Source: davit kirakosyan
Affirm Holdings Inc. Exceeds Analysts’ Expectations
Affirm Holdings Inc. (NASDAQ: AFRM), a popular buy-now-pay-later company, saw its shares surge by over 9% during intra-day trading on Friday. This leap came on the heels of the company’s impressive first-quarter fiscal 2026 results, which outperformed analysts’ predictions. The company also upgraded its full-year guidance, adding to the positive market sentiment.
Strong Financial Performance
Affirm posted adjusted earnings per share of $0.23, a figure that dwarfed the consensus forecast of $0.11 by a whopping 109%. This indicates that the company is not only growing but doing so at a rate that significantly exceeds market expectations.
The company’s revenue also saw a notable increase, rising 34% year over year to reach $933 million. This figure comfortably surpassed the anticipated $881.84 million. Such a substantial increase in revenue shows that the company’s business model is successfully attracting and retaining customers.
Surge in Gross Merchandise Volume
The Gross Merchandise Volume (GMV), a key metric that measures the total value of merchandise sold over a given period, surged by 42% to hit $10.8 billion. The substantial increase was primarily driven by a strong momentum in the direct-to-consumer business.
Card Segment Posts Exceptional Results
Affirm’s Card segment continued to deliver outstanding results, with card GMV witnessing a 135% surge year over year. The number of active cardholders grew by 500,000 from the previous quarter, reaching a total of 2.8 million.
Furthermore, the total number of active consumers rose 24% to 24.1 million. This marked the seventh straight quarter of accelerating user growth, demonstrating the increasing popularity of Affirm’s offerings among consumers.
Forecast for Fiscal Second Quarter
Despite the strong performance, Affirm’s forecast for the fiscal second quarter was slightly more conservative. The company projected revenue to fall between $1.03 billion and $1.06 billion. While the midpoint of this range is slightly below the consensus estimate of $1.06 billion, investors remained focused on the company’s robust quarterly performance.
Raised Full-Year Guidance
Affirm raised its full-year GMV forecast from above $46 billion to more than $47.5 billion. Maintaining its revenue-to-GMV ratio at around 8.4%, this implies a revenue above $3.99 billion. The company also reiterated its Revenue Less Transaction Costs (RLTC) guidance of $1.9 billion, which represents about 4% of revenue.
In addition to this, Affirm increased its adjusted operating margin target to above 27.1% from the previous target of more than 26.1%. This suggests that the company is not only expecting to increase its revenue but also improve its profitability, a positive sign for investors.
Conclusion
Affirm’s impressive quarterly results and upgraded full-year guidance underline the company’s robust growth trajectory. With strong performance in its card segment and an increase in the total number of active consumers, Affirm is establishing itself as a key player in the buy-now-pay-later space. The company’s focus on maintaining its profitability, as demonstrated by the raised adjusted operating margin target, further adds to its appeal for investors. Despite the slightly conservative forecast for the fiscal second quarter, Affirm’s market position appears to be strengthening.