Affirm's Revenue Outlook Remains Strong Despite Client Loss: RBC

Affirm's gross merchandise volume outlook remains upbeat despite a major client loss, according to RBC. The company's payment network offers consumers flexible alternatives to traditional payment options, including point-of-sale solutions, merchant commerce solutions, and a consumer-focused app. Affirm's platform provides tailored offers based on consumer preferences and offers a high-yield savings account in partnership with Cross River Bank.

Affirm Holdings, Inc. (AFRM) recently reported strong quarterly results, exceeding expectations and raising its outlook for fiscal 2026 despite the loss of a major client. The company's buy now, pay later (BNPL) platform topped analyst estimates, with gross merchandise volume (GMV) projected above $46 billion for the fiscal year 2026 [1]. RBC, a leading financial institution, responded by raising its forecasts, pegging 2026 GMV at $46.8 billion with nearly $3.91 billion in revenue, both higher than previous expectations [1].

Affirm's platform, which offers consumers flexible alternatives to traditional payment options, includes point-of-sale solutions, merchant commerce solutions, and a consumer-focused app. The Affirm App and Website provide tailored offers from merchants based on consumers' preferences. The company's strategic pivot toward zero-interest loans has also improved its delinquency rates, demonstrating its ability to balance growth with prudent credit management [1].

The company's success is driven by strategic AI tools like Adapt AI, which boosted GMV for merchants by 5% through dynamic pricing and personalized payment plans. The Affirm Card, launched in 2023, has become a linchpin of its growth strategy, generating $1.2 billion in volume and averaging $4,700 annually per cardholder [2]. Affirm's U.S. BNPL market share grew from 9% in 2022 to 13% by year-end 2024, driven by strategic partnerships and a focus on user experience [2].

Affirm's Q4 2025 earnings, which include a net income of $69.24 million and a 43% increase in GMV to $10.4 billion, signal a pivotal shift in the BNPL sector. The company's ability to achieve profitability while maintaining high growth rates challenges the narrative of rapid user acquisition over profitability. Affirm's AI-driven tools and product diversification have enabled it to scale without compromising credit quality [3].

The BNPL sector is poised for sustained growth, with the U.S. market projected to expand at an 8.5% compound annual growth rate (CAGR) through 2030, reaching $184.05 billion in value. Globally, the market is expected to surpass $911.8 billion by 2030, driven by adoption in emerging economies [3]. Regulatory shifts are also creating a more sustainable environment for BNPL providers, with the U.S. Consumer Financial Protection Bureau (CFPB) deprioritizing enforcement of its 2024 BNPL interpretive rule [4].

Affirm's Q4 results and strategic initiatives demonstrate its capacity to outperform in a maturing BNPL sector. With a robust balance sheet, a growing market share, and a product portfolio that aligns with consumer and merchant needs, the company is well-positioned to capitalize on the sector's long-term growth. Affirm's ability to maintain profitability while scaling its operations highlights the potential for BNPL firms to compete with traditional financial institutions on profitability and credit quality [3].

References:
[1] https://finimize.com/content/affirm-surpassed-expectations-and-raised-its-outlook-for-2026
[2] https://www.ainvest.com/news/affirm-reports-strong-quarter-exceeds-fy26-gmv-guidance-expectations-2508/
[3] https://www.ainvest.com/news/affirm-strong-q4-earnings-signal-turning-point-bnpl-stocks-2508/
[4] https://www.hklaw.com/en/insights/publications/2025/05/cfpb-provides-status-update-regarding-buy-now-pay-later