Affirm delivered one of the strongest fintech earnings reports of the week.
Fiscal fourth-quarter revenue reached approximately $1.17 billion, up 33% year over year.
Gross merchandise volume, or GMV, climbed 36% to about $14.1 billion.
Adjusted operating income reached roughly $353 million, representing an adjusted operating margin of approximately 30%.
Management then issued fiscal 2027 guidance calling for more than $64 billion in GMV.
The combination of growth and improving profitability changes one of the main questions investors have historically asked about Affirm.
The question used to be:
Can Affirm become profitable?
The new question is:
How long can Affirm continue growing above 30% while remaining profitable?
What Did Affirm Report?
Revenue rose 33% to approximately $1.17 billion.
GMV rose 36% to about $14.1 billion.
Revenue less transaction costs reached roughly $589 million, up around 39%.
Active consumers increased to approximately 27.8 million, up about 21%.
Affirm has now produced more than 30% GMV growth for multiple consecutive quarters.
Why Did Affirm Stock Rise?
There were three main reasons.
First, the Q4 growth numbers exceeded market expectations.
Second, profitability improved.
Third, management’s fiscal 2027 outlook suggested the momentum could continue.
For fiscal Q1 2027, Affirm expects revenue of approximately $1.19 billion to $1.22 billion and GMV of roughly $13.7 billion to $14.0 billion.
For the full fiscal year, GMV is expected to exceed $64 billion.
Management also expects GAAP operating margin above 14.5% and adjusted operating margin above 30.5% for fiscal 2027.
Was Affirm’s $4.62 EPS as Strong as It Looks?
Not entirely.
Affirm reported a very large GAAP earnings-per-share figure, but the number benefited substantially from a one-time deferred tax valuation allowance release.
That tax benefit does not represent recurring operating profit.
Investors should therefore avoid using the headline EPS figure as a direct measure of ongoing earnings power.
The cleaner metrics are revenue growth, GMV growth, revenue less transaction costs, operating income, operating margin and credit performance.
On those measures, the quarter was still strong.
Is Buy Now, Pay Later Still Growing?
Yes.
Affirm’s results suggest BNPL continues moving into mainstream commerce.
The company also continues expanding merchant distribution.
One important channel is Shopify.
Affirm is extending Shop Pay Installments into additional markets, including Australia.
Partnerships like Shopify allow Affirm to access large groups of merchants without acquiring every merchant individually.
What Is the Biggest Risk for Affirm?
Credit quality.
BNPL is still a form of consumer credit.
Rapid GMV growth only creates value if borrowers repay at acceptable rates.
A weakening labor market or increasing financial stress could increase delinquencies and losses.
That is why investors should watch credit metrics alongside revenue growth.
What Should AFRM Investors Watch Next?
The first metric is GMV.
Can the company actually exceed $64 billion in fiscal 2027?
The second is credit quality.
The third is revenue less transaction costs.
The fourth is international expansion.
Affirm’s latest earnings do not eliminate the risks associated with consumer lending.
But they do mark an important transition.
The company is no longer asking investors to believe that scale will eventually produce profitability.
It is showing meaningful profitability while GMV is still growing more than 30%.
That is why AFRM moved higher after earnings.