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Further Reading from MarketBeat Affirm Just Crushed Earnings—But Can It Outrun Klarna's Scale?Written by Leo Miller. Published 11/21/2025. 
Key Points - Affirm's latest earnings crushed Wall Street expectations, leading shares to soar.
- The company's renewed partnership with Amazon helps to stem Klarna-related fears.
- Rather than picking one or the other, analysts are optimistic about both AFRM and KLAR going forward.
Within the universe of buy-now-pay-later (BNPL) companies, Affirm (NASDAQ: AFRM) has clearly established itself as a leader. It is growing faster than other key players like Klarna (NYSE: KLAR) and has secured partnerships with major retail companies such as Amazon.com (NASDAQ: AMZN). Below, we look at Affirm's latest earnings and compare it with Klarna to provide an updated outlook on both stocks. Affirm Shows Broad-Based Strength, Shares Gain In its latest quarter, Affirm reported revenue of $993 million, up 34% year over year. That comfortably beat expectations of $882 million (26% growth). The topline beat helped the company deliver adjusted earnings per share of $0.23, more than double the $0.11 analysts expected. Trump has just signed an executive order creating America's first-ever National Investment Fund — a game-changing system designed to replace income taxes and send direct payouts to everyday Americans.
More than $1 TRILLION is expected to be distributed... and YOU could be eligible to claim a massive check. Click here to claim your stake before it's too late. Gross merchandise value (GMV), which measures the total value of transactions on its platform and serves as a gauge of market share, rose 42% to $10.8 billion—an acceleration from 35% growth a year earlier. Revenue less transaction costs (RLTC) climbed 60%, much faster than revenue, indicating margin expansion. RLTC as a percentage of GMV improved by 48 basis points to 4.2%, one of the company's key profitability metrics and above its long-term target of 3%–4%. The Affirm Card remains a growth driver: Affirm Card GMV increased 135%, materially contributing to overall growth. The company's 30-day delinquency rate stayed healthy in the 2%–3% range, essentially unchanged from a year ago, suggesting customer repayment ability has not deteriorated. Shares rose more than 11% on Nov. 7 in reaction to these results. Affirm vs. Klarna: 2 Different Flavors of BNPL With Klarna recently going public, investors are asking which BNPL name is the better investment. Comparing the two companies' metrics is instructive. Klarna grew GMV by 25% last quarter (23% on a like-for-like basis). Affirm is growing noticeably faster and appears to be taking share. Still, Klarna's overall GMV is roughly three times larger than Affirm's at $32.7 billion. That scale raises concerns that Klarna could become the default BNPL option for consumers and merchants, which would pressure Affirm's long-term growth. Affirm, however, renewed its partnership with Amazon through January 2031, securing an important source of volume and keeping Affirm tightly integrated with one of the world's largest online retailers. The agreement is not exclusive, though, so Amazon could add other BNPL options and dilute Affirm's share of that volume. Another key difference is product mix. Despite much higher GMV, Klarna generated $903 million in revenue last quarter—about $30 million less than Affirm. That gap reflects Klarna's heavy use of zero-interest loans, whereas Affirm reported that 72% of its transactions last quarter were interest-bearing. It's unsurprising that Klarna's GMV is larger given the appeal of 0% interest loans to consumers. Affirm's model currently yields higher profitability: it posted an adjusted operating margin of 28% last quarter. Klarna is focused on building a large consumer/merchant ecosystem and pushing toward profitability over time; its adjusted operating margin was -1.5% last quarter. These different strategies make it difficult to declare one model definitively better. Both approaches can work, but both are vulnerable to economic downturns that impair consumers' ability to repay loans. Wall Street Sees Significant Upside in AFRM and KLAR Wall Street appears optimistic on both names. The MarketBeat consensus price target for Affirm is just under $87, implying roughly 32% upside. Among analysts who updated their targets after the earnings release, the average exceeds $89, implying about 36% upside. The consensus price target for Klarna stands at $49, suggesting about 54% upside. Bank of America lowered its Klarna target to $46 after the earnings report, still implying nearly 45% upside from current levels.
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