Affirm's stock soared Friday on the heels of better-than-expected fiscal earnings that saw the buy now/pay later hit its highly anticipated profitability target it set out a year ago.
The company's stock jumped as much as 19% in morning trading in New York Friday before paring some of those gains in the afternoon. As of 1:48 p.m. ET, shares of Affirm were trading at $88.60, an increase of 12.1% or $9.55, from market open.
Revenue and net income for the quarter ending June 30 beat analysts' expectations, according to S&P CapitalIQ. Revenue landed at $876.4 million, an increase of 33% year over year and ahead of analysts' estimates of $837.1 million. Net income hit $69.24M, or 20 cents per share, ahead of an expected $39.8 million, or 11 cents per share.
Affirm's fiscal Q4 marked the first time that the company achieved operating income profitability, CEO Max Levchin said in his letter to shareholders. This time last year, Affirm's stock surged nearly 30% after its quarterly earnings pointed to a faster
"We consider Affirm the best-positioned BNPL provider in a burgeoning market, poised to take share through better user experience and transparent pricing, manifested through a superior underwriting model," William Blair analyst Andrew Jeffrey said in a research note.
Active customers hit 23 million, an increase of 23% from the same period last year, and active merchants grew 19% to almost 380,000. Delinquencies landed at 2.3%, a decrease of 10 basis points.
Gross merchandise value hit $10.4 billion, an increase of 43% compared to the same period last year, driven largely by
The Affirm Card, which has been a
Affirm also set out fiscal 2026 guidance that surprised investors. The company expects GMV to be greater than $46 billion, and revenue to be about 8% of GMV, or $336 million.
"At a high level, we have no weaknesses to report to investors, whether assessing consumer demand, borrower profile, credit performance, product mix, merchant marketing spend, funding outlook, or operating leverage," Citizens Bank analyst David Scharf said in a research note. "We are typically reluctant to resort to the cliché of 'firing on all cylinders,' yet the results and the company's initial FY26 (June) guidance point to this conclusion."
Mizuho analyst Dan Dolov called the guidance "amazing" on the call Thursday night. And JPMorgan Securities analyst Reginald Smith said Affirm has a history of "beating raising guidance throughout the year. We note FY25 and FY24 GMV ended up coming in 9% (~$3.2bn) and 11% (~$2.6bn) ahead of guidance first provided on the F4Q call," Smith said.
Commenting on hitting the company's profitability targets, Levchin addressed buy now/pay later naysayers in his letter to shareholders.
"Only a few moments ago it was a matter of some debate (outside our walls, of course) whether Affirm would so much as survive the rising Fed funds rate, let alone turn a profit," Levchin said. "And a few before that, whether it was possible to make money in consumer lending without the profit pools afforded by late fees and compounding interest. And a little earlier still, whether anyone would even trade the sloppy ease of revolving credit for the binary precision of individually underwritten transactions."
