Affirm (AFRM) Stock Dips Despite Strong Q3 Results and Raised Guidance

Key Highlights

• Affirm delivered fiscal Q3 revenue of $1.04 billion, representing a 33% year-over-year increase and surpassing Wall Street’s $995.3 million forecast.
• The company’s gross merchandise volume expanded 35% to reach $11.6 billion, marking the tenth consecutive quarter exceeding 30% GMV expansion.
• Earnings per share reached $0.30, significantly above the consensus estimate of $0.17, delivering a nearly 80% earnings surprise.
• Management elevated full-year GMV projections to $49.27–$49.57 billion and revenue expectations to $4.18–$4.21 billion.
• AFRM shares have declined approximately 9.5% year-to-date, trailing the S&P 500’s 7.6% advance during the same period.

Affirm Holdings delivered an impressive fiscal third-quarter performance on Wednesday, exceeding analyst expectations on both the top and bottom lines while upgrading its full-year projections for the second consecutive time.

The buy-now, pay-later company reported quarterly revenue of $1.04 billion, marking a 33% jump from the $783 million recorded in the same period last year. This figure exceeded Wall Street’s consensus forecast of $995.3 million. Earnings per share of $0.30 sailed past the $0.17 estimate, representing an approximately 80% surprise and extending the company’s streak to four consecutive quarterly earnings beats.

Gross merchandise volume, which serves as the primary metric for measuring transaction activity across Affirm’s platform, increased 35% to $11.6 billion. In his shareholder letter, CEO Max Levchin highlighted this achievement as the company’s “tenth consecutive quarter of over-30% growth.”

Affirm Holdings, Inc., AFRM

Shares edged up approximately 1.2% during Thursday’s premarket session. However, AFRM has declined roughly 9.5% throughout 2026 even as the S&P 500 has posted a 7.6% gain.

The platform’s active user base expanded to 26.8 million, while transactions per customer increased 20%. The active merchant network grew to 515,000.

The Affirm Card product emerged as a particularly strong performer. Active cardholders more than doubled from the prior year to 4.4 million. Card-related GMV surged 146% to $2.1 billion.

Affirm generates revenue through multiple channels including merchant fees, interest charges on installment loans, and its debit card offering. All these revenue streams contributed positively to the Q3 performance.

Management Elevates Full-Year Projections

Following the strong quarterly results, Affirm increased its fiscal-year GMV guidance to $49.27–$49.57 billion, an upgrade from the previous $48.3–$48.85 billion range established in February.

Full-year revenue expectations now stand at $4.18–$4.21 billion. The Street had been anticipating $4.14 billion.

For the upcoming quarter, analyst consensus calls for EPS of $0.29 on revenue of $1.08 billion. The full-year consensus estimate projects $1.08 in earnings per share on $4.14 billion in revenue.

Delinquency Metrics Remain Stable

A persistent worry surrounding the buy-now, pay-later industry involves escalating delinquency trends. Recent data from a LendingTree survey indicated 47% of BNPL users experienced a late payment within the past year, climbing from 41% in the previous survey and 34% in 2024.

Affirm countered this industry narrative, asserting it “continued to drive positive credit outcomes” during Q3. Management reported that delinquency rates across 30-day, 60-day, and 90-day categories remained relatively stable on a sequential basis.

The fintech sector broadly has faced headwinds in 2026. SoFi Technologies experienced its largest single-day decline on record last month despite also reporting better-than-expected earnings. The iShares Fintech Active ETF has fallen more than 8% year-to-date.

Affirm carries a Zacks Rank of #3 (Hold), indicating expectations for the stock to perform approximately in line with the broader market in the near term.

Delinquency metrics spanning 30-, 60-, and 90-day timeframes maintained sequential stability throughout the March quarter.

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