Affirm Q2FY26 Results: Revenue expected up 26% to $1.11 billion
- Analysts expect Affirm revenue to rise 26.2% to $1.11 billion in Q2 FY26
- EPS estimated at $0.82, up from $0.53 in the prior year quarter
- Stock trades at $77, down 11.6% from yearly highs ahead of results
- Allowance for credit losses rose to 6% of loans held for investment
- Previous quarter saw 33% revenue jump to $1.03 billion
*this image is generated using AI for illustrative purposes only.
Affirm Holdings Inc (NASDAQ: AFRM) prepares to release its fiscal second-quarter earnings for the period ending June, with analysts projecting revenue growth of 26.2% to $1.11 billion. The buy now, pay later lender faces scrutiny over credit quality metrics following competitor Klarna’s recent disclosure of deteriorating loan performance in Germany.
Shares of Affirm were trading at $77, down 11.6% from their high for the year, as investors await clarity on the company’s growth trajectory and delinquency trends. The upcoming report follows a quarter where Affirm posted a 33% revenue jump to $1.03 billion and a 35% rise in gross merchandise volume to $11.6 billion.
Analyst Estimates and Peer Context
Analysts expect Affirm’s earnings per share to climb to $0.82 in the current quarter, up from $0.53 in the second quarter of fiscal 2025. This projection comes despite the company missing estimates in each of the last three quarters. The market is closely watching how Affirm’s US-centric model performs relative to Klarna, which reported a 27% revenue increase to $1.04 billion but saw its stock fall to a five-month low due to sharp deterioration in its largest volume market, Germany.
| Metric | Estimate / Actual | Period | Change |
|---|---|---|---|
| Revenue | $1.11 billion | Q2 FY26 (Est) | +26.2% YoY |
| EPS | $0.82 | Q2 FY26 (Est) | Up from $0.53 |
| Revenue | $1.03 billion | Q1 FY26 (Act) | +33% YoY |
| GMV | $11.6 billion | Q1 FY26 (Act) | +35% YoY |
Credit Quality and Delinquencies
Beyond top-line figures, investors will focus on delinquency data and allowance for credit losses. In the most recent report, delinquencies rose slightly, partly attributed to a reduced denominator following tax refund seasonality. The allowance for credit losses as a percentage of loans held for investment increased to 6%, signaling heightened caution in lending standards or risk assessment.
What the Numbers Show
The divergence between Affirm’s consistent revenue growth and its repeated misses on analyst estimates suggests that while top-line expansion remains robust, cost management or margin pressures may be outpacing consensus expectations. Additionally, the rise in the allowance for credit losses to 6% coincides with slight increases in delinquencies, indicating that credit risk is becoming a more material factor in the company’s financial profile even as gross merchandise volume expands.
Technical Outlook and Analyst Targets
Technical analysis indicates a symmetrical triangle pattern forming after a bullish breakout, potentially signaling a bullish pennant formation. The stock has remained above the 100-day Exponential Moving Average and is forming a multi-month inverted head-and-shoulders pattern. Analysts maintain a bullish outlook, with BMO Capital Markets raising its target to $86, Truist to $83, and Cantor Fitzgerald to $88, aligning with the average analyst target.
How might Affirm's US-centric lending model provide a buffer against the credit deterioration seen in Klarna's European markets, and will this geographic divergence impact long-term valuation multiples?
Given the rising allowance for credit losses to 6%, what specific adjustments to underwriting standards or risk assessment algorithms should investors expect in upcoming quarters to stabilize delinquency trends?
Can Affirm sustain its projected 26.2% revenue growth while simultaneously addressing the margin pressures that have caused it to miss earnings estimates in three consecutive quarters?
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