Affirm (AFRM) Stock: Payment Firm Posts Big Earnings Beat as Volume Jumps 42%

TLDR

• Affirm posted fiscal Q1 2026 earnings of 23 cents per share, crushing the 11 cent Wall Street estimate and reversing a 31 cent loss from last year
• Revenue surged 34% to $933 million, beating the $883 million forecast, while gross merchandise volume jumped 42% to $10.8 billion
• The company’s new debit card added $1.4 billion in volume, though revenue from the card met expectations at $69.33 million
• Adjusted operating margin improved to 28.3% from 19% a year earlier, showing better profitability
• AFRM stock rallied over 11% in after-hours trading following the earnings beat

Affirm delivered a strong fiscal first quarter performance that topped analyst expectations across key metrics. The buy now pay later company reported earnings of 23 cents per share for the quarter ended September 30.

This marks a major turnaround from the 31 cent loss in the same quarter last year. Wall Street had expected just an 11 cent profit.

Revenue climbed 34% to $933 million. Analysts had forecast $883 million for the quarter.

Affirm Holdings, Inc., AFRM

The company’s gross merchandise volume grew 42% to reach $10.8 billion. This beat the consensus estimate of $10.38 billion.

Debit Card Adds Volume While Margins Expand

Affirm’s debit card product contributed $1.4 billion to total volume. However, debit card revenue of $69.33 million came in at expectations.

The company’s adjusted operating margin jumped to 28.3%, up from 19% in the prior year period. This improvement shows Affirm is scaling more efficiently.

The revenue mix continues shifting toward zero percent interest payment plans. These plans generate fees from merchants instead of interest from consumers.

Zero interest options typically have lower margins than interest-bearing products. But they attract customers with better credit who make larger purchases.

Apple Deal Could Drive Future Growth

Affirm faces competition from Klarna, Sezzle, Block’s Afterpay, and PayPal. The company maintains key partnerships with Amazon and Shopify.

The new Apple partnership launched in September. Affirm’s payment plans are now available for in-store iPhone purchases at Apple retail locations.

Analysts view the Apple deal as potentially material for 2026 growth. New partnerships with Wayfair and Fanatics are also expected to contribute.

Walmart recently moved most of its buy now pay later volume to Klarna. But Affirm’s new deals help offset that loss.

For fiscal Q2, Affirm guided revenue to $1.045 billion at the midpoint. This guidance came in roughly in-line with analyst expectations.

AFRM stock jumped over 11% to 73.32 in extended trading after the results. The stock had declined during Thursday’s regular session.

Shares had gained 7% year-to-date before the earnings announcement. The stock has an IBD Composite Rating of 81 and an Accumulation/Distribution Rating of B-minus.

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