Key Takeaways
- Affirm shares climbed 12% in premarket hours following a decisive Q2 FY2026 earnings victory that exceeded analyst projections on all fronts.
- Quarterly revenue climbed 33% from the prior year to $1.17 billion, surpassing the Street’s $1.11 billion forecast.
- Total gross merchandise volume (GMV) reached $14.1 billion, outpacing the consensus target of $13.4 billion.
- GAAP earnings per share registered at $4.62, obliterating the $0.35 analyst consensus.
- The company unveiled a strategic collaboration with Shopify to bring Shop Pay Installments to the Australian market.
Shares of Affirm (AFRM) rocketed 12% higher to $86.80 during Friday’s premarket session after the leading buy now, pay later platform reported fiscal second-quarter results that exceeded Wall Street’s projections on every major benchmark.
The company posted quarterly revenue of $1.17 billion for the period concluding June 30, marking a 33% increase compared to the same quarter last year and surpassing analyst predictions of $1.11 billion. The company outperformed consensus estimates by 5.2%.
The firm’s gross merchandise volume—representing the aggregate value of all transactions flowing through Affirm’s ecosystem—surged 36% to reach $14.1 billion. Market watchers had anticipated $13.4 billion. Approximately half of this expansion stemmed from direct point-of-sale integrations with merchants.
The company’s GAAP earnings per share came in at $4.62, dramatically exceeding the Street’s $0.35 projection. Pre-tax income reached $169.1 million, translating to a margin of 14.5%.
Michael Linford, who recently assumed the role of company president, characterized the performance as a “home run.” He emphasized that this marked Affirm’s 11th consecutive quarter delivering GMV expansion above the 30% threshold.
GAAP operating margins expanded to 12.6%, representing a 6% improvement compared to the year-ago period.
Forward Outlook Exceeds Street Estimates
Looking ahead to Q3 CY2026, Affirm projected midpoint revenue of $1.21 billion, representing a 3.6% premium to the analyst consensus of $1.16 billion.
For the complete fiscal year, management anticipates GMV will surpass $64 billion, beating the Street’s $63 billion forecast. CEO Max Levchin has consistently targeted a $100 billion GMV milestone, which market analysts project the company will achieve by 2029.
Susquehanna analyst James Friedman elevated his price objective to $110 from $105 while maintaining a Positive rating, describing both the quarterly performance and forward guidance as “exceptionally strong.”
Outperformance Against Fintech Competitors
Affirm’s impressive quarterly showing contrasts sharply with struggles facing other fintech companies. SoFi has declined 27% during 2026, while Klarna has plummeted nearly 52%. Affirm has gained just 4.1% year-to-date, underperforming broader market indices, though this latest report may shift investor sentiment.
Jefferies analyst John Hecht observed that fintech equities had already begun outperforming the S&P 500 during the weeks preceding earnings season, climbing an average of 6.7% versus the index’s 3.2% advance.
Linford attributed the robust results to healthy consumer financial conditions. When excluding Peloton and Pay in 4 loans from the calculation, Affirm’s 30-day delinquency rate increased 2.5% year-over-year, representing an improvement from the 2.7% to 2.8% upticks observed during the previous three quarters.
The company also introduced a newly formed growth division under the leadership of Pat Suh, previously serving as SVP of revenue, who will spearhead expansion initiatives into emerging markets.
Regarding strategic partnerships, Affirm and Shopify jointly announced the introduction of Shop Pay Installments across Australia. Shop Pay Installments has emerged as one of Shopify’s most widely adopted offerings in North America following its 2021 debut.
Linford characterized the Australian market entry as Shopify actively facilitating Affirm’s international expansion, referencing a comparable UK market launch the partners executed last year.
Over the past five years, Affirm has maintained an annualized revenue growth rate of 37.4%, with the most recent two-year period averaging 35.4% expansion.
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