Affirm’s fourth quarter results were shaped by continued diversification across its merchant base and growth in transaction volumes, with management emphasizing both new merchant additions and higher transactions per user as key contributors. CEO Max Levchin noted, “the business is growing quite well, and we’re quite happy with the diversification that we see in the GMV.” While revenue surpassed Wall Street’s expectations, the company’s non-GAAP profit came in below analyst consensus. Management downplayed concerns about merchant concentration, attributing any shifts to changes in the composition of its largest partners and ongoing expansion into new categories.
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Affirm (AFRM) Q4 CY2025 Highlights:
- Revenue: $1.12 billion vs analyst estimates of $1.06 billion (29.6% year-on-year growth, 6.3% beat)
- Adjusted EPS: $0.72 vs analyst expectations of $0.84 (13.9% miss)
- Adjusted EBITDA: $341.7 million vs analyst estimates of $313.1 million (30.4% margin, 9.2% beat)
- Operating Margin: 10.5%, up from -0.5% in the same quarter last year
- Market Capitalization: $18.83 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Affirm’s Q4 Earnings Call
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Andrew Jeffrey (William Blair) asked whether Affirm's business is truly diversifying beyond its largest merchants. CFO Rob O’Hare noted that merchant concentration has shifted due to partner transitions, but overall diversification is improving.
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Will Nance (Goldman Sachs) questioned the sustainability of Affirm's margin trajectory amid favorable funding conditions. O’Hare explained that take rates and transaction costs should remain similar to recent quarters due to continued benefits in funding markets.
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Jason Kupferberg (Wells Fargo) asked if heightened competition and aggressive promotions were impacting Affirm’s merchant pricing. CEO Max Levchin stated that Affirm’s transparent, no-interest offers remain a competitive advantage and saw no impact from competitor promotions.
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Nate Svensson (Deutsche Bank) inquired about the rationale for Affirm’s bank charter application. Levchin emphasized regulatory certainty as the main driver, with new product opportunities a potential long-term benefit.
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Matt Code (Truist Securities) asked about Affirm’s entry into new verticals like B2B services and rent. Levchin clarified that these are early-stage tests, with the Intuit partnership targeting consumer services billing rather than traditional B2B lending.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will focus on (1) adoption and expansion of the Affirm Card and international partnerships, (2) merchant uptake and measurable impact of new AI-powered tools like Boost AI, and (3) Affirm’s progress on regulatory milestones, including updates on its bank charter application. We will also monitor funding market dynamics and the scaling of new verticals to assess Affirm’s ability to sustain growth and manage risk.
Affirm currently trades at $56.54, down from $59.42 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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