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For Your Education and Enjoyment

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 established itself as a clear leader. It is growing faster than other major players such as Klarna (NYSE: KLAR), and it has strategic partnerships with large retail companies including Amazon.com (NASDAQ: AMZN). Below, we review Affirm’s latest quarter and compare it with Klarna to provide an updated outlook on these stocks.

Affirm Shows Broad-Based Strength, Shares Gain

In its latest quarter, Affirm posted revenue of $993 million, up 34%. 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.

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Gross merchandise value (GMV), a key metric that measures the total value of transactions on Affirm’s platform, rose 42% to $10.8 billion — an acceleration from 35% growth a year earlier.

Revenue less transaction costs (RLTC) grew 60%, well ahead of revenue growth, signaling expanding margins. RLTC as a percentage of GMV increased 48 basis points to 4.2%, above the company’s long-term target of 3%–4%. That percentage reflects how much Affirm retains after transaction costs for every dollar processed on its platform.

The Affirm Card remains a major growth driver: Card GMV jumped 135%, materially contributing to overall GMV gains. The company’s 30-day delinquency rate stayed healthy and stable at roughly 2%–3%, roughly unchanged from a year earlier. Shares rose more than 11% on Nov. 7 following the results.

Affirm vs. Klarna: 2 Different Flavors of BNPL

With Klarna’s recent IPO, investors are weighing which BNPL exposure is preferable. Comparing the two firms’ metrics is instructive. Klarna reported GMV growth of 25% last quarter (23% on a like-for-like basis). By contrast, Affirm is expanding faster and gaining share.

That said, Klarna’s GMV is still much larger — about three times Affirm’s at $32.7 billion. That scale raises concerns Klarna could become the default BNPL choice for consumers and merchants, which would be a headwind for 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 still add other BNPL options and dilute Affirm’s share of its volume.

Despite Klarna’s larger GMV, its $903 million in revenue last quarter was about $30 million lower than Affirm’s. A key reason: the majority of Klarna’s loans are zero‑interest, while Affirm reported that 72% of its transactions last quarter were interest-bearing. Zero‑percent loans naturally boost GMV but produce less interest income.

That difference in product mix is reflected in profitability. Affirm posted an adjusted operating margin of 28% last quarter. Klarna, focused on building a large consumer-and-merchant ecosystem and scaling its business, reported an adjusted operating margin of -1.5%. These divergent strategies make it difficult to declare one model definitively superior; each could succeed. The common risk for both remains an economic downturn that impairs consumers’ ability to repay loans.

Wall Street Sees Significant Upside in AFRM and KLAR

Analysts are generally optimistic. 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 target is slightly over $89 (about 36% upside).

The consensus price target for Klarna stands at $49, suggesting approximately 54% upside. Bank of America cut its Klarna target to $46 after the company’s report, which would imply near 45% upside from current levels.

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