 2025. Its total payment volume rose 6% year over year in the same period. PayPal has 438 million active accounts in second-quarter 2025.

Sezzle’s total revenues surged 76.4% year over year in the second quarter of 2025. Its total transactions rose 62.6% year over year to 8.2 million, with the repeat usage rate of 96.4%. Sezzle expects total revenues to rise 60%-65% year over year in 2025.

Affirm’s Price Performance, Valuation & Estimates

In the year-to-date period, AFRM’s shares gained 19.8% compared with the industry’s rise of 17.5%.

From a valuation standpoint, AFRM trades at a forward price-to-sales ratio of 5.83, above the industry average of 5.55. AFRM carries a Value Score of F.

The Zacks Consensus Estimate for Affirm’s fiscal 2025 earnings implies 103% growth from the year-ago period.

Affirm currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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