01—Abstract
Summary
Summary of the 10-Q filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Affirm Holdings, Inc. reported strong top-line growth in its fiscal second quarter of 2026, with total revenue increasing by 30% year-over-year to $1.12 billiona.
This growth was primarily driven by a significant 36% increase in Gross Merchandise Volume (GMV) to $13.8 billionb, indicating robust consumer adoption and merchant participation on the platform. The company also achieved a significant operational milestone by turning an operating loss into an operating income of $117.6 million, a substantial improvement from a $4.3 million loss in the prior year's quarter. This improved profitability is a testament to effective cost management and scaling efficiencies, with total operating expenses growing at a slower pace than revenue.
The balance sheet reflects substantial growth in loans held for investment, which increased to $8.3 billionc net of allowance, demonstrating the company's expanding lending portfolio. However, the provision for credit losses also increased by 40% year-over-year, reflecting a proactive approach to managing potential credit risks associated with portfolio growth. Despite increased credit provisions and higher operational costs in areas like technology and processing, the company's ability to translate revenue growth into profitability is a key positive takeaway for investors, signaling operational leverage and a move towards sustainable financial health.
02—Key points
Key Highlights
- Total revenue surged by 30% year-over-year to $1.12 billion, driven by strong GMV growth.
- Gross Merchandise Volume (GMV) increased by 36% year-over-year to $13.8 billion, indicating significant platform expansion.
- The company achieved operating income of $117.6 million, a substantial improvement from an operating loss of $4.3 million in the prior year's quarter.
- Loans held for investment grew by 22% to $8.3 billion (net of allowance), showcasing portfolio expansion.
- Provision for credit losses increased by 40% to $214.2 million, reflecting proactive risk management amidst portfolio growth.
- Active consumers grew by 23% to 25.8 million, and transactions per active consumer increased by 20% to 6.4, demonstrating enhanced customer engagement.
- Sales and marketing expenses decreased by 27%, largely due to a reduction in warrant expense related to commercial agreements.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed February 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.12B$866.38M | +29.6% |
| Operating Expenses | $1.01B$870.70M | +15.5% |
| Operating Income | $117.63M-$4.32M | +2821.6% |
| Interest Expense | $111.72M$107.76M | +3.7% |
| Net Income | $129.59M$80.36M | +61.3% |
| EPS (Basic) | $0.39$0.25 | +56.0% |
| EPS (Diluted) | $0.37$0.23 | +60.9% |
| Shares Outstanding (Basic) | 334.27M322.28M | +3.7% |
| Shares Outstanding (Diluted) | 349.37M345.20M | +1.2% |
05—Questions
Frequently Asked Questions
What is Affirm's revenue growth and what is driving it?
Affirm Holdings, Inc. reported a 30% year-over-year increase in total revenue for the three months ended December 31, 2025, reaching $1.12 billion. This growth was primarily fueled by a substantial 36% increase in Gross Merchandise Volume (GMV) to $13.8 billion. Merchant network revenue and interest income also contributed positively to the top line.
How did Affirm's profitability evolve in this quarter?
The company demonstrated significant progress in profitability, achieving an operating income of $117.6 million for the quarter, a stark contrast to the operating loss of $4.3 million reported in the same period last year. This turnaround was driven by revenue growth outpacing operating expense growth and strategic reductions in sales and marketing expenses.
What is the trend in Affirm's loan portfolio and credit loss provisioning?
Loans held for investment, net, increased to $8.3 billion as of December 31, 2025, indicating continued expansion of the company's lending activities. Concurrently, the provision for credit losses rose by 40% year-over-year to $214.2 million. This increase suggests Affirm is proactively setting aside more capital to cover potential loan defaults as its portfolio grows, a prudent measure in managing credit risk.
What are the key drivers behind the increase in active consumers and transaction frequency?
Affirm's active consumer base grew by 23% to 25.8 million, and transactions per active consumer increased by 20% to 6.4. This enhanced engagement is attributed to platform growth, strong merchant and partner relationships, expansion of direct-to-consumer products like the Affirm Card, and a high retention rate of existing customers.
06—Continue