Affirm's Q4 Revenue Surges 33% Year-Over-Year, Beats Expectations

Affirm Holdings, often likened to the "American version of Huabei," released its fourth-quarter earnings report on Thursday, revealing figures that surpassed market expectations. The company's revenue for the quarter grew by 33% year-over-year to $876 million, outpacing the anticipated $837 million. Net income for the quarter stood at $69.2 million, a notable improvement from the $45.1 million loss reported in the same period last year. Earnings per share were $0.20, exceeding the market's forecast of $0.11.

The total gross merchandise volume (GMV) for the fourth quarter increased by 43% year-over-year to $10.4 billion. In a letter to shareholders, Affirm emphasized that this consistent performance has enabled the company to achieve operating profit in the fourth quarter of fiscal year 2025, aligning with the timeline promised a year ago. This achievement underscores Affirm's strategic execution and financial discipline, positioning the company for sustained growth.

Looking ahead, Affirm anticipates revenue for the first quarter of fiscal year 2026 to range between $855 million and $885 million, with GMV expected to be between $10.1 billion and $10.4 billion. The company's stock has risen by 31% year-to-date, outperforming the broader market indices. This positive momentum reflects investor confidence in Affirm's business model and growth prospects.

Affirm, which went public in 2021, operates in a highly competitive e-commerce sector. The company has forged strategic partnerships with major players such as Amazon and Shopify, enhancing its market presence and customer reach. However, the recent shift by Walmart to competitor Klarna, which is expected to go public soon, presents a significant challenge. Additionally, Affirm's partnership with Apple, announced last year, further expands its market reach and competitive edge.

Despite the competitive landscape, Affirm's strong fourth-quarter performance and strategic initiatives position the company for continued success. The company's ability to deliver on its financial commitments and adapt to market dynamics bodes well for its future growth and market leadership. As Affirm continues to innovate and expand its partnerships, it is well-positioned to capitalize on the growing e-commerce market and maintain its competitive advantage.