Affirm Holdings Inc. (NASDAQ: AFRM) saw its stock price fall during aftermarket trading despite announcing strong financial results for its second fiscal quarter and raising its future revenue projections. The company exceeded market expectations for both profit per share and overall sales, alongside a notable increase in its gross merchandise value and user engagement. These outcomes reflect a robust operational performance, even as the market reacted with a share price adjustment.
Strong Q2 Performance and Growth Metrics
Affirm Holdings Inc. posted impressive figures for its second fiscal quarter, surpassing analyst expectations. The company reported earnings of 37 cents per share, outperforming the consensus estimate of 30 cents. Additionally, quarterly revenue reached $1.12 billion, comfortably exceeding the Street's projection of $1.06 billion. This strong financial performance highlights Affirm's continued growth and its ability to generate significant revenue streams in a competitive market. These results indicate a solid operational foundation and effective business strategies.
Beyond the headline financial numbers, Affirm demonstrated substantial growth in key operational metrics. Gross Merchandise Volume (GMV) surged by 36% to $13.8 billion, showcasing increased transaction activity across its platform. The active customer base expanded by 23% to 25.8 million, reflecting a growing adoption of its services. Furthermore, the number of active merchants partnering with Affirm saw a significant 42% increase, reaching 478,000. These figures collectively underscore the company's expanding market penetration and the increasing utility of its buy-now-pay-later services among both consumers and businesses. Despite these positive indicators, the stock experienced a downturn in extended trading.
Future Outlook and Market Reaction
Looking ahead, Affirm has provided an optimistic forecast for the third quarter and the full fiscal year 2026. The company anticipates third-quarter revenue to fall between $970 million and $1 billion, aligning closely with analyst estimates of $979.57 million. Moreover, Affirm has raised its revenue guidance for fiscal year 2026 to a range of $4.09 billion to $4.15 billion, signaling confidence in its sustained growth trajectory. This upward revision in guidance suggests that the company expects to maintain its strong performance and capture further market share in the coming periods, reinforcing its long-term financial health.
Despite the positive earnings beat and the upward revision of its fiscal year guidance, Affirm's stock experienced a 4.4% decline in Thursday's extended trading, settling at $56.80. This market reaction, where a stock dips despite positive news, can sometimes be attributed to factors such as profit-taking, broader market sentiment, or specific investor expectations that may not have been fully met, even with strong results. Such movements highlight the complexities of stock market dynamics, where a confluence of factors beyond just financial performance can influence immediate share price fluctuations. Investors might be scrutinizing other aspects, such as future growth sustainability, competitive landscape shifts, or valuation concerns, leading to a cautious response even in the face of robust financial reports.