Affirm Reports Strong Fourth Quarter Results
Affirm’s shares jumped 20% on Friday following the release of its fourth quarter results, which exceeded Wall Street’s expectations. So far this year, the stock has increased by 31%, significantly outpacing the Nasdaq’s 12% growth.
The company’s earnings were considerably better than anticipated, coming in at 20 cents per share, almost double what analysts had forecasted. Revenue reached $876 million, marking a 33% increase from the previous year.
Net income for the quarter stood at $69.2 million, a notable improvement compared to a loss of $45.1 million during the same quarter last year.
Affirm also raised its financial projections for fiscal year 2026 and provided optimistic forecasts for the current quarter.
During an investor call on Thursday, CEO Max Levchin emphasized the resilience of U.S. consumers and the company’s growing momentum. “We believe we have a strong capability to manage repayments effectively,” he noted.
Despite initial concerns about potential losses, Affirm reported that its important volume metrics saw a 44% increase year-over-year, outpacing expectations by nearly $1 billion. This growth came even as competition from rivals such as Klarna intensified.
The competition is palpable, especially with e-commerce giants like Shopify and Amazon also gaining ground in the market. Affirm, launched in 2021, faces challenges as these competitors prepare for their own public offerings.
Given its dependence on consumer spending, Affirm has seen increased popularity for online loans across various sectors, including electronics and travel. The U.S. economy grew by 3.3% in the second quarter, rebounding from a contraction earlier in the year that was attributed to an influx of imports ahead of tariffs.
The company is now focused on expanding its presence at the point of sale through its AFFIRM cards. This initiative is showing promise, as card usage has surged by 132%, totaling $1.2 billion in gross merchandise volume. The number of active cardholders has nearly reached 2.3 million, while in-store spending surged by 187%. Moreover, zero-interest loans have tripled, making up about 14% of the card volume.
Levchin pointed to advances in artificial intelligence as a significant advantage for Affirm. The early rollout of the Adapai system is already yielding promising results, providing valuable insights to sellers.
