Affirm closed fiscal 2026 with another quarter of rapid growth and improving profitability as gross merchandise volume surpassed $14 billion and revenue less transaction costs increased faster than both GMV and total revenue.
Fourth-quarter gross merchandise volume increased 36% year-over-year to $14.1 billion.
Revenue increased 33% to approximately $1.2 billion.
Revenue less transaction costs, a closely watched measure of the economics Affirm retains after transaction-related expenses, increased even faster at 39% to $589 million.
The quarter extended an unusually durable growth streak.
Affirm has now generated at least 30% GMV growth for 11 consecutive quarters.
Full-year GMV surpassed $50 billion.
Maintaining that level of growth as the transaction base becomes larger demonstrates that Affirm continues expanding both its consumer usage and merchant network.
The company’s profitability profile also improved materially.
GAAP operating margin reached 13%, representing an increase of approximately six percentage points.
Adjusted operating income reached 30% of revenue, up three percentage points.
The combination of 36% GMV growth, 39% RLTC growth and a higher operating margin indicates Affirm is generating operating leverage while continuing to expand rapidly.
Merchant growth remains another important component of the story.
Active merchants increased more than 50% during the quarter.
The increase was driven primarily by platform partnerships, and the merchant growth rate doubled compared with the prior-year period.
Affirm said merchant dollar-based net expansion has averaged approximately 120% during the past three years.
That metric indicates that existing merchant relationships, in aggregate, have continued generating more volume over time even before accounting for newly added merchants.
Affirm is also expanding into additional verticals.
New integrations in professional services, elective medical services and automotive products and services are already generating billions of dollars of annual GMV.
Those newer categories are growing at approximately twice the company’s overall rate.
The company is expanding geographically as well.
Initiatives include Shop Pay Installments in Australia through Shopify and the continuing development of Affirm’s early-stage operation in the United Kingdom.
Affirm’s funding infrastructure has expanded alongside its transaction volume.
Funding capacity increased to $30 billion from $26.1 billion a year earlier.
Based on Affirm’s approximately five-month weighted-average loan duration, management estimates that the capacity could support more than $70 billion of annual GMV.
The company also ended the quarter with approximately $1.5 billion of net cash.
GAAP net income reached approximately $1.6 billion, but that figure requires an important earnings-quality caveat.
Profit was materially increased by the release of a valuation allowance against most of Affirm’s domestic deferred tax assets.
For that reason, the improvement in operating margin and revenue less transaction costs provides a cleaner indication of underlying operating progress than the headline GAAP net-income figure.
The positive story is therefore the combination of sustained high growth and improving economics.
Affirm has maintained at least 30% GMV growth for nearly three years while simultaneously expanding operating margins, merchant relationships, newer verticals and funding capacity.
KEY QUOTES:
“We once again drove exceptionally strong and profitable growth across the entire P&L, with RLTC growing a standout 39%.”
“This is our 11th consecutive quarter of 30% or faster GMV growth.”
Max Levchin, Founder and Chief Executive Officer of Affirm
