TLDR
- Affirm exceeded fourth-quarter revenue projections, reporting $1.2 billion—a 33% year-over-year increase
- Total gross merchandise volume climbed 36% to reach $14.1 billion, surpassing the $13.4 billion analyst forecast
- AFRM shares climbed 8.9% to close at $84.42 on Friday, marking the strongest daily performance since January
- Shopify and Affirm are rolling out Shop Pay Installments across Australia
- Several Wall Street firms increased their price targets, including Citi’s $115 and J.P. Morgan’s $105
Affirm delivered impressive fiscal fourth-quarter results that exceeded Wall Street expectations across key metrics including revenue and gross merchandise volume. Shares surged 8.9% to reach $84.42 on Friday, representing the company’s most significant single-session advance since January.
The buy now, pay later company reported revenue of $1.2 billion during the three-month period ending June 30, representing a 33% year-over-year jump and comfortably surpassing the Street’s $1.1 billion projection.
Total gross merchandise volume reached $14.1 billion, marking a 36% expansion and significantly exceeding the $13.4 billion consensus forecast. Approximately half of this growth originated from direct merchant point-of-sale integration channels.
GAAP operating margins expanded by six percentage points compared to the previous year, reaching 12.6%, demonstrating the company’s improving operational efficiency.
Michael Linford, who recently assumed the role of company president, characterized the quarterly performance as a “home run,” emphasizing that it represented the 11th consecutive quarter delivering GMV expansion exceeding 30%.
Shopify Australia Expansion
Coinciding with the earnings announcement, Affirm revealed an expansion of its strategic alliance with Shopify to introduce Shop Pay Installments throughout Australia. This payment solution has emerged as one of Shopify’s most widely adopted checkout options in the US, Canada, and the UK since its 2021 debut.
The Australian launch represents Affirm’s re-entry into the market down under. Merchants operating on Shopify’s platform in Australia can now provide customers with flexible fortnightly or monthly payment plans that carry no late payment penalties.
Linford positioned the expansion as Shopify facilitating Affirm’s international growth, drawing parallels to the previous year’s United Kingdom rollout.
“Our largest partner, Shopify, is once again pulling us into a new market,” Linford said. “We really think there’s an opportunity here to serve all the markets that Shopify is in.”
Analyst Reaction
Wall Street analysts responded enthusiastically to the results. Susquehanna’s James Friedman increased his price objective to $110 from $105, describing both the quarterly performance and the full-year 2027 outlook as “exceptionally strong.”
Bryan Keane from Citi maintained his Buy rating while keeping his $115 price target intact. He characterized Affirm as a “secular winner in payments” and suggested the company has reached a scale where it is “too big to be slowed down or disintermediated.”
J.P. Morgan’s Connor Allen boosted his price target to $105 from $90, while reaffirming an Overweight rating on the shares.
Morgan Stanley’s James Faucette modestly raised his target to $82 from $80 but maintained a neutral stance, pointing to valuation concerns.
Looking ahead to fiscal year 2027, Affirm provided guidance projecting GMV will surpass $64 billion, eclipsing the $63 billion consensus estimate. Management outlined a medium-term objective of achieving $100 billion in GMV, a benchmark Wall Street expects the company to reach by 2029.
The company’s 30-day delinquency rate registered at 2.5% for the quarter when excluding Peloton and Pay in 4 loans, improving from the 2.7% to 2.8% range observed throughout the preceding three quarters.
Through Friday’s close, Affirm stock has advanced 4.1% in 2026, underperforming the broader market indices. Competing fintech players SoFi and Klarna have posted negative returns year to date, declining 27% and 52% respectively.
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