Consumer financing firm Affirm Holdings reported fiscal fourth-quarter earnings and revenue that topped Wall Street targets. Affirm stock surged on Friday amid strong 2026 guidance on a key growth metric amid worries over Walmart.
The San Francisco-based company reported July-quarter earnings after the market close on Thursday. A new product, the Affirm debit card, boosted Q2 financial results.
"The quarter itself was really solid across the board with no material areas of weakness, and the 2026 guidance for GMV growth of over 25% easily digested the anticipated removal of Walmart volume which should roll-off this quarter," said Evercore ISI analyst Adam Frisch in a report. "But what really stood out to us was a reminder about how many growth opportunities (from new geographies, new products, new users, etc.) have yet to be realized. We continue to view BNPL as a compelling blend of a well-established global payment alternative with significant medium- and long-term growth potential still ahead."
Affirm is one of the biggest providers of buy now, pay later installment payment services. With BNPL options, consumers pay off purchases in monthly installments, either with low interest or none at all. Also, Affirm's new debit card has been gaining traction.
Buy Now, Pay Later Leader
The company reports results using generally accepted accounting principles, or GAAP. In the Affirm earnings report, the company reported a profit of 20 cents versus a 14-cent loss a year earlier.
Analysts polled by FactSet had predicted 12-cent profit.
Affirm said revenue climbed 33% to $876 million vs. estimates of $837 million. The company said gross merchandise volume rose 43% to $10.4 billion vs. estimates at $9.61 billion.
Also, revenue less transaction costs (RLTC) came in at $425 million versus estimates of $394 million. Total active customers on the company's platform increased to 23 million from 21.9 million the previous quarter.
Meanwhile, the company forecast fiscal 2026 gross merchandise volume "above $46 billion" versus estimates of 27% growth to $45.53 billion.
On the stock market today, Affirm stock surged over 15% to 92.37 in early trading.
Affirm Stock: Debit Card Growth
In fiscal Q4, revenue from the Affirm debit card came in at $67.1 million, handily beating estimates of $58 million.
Further, AFRM stock had advanced 31% in 2025 before the release of fiscal Q4 earnings.
Affirm has garnered about one-third of its revenue from interest income paid by consumers. But Affirm's product mix has been shifting to more BNPL plans with no interest.
Instead, Affirm garners revenue from fees paid by merchants. Zero percent interest BNPL plans generally have lower margins than interest-bearing products. But zero interest plans attract higher credit quality consumers who usually buy bigger items at stores.
Affirm competes with Klarna, Sezzle, Block's Afterpay and PayPal Holdings. Further, Klarna is expected to launch its initial public offering in September.
While Walmart has shifted most of its BNPL payments to Klarna, Affirm has many other partners, including Amazon.com and Shopify. Analysts say a new partnership with Apple could be material in 2026.
Affirm Stock: Technical Ratings
Meanwhile, AFRM stock holds an IBD Composite Rating of 86, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Affirm stock has an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
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