Affirm Holdings (AFRM) saw its shares climb 8.6% in after-hours trading on Thursday, as the buy-now-pay-later provider reported record quarterly gross merchandise volume (GMV) and offered a bullish outlook for fiscal 2027. The stock, which closed regular trading at $77.49, jumped to $84.13 by 5:30 PM EDT, adding roughly $2.2 billion to the company's market value.
Record GMV and Revenue Growth
For the fiscal fourth quarter, Affirm's GMV surged 36% year-over-year to $14.1 billion, while total revenue advanced 33% to $1.166 billion. The company's revenue less transaction expenses—a key profitability metric—grew 38.6% to $589.1 million, indicating improved transaction economics. These figures underscore the company's ability to scale its lending platform while maintaining cost discipline.
Card Business Drives Expansion
The Affirm Card continued to be a primary growth engine, with card GMV jumping 124% to $2.842 billion. Active card users more than doubled to 5.2 million, achieving a 19% attach rate. The number of active consumers overall increased 21% to 27.8 million, and the average transactions per active consumer rose 20% to 7.0, reflecting deeper customer engagement.
Credit Quality and Operating Leverage
Credit costs remain a watchpoint. The allowance for credit losses climbed 42.5% to $223.2 million, outpacing revenue growth. However, total transaction costs grew at a slower 27.8% pace, helping drive operating leverage. GAAP operating income more than doubled to $147.3 million, while adjusted operating margin improved to 30% from 27% a year earlier. Quarterly net income reached $1.617 billion, though this included a $1.448 billion tax benefit, making the statutory profit less comparable year-on-year.
Guidance and Analyst Sentiment
Looking ahead, Affirm projects fiscal first-quarter GMV between $13.7 billion and $14.0 billion, with revenue expected in the range of $1.19 billion to $1.22 billion. For the full fiscal 2027, management forecasts GMV exceeding $64 billion and an adjusted operating margin above 30.5%. Wall Street was largely optimistic ahead of the release, with 17 of 22 analysts rating the stock a Buy and five a Hold. The consensus price target of $93.28 sits about 10.9% above the after-hours price.
Market Context and Risks
The after-hours surge reflects growing investor confidence in Affirm's execution, particularly as its card product pushes the company beyond traditional online checkout. However, risks remain, including exposure to funding availability, merchant concentration, and the precision of its credit assessments. Rapid expansion of provisions could compress transaction margins if consumer defaults increase. Extended-hours trading also carries lower liquidity, which can amplify price swings.
As Affirm continues to scale, the focus will be on sustaining this momentum through a full credit cycle. The latest results suggest the company is making strides in balancing growth with profitability, but the coming quarters will test its ability to maintain these improvements amid a dynamic economic environment.
