Affirm Q4 Earnings Beat Estimates on Increasing Transaction Volumes

Affirm Holdings, Inc. AFRM reported fourth-quarter fiscal 2025 earnings per share (EPS) of 20 cents, which beat the Zacks Consensus Estimate of 11 cents. The bottom line improved from the prior-year quarter’s loss of 14 cents per share.

Total revenues improved 33% year over year to $876.4 million and surpassed management’s expectation of $815-$845 million. The top line beat the consensus mark by 4.4%.

The strong quarterly results benefited from solid growth in Gross Merchandise Value (GMV), rising transaction volumes fueled by repeat customers and surging card network revenues. However, the upside was partly offset by an elevated expense level and rising provision for credit losses.

Affirm Holdings, Inc. Price, Consensus and EPS Surprise

Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote

Q4 Performance of Affirm

As of June 30, 2025, AFRM’s active merchants were 377,000, up 24% year over year. GMV of $10.4 billion climbed 43% year over year in the quarter under review, which exceeded management’s expected range of $9.4-$9.7 billion and the Zacks Consensus Estimate of $9.5 billion. The metric was aided by strong contributions from the company's largest merchant partner, 0% APR monthly installment loans and direct-to-consumer offerings.

Total transactions rallied 51.8% year over year to 37.5 million on the back of a significant surge in repeat customer transactions. The metric surpassed the consensus mark of 30.3 million.

Servicing income of $33.9 million advanced 23% year over year and beat the consensus mark of $33.8 million. Interest income rose 24% year over year to $419.1 million and beat the Zacks Consensus Estimate of $416.1 million.

Merchant network revenues improved 32.3% year over year to $239.5 million in the fiscal fourth quarter, beating the consensus mark of $235 million. The metric gained from a growing GMV. Card network revenues were $67.1 million, which increased 56.2% year over year, attributable to the higher usage of Affirm Card and Affirm virtual cards. The metric surpassed the consensus mark of $59.1 million.

Total operating expenses increased 11.7% year over year to $818.4 million due to higher loss on loan purchase commitment, funding costs, processing and servicing, and technology and data analytics expenses. Provision for credit losses escalated 33.2% year over year to $156.6 million. Nevertheless, sales and marketing expenses dropped 41.2% year over year.

Adjusted operating income totaled $237 million, which surged 58.2% year over year. Adjusted operating margin improved 430 basis points year over year to 27%, which surpassed management’s estimated 23-25% range.

Affirm's net income was $69.2 million against a net loss of $45.1 million in the prior-year quarter.

Financial Position of Affirm (As of June 30, 2025)

Affirm exited the fiscal fourth quarter with cash and cash equivalents of $1.4 billion, which climbed 33.7% from the fiscal 2024-end figure. Total assets of $11.2 billion increased 17.2% from the fiscal 2024-end.

Funding debt amounted to $1.6 billion, down 11.7% from the figure as of June 30, 2024.

Total stockholders’ equity of $3.1 billion rose 12.3% from the fiscal 2024-end figure.

AFRM generated $74.6 million of net cash from operations during the June quarter, which increased 8.5% year over year.

AFRM’s Q1 Guidance

Affirm forecasts first-quarter fiscal 2026 GMV to be in the range of $10.1-$10.4 billion. Revenues are anticipated to be within the range of $855-$885 million. The weighted average shares outstanding are expected to be 348 million. It projects the adjusted operating margin to be within 23-25%.

AFRM’s FY26 View

Management anticipates GMV to be more than $46 billion. Revenues are anticipated to be 8.4% of GMV. Adjusted operating margin is estimated to be more than 26.1%. Weighted average shares outstanding are estimated to be 352 million.

AFRM’s Zacks Rank & Key Picks

AFRM currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Computer and Technology space are Astera Labs, Inc. ALAB, Reddit, Inc. RDDT and Penguin Solutions, Inc PENG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Astera Labs’ current-year earnings of $1.58 per share has witnessed seven upward revisions in the past 30 days against none in the opposite direction. Astera Labs beat earnings estimates in each of the trailing four quarters, with the average surprise being 32.2%. The consensus estimate for current-year revenues is pegged at $757.7 million, implying 91.2% year-over-year growth.

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The Zacks Consensus Estimate for Penguin Solutions’ current-year earnings is pegged at $1.85 per share, implying 48% year-over-year growth. In the past 60 days, Penguin Solutions has witnessed two upward estimate revisions against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $1.4 billion, calling for 17.1% year-over-year growth.

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