Affirm (AFRM) Q3 2026 earnings summary

Executive summary

• Achieved record Q3 results with GMV reaching $11.6B, up 35% year-over-year, and revenue at $1.04B, a 33% increase; active consumers grew 22% to 26.8M, with transactions per active user up 20% to 6.7.

• Net income for the quarter was $102.9M, up from $2.8M in the prior year, and nine-month net income reached $313.2M versus a loss of $17.1M year-over-year.

• Merchant and consumer engagement surged, with 96% of transactions from repeat customers and total transactions up 45% year-over-year.

• No signs of credit deterioration among underwritten consumers; funding environment remains highly constructive with deep capital markets and oversubscription in ABS deals.

• The company continues to expand funding relationships and diversify its loan product mix, with strong growth in both interest-bearing and 0% APR loans.

Financial highlights

• Revenue less transaction costs for Q3 FY26 was $425M, up 20% year-over-year; ex-provision, it was $695M, up 39%.

• Adjusted operating income for Q3 FY26 was $281M, with an adjusted operating margin of 27%; GAAP operating income was $88M, margin 8%.

• Funding costs declined by approximately 125 basis points year-over-year, driven by tightening spreads and lower benchmark rates.

• Allowance for losses stood at $512M, representing 6.0% of loans held for investment.

• Gain on sales of loans surged 68% to $127.2M for the quarter, reflecting higher loan sale volume and favorable market conditions.

Outlook and guidance

• FY Q4 2026 GMV expected between $13.15B and $13.45B; revenue between $1.08B and $1.11B.

• FY 2026 GMV guidance is $49.27B–$49.57B; revenue $4.18B–$4.21B; adjusted operating margin projected at 28.2%–28.8%.

• Management expects continued growth in GMV and active consumers, supported by product innovation and expanded merchant partnerships.

• International expansion investments underway, with minimal near-term drag expected on revenue less transaction costs due to the scale of U.S. and Canadian businesses.

• Potential release of significant portion of U.S. deferred tax valuation allowance by end of FY26 if earnings trajectory continues.