By Mackenzie Tatananni

Affirm Holdings stock declined Friday even after the fintech posted solid fiscal second-quarter earnings. The company's chief operating officer said he wasn't bothered by the noise.

"There's a reason to get excited about what we're up to, but a lot needs to be digested," Michael Linford said in an interview with Barron's.

At a glance, quarterly earnings were strong. Revenue of $1.12 billion beat analysts' calls for $1.06 billion, according to FactSet. Gross merchandise volume rose 36% to $13.8 billion, a "record" for the company, Affirm said. The number also was higher than Wall Street forecasts for $13.3 billion.

GMV, as it is better known, is a key performance indicator representing the total dollar value of all transactions on Affirm's platform, net of refunds. It's a metric closely watched by investors every quarter.

The company boosted its GMV outlook for the fiscal year, guiding for a range of $48.3 billion to $48.85 billion, up from $47.5 billion previously. Analysts were looking for the low end of the range.

The company also provided guidance for the fiscal third quarter. Affirm forecast GMV between $11 billion and $11.25 billion, compared with analysts' expectations of $11.05 billion.

Although some Wall Street firms picked up on an implied deceleration in gross merchandise volume growth for the second half of the year, Evercore ISI analysts called it "misconstrued," arguing that the fiscal second quarter appeared to be Affirm's first without Walmart volumes.

The partnership with Walmart has been gradually winding down for months. Linford earlier told Barron's that the company expected to be rolled off and replaced by Klarna in the second fiscal quarter.

Excluding Walmart volumes from the past three quarters, Evercore actually expects to see an acceleration in GMV for the full fiscal year.

"I think people might be reading a little bit too much into the number," the chief operating officer said. "I think that's probably a hammer looking for a nail. The reality is, this business is just doing incredibly well and making a ton of progress."

He noted that Affirm approaches guidance "very, very cautiously," as evidenced by past quarters. "We start off with with a number that we feel really good about and then re-evaluate it when we get closer to the quarter, and that's been our track record," Linford said.

One standout was Affirm's branded debit card, which continued to gain traction in the quarter. Affirm Card gross margin volume more than doubled to $2.2 billion as the number of cardholders steadily ticked higher, rising to 3.7 million from 2.8 million at the end of last quarter.

"With the vast majority of Affirm volume online, we believe the card will help it commercialize in-store shopping," posited Susquehanna analysts. They noted that the the Affirm Card "also serves as an important vehicle to push 0% APR loans," another product that is seeing increased popularity with Affirm's customers.

Other firms were similarly upbeat. J.P. Morgan continues to view Affirm as a "core holding," despite the recent compression in fintech multiples.

"We are comforted by Affirm's history of beating and raising, and continue to see plenty of white space for Affirm in the form of continued consumer adoption of BNPL and expansion into new verticals and international markets," wrote analysts.

Ask Linford, and he'll say analysts have reason to be optimistic. He highlighted a slew of initiatives the company unveiled over the past year, including partnerships with Fiserv and Fidelity National Information Services. "If you sum up all those opportunities, that's like more market opportunity than what Affirm has in its business today, " he said.

The executive indicated the company aims to position itself for longer-term growth. One step: its application for a bank charter. Notably, Affirm is moving to become an industrial loan company rather than a commercial bank.

"We really don't want to become a bank holding company," Linford said when asked to explain the decision. "The rate of change in our business is so high right now that the limitations it would put in our technical development efforts make that a pretty unattractive proposition for us."

At its core, Affirm is a software company, Linford continued. "That's the one thing I plead with people to understand," he said. "We're a software company who monetizes it through financial products."

Although other buy-now, pay-later providers like PayPal Holdings and Klarna Group make for easy comparisons, their consumer networks seldom overlap.

In Linford's view, the real competitors are the credit cards. Wall Street seems to agree: Susquehanna analysts in January made the case for Affirm to take market share from revolving credit over time.

"The fundamental trend here is consumers are done with revolving credit accounts," Linford said. "The way in which you can deliver credit outside of revolving credit is becoming this catch-all buy now, pay later, but that's fundamentally different than what we do in our monthly installment program. To lump all that stuff together is a bit of a shortcut."

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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February 06, 2026 11:46 ET (16:46 GMT)

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