Affirm Q2 Earnings Beat Estimates on Higher Transactions

Core Insights - Affirm Holdings, Inc. (AFRM) reported second-quarter fiscal 2026 earnings of 37 cents per share, exceeding the Zacks Consensus Estimate by 32.1% and reflecting a year-over-year increase of 60.9% [1] - Net revenues reached $1.1 billion, surpassing management's expectations of $1.03-$1.06 billion, marking a 30% year-over-year growth and exceeding the consensus estimate by 6.3% [1] Financial Performance - The strong quarterly results were driven by increased network revenues and servicing income, along with higher transaction volumes and repeat customer engagement [2] - Total transactions rose 44% year over year to 54.9 million, exceeding the consensus mark of 44.8 million [6] - Gross Merchandise Value (GMV) was $13.8 billion, a 36% increase year over year, surpassing management's guidance and the Zacks Consensus Estimate [5][8] - Servicing income increased by 48.8% year over year to $42.7 million, beating the consensus estimate of $41.6 million [6] - Interest income rose 20.6% year over year to $493.6 million, outpacing the Zacks Consensus Estimate of $484.6 million [6] - Merchant network revenues improved 34.1% year over year to $328.4 million, exceeding the consensus mark of $313.8 million [7] Operating Metrics - Adjusted operating income totaled $337 million, up 41.7% year over year, with an adjusted operating margin expanding by 300 basis points to 30% [10] - Total operating expenses increased 15.5% year over year to $1 billion, driven by higher costs related to loan commitments, funding, processing, and technology [9] Financial Position - As of Dec. 31, 2025, Affirm had cash and cash equivalents of $1.5 billion, a 12.8% increase from the end of fiscal 2025 [11] - Total assets rose 16.2% to $13 billion, while funding debt increased to $3 billion from $1.6 billion at the end of fiscal 2025 [11] Future Guidance - For Q3 fiscal 2026, Affirm forecasts GMV between $11-$11.25 billion and revenues in the range of $0.97-$1 billion [13] - For Q4 fiscal 2026, GMV is expected to be between $12.75-$13.05 billion, with revenues anticipated in the range of $1.06-$1.09 billion [14] - For the full fiscal 2026, management anticipates GMV between $48.3-$48.85 billion and revenues in the range of $4.086-$4.146 billion [15]