(Bloomberg) -- Affirm Holdings Inc. said funding costs will be a headwind for the buy-now, pay-later company’s margins in coming months.

The financial-technology company expects those increased expenses — brought on by rising interest rates — to eat into one of its key metrics: revenue less transaction costs.

“We have been using warehouse facilities” and other funding mechanisms, Rob O’Hare, Affirm’s senior vice president of finance, said at a conference hosted by Barclays Plc Tuesday. “That will drive up funding costs.”

Shares of the San Francisco-based company rebounded from early losses, gaining 2.4% at 9:54 a.m. in New York after dropping as much as 1.9% after the remarks. They have surged 149% this year.

O’Hare’s comments are in line with remarks executives made during the company’s quarterly earnings report last month. Shares surged on that report, after the fintech said it saw an increase in transactions on the platform. Chief Financial Officer Michael Linford acknowledged that interest-rate hikes and changing post-pandemic consumer appetites were challenging obstacles to navigate.

O’Hare said Tuesday that funding costs will “be a drag” on margins, “but we think we’re doing a good job.”

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