Affirm (AFRM) delivers impressive results, lifting guidance and investor optimism.
Buy-now-pay-later leader Affirm reported another standout quarter, beating Wall Street’s expectations and raising its outlook for fiscal 2026. The strong performance sent shares sharply higher as investors reacted to accelerating growth and improving profitability.
Key Points:
- Earnings per share came in at $0.23 versus $0.11 expected.
- Revenue rose 34% year over year to $933.3 million.
- The company raised its fiscal 2026 outlook, expecting gross merchandise volume above $47.5 billion.
Affirm’s Growth Accelerates Across Core Businesses
Affirm reported a major turnaround this quarter, posting a profit of $0.23 per share compared with a loss of $0.31 a year earlier. Revenue surged 34% to $933.3 million, easily topping analyst forecasts of $883.2 million. This growth was fueled by a 42% jump in gross merchandise volume (GMV) to $10.8 billion and rising consumer engagement across its payment network.
The company’s “buy now, pay later” model continues to gain traction, offering flexible installment loans to consumers shopping online or in stores. Affirm’s active user base climbed 24% to 24.1 million, marking its seventh consecutive quarter of accelerating growth. Its Affirm Card, a debit-style product, saw GMV rise 135% year over year, while active cardholders reached 2.8 million.
What’s Behind the Profit Surge?
Affirm’s execution in the asset-backed securities (ABS) market and strong partnerships played a key role in this performance. The company successfully expanded its relationships with blue-chip investors, allowing it to efficiently fund loan growth at favorable rates.
A five-year extension of its agreement with Amazon (AMZN) provided another major boost, signaling long-term confidence from one of Affirm’s largest merchant partners. The total number of merchants on its platform grew 30% to 419,000, driven by wallet integrations and software partnerships.
Despite this success, management kept its revenue less transaction cost ratio at around 4%, suggesting a cautious balance between growth and profitability. Still, the company raised its adjusted operating margin target to above 27.1% for fiscal 2026.
Is Affirm One of the Best Stocks to Buy Right Now?
Affirm’s steady execution and rising market share make it one of the companies that are good to invest in within the fintech space. Its ability to grow even amid high interest rates highlights a resilient business model. The company’s long-term revenue growth—over 42% annually in the last five years—suggests strong demand for its services.
While competition in the buy-now-pay-later market remains intense, Affirm’s focus on underwriting discipline, partnership expansion, and new product lines positions it as one of the best company investments in the digital payments sector.
What It Means for Investors
For investors analyzing stocks in fintech, Affirm stands out for its consistent growth and improving financial health. The sharp rise in profitability and higher forward guidance show the company’s ability to scale efficiently.
Affirm’s partnership with Amazon and strong performance in its card business highlight its expanding ecosystem. However, maintaining margins and managing credit risk remain key factors to watch.
Overall, the company’s results signal continued momentum, making it a potential candidate for investors seeking growth-oriented opportunities in financial technology.
Conclusion
Affirm’s strong quarter underscores growing consumer adoption and effective cost control. With rising revenue, solid partnerships, and a bullish 2026 outlook, the company appears well-positioned for sustained expansion. For those exploring the basics of investing or looking for investment news on promising fintech stocks, Affirm remains a name to watch closely.
FAQs
What does Affirm do?
Affirm provides a buy-now-pay-later payment network that lets consumers make purchases and pay over time with clear, interest-free or low-interest installment options.
How did Affirm perform this quarter?
Affirm reported earnings of $0.23 per share on revenue of $933.3 million, beating Wall Street estimates and showing strong year-over-year growth.
Why did Affirm’s stock rise?
Investors reacted positively to the company’s earnings beat, raised guidance for 2026, and the extension of its partnership with Amazon.
Is Affirm profitable now?
Yes. The company posted a profit this quarter after reporting losses in the prior year, showing improving operating efficiency.
What should investors watch next?
Key factors include growth in its card business, credit performance, and how the company manages competition in the buy-now-pay-later sector.
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