Affirm Posts Fourth-Quarter Profit as GMV Surges 43% to $10.4 Billion
Affirm Holdings delivered a solid end to its fiscal year, swinging to a quarterly profit on stronger-than-expected results as gross merchandise volume climbed 43% year over year to $10.4 billion in the fourth quarter. The buy now, pay later provider reported earnings of $0.20 per share on revenue of $876.42 million, topping analysts’ consensus of about $0.11 per share and $837.44 million in revenue. This followed an operating income of $58.06 million, reversing a $73.46 million operating loss in the year-ago period.
In a letter to shareholders, Affirm CEO Max Levchin attributed the results to ongoing execution across several fronts. He highlighted an expanded merchant network, higher transaction frequency driven by direct-to-consumer products, and a continued focus on strong credit performance. “This consistent execution led Affirm to achieve operating income profitability in FQ4’25 – right on the schedule we committed to a year ago,” Levchin said.
The company noted that GMV gains were propelled by strength with its largest merchant partners, the popularity of 0% APR monthly installment loans, and growth in the direct-to-consumer segment, including the Affirm Card.
Looking ahead, Affirm released guidance for the first quarter of fiscal 2026, projecting revenue in the range of $855 million to $885 million and GMV between $10.10 billion and $10.40 billion. For the full year, the company expects GMV to exceed $46 billion, signaling continued growth in its BNPL ecosystem and merchant network.
Affirm’s shares rose earlier this year and continued to move higher in after-hours trading on the results, reflecting investor enthusiasm for the path to profitability and sustained GMV expansion.
What this means for Affirm
– The brisk GMV growth coupled with a move into profitability underscores improved unit economics and risk management.
– A broader merchant base and enhanced direct-to-consumer features appear to be delivering material top-line momentum.
– The guidance suggests confidence in continued GMV strength into fiscal 2026, though investors will be watching for sustained profitability and how flexible the model remains amid competitive BNPL pressures.
Summary
Affirm posted a strong fourth quarter with GMV up 43% to $10.4 billion and a return to profitability, supported by expanded merchant partnerships, 0% APR installment loans, and direct-to-consumer initiatives. The company provided optimistic guidance for fiscal 2026, reinforcing a positive trajectory for its BNPL platform.
Positive note
The results signal improving profitability while continuing to scale volume, which could bode well for long-term margins if Affirm can maintain its momentum in both merchant partnerships and consumer adoption.
Additional context
Affirm’s ability to translate GMV growth into operating income in the latest quarter may reflect a broader shift toward more disciplined cost management and credit performance. If this pace persists, the company could see sustained investor interest as it expands its ecosystem and refines its offerings for both merchants and consumers.