In a compelling display of financial resilience and strategic foresight, Affirm, the prominent 'buy now, pay later' (BNPL) platform, has announced a dramatic shift to profitability during its fiscal fourth quarter. This impressive turnaround, fueled by a remarkable surge in gross merchandise volume, has not only exceeded analyst predictions but has also ignited a wave of investor confidence, sending the company's stock soaring.
Affirm Reports Impressive Fiscal Fourth Quarter Results and Outlook
In a significant announcement, Affirm (AFRM), a pivotal player in the 'buy now, pay later' financial sphere, revealed its fiscal fourth-quarter earnings, showcasing a triumphant return to profitability. During this period, the company posted earnings per share (EPS) of $0.20, marking a notable improvement from a $0.14 loss per share in the corresponding quarter of the previous year. This positive shift handily surpassed the $0.11 per share anticipated by analysts, underscoring Affirm's robust operational improvements.
Furthermore, Affirm's revenue reached an impressive $876.4 million, outperforming the $837.4 million consensus forecast. The company's operating income for the fiscal fourth quarter stood at a healthy $58.1 million, a stark contrast to the operating loss of $73.5 million recorded in the same period last year. This substantial financial recovery reflects the efficacy of Affirm's strategic initiatives and its expanding market footprint.
A key driver of this exceptional performance was the burgeoning gross merchandise volume (GMV), which surged by a remarkable 43% to $10.40 billion. This figure significantly exceeded analysts' estimates of $9.64 billion, propelled by strong partnerships with major merchants, the popularity of 0% APR monthly installment loans, and the booming direct-to-consumer business, notably including the Affirm Card. Max Levchin, Affirm's visionary CEO, highlighted in a communiqué to shareholders the company's successful expansion of its merchant network, increased transaction frequency through direct-to-consumer offerings, and diligent focus on maintaining stellar credit performance. Levchin proudly stated that this consistent execution led to the achievement of operating income profitability in FQ4'25, exactly as committed a year prior.
Looking ahead, Affirm has provided an optimistic outlook for the first quarter of fiscal year 2026, projecting revenue to be in the range of $855 million to $885 million. While the midpoint of this forecast is slightly below some analyst estimates, the company anticipates GMV to range between $10.10 billion and $10.40 billion. For the entire fiscal year 2026, Affirm expects GMV to exceed $46 billion, signaling continued growth, although it is marginally below the $47.79 billion consensus estimates.
The market's reaction to these positive developments was swift and decisive. In early trading on Friday, Affirm's shares experienced a significant boost, climbing by 17%. This surge has pushed the company's year-to-date gains beyond 50%, underscoring strong investor confidence in its future trajectory and its pivotal role in reshaping consumer finance.
The remarkable journey of Affirm from quarterly losses to a significant profit underscores the burgeoning potential of the 'buy now, pay later' model. This success story serves as an inspiring example of how innovative financial solutions, coupled with strategic execution and a deep understanding of consumer needs, can navigate and thrive in a dynamic market landscape. For both investors and consumers, Affirm's trajectory highlights the growing acceptance and viability of flexible payment options, hinting at a future where such services are not just alternatives but integral components of everyday commerce.