Affirm (AFRM) Stock Drops Despite Strong Q3 Results and Revenue Surge

Key Takeaways

Table of Contents

Affirm delivered fiscal Q3 revenues of $1.04 billion, representing a 33% year-over-year increase and surpassing Wall Street’s $995.3 million projection.
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 outperforming the Street’s $0.17 forecast with a 79.5% positive variance.
Management increased full-year GMV projections to $49.27–$49.57 billion while boosting revenue targets 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 robust fiscal third-quarter results on Wednesday, surpassing analyst expectations across key metrics while upgrading its full-year projections for the second consecutive time.

$AFRM (Affirm) #earnings are out: pic.twitter.com/6Fb9VjdcgA
— The Earnings Correspondent (@earnings_guy) May 7, 2026

Quarterly revenues reached $1.04 billion, marking a 33% jump from last year’s $783 million figure. This performance exceeded the Street’s consensus forecast of $995.3 million. The company’s earnings per share of $0.30 demolished expectations of $0.17 by nearly 80%, extending the company’s winning streak to four consecutive quarterly beats.

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

Affirm Holdings, Inc., AFRM

Shares experienced a modest 1.2% uptick during Thursday’s premarket session. However, AFRM has shed roughly 9.5% during 2026 as the S&P 500 has climbed 7.6%.

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

The Affirm Card emerged as a major growth driver. Active cardholders more than doubled from the prior year to 4.4 million. Card-related GMV skyrocketed 146% to $2.1 billion.

Affirm generates revenue through multiple channels including merchant fees, installment loan interest, and its debit card offering. All revenue streams contributed positively to the third-quarter performance.

Management Elevates Full-Year Projections

Following these results, Affirm increased its fiscal-year GMV outlook to $49.27–$49.57 billion, representing an upgrade from the previous $48.3–$48.85 billion range announced in February.

The company now anticipates full-year revenues of $4.18–$4.21 billion. Analysts had previously forecasted $4.14 billion.

For the upcoming quarter, the Street expects EPS of $0.29 on revenues of $1.08 billion. Full-year consensus estimates stand at $1.08 EPS with $4.14 billion in revenue.

Credit Performance Remains Stable

A key worry surrounding the buy-now, pay-later industry involves escalating delinquency trends. Recent LendingTree research indicated 47% of BNPL consumers experienced late payments during the past year, rising from 41% previously and 34% in 2024.

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

The broader fintech industry has faced headwinds throughout 2026. SoFi Technologies experienced its largest single-session decline on record last month despite posting strong earnings. The iShares Fintech Active ETF has fallen more than 8% year-to-date.

Affirm currently maintains a Zacks Rank of #3 (Hold), indicating expectations for near-term market-aligned performance.

Delinquency metrics spanning 30-, 60-, and 90-day intervals remained sequentially stable throughout the March quarter.