Retailers, fast food chains, and home improvement stores are all saying that Americans are tightening their belts, but ask buy now, pay later giant Affirm ($AFRM), and they’ll tell you people are shopping ‘til they drop. Problem is… we might not know when (or if) they’ll drop. Despite a testy economy, the buy now, pay later (BNPL) provider, which serves 300K+ merchants, saw a record quarter of spending, strong revenues, and shrinking losses — sending its stock up nearly 40% since last week’s earnings report.

• Affirm’s revenues rose 48% to $659M, while its loss narrowed to $45M. CEO Max Levchin told investors that the installment payment innovator will reach operating profitability by Q4 2025.
• To offset higher financing costs, Affirm recently bumped up its maximum interest rate from 30% to 36%.

Insert more debt to keep playing: Gina Sanchez, Chief Market Strategist at Lido Advisors, warns that “consumption is falling,” which could eventually impact Affirm. But for now, spending continues. BNPL competitor Zip predicts its US transaction growth to rise 30% in FY 2025 — while Klarna, aiming to go public in 2025, saw profits jump to 673M Swedish krona ($66M USD) in the six months through June, compared to a loss of 456M krona the year prior. Apple’s brief foray into BNPL ended in June when it announced plans to partner with third-party vendors instead — a relief for Affirm, which had once been seen as a potential competitor to Apple’s BNPL product.