Affirm Stock Jumps 12% on Consumer Strength, CEO Says

Affirm (AFRM) shares experienced a 12% surge on Friday, propelled by the buy now, pay later (BNPL) giant’s fiscal fourth-quarter performance that handily surpassed Wall Street’s expectations. This impressive report comes against a backdrop of robust year-to-date growth, with Affirm already up 31% versus the Nasdaq’s 12% gain.

CEO Max Levchin, in an appearance on CNBC’s “Money Movers,” declared that the company is “firing on all pistons.” This confident assessment stems from earnings of 20 cents per share, nearly double the analyst consensus, and revenue of $876 million, a resounding 33% increase year-over-year.

The bottom line also told a compelling story: net income for the quarter landed at $69.2 million, a stark contrast to the $45.1 million loss recorded during the same period last year.

“You can see that consumers are transacting more and more frequently,” Levchin told CNBC, attributing the growth to a virtuous cycle. “The consumer growth itself, the merchant growth, all these things compound to just drive usage more and more.”

Adding to the positive sentiment, Affirm issued robust guidance for fiscal 2026 and offered an optimistic forecast for the current quarter, signaling sustained momentum.

During Thursday’s investor call, Levchin highlighted strength in consumer behavior and notable momentum in the U.S. market, reinforcing the company’s confidence in its trajectory.

“We feel quite excellent about our ability to get paid back on time,” he confidently stated.

Heading into the earnings release, a key concern lingered: would the loss of Walmart to rival Klarna negatively impact results? The answer resoundingly was no. Affirm’s crucial volume metric surged by an impressive 44% compared to the prior year, exceeding expectations by nearly a billion dollars— a feat fueled by its partnerships with Shopify and Amazon.

Affirm, which went public in 2021, faces intensifying competition in the dynamic e-commerce landscape, with Klarna poised for a potential IPO. However, Affirm has been actively fortifying its relationships with major retailers, including a significant deal with Apple last year, in a bid to maintain its competitive edge.

Affirm’s business model is inextricably linked to consumer spending, as its online lending services are particularly popular among retailers in categories such as electronics, apparel, and travel. This close correlation underscores the importance of macroeconomic factors for Affirm’s continued success.

After an initial contraction in the first quarter due to an import surge ahead of tariff implementations, the U.S. economy rebounded strongly, expanding by 3.3% in the second quarter. This resilient performance highlights the strength of consumers and businesses even amidst tariff-related volatility.

Affirm is strategically pursuing market share at the point-of-sale through the Affirm Card. It is a pivotal initiative aimed at expanding the platform’s usability and is quickly paying dividends:

Card GMV surged 132% to $1.2 billion, demonstrating strong user adoption.
The active user base nearly doubled to 2.3 million cardholders.
In-store spending witnessed a remarkable surge of 187%.
Zero-percent APR loans experienced a tripling in volume, now accounting for roughly 14% of total card volume.

This compelling value proposition is key component to Affirm’s continued success in building market share.

Levchin addressed industry concerns concerning the sustainability of 0% APR loans by noting that 50% of new users into the Affirm environment through the “compelling” rate. Moreover

“These 0% deals are still underwritten every time,” he told CNBC on Friday. “If we think the person cannot afford to borrow money, we will very sadly and compassionately tell them, ‘Hey, this isn’t for you. It’s not going to work out.’ “

Artificial intelligence emerged as another bright spot for the company. Levchin highlighted that early deployments of Affirm’s new AdaptAI system have already yielded an impressive average 5% increase in merchant volume effectively making improvements to customers that drive additional business outcomes for merchants — underlining Affirm’s longstanding commitment to leveraging machine learning for credit scoring and checkout optimization.