Affirm Q4 Earnings Beat Estimates on Increasing Transaction Volumes

Core Insights - Affirm Holdings, Inc. (AFRM) reported a fourth-quarter fiscal 2025 earnings per share (EPS) of 20 cents, exceeding the Zacks Consensus Estimate of 11 cents and improving from a loss of 14 cents per share in the prior-year quarter [1][9] - Total revenues increased by 33% year over year to $876.4 million, surpassing management's expectations of $815-$845 million and beating the consensus mark by 4.4% [1][2] Financial Performance - Gross Merchandise Value (GMV) reached $10.4 billion, a 43% year-over-year increase, exceeding management's expected range of $9.4-$9.7 billion and the Zacks Consensus Estimate of $9.5 billion [3][9] - Total transactions surged by 51.8% year over year to 37.5 million, driven by repeat customer transactions, surpassing the consensus mark of 30.3 million [4][9] - Interest income rose by 24% year over year to $419.1 million, beating the Zacks Consensus Estimate of $416.1 million [4] - Merchant network revenues improved by 32.3% year over year to $239.5 million, exceeding the consensus mark of $235 million [5] Operating Expenses and Income - Total operating expenses increased by 11.7% year over year to $818.4 million, influenced by higher costs related to loan purchase commitments, funding, processing, and technology [6] - Adjusted operating income totaled $237 million, a 58.2% year-over-year increase, with an adjusted operating margin improving by 430 basis points to 27%, surpassing management's estimated range of 23-25% [7] Financial Position - As of June 30, 2025, Affirm had cash and cash equivalents of $1.4 billion, a 33.7% increase from the fiscal 2024-end figure [8] - Total assets rose by 17.2% to $11.2 billion, while funding debt decreased by 11.7% to $1.6 billion [8] Future Guidance - For the first quarter of fiscal 2026, Affirm forecasts GMV in the range of $10.1-$10.4 billion and revenues between $855-$885 million [11] - For fiscal year 2026, management anticipates GMV to exceed $46 billion, with revenues expected to be 8.4% of GMV and an adjusted operating margin of more than 26.1% [12]