Affirm Holdings, Inc. (NASDAQ:AFRM) shares are trading higher premarket on Friday after the company reported strong fourth-quarter earnings results.

Adjusted EPS of 48 cents beat the analyst estimate of 34 cents. Sales of $1.165 billion exceeded the $1.106 billion consensus estimate.

Eyes Merchant Expansion

Gross Merchandise Volume (GMV) was $14.1 billion, up 36% year-over-year. Total transactions increased to 53 million, growing 41% and outpacing overall GMV growth.

Transactions per active consumer continue to rise as Affirm expands its merchant base, consumer touchpoints and Affirm Card, while automation is making merchant launches faster and more efficient.

The company currently reaches only 80 of the top 250 e-commerce sites and about 10% of e-commerce merchants. During the call, management described the market as having an “enormous amount of greenfield” potential for further merchant expansion.

Affirm offers point-of-sale credit, the Affirm Card, Affirm Money accounts and business-purchase solutions, with additional products in development for fiscal 2029 and beyond.

Services volume nearly doubled year over year, supported by two large platform wins, although adoption remains early and requires further customization.

No Hidden Fee Model

Affirm Card’s attach rate reached 19% of active users, with cardholders spending roughly 2x the amount of typical customers. Management said the card remains highly profitable and plans to maintain point-of-sale financing options while adding card-specific features.

The company is improving the in-store experience and plans to launch new concepts offering greater financing value, including 0% interest and no fees, despite requiring slightly more effort than traditional cards. Affirm said early UK performance has been strong among consumers and merchants, who have responded positively to its no-hidden-fee model.

Affirm said its direct-to-consumer products now generate more than 80% of loans with interest, while Pay in X volume grew 41%. The company sees significant potential in longer-duration 0% financing, though it requires highly precise underwriting, which management views as a competitive advantage.

Outlook

For fiscal 2027, the company expects revenue of more than $5.44 billion versus the $5.287 billion estimate, with GMV expected to exceed $64 billion and the revenue-to-GMV ratio projected at 8.5%.

Revenue less transaction costs is expected at around 4.16% in the fiscal year, with funding costs and the funding mix broadly similar to fiscal 2026, including potential non-consolidated ABS deals that can boost quarterly gain-on-sale revenue.

For the first quarter, Affirm expects sales of $1.19 billion-$1.22 billion, compared with the $1.162 billion analyst estimate.

AFRM Price Action: Affirm Holdings shares were up 7.38% at $83.21 at the time of publication on Friday, according to Benzinga Pro data.

Photo via Shutterstock