Affirm shares fall 2.9% despite Q1 profit beat

Affirm (AFRM) reported fiscal first-quarter net income of $164.2 million, or 47 cents per diluted share.

Shares fell 2.9% at 9:36 a.m. ET, from a $69.66 close.

Revenue grew 35% from a year earlier.

Here's how the company did:

• Diluted EPS: 47 cents vs. 23 cents a year earlier, against 39 cents expected
• Revenue: $1.26 billion vs. $933.3 million a year earlier, against $1.23 billion expected
• Net income: $164.2 million vs. $80.7 million
• Gross merchandise volume: $14.4 billion, up 34% from $10.8 billion
• Operating income: $187.1 million vs. $63.7 million

It was the twelfth consecutive quarter of gross merchandise volume growth above 30%.

Revenue less transaction costs, which subtracts loan losses, funding costs and processing and servicing expenses, rose 36% to $617.1 million.

Interest income rose 45%, to $658.1 million.

Fiscal 2027 outlook

For the fiscal second quarter, the company expects gross merchandise volume of $17.9 billion to $18.2 billion and revenue of $1.44 billion to $1.47 billion.

For fiscal 2027, the company expects gross merchandise volume of more than $65.25 billion and an operating margin of more than 14.75%.

Adjusted operating margin is expected to be more than 30.75%. Revenue as a percentage of gross merchandise volume is expected to be similar to fiscal 2026, at about 8.49%.

Card and credit

Affirm Card gross merchandise volume grew 117% to $3.3 billion, and active cardholders reached 6.0 million.

Provision for credit losses rose to $259.4 million from $162.8 million a year earlier.

Thirty-day-plus delinquencies, excluding Peloton and Pay in X loans, were 2.9%, up 9 basis points from a year earlier.

Funding and costs

Adjusted operating income was $379.7 million, up from $263.9 million.

Funding capacity rose to $31.7 billion from $26.6 billion a year earlier. Net cash was $1.9 billion at quarter end.