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Affirm Q2 Earnings Beat Estimates on Higher Transactions
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Key Takeaways
AFRM delivered Q2 EPS of 37 cents, beating estimates as net revenues surged 30% year over year.
Affirm saw GMV climb 36% to $13.8 billion, driven by POS integrations, wallet partnerships and DTC offerings.
AFRM's adjusted operating margin expanded 300 bps to 30% on higher network revenues and servicing income.
Affirm Holdings, Inc. (AFRM - Free Report) posted second-quarter fiscal 2026 earnings of 37 cents per share, which beat the Zacks Consensus Estimate by 32.1%. The metric rose 60.9% year over year.
Net revenues were $1.1 billion, above management’s expectation of $1.03-$1.06 billion, representing a 30% year-over-year surge. The top line surpassed the consensus estimate by 6.3%.
AFRM’s strong quarterly results can be attributed to higher network revenues and servicing income. Higher transactions and repeat customer engagement also boosted performance. The results were partly offset by an elevated expense level and rising provision for credit losses.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
As of Dec. 31, 2025, AFRM’s active merchants were 478,000, up 42% year over year. Gross Merchandise Value (GMV) of $13.8 billion, which climbed 36% year over year, exceeded management’s guidance of $13-$13.3 billion. The figure also surpassed the Zacks Consensus Estimate of $13.3 billion. The metric was aided by strong contributions from direct merchant point-of-sale integrations, wallet partnerships and direct-to-consumer offerings.
Total transactions rallied 44% year over year to 54.9 million on the back of a significant surge in repeat customer transactions. The metric beat the consensus mark of 44.8 million.
Servicing income of $42.7 million advanced 48.8% year over year and beat the consensus mark of $41.6 million. Interest income rose 20.6% year over year to $493.6 million and outpaced the Zacks Consensus Estimate of $484.6 million.
Merchant network revenues improved 34.1% year over year to $328.4 million, beating the consensus mark of $313.8 million. The metric gained from a growing GMV. Card network revenues amounted to $73 million, which increased 26% year over year, attributable to the higher usage of Affirm Card and Affirm virtual cards. The metric missed the consensus mark of $82.1 million.
Total operating expenses increased 15.5% year over year to $1 billion million due to higher loss on loan purchase commitment, funding costs, processing and servicing, and technology and data analytics expenses. Provision for credit losses escalated 40% year over year to $214.2 million. Sales and marketing expenses dropped 27.4% year over year to $98.8 million.
Adjusted operating income totaled $337 million, up 41.7% year over year. Adjusted operating margin improved 300 basis points year over year to 30%, well within management’s guidance of 28-30%. Affirm's net income increased 61% year over year to $129.6 million.
Financial Position of Affirm Holdings (as of Dec. 31, 2025)
Affirm Holdings exited the fiscal second quarter with cash and cash equivalents of $1.5 billion, which increased 12.8% from the fiscal 2025-end figure. Total assets of $13 billion rose 16.2% from the fiscal 2025-end level.
Funding debt totaled $3 billion compared with $1.6 billion at the end of fiscal 2025. Total stockholders’ equity was $3.5 billion, up from $3.1 billion at the end of fiscal 2025.
AFRM generated $548.3 million in net cash from operations for the six months ended Dec. 31, 2025, compared with $508.9 million for the six months ended Dec. 31, 2024.
Q3 Guidance
Affirm Holdings forecasts third-quarter fiscal 2026 GMV in the range of $11-$11.25 billion. Revenues are anticipated to be in the range of $0.97-$1 billion. Transaction costs are estimated to be between $520 million and $535 million. The weighted average shares outstanding are expected to be 352 million. It projects the adjusted operating margin in the 24.5-25.5% range.
Q4 Guidance
Affirm Holdings forecasts fourth-quarter fiscal 2026 GMV in the range of $12.75-$13.05 billion. Revenues are anticipated to be in the range of $1.06-$1.09 billion. Transaction costs are estimated to be between $550 million and $565 million. The weighted average shares outstanding are expected to be 353 million. It projects the adjusted operating margin to be in the range of 26.5-28.5%.
Fiscal 2026 View
Management anticipates GMV to be in the range of $48.3-$48.85 billion in fiscal 2026. Revenues are anticipated to be in the range of $4.086-$4.146 billion. Adjusted operating margin is now estimated to be in the band of 27.4-28.1%. Weighted average shares outstanding are estimated to be 351 million.
Other payment space players like Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and American Express (AXP - Free Report) have also reported their quarterly numbers. Here’s how they have performed:
MasterCard posted fourth-quarter earnings of $4.76 per share, which beat the Zacks Consensus Estimate of $4.20 per share. The company registered earnings of $3.82 per share a year ago. It posted revenues of $8.8 billion, which surpassed the Zacks Consensus Estimate by 0.8%. MA reported revenues of $7.5 billion a year ago.
Visa reported first-quarter fiscal 2026 earnings per share (EPS) of $3.17, which beat the Zacks Consensus Estimate of $3.14. The bottom line increased 15% year over year. Net revenues of $10.9 billion improved 15% year over year. The top line beat the consensus mark by 1.9% on higher payments and cross-border volumes. However, the upside was partly offset by increased operating expenses.
American Express posted fourth-quarter earnings of $3.53 per share, which missed the Zacks Consensus Estimate of $3.54 per share. The company reported earnings of $3.04 per share a year ago. AXP posted revenues of $19 billion, which surpassed the Zacks Consensus Estimate by 0.8%. It registered revenues of $17.2 billion a year ago.
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Affirm Q2 Earnings Beat Estimates on Higher Transactions
Key Takeaways
Affirm Holdings, Inc. (AFRM - Free Report) posted second-quarter fiscal 2026 earnings of 37 cents per share, which beat the Zacks Consensus Estimate by 32.1%. The metric rose 60.9% year over year.
Net revenues were $1.1 billion, above management’s expectation of $1.03-$1.06 billion, representing a 30% year-over-year surge. The top line surpassed the consensus estimate by 6.3%.
AFRM’s strong quarterly results can be attributed to higher network revenues and servicing income. Higher transactions and repeat customer engagement also boosted performance. The results were partly offset by an elevated expense level and rising provision for credit losses.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote
Q2 Performance of Affirm
As of Dec. 31, 2025, AFRM’s active merchants were 478,000, up 42% year over year. Gross Merchandise Value (GMV) of $13.8 billion, which climbed 36% year over year, exceeded management’s guidance of $13-$13.3 billion. The figure also surpassed the Zacks Consensus Estimate of $13.3 billion. The metric was aided by strong contributions from direct merchant point-of-sale integrations, wallet partnerships and direct-to-consumer offerings.
Total transactions rallied 44% year over year to 54.9 million on the back of a significant surge in repeat customer transactions. The metric beat the consensus mark of 44.8 million.
Servicing income of $42.7 million advanced 48.8% year over year and beat the consensus mark of $41.6 million. Interest income rose 20.6% year over year to $493.6 million and outpaced the Zacks Consensus Estimate of $484.6 million.
Merchant network revenues improved 34.1% year over year to $328.4 million, beating the consensus mark of $313.8 million. The metric gained from a growing GMV. Card network revenues amounted to $73 million, which increased 26% year over year, attributable to the higher usage of Affirm Card and Affirm virtual cards. The metric missed the consensus mark of $82.1 million.
Total operating expenses increased 15.5% year over year to $1 billion million due to higher loss on loan purchase commitment, funding costs, processing and servicing, and technology and data analytics expenses. Provision for credit losses escalated 40% year over year to $214.2 million. Sales and marketing expenses dropped 27.4% year over year to $98.8 million.
Adjusted operating income totaled $337 million, up 41.7% year over year. Adjusted operating margin improved 300 basis points year over year to 30%, well within management’s guidance of 28-30%. Affirm's net income increased 61% year over year to $129.6 million.
Financial Position of Affirm Holdings (as of Dec. 31, 2025)
Affirm Holdings exited the fiscal second quarter with cash and cash equivalents of $1.5 billion, which increased 12.8% from the fiscal 2025-end figure. Total assets of $13 billion rose 16.2% from the fiscal 2025-end level.
Funding debt totaled $3 billion compared with $1.6 billion at the end of fiscal 2025. Total stockholders’ equity was $3.5 billion, up from $3.1 billion at the end of fiscal 2025.
AFRM generated $548.3 million in net cash from operations for the six months ended Dec. 31, 2025, compared with $508.9 million for the six months ended Dec. 31, 2024.
Q3 Guidance
Affirm Holdings forecasts third-quarter fiscal 2026 GMV in the range of $11-$11.25 billion. Revenues are anticipated to be in the range of $0.97-$1 billion. Transaction costs are estimated to be between $520 million and $535 million. The weighted average shares outstanding are expected to be 352 million. It projects the adjusted operating margin in the 24.5-25.5% range.
Q4 Guidance
Affirm Holdings forecasts fourth-quarter fiscal 2026 GMV in the range of $12.75-$13.05 billion. Revenues are anticipated to be in the range of $1.06-$1.09 billion. Transaction costs are estimated to be between $550 million and $565 million. The weighted average shares outstanding are expected to be 353 million. It projects the adjusted operating margin to be in the range of 26.5-28.5%.
Fiscal 2026 View
Management anticipates GMV to be in the range of $48.3-$48.85 billion in fiscal 2026. Revenues are anticipated to be in the range of $4.086-$4.146 billion. Adjusted operating margin is now estimated to be in the band of 27.4-28.1%. Weighted average shares outstanding are estimated to be 351 million.
Affirm Holdings Zacks Rank
Affirm Holdings currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did the Peers Perform?
Other payment space players like Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and American Express (AXP - Free Report) have also reported their quarterly numbers. Here’s how they have performed:
MasterCard posted fourth-quarter earnings of $4.76 per share, which beat the Zacks Consensus Estimate of $4.20 per share. The company registered earnings of $3.82 per share a year ago. It posted revenues of $8.8 billion, which surpassed the Zacks Consensus Estimate by 0.8%. MA reported revenues of $7.5 billion a year ago.
Visa reported first-quarter fiscal 2026 earnings per share (EPS) of $3.17, which beat the Zacks Consensus Estimate of $3.14. The bottom line increased 15% year over year. Net revenues of $10.9 billion improved 15% year over year. The top line beat the consensus mark by 1.9% on higher payments and cross-border volumes. However, the upside was partly offset by increased operating expenses.
American Express posted fourth-quarter earnings of $3.53 per share, which missed the Zacks Consensus Estimate of $3.54 per share. The company reported earnings of $3.04 per share a year ago. AXP posted revenues of $19 billion, which surpassed the Zacks Consensus Estimate by 0.8%. It registered revenues of $17.2 billion a year ago.