Affirm Q2 Earnings Beat Expectations with Strong Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy AFRM?
Source: seekingalpha
- Earnings Performance: Affirm reported a Q2 GAAP EPS of $0.37, beating expectations by $0.10, indicating a sustained improvement in profitability that boosts investor confidence.
- Significant Revenue Growth: The company achieved total revenue of $1.12 billion, a 29.3% year-over-year increase, surpassing expectations by $60 million, demonstrating its growing competitiveness in the market and enhancing future growth potential.
- Decline in GMV Revenue Ratio: Despite the revenue growth, the revenue as a percentage of GMV decreased to 8.14%, down 40 basis points year-over-year, reflecting potential impacts on the profitability model due to changing market conditions.
- Stock Price Fluctuation: Despite strong earnings, Affirm's shares fell by 1.3%, possibly due to market caution regarding future growth, prompting investors to monitor the company's strategic adjustments closely.
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Analyst Views on AFRM
Wall Street analysts forecast AFRM stock price to rise
18 Analyst Rating
12 Buy
6 Hold
0 Sell
Moderate Buy
Current: 49.760
Low
83.00
Averages
95.50
High
114.00
Current: 49.760
Low
83.00
Averages
95.50
High
114.00
About AFRM
Affirm Holdings, Inc. provides consumers with an alternative to traditional payment options. The Company is engaged in building a payment network. Its platform comprises three core elements: point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. Its Affirm App and Website provide tailored offers from merchants based on consumers' preferences. Consumers can apply at affirm.com or via the Affirm App and, upon approval, receive a single-use virtual card to use online or in-store. Its Affirm Card allows consumers to link a bank account to pay in full, or apply to pay overtime through the Affirm App. It offers users an in-app post-purchase feature that allows them to instantly apply to convert any eligible debit transaction into an installment loan. Through the Affirm app and in partnership with Cross River Bank, it offers a savings account, with no minimum deposit requirements or fees.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Growth Outlook Adjustment: While the company anticipates 32%-33% volume growth for fiscal 2026, surpassing the consensus estimate of 29%, analysts expressed disappointment over the fourth quarter's GMV performance, suggesting risks of slowing growth.
- Analyst Rating Changes: JPMorgan analyst Reginald Smith maintained an Overweight rating on Affirm but reduced the price target from $94 to $79, reflecting a cautious outlook on future growth.
- Market Reaction: Affirm's shares fell 1.26% to $59.42 in premarket trading on Friday, indicating investor concerns regarding the company's slowing growth trajectory.
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- Customer and Merchant Growth: Active customers increased by 23% to 25.8 million, while active merchants rose by 42% to 478,000, showcasing Affirm's competitive edge and appeal in the market, potentially laying the groundwork for future revenue growth.
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- Revenue Growth: The company achieved quarterly revenue of $1.12 billion, exceeding Wall Street's expectation of $1.06 billion, reflecting strong market demand that supports future business expansion.
- Strategic Partnership: Affirm's collaboration with Virgin Media O2 introduces transparent and flexible hardware financing options for O2 customers, enhancing O2's competitiveness in the SIM-free market, which is expected to attract more customers and increase sales.
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- Jobs Report Delayed: The January jobs report, originally scheduled for release today, has been postponed to next Wednesday due to the partial government shutdown earlier this week, which may affect short-term market expectations regarding economic health and increase investor uncertainty.
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- No Hidden Fees: Affirm's financing options cover mobile phones, headphones, and gaming consoles, ensuring customers are not charged late or hidden fees when repaying their loans, which enhances payment transparency and builds trust with consumers.
- Market Expansion Potential: This partnership allows Virgin Media O2 to expand its offerings in the SIM-free market, adding to its existing portfolio of Pay Monthly Handset Bundles and SIM Only options, thereby increasing its competitive edge in the market.
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- Strong Performance: Affirm Holdings reported fiscal Q2 revenues and volumes exceeding expectations, prompting management to raise its fiscal 2026 guidance, indicating resilience in the market.
- Growth Outlook Adjustment: While the company anticipates 32%-33% volume growth for fiscal 2026, surpassing the consensus estimate of 29%, analysts expressed disappointment over the fourth quarter's GMV performance, suggesting risks of slowing growth.
- Analyst Rating Changes: JPMorgan analyst Reginald Smith maintained an Overweight rating on Affirm but reduced the price target from $94 to $79, reflecting a cautious outlook on future growth.
- Market Reaction: Affirm's shares fell 1.26% to $59.42 in premarket trading on Friday, indicating investor concerns regarding the company's slowing growth trajectory.
See More
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- Earnings Beat: Affirm reported earnings per share of 37 cents for Q2, surpassing the consensus estimate of 30 cents, indicating improved profitability that may attract more investor interest.
- Significant Revenue Growth: The company posted revenue of $1.12 billion, exceeding the expected $1.05 billion, demonstrating strong business expansion and market demand, which is likely to drive stock price appreciation.
- Customer and Merchant Growth: Active customers increased by 23% to 25.8 million, while active merchants rose by 42% to 478,000, showcasing Affirm's competitive edge and appeal in the market, potentially laying the groundwork for future revenue growth.
- Guidance Upgrade: Affirm raised its fiscal year 2026 revenue guidance to between $4.08 billion and $4.14 billion, reflecting confidence in future performance, which may enhance market sentiment towards its stock.
See More
Affirm Shares Decline Post-Earnings, Analysts Consider It Unjustified.
- Stock Performance: Affirm Holdings' stock declined on Friday despite reporting strong fiscal second-quarter earnings.
- Analyst Opinions: Some analysts believe the market reaction to the earnings report is unjustified.
See More
Affirm Partners with Virgin Media O2 for Flexible Financing Solutions
- Earnings Beat: Affirm reported Q2 2026 earnings of $0.37 per share, surpassing the consensus estimate of $0.30, indicating improved profitability that may boost investor confidence.
- Revenue Growth: The company achieved quarterly revenue of $1.12 billion, exceeding Wall Street's expectation of $1.06 billion, reflecting strong market demand that supports future business expansion.
- Strategic Partnership: Affirm's collaboration with Virgin Media O2 introduces transparent and flexible hardware financing options for O2 customers, enhancing O2's competitiveness in the SIM-free market, which is expected to attract more customers and increase sales.
- Positive Outlook: Affirm anticipates Q3 revenue between $970 million and $1 billion, and Q4 between $1.060 billion and $1.090 billion, while raising its FY26 revenue guidance to $4.09 billion to $4.15 billion, demonstrating confidence in future growth.
See More
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- Futures Rise: U.S. stock futures advanced on Friday after Thursday's sharp sell-off, indicating a potential recovery in investor sentiment and possibly leading to increased capital inflows into the market.
- Trump's Drug Price Website: President Trump announced the launch of a new website aimed at lowering drug prices, which will provide consumers access to more affordable prescription medications, potentially impacting pricing strategies in the pharmaceutical industry and raising public awareness about drug accessibility.
- Jobs Report Delayed: The January jobs report, originally scheduled for release today, has been postponed to next Wednesday due to the partial government shutdown earlier this week, which may affect short-term market expectations regarding economic health and increase investor uncertainty.
- Stable Treasury Yields: The 10-year Treasury bond yield stood at 4.20%, while the two-year bond yield was at 3.48%, reflecting market expectations of unchanged interest rates; the CME Group's FedWatch tool indicates an 81.3% likelihood of this, which could influence investors' asset allocation strategies.
See More
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- Partnership Announcement: Affirm has partnered with Virgin Media O2, one of the UK's leading mobile providers, to offer transparent and flexible hardware financing options, enhancing customer experience for both new and existing users when purchasing devices.
- No Hidden Fees: Affirm's financing options cover mobile phones, headphones, and gaming consoles, ensuring customers are not charged late or hidden fees when repaying their loans, which enhances payment transparency and builds trust with consumers.
- Market Expansion Potential: This partnership allows Virgin Media O2 to expand its offerings in the SIM-free market, adding to its existing portfolio of Pay Monthly Handset Bundles and SIM Only options, thereby increasing its competitive edge in the market.
- Future Development Plans: Flexible payment plans are expected to be available to Virgin Media O2 customers later this summer, pending regulatory approval, which will help improve payment convenience for customers and enhance the company's market influence.
See More
