Affirm (AFRM) Stock: Payment Firm Crushes Earnings as Debit Card Takes Off

TLDR

• Affirm reported Q1 fiscal 2026 earnings of 23 cents per share, crushing expectations of 11 cents, while revenue jumped 34% to $933 million versus estimates of $883 million.
• Gross merchandise volume surged 42% to $10.8 billion, with the new debit card contributing $1.4 billion, though debit card revenue of $69.33 million only met estimates.
• Operating margin expanded to 28.3% from 19% a year ago, marking a turnaround from a 31-cent loss per share in the prior year period.
• Q2 guidance came in at $1.045 billion revenue, roughly in-line with Wall Street expectations.
• AFRM stock jumped over 11% in after-hours trading to $73.32 following the earnings beat.

Affirm just delivered a quarter that has investors buzzing. The company reported fiscal Q1 2026 results that blew past Wall Street’s expectations on nearly every metric that matters.

The San Francisco-based payment network posted earnings of 23 cents per share for the quarter ended September 30, 2025. That demolished analyst estimates of 11 cents per share. Even better, this profit marks a complete reversal from the 31-cent loss the company reported in the same period last year.

Affirm Holdings, Inc., AFRM

Revenue climbed 34% year-over-year to $933 million. Analysts had expected $883 million. The beat was substantial enough to send AFRM stock soaring over 11% to $73.32 in extended trading.

Gross merchandise volume tells an equally strong story. GMV jumped 42% to $10.8 billion, topping the $10.38 billion estimate. The company’s new debit card accounted for $1.4 billion of that volume, showing real traction for the product.

Operating margin expansion caught attention too. The metric hit 28.3%, up from 19% in the prior year period. That kind of improvement suggests Affirm is getting better at converting revenue into actual profit.

Debit Card Shows Promise But Revenue Meets Expectations

The debit card contribution to GMV was impressive. However, debit card revenue came in at $69.33 million, just meeting estimates. This means the card is driving volume but not yet delivering outsized revenue gains.

Affirm’s business model is shifting. The company used to pull about one-third of revenue from interest income paid by consumers. Now the mix is tilting toward zero-percent interest BNPL plans.

These plans bring in revenue from merchant fees instead of consumer interest. Zero-percent plans typically carry lower margins than interest-bearing products. But they attract higher credit quality consumers who tend to make larger purchases.

For fiscal Q2, Affirm guided to revenue of $1.045 billion at the midpoint. That came in roughly in-line with what the Street expected. Not a surprise, but not a disappointment either.

Apple Partnership Could Move The Needle

Competition in the BNPL space stays fierce. Klarna, Sezzle, Block’s Afterpay, and PayPal all want a piece of the market. Walmart recently shifted most BNPL payments to Klarna, dealing Affirm a blow.

But Affirm has other major partnerships. Amazon and Shopify remain key partners. More importantly, a new Apple partnership could deliver real upside in 2026.

In September, Affirm announced its BNPL plans work for in-store purchases at Apple stores for iPhone users. Analysts believe this partnership could be material. New deals with Wayfair and sports retailer Fanatics add to the growth story.

AFRM stock fell during Thursday’s regular trading session. Investors worried about rising layoff announcements and economic uncertainty. The stock had gained 7% in 2025 before the earnings release.

The after-hours pop of 11% suggests investors liked what they saw. The earnings beat was substantial. The margin improvement was real. And the guidance didn’t disappoint.

Affirm holds an IBD Composite Rating of 81. The company also carries an Accumulation/Distribution Rating of B-minus, indicating more funds are buying than selling over the past 13 weeks.

CEO Max Levchin, COO Michael Linford, and CFO Rob O’Hare hosted a conference call at 2:00pm PT to discuss the results.

The post Affirm (AFRM) Stock: Payment Firm Crushes Earnings as Debit Card Takes Off appeared first on CoinCentral.