SAN FRANCISCO - Affirm (NASDAQ: AFRM), a payment network known for empowering consumers, has expanded its collaboration with Expedia (NASDAQ:EXPE) Group™ by partnering with Hotels.com, offering approved guests the option to book now and pay over time. This partnership allows travelers to split the cost of their accommodations into manageable payments without incurring late or hidden fees.
By choosing Affirm at checkout, customers can see the total cost of their booking upfront, ensuring transparency and a commitment to no additional charges. This new service is an extension of Affirm's existing relationship with Expedia Group, where it serves as the exclusive buy now, pay later provider for Expedia and Vrbo.
Clayton Nelson, Vice President of Strategic Partnerships & Affiliates at Expedia Group, expressed enthusiasm about the enhanced partnership, highlighting the added value of payment flexibility for travelers. Similarly, Pat Suh, Affirm’s SVP of Revenue, emphasized the importance of this milestone in meeting consumer demand for more accommodating payment options in the travel industry.
The integration with Hotels.com adds to Affirm's extensive network of 292,000 retail partners, which includes major names such as Amazon (NASDAQ:AMZN) and American Airlines (NASDAQ:AAL). Offering Affirm as a payment solution has been shown to drive sales and reach new customers for these partners.
Hotels.com, part of the Expedia Group, offers a wide selection of accommodations worldwide and rewards its members with savings and perks through its One Key loyalty program. This program extends beyond hotel stays, allowing members to earn and use rewards on flights and vacation rentals on Expedia and Vrbo.
The collaboration between Affirm and Hotels.com is based on a shared commitment to improving the travel experience through innovative payment solutions. The full details of the partnership are based on a press release statement from Affirm. Eligibility for payment options through Affirm is subject to terms provided by their lending partners.
In other recent news, Affirm has been making significant strides in its business operations. The company recently partnered with Canadian home improvement retailer, RONA, to offer flexible payment options for eligible customers. This collaboration extends Affirm's reach in the Canadian market, adding RONA to its existing network of retail partners, which includes Amazon, Apple (NASDAQ:AAPL), and Samsung (KS:005930).
Affirm has also amended its credit agreement, increasing its borrowing capacity from $205 million to $330 million and extending the agreement's maturity date. This move reflects the company's commitment to long-term growth. However, the company was also recently affected by a cybersecurity incident at partner bank Evolve Bank & Trust, though Affirm's own systems were not compromised.
Analysts have been closely monitoring Affirm's progress. JMP Securities initiated coverage with a Market Perform rating, while Goldman Sachs (NYSE:GS) upgraded Affirm to a 'buy' rating, citing the company's effective credit management. In contrast, CFRA maintained a 'sell' rating, projecting future revenue forecasts for the fiscal years 2024 to 2026 at $2.3 billion, $2.7 billion, and $3.2 billion respectively.
The U.S. Consumer Financial Protection Bureau (CFPB) has extended certain consumer protection rules to the BNPL industry, impacting companies like Affirm. Despite these developments, Affirm continues to adapt and thrive in the evolving financial landscape.
InvestingPro Insights
As Affirm (NASDAQ: AFRM) continues to expand its reach in the travel industry through strategic partnerships, its financial data tells a story of growth and market dynamics. Affirm's collaboration with Hotels.com is set against a backdrop of significant revenue growth, with the company's revenue in the last twelve months as of Q3 2024 reaching $2.1 billion, marking a substantial increase of 40.05%. This growth is indicative of Affirm's expanding market presence and may reflect the company's ability to capitalize on emerging trends in consumer financing.
InvestingPro data underscores the company's high revenue growth rate, which was even more pronounced in Q3 2024 at 51.23% on a quarterly basis. Despite not being profitable over the last twelve months, with an operating income margin of -36.75%, Affirm's gross profit margin stood at a healthy 61.84%, suggesting that while the company is investing heavily in growth, it still retains a strong underlying business model.
InvestingPro Tips highlight that Affirm's stock has experienced a significant return over the last week of 15.58%, though analysts caution that the stock price movements are quite volatile. This could be relevant for investors interested in the company's stock, as it may offer opportunities for short-term gains but also poses risks due to its volatility. Furthermore, while Affirm has not been profitable over the last twelve months and does not pay dividends, its liquid assets exceed short-term obligations, which could provide some financial stability.
For readers interested in a deeper dive into Affirm's financial health and stock performance, there are additional InvestingPro Tips available on https://www.investing.com/pro/AFRM. As of the latest update, there are six more tips that could provide valuable insights for potential investors or current shareholders looking to understand the company's prospects.
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