Affirm (AFRM) Stock Rockets 15% as BNPL Giant Crushes Earnings Expectations

TLDR

Table of Contents

Affirm (AFRM) stock jumped over 14% in premarket trading after reporting Q4 revenue of $876.42 million, beating analyst estimates of $837.05 million
The company swung to a net income of $69.2 million from a net loss of $45.2 million in the same period last year
Gross merchandise volume increased 43% to $10.4 billion, with active consumers growing 24% to 23 million
Affirm forecasts fiscal 2026 GMV above $46 billion, exceeding Wall Street estimates of $45.67 billion
Multiple brokerages raised price targets, with Jefferies lifting its target to $110 from $95

Affirm stock surged over 14% in premarket trading Friday morning. The buy-now-pay-later company delivered fourth-quarter results that topped Wall Street expectations across key metrics.

The company reported revenue of $876.42 million for the quarter ended June 30. This beat analyst estimates of $837.05 million by a healthy margin.

Affirm also swung to profitability in the quarter. The company posted net income of $69.2 million, a sharp turnaround from the $45.2 million net loss in the same period last year.

Affirm, $AFRM, Q4-25. Results:
📊 Adj. EPS: $0.69 🟢
💰 Revenue: $876M 🟢
📈 Net Income: $69M
🔎 Achieved profitability with $58M in operating income and record GMV of $10.4B, fueled by strong 0% APR loan adoption and Affirm Card growth. pic.twitter.com/bbeLh4EJay
— EarningsTime (@Earnings_Time) August 28, 2025

CEO Max Levchin struck an optimistic tone about the company’s trajectory. “Profitability is, of course, a point in the journey, not the destination,” he said in a letter to shareholders.

The results showed strong momentum across Affirm’s business metrics. Gross merchandise volume, which tracks the total value of transactions processed, jumped 43% to $10.4 billion.

Active consumers on the platform grew 24% to reach 23 million users. The merchant count also expanded 24% to 377,000 active partners.

Affirm’s direct-to-consumer business performed particularly well. Direct-to-consumer GMV surged 61% to $3.1 billion in the quarter.

The Affirm Card contributed to this growth. GMV from the card jumped 132% to $1.2 billion within the direct-to-consumer segment.

Strong Performance Across Categories

The company saw growth across multiple spending categories. General merchandise, electronics, travel and ticketing, and fashion and beauty all contributed to the quarter’s performance.

This broad-based growth reflects resilient consumer spending patterns. Relief from tariff uncertainty and expectations of rate cuts have supported consumer activity across categories.

Optimistic Outlook for Fiscal 2026

Affirm provided an upbeat forecast for the coming fiscal year. The company expects fiscal 2026 GMV to exceed $46 billion, above the analyst consensus of $45.67 billion.

Revenue is projected to account for 8.4% of GMV in fiscal 2026. For the first quarter, Affirm expects revenue between $855 million and $885 million.

BTIG analysts expressed confidence in the company’s growth trajectory. “We expect GMV growth will continue at 30%+ year on year and think Affirm can eventually be as big as the traditional point of sale credit card providers,” they wrote.

However, the analysts cautioned about near-term margin pressure. Increased competition from traditional credit cards and other fintechs could impact profitability.

Retail sentiment on Stocktwits shifted to “extremely bullish” from “bullish” following the results. Message volume around the stock also spiked as traders reacted to the news.

Multiple brokerages responded by raising their price targets. Jefferies lifted its target to $110 from $95, while J.P.Morgan also increased its forecast.

The median price target among 25 analysts covering the stock rose to $75 from $66 in May. None of the analysts currently recommend selling Affirm shares.

The stock has gained nearly 31% year-to-date through Thursday’s close. This outperforms the S&P 500’s 11% gain over the same period.

If premarket gains hold, Affirm shares are set to hit their highest level in over three years. The stock was trading at $92.06 in premarket activity, up 15.1% from the previous close.

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