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AFRM posted Q3 EPS of 30 cents, topping estimates as revenues rose 32.6% year over year.
Affirm's GMV climbed 35% to $11.6B, driven by merchant integrations and wallet partnerships.
AFRM raised the Q4 and FY26 outlook for GMV, revenues and adjusted operating margin.
Affirm Holdings, Inc. (AFRM - Free Report) posted third-quarter fiscal 2026 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by 76.5%. The metric rose from 1 cent a year ago.
Net revenues were $1.04 billion, above management’s expectation of $0.97-$1 billion, representing a 32.6% year-over-year rise. The top line surpassed the consensus estimate by 4.1%.
AFRM’s strong quarterly results can be attributed to higher interest income and solid Gross Merchandise Volume growth. 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 March 31, 2026, AFRM’s active merchants were 515,000, up 44% year over year. Gross Merchandise Volume (GMV) of $11.6 billion, which climbed 35% year over year, exceeded management’s guidance of $11-$11.3 billion. The figure also surpassed the Zacks Consensus Estimate of $11.2 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 45% year over year to 45.3 million on the back of a significant surge in repeat customer transactions. The metric beat the consensus mark of 42.2 million. Active cardholders surged more than doubled to 4.4 million, lifting the card attach rate to about 17%.
Servicing income of $44.6 million advanced 39.2% year over year and came in line with the consensus mark. Interest income rose 32.2% year over year to $532.4 million and beat the Zacks Consensus Estimate of $504.1 million.
Merchant network revenues improved 25.3% year over year to $268 million but missed the consensus mark of $271.7 million. The metric gained from a growing GMV. Card network revenues amounted to $66.5 million, which increased 13.5% year over year, attributable to the higher usage of Affirm Card and Affirm virtual cards. The metric missed the consensus mark of $72.8 million.
Total operating expenses increased 20.1% year over year to $950.3 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 33.5% year over year to $196.5 million. Sales and marketing expenses dropped 1.6% year over year to $72.9 million.
Adjusted operating income totaled $281 million, up 62% year over year. Adjusted operating margin improved 500 basis points year over year to 27%, well above the management’s guidance of 24.5-25.5%. Affirm's net income increased to $129.6 million from $2.8 million a year ago.
Financial Position of Affirm (As of March 31, 2026)
Affirm exited the fiscal third quarter with cash and cash equivalents of $1.7 billion, which increased from $1.4 billion at the fiscal 2025-end. Total assets of $13.1 billion rose from the fiscal 2025-end level of $11.2 billion.
Funding debt totaled $2.4 billion compared with $1.6 billion at the end of fiscal 2025. Total stockholders’ equity was $3.8 billion, up from $3.1 billion at the end of fiscal 2025.
AFRM generated $934.8 million in net cash from operations for the nine months ended March 31, 2026, compared with $719.3 million for the nine months ended March 31, 2025.
Q4 Guidance by AFRM
Affirm now expects fourth-quarter fiscal 2026 GMV in the range of $13.15-$13.45 billion, up from the previously projected range of $12.75-$13.05 billion. Revenues are now anticipated to be in the range of $1.08-$1.11 billion, up from the earlier expected range of $1.06-$1.09 billion. Transaction costs are now estimated to be between $545 million and $560 million. The weighted average shares outstanding are expected to be 352 million. It now projects the adjusted operating margin to be in the range of 27.5-29.5%.
AFRM’s FY26 View
Management now anticipates fiscal 2026 GMV to be in the range of $49.265-$49.565 billion, up from the previously expected range of $48.3-$48.85 billion. Revenues are now anticipated to be in the range of $4.175-$4.205 billion. Adjusted operating margin is now estimated to be in the band of 28.2-28.8%, up from the earlier projected band of 27.4-28.1%. Weighted average shares outstanding are estimated to be 349 million.
Other payment space players like Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and American Express Company (AXP - Free Report) have also reported their quarterly numbers. Here’s how they have performed:
Mastercard reported first-quarter 2026 adjusted earnings of $4.60 per share, which topped the Zacks Consensus Estimate by 4.6%. The bottom line improved 23.3% year over year. Net revenues advanced 15.8% year over year to $8.4 billion. MA’s quarterly results benefited from growing cross-border volumes and solid growth in value-added services revenues. However, the upside was partly offset by elevated operating expenses and higher payment network rebates from new and renewed deals.
Visa delivered second-quarter fiscal 2026 adjusted earnings of $3.31 per share, up 20% year over year, and beat the Zacks Consensus Estimate by 7.1%. Net revenues came in at $11.23 billion, rising 17% year over year. V’s quarterly results reflected resilient spending trends, higher cross-border volumes and solid network activity, including a 9% year-over-year increase in payments volume on a constant-dollar basis. However, the upside was partly offset by increased operating expenses.
American Express reported first-quarter 2026 EPS of $4.28, which surpassed the Zacks Consensus Estimate by 6.2% and advanced 18% year over year. Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. AXP’s quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by elevated operating expenses.
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Affirm Q3 Earnings Beat on Strong GMV Growth & Higher Transactions
Key Takeaways
Affirm Holdings, Inc. (AFRM - Free Report) posted third-quarter fiscal 2026 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by 76.5%. The metric rose from 1 cent a year ago.
Net revenues were $1.04 billion, above management’s expectation of $0.97-$1 billion, representing a 32.6% year-over-year rise. The top line surpassed the consensus estimate by 4.1%.
AFRM’s strong quarterly results can be attributed to higher interest income and solid Gross Merchandise Volume growth. 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
Q3 Performance of Affirm
As of March 31, 2026, AFRM’s active merchants were 515,000, up 44% year over year. Gross Merchandise Volume (GMV) of $11.6 billion, which climbed 35% year over year, exceeded management’s guidance of $11-$11.3 billion. The figure also surpassed the Zacks Consensus Estimate of $11.2 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 45% year over year to 45.3 million on the back of a significant surge in repeat customer transactions. The metric beat the consensus mark of 42.2 million. Active cardholders surged more than doubled to 4.4 million, lifting the card attach rate to about 17%.
Servicing income of $44.6 million advanced 39.2% year over year and came in line with the consensus mark. Interest income rose 32.2% year over year to $532.4 million and beat the Zacks Consensus Estimate of $504.1 million.
Merchant network revenues improved 25.3% year over year to $268 million but missed the consensus mark of $271.7 million. The metric gained from a growing GMV. Card network revenues amounted to $66.5 million, which increased 13.5% year over year, attributable to the higher usage of Affirm Card and Affirm virtual cards. The metric missed the consensus mark of $72.8 million.
Total operating expenses increased 20.1% year over year to $950.3 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 33.5% year over year to $196.5 million. Sales and marketing expenses dropped 1.6% year over year to $72.9 million.
Adjusted operating income totaled $281 million, up 62% year over year. Adjusted operating margin improved 500 basis points year over year to 27%, well above the management’s guidance of 24.5-25.5%. Affirm's net income increased to $129.6 million from $2.8 million a year ago.
Financial Position of Affirm (As of March 31, 2026)
Affirm exited the fiscal third quarter with cash and cash equivalents of $1.7 billion, which increased from $1.4 billion at the fiscal 2025-end. Total assets of $13.1 billion rose from the fiscal 2025-end level of $11.2 billion.
Funding debt totaled $2.4 billion compared with $1.6 billion at the end of fiscal 2025. Total stockholders’ equity was $3.8 billion, up from $3.1 billion at the end of fiscal 2025.
AFRM generated $934.8 million in net cash from operations for the nine months ended March 31, 2026, compared with $719.3 million for the nine months ended March 31, 2025.
Q4 Guidance by AFRM
Affirm now expects fourth-quarter fiscal 2026 GMV in the range of $13.15-$13.45 billion, up from the previously projected range of $12.75-$13.05 billion. Revenues are now anticipated to be in the range of $1.08-$1.11 billion, up from the earlier expected range of $1.06-$1.09 billion. Transaction costs are now estimated to be between $545 million and $560 million. The weighted average shares outstanding are expected to be 352 million. It now projects the adjusted operating margin to be in the range of 27.5-29.5%.
AFRM’s FY26 View
Management now anticipates fiscal 2026 GMV to be in the range of $49.265-$49.565 billion, up from the previously expected range of $48.3-$48.85 billion. Revenues are now anticipated to be in the range of $4.175-$4.205 billion. Adjusted operating margin is now estimated to be in the band of 28.2-28.8%, up from the earlier projected band of 27.4-28.1%. Weighted average shares outstanding are estimated to be 349 million.
Affirm’s Zacks Rank
Affirm 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 Company (AXP - Free Report) have also reported their quarterly numbers. Here’s how they have performed:
Mastercard reported first-quarter 2026 adjusted earnings of $4.60 per share, which topped the Zacks Consensus Estimate by 4.6%. The bottom line improved 23.3% year over year. Net revenues advanced 15.8% year over year to $8.4 billion. MA’s quarterly results benefited from growing cross-border volumes and solid growth in value-added services revenues. However, the upside was partly offset by elevated operating expenses and higher payment network rebates from new and renewed deals.
Visa delivered second-quarter fiscal 2026 adjusted earnings of $3.31 per share, up 20% year over year, and beat the Zacks Consensus Estimate by 7.1%. Net revenues came in at $11.23 billion, rising 17% year over year. V’s quarterly results reflected resilient spending trends, higher cross-border volumes and solid network activity, including a 9% year-over-year increase in payments volume on a constant-dollar basis. However, the upside was partly offset by increased operating expenses.
American Express reported first-quarter 2026 EPS of $4.28, which surpassed the Zacks Consensus Estimate by 6.2% and advanced 18% year over year. Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. AXP’s quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by elevated operating expenses.