Investors who are worried about Affirm’s ties to Peloton may not be giving the fintech firm enough credit for branching out.
Peloton has long been Affirm’s biggest revenue driver, accounting for between 20% and 30% of revenue in recent years. Peloton’s sales surge early in the pandemic was a boost for Affirm, which provides loans to let customers pay off $1,500-plus bikes and treadmills. As demand for Peloton’s home-fitness equipment has plummeted, Affirm’s Peloton revenue has fallen by nearly 50% in the quarter ended Sept. 30 versus a year earlier.
The good news is that newer partnerships with merchant platforms like Shopify and Amazon appear to be absorbing some of the Peloton dropoff. Affirm’s total revenue rose in the third quarter, while Peloton’s share of revenue dropped to 10% from 30%. Amazon likely unseated Peloton as Affirm’s top revenue source by the end of 2021, Mizuho Financial Group research analyst Dan Dolev said.
