Affirm Reports $1.262 Billion in Revenue, Up 35% in Fiscal First Quarter
Key Facts
Affirm reported results on November 5 for its fiscal first quarter ended September 30, 2026, posting total revenue of $1.262 billion, up 35% year over year. Operating income was $187 million, up 194% from the same period, according to the shareholder letter published by the company. Net income also reached $164.2 million, compared with $80.7 million in the three months ended September 30, 2025. The results show revenue and operating profitability growth during the quarter. At the same time, this expansion was accompanied by an increase in credit loss indicators, making the quality of lending growth one of the report’s key areas of focus.
The provision for credit losses rose to 6.3% of loans held for investment as of September 30, compared with 5.9% on June 30, 2026, and 5.9% on September 30, 2025. The company said in its filing that the provision for credit losses increased by $96.6 million, or 59%, year over year during the three months ended September 30. Delinquencies of 30 days or more, excluding Peloton and Pay in X loans, also rose 35 basis points sequentially to 2.9%. The rate was 9 basis points above its level a year earlier. These figures put credit indicators in the context of business growth, with the quarterly and annual comparisons differing.
Some of the business expansion came through the company’s direct-to-consumer products, whose gross merchandise volume rose 55% to $5.1 billion. Gross merchandise volume transacted using the Affirm Card grew 117% to $3.3 billion, while active cardholders numbered 6 million. The company said in its filing that gross merchandise volume growth was driven by its direct-to-consumer products, including the Affirm Card. Active consumers rose 19% to 28.7 million, while active merchants increased 48% to about 621,000 as of September 30. These indicators reflect a widening user and merchant base alongside growth in the card and direct-to-consumer products.
Operating income improved to $187 million, compared with $64 million in fiscal first-quarter 2026, while the operating margin rose to about 14.8% from 6.8%. On the funding side, funding capacity stood at $31.7 billion at quarter-end, compared with $30.0 billion at the end of fiscal fourth-quarter 2026. Affirm said this capacity could support more than $70 billion in annual gross merchandise volume. The average annual funding cost was 6.0%, down about 69 basis points from a year earlier, but up 27 basis points sequentially during the quarter. The company attributed the quarterly increase to higher benchmark interest rates and said fixed-cost funding accounted for more than 70% of its off-balance-sheet funding outstanding.
Details of the business mix showed that gross merchandise volume from interest-bearing installment loans was $10.3 billion, compared with $7.7 billion in the year-earlier period, an increase of 34%. These loans accounted for 71% of gross merchandise volume, compared with 72% a year earlier. Meanwhile, the share of the five largest merchants and partners fell to 40% of gross merchandise volume from 44% in the comparison period. Amazon alone accounted for 20% of volume, compared with 21%. These figures provide a picture of the loan mix and partner concentration alongside growth in total transactions.
For the fiscal second quarter, the company forecast gross merchandise volume of between $17.9 billion and $18.2 billion, and revenue of between $1.435 billion and $1.465 billion. For fiscal 2027, it expects gross merchandise volume to exceed $65.25 billion. The company did not describe the annual forecast as an increase to previous guidance. After the results announcement, Barclays cut its price target to $100 from $105, and Goldman Sachs lowered its target to $103 from $115. TD Cowen also cut its target to $110 from $124, and Morgan Stanley to $79 from $82, according to Investing.com. AFRM shares closed at $69.66 on November 5, according to EL7 data.