TLDR
- Affirm delivered fiscal Q1 2026 earnings of 23 cents per share, doubling Wall Street’s 11 cent estimate and flipping from a 31 cent loss last year
- Revenue increased 34% to $933 million versus the $883 million consensus, with gross merchandise volume climbing 42% to $10.8 billion
- The debit card product generated $1.4 billion in volume, while debit card revenue of $69.33 million matched forecasts
- Operating margin improved to 28.3% from 19% in the year-ago period, demonstrating enhanced profitability
- AFRM shares surged more than 11% in after-hours trading on the strong quarterly results
Affirm reported fiscal first quarter results that blew past Wall Street projections. The payment technology company earned 23 cents per share for the quarter ending September 30.
This represents a complete reversal from the 31 cent per share loss recorded in last year’s first quarter. Analysts surveyed by FactSet had predicted earnings of just 11 cents per share.
Revenue jumped 34% year-over-year to $933 million. The Street expected $883 million for the period.
Gross merchandise volume increased 42% to $10.8 billion. This metric tracks the total dollar amount of transactions processed through Affirm’s platform.
Wall Street had forecast gross merchandise volume of $10.38 billion. The beat shows merchants and consumers are using Affirm’s services at an accelerating rate.
Profitability Picture Brightens
Affirm’s adjusted operating margin expanded to 28.3% in the quarter. This compares to 19% in the same quarter of fiscal 2025.
The margin improvement indicates the company is converting more revenue into profit as it grows. Better unit economics help justify the platform’s valuation.
Affirm’s new debit card added $1.4 billion to quarterly volume. The card lets users access buy now pay later features for everyday purchases.
Debit card revenue came in at $69.33 million. This matched analyst expectations but didn’t exceed them.
The company continues transitioning toward zero percent interest payment plans. Merchants pay fees to offer these plans instead of consumers paying interest.
Retail Partnerships Expand
Affirm operates in a crowded space with competitors like Klarna, Sezzle, Block’s Afterpay, and PayPal. Strategic partnerships differentiate the company.
The firm maintains relationships with Amazon and Shopify. These integrations give Affirm access to millions of potential customers.
A September launch with Apple could prove material for fiscal 2026. Consumers can now use Affirm for in-store iPhone purchases at Apple retail locations.
Partnerships with Wayfair and sports merchandise company Fanatics are also in development. These deals expand Affirm’s reach into new product categories.
Walmart shifted most buy now pay later volume to Klarna earlier this year. But new partnerships appear positioned to offset that revenue loss.
Affirm guided fiscal Q2 revenue to $1.045 billion at the midpoint. This outlook aligned with analyst expectations of similar levels.
AFRM stock jumped over 11% to 73.32 in extended trading following the report. Regular session trading saw shares decline on Thursday.
Year-to-date, AFRM stock had risen 7% before the earnings release. The company holds an IBD Composite Rating of 81.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
