Affirm Reaches Profitability as BNPL Scale Turns Into Sustainable Growth

Affirm Holdings Inc delivered exceptional fourth-quarter fiscal 2025 results that sent shares soaring over 11% to $89.35 as of market close on August 29, 2025. The buy now, pay later (BNPL) provider achieved a significant milestone by reaching GAAP operating profitability while posting robust growth across all key metrics. With gross merchandise volume surging 43% year-over-year and the company’s direct-to-consumer Affirm Card business exploding with 132% growth, Affirm is capitalizing on the expanding BNPL market amid resilient consumer spending patterns in the current economic environment.

Record-Breaking Financial Performance Drives Market Confidence

Affirm’s fourth-quarter results showcased the company’s ability to scale profitably, with gross merchandise volume reaching $10.4 billion, representing a 43% year-over-year increase. Revenue climbed 33% to $876 million, significantly beating analyst expectations of $837.4 million. The company achieved a critical milestone by reporting GAAP operating income of $58 million, marking a dramatic turnaround from the $73.5 million operating loss in the same period last year.

The strong financial performance reflects robust consumer demand for flexible payment solutions across multiple retail categories. Active consumers grew 24% to 23 million, while transactions per active consumer increased 19% to 5.8, demonstrating both customer acquisition success and deepening engagement. With 95% of transactions coming from repeat borrowers, Affirm has built a loyal customer base that continues to drive sustainable growth momentum.

Three Key Growth Catalysts Fueling Stock Momentum

The first major factor driving Affirm’s rally is the explosive growth of its direct-to-consumer Affirm Card business. Card GMV surged 132% to $1.2 billion in Q4 2025, with active cardholders growing 97% to 2.3 million users. The card has achieved a 10% attach rate among Affirm’s customer base, providing the company with reduced dependence on merchant partnerships while capturing higher-margin direct consumer relationships.

Second, Affirm’s successful diversification across retail categories has reduced concentration risk while expanding its addressable market. The company now operates across nine major industry categories, with general merchandise representing 36% of GMV and all categories showing strong year-over-year growth. This diversification strategy, combined with 155 merchants generating over $1,000 in trailing twelve-month GMV, provides multiple avenues for continued expansion.

Third, the achievement of sustainable profitability marks a crucial inflection point for the company. With adjusted operating margin forecast to exceed 26.1% for fiscal 2026 and GAAP operating margin above 6.0%, Affirm has demonstrated its ability to monetize growth effectively. The company’s strong funding capacity of $26.1 billion, with only 58% currently utilized, positions it well for continued expansion while maintaining healthy credit performance metrics.

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