BNPL Fintech Affirm Holdings Inc. (NASDAQ: AFRM) unveiled its fiscal second-quarter 2026 earnings on February 5, 2026, showcasing impressive operational momentum despite broader market uncertainties. The San Francisco-based fintech reported revenue of $1.12 billion, surpassing analyst projections of $1.06 billion by approximately 5.7%.This marked a substantial year-over-year increase, driven by heightened consumer adoption of flexible payment options during a period of persistent inflation and cautious spen ...

Affirm Stock Slips After Earnings. Analysts Say That's Unwarranted. - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Affirm Stock Slips After Earnings. Analysts Say That's Unwarranted.By [Mackenzie Tatananni]ShareResize---ReprintsIn this art ...

Affirm stock price continued its recent downward trend after the company published its financial results on Thursday. AFRM moved to a low of $56, down by 40% from its highest level in 2025. ...

Core Viewpoint - Affirm and Virgin Media O2 have announced a partnership to provide transparent and flexible payment options for hardware financing to O2 customers, enhancing their purchasing experience [1] Group 1: Partnership Details - The partnership will allow both new and existing O2 customers to select payment options that best fit their needs when purchasing devices [1] - Affirm will specifically offer financing options for mobile phones and other hardware [1]

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Core Insights - Affirm's fiscal second quarter demonstrates the integration of buy now, pay later (BNPL) into everyday commerce, moving beyond occasional large purchases [1] Financial Performance - Gross merchandise volume (GMV) increased by 36% year over year to $13.8 billion, while revenue rose by 30% to $1.1 billion [3] - Active consumers grew by 23% to 25.8 million, with transactions per active consumer increasing by 20% to 6.4, and active merchants expanding by 42% to approximately 478,000 [3] Business Growth Drivers - Growth was fueled by point-of-sale integrations, wallet partnerships, and the direct-to-consumer business, particularly the Affirm Card, which saw direct-to-consumer GMV rise by 52% to $4.3 billion [4] - The Affirm Card's volume surged by 159% to $2.2 billion, with active cardholders more than doubling to 3.7 million, leading to card attach rates of about 14% [4] Zero-Interest Financing - GMV associated with 0% APR products grew by 60%, with over 60% of new customers opting for a 0% option for their first transaction [5] - Nearly 39% of all purchases during the quarter were interest-free, with around 60,000 merchants offering 0% APR deals, nearly quadrupling from the previous year [5] Consumer Credit Health - Thirty-plus-day delinquencies on monthly installment loans were at 2.7%, showing a year-over-year increase but a sequential decrease, while recent cohorts tracked toward approximately 3.5% net charge-offs [9] - Pay-in-4 losses remained below 1% of GMV, and the allowance for credit losses was consistent at 5.4% of loans held for investment [9] Technological Advancements - Affirm's AdaptAI and BoostAI systems are increasingly shaping financing offers and merchant performance, with BoostAI now operational across numerous enterprise merchants and small businesses [11] - BoostAI allows merchants to allocate additional funds for Affirm-specific promotions, optimizing conversion rates through automated A/B testing [12] Strategic Initiatives - Affirm expanded partnerships with major retailers and embedded pay-over-time options into QuickBooks Payments, while also testing rent-related use cases [12] - The company applied for an industrial bank charter to gain regulatory clarity, which is viewed as a long-term investment rather than an immediate growth driver [13] Future Projections - Affirm projected GMV for the current fiscal year to be between $48.3 billion and $48.85 billion, with revenue expected between $4.09 billion and $4.15 billion, indicating a deceleration from recent growth rates [14] - Operating margins are anticipated to improve in the second half of the year, despite a 6% drop in shares during after-hours trading [14] Overall Strategy - The quarter reflects Affirm's deeper penetration into everyday commerce, expanding distribution through the Affirm Card and partnerships, while enhancing automated decision-making processes [15]

分组1 - Affirm Holdings reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, and up from $0.23 per share a year ago, representing an earnings surprise of +32.14% [1] - The company posted revenues of $1.12 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 6.25%, and compared to year-ago revenues of $866.38 million [2] - Affirm Holdings has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has underperformed the market, losing about 16.5% since the beginning of the year, while the S&P 500 has gained 0.5% [3] - The current consensus EPS estimate for the coming quarter is $0.16 on revenues of $970.45 million, and for the current fiscal year, it is $1.01 on revenues of $4.07 billion [7] - The Zacks Industry Rank for Internet - Software is currently in the top 38% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - The company reported excellent results for Q2 of FY 2026, with significant growth in key metrics, although specific figures were not disclosed in the opening remarks [6][10]. - The company expects RLTC take rates to hover slightly above 4% for Q3 and Q4, indicating a stable margin outlook despite some year-over-year softening in revenue take rates [21][24]. Business Line Data and Key Metrics Changes - The Affirm Card has shown remarkable growth, with GMV up nearly 160% year-over-year and active cardholders increasing by 121% [61]. - The "other" category, which includes various smaller merchants, has grown to represent 15% of total GMV, indicating a diversification in the business [30][87]. Market Data and Key Metrics Changes - The company is experiencing healthy consumer trends, with consumers showing a willingness to borrow and repay, contributing to stable growth in the current economic environment [18][19]. - The ABS market remains constructive, with recent deals priced with spreads under 100 basis points, reflecting strong market confidence in the company's credit outcomes [49]. Company Strategy and Development Direction - The company is focused on expanding its merchant base and diversifying its offerings, with plans to explore new verticals such as home improvement and medical services [110]. - The application for a bank charter is aimed at achieving regulatory certainty and unlocking new product opportunities in the future, although the timeline for approval is uncertain [38][72]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current consumer health and the ability to manage credit effectively, with no significant deviations from previous quarters [18][97]. - The company anticipates a slowdown in GMV growth to 30% in Q3 and 25% in Q4, primarily due to the transition with a large retail partner [66]. Other Important Information - The company is actively monitoring regulatory developments, particularly concerning potential caps on BNPL rates, but has not seen any immediate threats [70][72]. - The partnership with Fiserv aims to integrate buy now, pay later capabilities into existing banking products, indicating a strategic move to broaden market reach [115]. Q&A Session Summary Question: Dynamics of growth with top merchants - Management noted that the top five merchants for Q2 FY 2026 are different from the previous year, and the business is diversifying well despite some concentration [10][14]. Question: Overview of consumer trends and economic health - Management indicated that consumers are healthy and willing to repay loans, with no significant changes observed in the current quarter [18][19]. Question: RLTC margin trajectory - Management expects RLTC take rates to remain slightly above 4% in the upcoming quarters, with benefits from reduced funding costs [21][24]. Question: Impact of competition on merchant pricing - Management stated that aggressive promotional strategies from competitors have not affected Affirm's pricing or market position [28]. Question: Growth in the "other" category - Management explained that the "other" category includes a diverse range of small merchants, which are increasingly recognizing the value of offering Affirm [30][33]. Question: Bank charter application rationale - Management clarified that the primary motivation for applying for a bank charter is regulatory certainty, with potential long-term benefits for product offerings [38][72]. Question: ABS deal execution - Management highlighted strong execution in the ABS market, with favorable pricing conditions reflecting confidence in the company's credit management [49]. Question: Growth opportunities in new verticals - Management discussed the cautious approach to entering new verticals, emphasizing consumer demand as the driving factor for expansion [110].

Financial Data and Key Metrics Changes - The company reported excellent results for Q2 of FY 2026, with significant growth in key metrics, although specific figures were not disclosed in the opening remarks [6][10]. - The company expects RLTC take rates to hover slightly above 4% for Q3 and Q4, maintaining a similar trajectory to Q2 [21][23]. Business Line Data and Key Metrics Changes - The Affirm Card saw GMV year-over-year growth of just under 160%, with active cardholders increasing by 121% and 0% deals on the card rising by 190% year-over-year [61]. - The "other" category, which includes various small merchants, has grown to represent 15% of total GMV and is experiencing triple-digit growth [30][33]. Market Data and Key Metrics Changes - The company is expanding its international presence, particularly in the U.K., with new partnerships and deals that are expected to scale up [62][63]. - The market for ABS deals remains constructive, with recent deals priced with spreads under 100 basis points, indicating strong confidence from investors [49]. Company Strategy and Development Direction - The company is focused on building a universal acceptance mark similar to Visa, aiming to be present in every retail environment, both online and offline [111]. - The decision to explore new categories such as home improvement and medical is driven by consumer demand and the desire to build a broader network [110]. Management's Comments on Operating Environment and Future Outlook - Management noted that the current consumer environment appears healthy, with consumers willing and able to repay loans [18]. - There are no significant deviations from previous quarters, and the company is not seeing disturbances in credit quality [97]. Other Important Information - The company has applied for a bank charter to gain regulatory certainty and potentially unlock new products and services in the future [38][39]. - The Boost AI product is still in early stages, with limited merchant adoption, but it is expected to enhance marketing effectiveness for merchants [48]. Q&A Session Summary Question: Dynamics of growth with top merchants - Management indicated that the top five merchants for Q2 FY 2026 are different from the previous year, and the business is diversifying well despite some concentration [10][14]. Question: Overview of consumer trends and economic health - Management stated that the current consumer is healthy and willing to repay loans, with no significant changes observed in the economic environment [17][18]. Question: RLTC margin trajectory - Management expects RLTC margins to remain around 4% for the remainder of the year, with benefits from lower transaction costs [21][24]. Question: Impact of competition on merchant pricing - Management noted that aggressive promotional strategies from competitors have not significantly affected Affirm's pricing or market position [27][29]. Question: Growth in the "other" category - Management explained that the "other" category includes a diverse range of small merchants, and growth in this area is driven by increased awareness of Affirm's offerings [30][33]. Question: Bank charter application - Management clarified that the bank charter application is primarily for regulatory certainty and not directly linked to short-term funding costs [38][110]. Question: ABS deal execution - Management highlighted strong execution in ABS deals, with favorable market conditions leading to lower financing costs [49]. Question: Fiserv partnership - Management discussed the partnership with Fiserv, aiming to provide Buy Now, Pay Later capabilities through existing debit card infrastructure [116].

Financial Data and Key Metrics Changes - The company reported excellent results for Q2 of fiscal 2026, with significant growth in key metrics [4][10] - The RLTC take rates are expected to remain slightly above 4% for Q3 and Q4, with transaction costs benefiting from lower funding costs [21][22] Business Line Data and Key Metrics Changes - The Affirm Card saw GMV growth of just under 160% year-over-year, with active cardholders increasing by 121% and 0% deals on the card rising by 190% [60] - The "other" category, which includes various small merchants, has grown to 15% of total GMV and is experiencing triple-digit growth [29][32] Market Data and Key Metrics Changes - The company is seeing healthy consumer trends, with consumers willing and able to repay loans, indicating a stable economic environment [15] - The ABS market remains constructive, with recent deals priced with spreads under 100 basis points, reflecting strong market confidence [48] Company Strategy and Development Direction - The company is focused on expanding its network and aims to be universally accepted across various retail sectors, similar to major credit card brands [109] - The decision to explore new verticals such as home improvement and medical is driven by consumer demand and the goal of building a comprehensive service network [108] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current consumer health and the ability to manage credit effectively, with no significant disturbances noted in the market [94] - The company is tracking regulatory developments closely but has not identified any immediate concerns regarding potential caps on BNPL rates [70][71] Other Important Information - The company has applied for a bank charter to enhance regulatory certainty and potentially unlock new products and services in the future [38][39] - The Boost AI product is still in early stages, but it is expected to enhance merchant engagement through automated A/B testing [46] Q&A Session Summary Question: Can you discuss the dynamics of growth with the top five merchants? - Management noted that the top five merchants for Q2 of FY 2026 are different from the previous year, and the business is diversifying well despite some concentration [11] Question: What are the current consumer and credit trends? - Management indicated that consumers are healthy and willing to repay loans, with no significant deviations from previous quarters [15] Question: Can you elaborate on the RLTC margin trajectory? - Management expects RLTC take rates to hover around 4% for the remainder of the year, with transaction costs benefiting from favorable funding conditions [21][22] Question: How is competition affecting merchant pricing? - Management stated that aggressive promotional strategies from competitors have not impacted Affirm's pricing or market position [26][28] Question: What is the growth outlook for the Affirm Card and international expansion? - The Affirm Card is a significant growth driver, with plans for further expansion in the UK and other international markets [61][62] Question: What is the current state of the ABS market? - Management reported strong execution in the ABS market, with favorable pricing conditions and high confidence from investors [48] Question: How is the regulatory environment evolving? - Management is actively monitoring regulatory discussions but has not seen immediate threats to their business model [70][71] Question: What are the implications of entering new verticals? - Management clarified that new verticals are based on consumer demand and are part of a strategy to build a comprehensive service network [108]