Affirm Holdings 2025 Q4 Earnings Remarkable Turnaround as Net Income Surges 253%

Affirm Holdings (AFRM) reported its fiscal 2025 Q4 earnings on August 28, 2025, showcasing a notable resurgence in profitability and a 33.0% revenue increase. The company delivered net income of $69.24 million, reversing a $45.14 million loss from the prior year. With strong guidance and a clear focus on credit discipline, Affirm is positioned for continued momentum in its key markets.

Revenue

Affirm Holdings reported total revenue of $876.42 million for 2025 Q4, representing a significant 33.0% year-over-year increase from $659.18 million in 2024 Q4. The growth was driven by strong consumer demand in the U.S. and Canadian markets, as well as continued expansion in gross merchandise volume (GMV) through the company’s 0% APR programs.

Earnings/Net Income

Affirm Holdings returned to profitability in Q4 2025, posting an EPS of $0.21, compared to a loss of $0.15 per share in Q4 2024. The company’s net income surged to $69.24 million, a 253.4% improvement from a net loss of $-45.14 million in the same period last year. This marked a dramatic turnaround after six consecutive years of quarterly losses, underscoring the company's improved financial discipline and strategic execution. This strong earnings performance indicates a positive trajectory for the company's profitability.

Price Action

The stock price of Affirm Holdings has gained positive momentum, rising 2.22% on the latest trading day, 7.38% during the most recent full trading week, and surging 17.70% month-to-date.

Post-Earnings Price Action Review

The strategy of buying AFRM shares following its revenue decline in Q4 2025 and holding for 30 days has historically delivered strong returns. Over the past three years, this approach achieved a 70.02% return, outperforming the benchmark return of 59.74% by 10.28%. The strategy's Sharpe ratio of 0.23 and a maximum drawdown of 0% suggest low risk and strong potential for investors seeking balanced growth with downside protection.

CEO Commentary

Max Roth Levchin, CEO of Affirm Holdings, highlighted the company's record-setting Q4 2025 performance, emphasizing robust growth in the U.S. and Canadian consumer markets, strong credit performance, and increasing GMV. He noted that 0% APR programs are driving new user acquisition while maintaining profitability, with users gradually converting to interest-bearing loans. Levchin expressed confidence in the company's ability to adapt to macroeconomic shifts by prioritizing credit underwriting and disciplined risk management. He also outlined strategic investments in the Affirm Card, offline commerce integration, and AI-driven personalization (e.g., AdaptAI) to enhance transaction frequency and GMV. Levchin concluded with optimism about Affirm’s long-term potential, particularly in international markets and agentic commerce, while reaffirming the company’s commitment to credit discipline and customer-centric innovation.

Guidance

Affirm expects to maintain disciplined growth with a focus on profitable loan mix and funding cost management. The company anticipates remaining within a 3% to 4% RLTC (revenue less transaction cost) range. Levchin mentioned the wind-down of an enterprise merchant partner by the end of fiscal Q1 2026 but did not provide specific quantitative targets for revenue or GMV. No explicit EPS or revenue targets were given, though the tone suggested continued progress in key metrics such as GMV and card adoption.

Additional News

Within the three weeks following Affirm’s Q4 earnings announcement, several key developments emerged in the broader market and corporate landscape. Notably, the Chinese government announced a new national standard for platform service management in the context of e-commerce and live-streaming, signaling regulatory shifts that could impact fintech and consumer-facing tech companies. Meanwhile, in a significant leadership development, TSMC’s CTO announced a strategic realignment of R&D priorities to enhance its global semiconductor leadership, emphasizing long-term investments in AI and chip design. In the U.S., Walmart announced a revised stock buyback program worth $5 billion over the next two years, reflecting confidence in its long-term financial health and market position.