10-Q · May 7, 2026
Affirm reported significant growth in revenue for Q3 2026, achieving $1,039 million, up 33% year-over-year, but missed EPS expectations with $0.30. The company's net income also improved sharply compared to the prior…
Earnings analysis · 10-K
AFRM earnings analysis
Filed August 27, 2026 · Our reading of the company's report
The latest report
Affirm delivered a strong fiscal 2026 inflection, with revenue up 32%, GMV up 37%, positive operating income of $417.0M and operating cash flow of $1.231B. The company is extending its data-driven underwriting and…
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Affirm delivered a strong fiscal 2026 inflection, with revenue up 32%, GMV up 37%, positive operating income of $417.0M and operating cash flow of $1.231B. The company is extending its data-driven underwriting and network strategy through Affirm Card, AdaptAI, Affirm Edge, merchant expansion and international launches, while repeat usage and consumer engagement accelerated. However, reported EPS benefited from a roughly $1.5B deferred-tax valuation allowance release, and rising credit costs, heightened state BNPL scrutiny, bank-partner concentration and uncertainty around the Affirm Bank application temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $5.53
- Operating margin
- 9.8%
- Segment
- Single reportable segment: unsecured consumer loans and related commerce/payment services; geographic revenue: United States $4.112B, Canada $142.8M, other $6.3M
What stood out
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Revenue Growth and Operating Turnaround
Revenue increased 32% to $4.261B in fiscal 2026 from $3.224B in fiscal 2025 and $2.323B in fiscal 2024. Operating income improved to $417.0M from an $87.3M loss in 2025 and a $615.8M loss in 2024, implying an approximately 9.8% operating margin in 2026.
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Network Scale and Engagement Accelerated
GMV reached $50.2B, up 37% year over year and 88% over two years. Active consumers increased 21% to 27.8 million, while transactions per active consumer rose 20% to 7.0, supporting the company’s network-effect and repeat-use strategy.
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Data and Network Effects Strengthen Moat
Affirm’s stated moat is its proprietary underwriting and technology platform, trained on data from approximately 553 million loans and using more than 1,000 data points for credit assessment. The company had approximately 571,000 active merchants as of June 30, 2026, and 96% of transactions were driven by repeat consumers.
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Product Roadmap Broadens Use Cases
Product mix continued shifting toward broader, higher-frequency use cases: Affirm Card represented approximately 15% of transactions versus 10% in 2025, while Pay-in-X and 0% APR installment loans increased to 16% and 14% of GMV, respectively, from 14% and 13%. The roadmap includes AdaptAI, Affirm Edge, expanded in-store usage and international expansion, including a limited Australia launch in fiscal 2027.
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Strong Liquidity and Technology Investment
Cash generation improved, with operating cash flow rising to $1.231B from $793.9M in 2025 and $450.1M in 2024. The company invested $238.3M in property, equipment and software, including internally developed technology, and ended the year with $2.603B of cash, cash equivalents and available-for-sale securities.
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Profitability Inflection Includes Tax Benefit
The $1.930B fiscal 2026 net income included a significant non-cash tax benefit of approximately $1.5B from releasing a substantial portion of the domestic deferred-tax valuation allowance. Excluding that tax benefit, the operating turnaround remains positive, but reported EPS of $5.53 is not representative of recurring earnings power.
What to watch
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Credit Losses and Delinquencies Rising
Credit costs increased alongside portfolio growth: provision for credit losses rose 29% to $796.7M, net charge-offs increased to $611.6M from $500.8M in 2025, and the allowance for credit losses reached $563.3M versus $396.9M. Loans modified for borrowers experiencing financial difficulty increased to 0.25% of receivables from 0.17%, indicating continued consumer-credit pressure.
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Affirm Bank Approval Uncertain
Affirm submitted applications on January 23, 2026 to establish Affirm Bank, but the filing states that the application has attracted opposition from industry and advocacy groups and may face extended review, heightened capital requirements or activity restrictions. Failure to obtain approval, or costly compliance requirements if approved, could delay the expected benefits of lower funding costs and reduced reliance on partner banks.
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BNPL Regulation and Bank Concentration
State regulatory risk became more material as a coalition of seven state attorneys general initiated coordinated BNPL inquiries in December 2025, while New York and Illinois enacted BNPL-specific legislation. Separately, substantially all U.S. partner-bank-originated loans depend on Celtic Bank and Lead Bank, and the filing says both banks originate substantially all such loans; disruption to either relationship could require new licenses or curtail originations.
Management's outlook
The 10-K does not provide quantitative annual guidance; forward outlook is deferred to the earnings press release and conference call.
Earlier filings 4
10-Q · February 5, 2026
Affirm reported net revenue of $1,123,019,000 for the quarter ended December 31, 2025, up $256,638,000 (+29.6%) versus the prior-year quarter, and generated operating income of $117,626,000 and net income of…
10-Q · November 6, 2025
Affirm reported third-quarter net revenue of $933,337,000 and generated net income of $80,694,000 (diluted EPS $0.23), a sharp reversal from a net loss of $(100,222,000) (diluted $(0.31)) in the prior-year quarter.…
10-Q · May 9, 2025
Affirm reported quarterly revenue of $783.135 million, up $206.978 million (+35.9%) versus $576.157 million a year ago, and generated net income of $2.804 million (diluted EPS $0.01) versus a net loss of $(133.936)…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.