Affirm Shares Surge 11.6% on Earnings Beat Outperforming Wall Street Volume Ranks 103rd in Market

Market Snapshot

Affirm Holdings (AFRM) surged 11.61% on November 7, 2025, closing at $73.66, following a third-quarter earnings report that outperformed Wall Street expectations. The stock’s trading volume spiked to $1.16 billion, a 60.03% increase from the prior day, ranking it 103rd in market-wide volume. The rally was driven by a 33.6% year-over-year revenue jump to $933.3 million and a doubling of earnings per share to $0.23, surpassing analyst forecasts. This marked a reversal from a 31-cent loss in the same quarter the previous year, with pre-tax profit margins expanding by 23 percentage points. The performance positioned Affirm as a standout in the volatile buy-now-pay-later (BNPL) sector, which has seen mixed results amid macroeconomic uncertainty.

Key Drivers

Earnings Outperformance and Profitability Expansion

Affirm’s Q3 2025 results underscored its transition from a growth-focused BNPL provider to a profit-generating entity. Revenue surged 33.6% year-over-year to $933.3 million, exceeding the $883 million consensus estimate, while GAAP earnings of $0.23 per share more than doubled the $0.11 expected. This outperformance was fueled by a 23 percentage-point expansion in pre-tax profit margins compared to the prior year, reflecting improved operational efficiency and cost management. The adjusted operating margin climbed to 28.3%, up from 19% in the same period in 2024, signaling Affirm’s ability to scale profitably. Analysts highlighted the company’s disciplined underwriting and capital-raising capabilities, particularly in the asset-backed securities (ABS) market, as key enablers of this margin improvement.

Strategic Partnerships and Market Expansion

Affirm’s aggressive expansion into new partnerships and verticals has been a recurring catalyst for investor confidence. A September 2025 agreement with Apple allowed consumers to use Affirm for in-store iPhone purchases at Apple retail locations, capitalizing on the holiday shopping season. Additionally, collaborations with Worldpay and Google’s Agent Payments Protocol (AP2) integrated Affirm’s BNPL services into embedded payments for software platforms and AI-driven shopping experiences, respectively. These partnerships expanded Affirm’s reach to over 1,000 software companies and positioned it to leverage Worldpay’s $400 billion annual transaction volume. The company also deepened ties with Wayfair, embedding BNPL options into its checkout process ahead of Way Day sales, and expanded into healthcare and sports retail via partnerships with FuturHealth and Fanatics. Such moves diversified Affirm’s revenue streams and mitigated prior challenges, such as Walmart’s shift to Klarna earlier in 2025.

Insider Selling and Market Sentiment

Despite strong earnings, Affirm’s stock faced pressure from significant insider selling. In September 2025, CFO Robert O’Hare sold $2.6 million in shares, while co-founder Max Levchin initiated a $58 million Class A stock sale, adding to prior transactions totaling $54 million. Such activity raised concerns about insider sentiment, with some investors interpreting the sales as a sign of overvaluation. However, management attributed these moves to personal financial planning rather than pessimism about the business. The stock had already fallen 25% from its recent highs, reflecting broader market jitters about BNPL sector risks, including regulatory scrutiny and economic headwinds. Despite these challenges, Affirm’s stock rebounded sharply after the Q3 results, with analysts noting that insider selling often occurs in mature companies and does not necessarily correlate with long-term performance.

Forward Outlook and Guidance

Affirm’s upgraded guidance for FY2026 further bolstered investor optimism. The company projected gross merchandise volume (GMV) exceeding $47.5 billion and maintained a revenue take rate of 8.4% of GMV, aligning with analyst expectations. Management emphasized continued investment in product innovation, including the Affirm Card and 0% APR promotional campaigns, as well as the five-year extension of its Amazon partnership. These initiatives aim to drive transaction frequency and customer acquisition, particularly in lower-average-order-value categories like apparel and beauty. While CFO O’Hare cautioned against aggressive margin expansion, highlighting the need to maintain take rates near 4%, the upgraded GMV forecast and strategic focus on profitability suggested Affirm’s ability to balance growth and margins. The stock closed the day at $73.66, up 11.6%, but remained 20% below its 52-week high, leaving room for further appreciation if execution aligns with expectations.

Conclusion

Affirm’s Q3 2025 results and strategic initiatives demonstrated its resilience in a competitive BNPL landscape. The earnings outperformance, margin expansion, and diversified partnership strategy positioned the company to capitalize on holiday demand and broader retail trends. However, insider selling and macroeconomic uncertainties introduced volatility, requiring investors to weigh short-term concerns against long-term growth potential. With a forward-looking GMV forecast and a focus on operational efficiency, Affirm appears poised to navigate sector-specific challenges while maintaining its leadership in the BNPL market.