Affirm beat but fell on provisions near $259 million; its push into banks' apps starts in 2027
Affirm beat its fiscal first quarter and the stock still slid, because provisions on experimental loans reached about $259 million. The next leg of growth, Affirm Edge, would put its installment loans inside banks' own apps, with pilots set for the first half of 2027.
Vincent Jiangthree-minute read
Affirm−2.35% — Affirm, down 2.35 percent today, the buy-now-pay-later lender, reported its fiscal first quarter on November 5: gross merchandise volume, the value of purchases financed on its platform, rose 34% to $14.4 billion, a twelfth straight quarter above 30% growth 15. Revenue rose 35% to $1.262 billion, net income reached $164 million for an eighth consecutive quarter of GAAP profit, and earnings of 47 cents a share beat the 38-cent consensus 15. The stock still touched $66.13 on Friday and closed at $68.11, down 2.2% 13.
Revenue growth re-accelerated to 35% in the September quarter
Fastest year-over-year growth since the March 2025 quarter
Data
| Revenue | |
|---|---|
| Q2 '24 | $0.66B |
| Q3 '24 | $0.7B |
| Q4 '24 | $0.87B |
| Q1 '25 | $0.78B |
| Q2 '25 | $0.88B |
| Q3 '25 | $0.93B |
| Q4 '25 | $1.12B |
| Q1 '26 | $1.04B |
| Q2 '26 | $1.17B |
| Q3 '26 | $1.26B |
The bank channel finally has a date
This print was the test October set up, when Zip's fraud quarter pushed its bad debts to 1.97% and Affirm's chief financial officer sold 96% of his stock near $80.
New since then: a date for the bank channel. President Michael Linford confirmed on the earnings call that the first pilots for Affirm Edge, which puts installment lending inside banks' and credit unions' own apps with Affirm originating and servicing the loans, go live in the first half of 2027 25. "Patience is the code word here," he said, because bank partners "don't move exceptionally fast" 2.
Approve more, reserve more
The bill that weighed on the stock was credit. September underwriting tests left extra loans on Affirm's balance sheet and lifted provisions, a move Chief Financial Officer Rob O'Hare defended as profitable customer acquisition 7. Citizens JMP analyst David Scharf sized the tests at several hundred million dollars against roughly $10 billion of owned receivables, with credit-loss provisions near $259 million 1.
The allowance for credit losses, Affirm's reserve against souring loans, rose to 6.3% from 5.9%, and 30-day delinquencies climbed 35 basis points sequentially to 2.9% 58. The company's counter is a transformer-based underwriting model, kin to the engines behind large language models, that lifted conversion 3.4% while holding credit losses flat 5.
Every target still sits above the price
Edge prices the upside. Affirm sized the bank channel at $140 billion at its May investor day; its rails already run inside debit cards issued by the processors FIS and Fiserv−0.21% — Fiserv, down 0.21 percent today, and $74 billion-asset Old National Bank wants the lending kept in-house 2.
Volume was growing in the high-30s percent range in October, O'Hare said 7. The downside lands on shareholders, who absorb the reserves before any losses show. The Street priced both the next day: BofA−0.48% — BofA, down 0.48 percent today Securities raised its target to $109, Piper Sandler cut to $105, J.P 346. Morgan cut to $95 and RBC to $83 346.
The Street cut its numbers and stayed bullish anyway
Every post-print target sits 17 to 60 percent above the $68.11 close
Data
| Value | |
|---|---|
| BofA Securities | $109 |
| Piper Sandler | $105 |
| Barclays | $100 |
| Scotiabank | $97 |
| J.P. Morgan | $95 |
| Citizens JMP | $85 |
| RBC Capital | $83 |
| Stephens | $80 |
February decides
The next readings land with the fiscal second-quarter print, due early February, which shows whether the 6.3% allowance and 2.9% delinquency hold as the short-term test loans roll off within months 15. The first Edge pilot is due by June 25. Affirm spent a decade renting space at other companies' checkouts; Edge is its first bid to own the door.
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