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Investing.com -- Shares of Affirm Holdings Inc (NASDAQ:AFRM) rose 3% in after-hours trading Thursday after the company delivered stronger-than-expected fourth-quarter results and achieved operating profitability, signaling sustained momentum across key growth drivers. Investors responded positively to gains in user engagement, merchant expansion, and disciplined cost management, even as forward revenue guidance remained largely in line with expectations.
For the fiscal fourth quarter ended June 30, Affirm reported adjusted earnings per share of $0.20, surpassing analysts’ forecast of $0.12. Revenue increased 33% year over year to $876.4 million, beating the $834.4 million consensus estimate, supported by higher loan sales, interest income, and network fees.
Gross merchandise volume grew 43% to $10.4 billion, led by a 93% increase in 0% APR installment loan GMV and 132% growth in Affirm Card volumes. Revenue less transaction costs rose 37% to $425 million, or 4.1% of GMV—comfortably above the company’s long-term target range.
“This consistent execution led Affirm to achieve operating income profitability in FQ4’25 – right on the schedule we committed to a year ago,” management stated in the company’s shareholder letter. “Profitability is of course a point in the journey, not the destination," management added, emphasizing a focus on long-term growth, product innovation, and operational discipline.
The company reported active consumers rose 24% to 23 million, with transaction frequency per user also climbing 20% year over year. Affirm Card adoption accelerated, driving a 187% increase in in-store spend and boosting the card attach rate to 10%.
Looking ahead, Affirm guided fiscal Q1 2026 revenue between $855 million and $885 million, compared with consensus expectations of $858.4 million. GMV is projected to remain strong at $10.10 billion to $10.40 billion, reflecting ongoing traction across integrated merchant and direct-to-consumer channels.
The company also highlighted expanding generative AI use cases—including underwriting, consumer interaction, and productivity enhancements, with early pilots driving a 5% boost in GMV among adopting partners. Funding capacity grew to $26.1 billion, underscoring Affirm’s ability to support elevated loan volumes amid rising demand.
With escalating adoption of its 0% APR products, a resurgent card business, and a commitment to scalable growth, Affirm appears to be gaining investor confidence. Positive operating leverage and improving capital flexibility position the company well heading into FY26 despite macro uncertainty in consumer credit.