Affirm Stock Rallies After Strong Q4 Earnings: Details

Affirm Holdings (AFRM) significantly outperformed expectations in its fourth quarter, reporting EPS of $0.20 and revenue of $876.41 million, both well above Street estimates. Crucially, the company issued a robust fiscal 2026 revenue forecast of $3.86 billion, substantially exceeding the $3.18 billion consensus, which propelled AFRM shares up over 9% in after-hours trading.

Analysis

Affirm Holdings (AFRM) delivered a significant fourth-quarter earnings beat, reporting earnings per share of $0.20, which is double the consensus Street estimate of $0.10. The company also surpassed top-line expectations with quarterly revenue of $876.41 million against a forecast of $837.02 million. This performance is underpinned by strong execution on core strategic initiatives during fiscal year 2025, evidenced by a 24% increase in active merchants to 377,000 and a 20% rise in transaction frequency. Critically, the company maintained strong unit economics, citing excellent credit performance with a 4.0% Revenue Less Transaction Costs (RLTC). While the first-quarter revenue guidance of $855 million to $885 million is largely in line with estimates, the primary catalyst for the stock's 9.08% after-hours surge is the exceptionally strong fiscal 2026 revenue forecast. Management guided for $3.86 billion in fiscal 2026 revenue, substantially outpacing the consensus estimate of $3.18 billion and signaling profound confidence in its long-term growth trajectory.

Key Decisions for Investors

• The substantial beat on fiscal 2026 revenue guidance to $3.86 billion, well above the $3.18 billion consensus, provides a strong long-term growth catalyst that could warrant a re-evaluation of the stock's valuation multiples.
• Investors should monitor key operational metrics in subsequent quarters, specifically the continued growth in active merchants and transaction frequency, as well as credit performance indicators like the RLTC, to ensure the company's strategic execution remains on track.
• Given the stock's sharp 9.08% after-hours rally, investors should weigh the powerful long-term guidance against the more modest, in-line revenue forecast for the upcoming first quarter when considering entry or exit points.