Key Takeaways
- Affirm shares climbed 12% in early Friday trading following fiscal Q2 FY2026 results that exceeded Wall Street projections on all fronts.
- The company posted revenue of $1.17 billion, representing a 33% year-over-year increase and surpassing the $1.11 billion analyst consensus.
- Total gross merchandise volume (GMV) reached $14.1 billion, outpacing the estimated $13.4 billion.
- GAAP earnings per share registered at $4.62, significantly above the analyst projection of $0.35.
- The company revealed a strategic collaboration with Shopify to introduce Shop Pay Installments across Australia.
Shares of Affirm (AFRM) rocketed 12% higher to $86.80 during Friday’s premarket session following the buy now, pay later platform’s impressive fiscal second-quarter earnings release that surpassed analyst projections on every key metric.
The fintech company reported quarterly revenue of $1.17 billion for the period concluding June 30, marking a 33% annual increase and beating the Street’s $1.11 billion estimate. The revenue beat represented a 5.2% upside versus consensus forecasts.
The company’s gross merchandise volume, which measures the aggregate dollar amount of transactions flowing through Affirm’s payment network, surged 36% to reach $14.1 billion. This figure topped analyst predictions of $13.4 billion. Approximately 50% of this expansion came from direct point-of-sale merchant integrations.
On the earnings front, GAAP EPS checked in at $4.62, dramatically exceeding the Street’s $0.35 estimate. The company generated pre-tax income of $169.1 million, translating to a margin of 14.5%.
Michael Linford, who recently stepped into the president role, characterized the quarterly performance as a “home run.” He emphasized that this marked the company’s 11th consecutive quarter of GMV expansion surpassing 30%.
GAAP operating margins expanded to 12.6%, reflecting a 6% improvement compared to the year-ago quarter.
Forward Outlook Exceeds Street Estimates
Looking ahead to Q3 CY2026, Affirm issued revenue guidance of $1.21 billion at the midpoint, representing a 3.6% beat versus the analyst consensus of $1.16 billion.
On a full-year basis, management projected GMV to surpass $64 billion, above the $63 billion Street estimate. CEO Max Levchin has previously articulated a long-term target of $100 billion in GMV, which Wall Street forecasts could materialize by 2029.
Susquehanna’s James Friedman increased his price objective to $110 from $105 while maintaining his Positive rating, describing both the quarterly results and forward guidance as “exceptionally strong.”
Performance Outshines Fintech Competitors
Affirm’s impressive quarterly showing contrasts sharply with recent struggles across the fintech sector. SoFi has declined 27% during 2026, while Klarna has plummeted nearly 52%. Affirm had gained only 4.1% year-to-date prior to this earnings announcement, underperforming broader market indices, though this report may shift investor sentiment.
Jefferies analyst John Hecht observed that fintech equities had already begun outperforming the S&P 500 heading into earnings season, posting average gains of 6.7% compared to the benchmark’s 3.2% advance.
Linford attributed the robust results to healthy consumer financial conditions. When excluding Peloton and Pay in 4 products, Affirm’s 30-day delinquency rate increased 2.5% year-over-year, representing a slowdown from the 2.7% to 2.8% increases observed during the previous three quarters.
The company also announced the formation of a dedicated growth division under the leadership of Pat Suh, previously serving as SVP of revenue, to spearhead expansion into additional markets.
On the partnership side, Affirm joined forces with Shopify to roll out Shop Pay Installments throughout Australia. Since debuting in North America in 2021, Shop Pay Installments has emerged as one of Shopify’s most widely adopted features.
Linford characterized the Australian market entry as Shopify actively bringing Affirm into new territories, referencing a comparable UK market expansion the partners executed last year.
Over the past five years, Affirm has maintained an annualized revenue growth rate of 37.4%, with the most recent two-year period averaging 35.4% expansion.
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