Slug: affirm
Date: 2026-10-06
Industry: BNPL / Consumer Credit
Accent: #4A4AF4
Status: Public (NASDAQ: AFRM). Fiscal year ends June 30. All figures are from the audited fiscal 2026 Form 10-K (fiscal year ended June 30, 2026; filed Aug 27, 2026). Fiscal Q1 2027 results had not been reported as of Oct 6, 2026. The Q4 FY26 shareholder letter (8-K Ex. 99.1, Aug 2026) is filed as images only and was not used for figures.
| Metric | Value | Label | Source |
|---|---|---|---|
| GMV FY26 | $50.2B (+37% vs FY25; +88% vs FY24) | FACT | 10-K |
| GMV mix FY26 | Interest-bearing monthly installments 70% (72% FY25); Pay-in-X 16%; 0% APR monthly installments 14% | FACT | 10-K |
| Concentration | Amazon 22% of GMV (22% FY25, 21% FY24); top five merchants/platform partners 44% (47% FY25) | FACT | 10-K |
| Revenue FY26 | Total revenue, net $4,261M (+32%): merchant network $1,150M; card network $294M; interest income $2,047M; gain on sales of loans $597M; servicing income $173M | FACT | 10-K |
| Operating expenses FY26 | Total $3,844M: loss on loan purchase commitment $312M; provision for credit losses $797M; funding costs $454M; processing & servicing $614M; technology & data analytics $747M; sales & marketing $343M (−21%); G&A $578M | FACT | 10-K |
| Profit FY26 | Operating income $417M (vs −$87M FY25, −$616M FY24); pre-tax income $493M; net income $1,930M including a ~$1.4B non-cash income tax benefit from releasing most of the domestic valuation allowance | FACT | 10-K |
| Amazon warrants | Sales & marketing includes $199.9M Amazon warrant expense (vs $292.3M); in Nov 2025 Affirm and Amazon signed a Second Amended and Restated Installment Financing Services Agreement, the asset's benefit period was extended from four to nine years, and later-vesting warrants were repriced from $100 to $63.06 | FACT | 10-K |
| Shopify | Warrants granted FY21 for the commercial agreement; Global Customer Installment Program Agreement dated Feb 14, 2025 | FACT | 10-K |
| Network | Active consumers 27.8M (+21%); transactions per active consumer 7.0 (5.8 FY25; 4.9 FY24); ~571K active merchants | FACT | 10-K |
| Affirm Card | ~15% of transactions at Jun 30, 2026 (10% in 2025, 8% in 2024); 25% of FY26 transactions initiated via app, website and Affirm Card | FACT | 10-K |
| Banks | U.S. loans substantially all originated by Celtic Bank and Lead Bank (APR up to 36%); Cross River Bank (up to 30%) and the FDIC-insured Affirm Money Account | FACT | 10-K |
| Funding | Sold loans with $21.9B unpaid principal in FY26 (+39%); equity capital ≈4% of total platform portfolio; warehouse lines, securitizations, forward-flow sales | FACT | 10-K |
| Balance sheet | Loans held for investment $9.56B (allowance $563M); cash $1.63B; total assets $15.79B | FACT | 10-K |
| People | 2,358 employees at Jun 30, 2026 | FACT | 10-K |
| Markets | U.S., Canada, U.K.; limited Australia launch in fiscal Q1 2027; plans for continental Europe | FACT | 10-K |
| Revenue ÷ GMV | ≈8.5% ($4.26B ÷ $50.2B) | INFERENCE | 10-K |
| Merchant network revenue ÷ GMV | ≈2.3% | INFERENCE | 10-K |
| Revenue less transaction costs | ≈$2.08B (≈4.2% of GMV), computed as revenue minus loss on loan purchase commitment, provision, funding costs, processing & servicing (Affirm's usual definition) | INFERENCE | 10-K |
| Interest share | Interest income ≈48% of revenue | INFERENCE | 10-K |
Merchants pay Affirm to close bigger sales (merchant fees, highest on 0% APR promos) → consumers pay simple interest on 70% of GMV, with no late fees → Affirm sells most loans to capital partners and keeps about 4% equity in the portfolio → Amazon is 22% of GMV, so the Affirm Card (15% of transactions) is the push to own the customer directly → FY26 operating income flipped to +$417M on $4.26B revenue.
The lesson is "a lender dressed as a checkout button." Affirm earns from both sides of a purchase: merchants pay because a clear monthly price lifts conversion and basket size, and borrowers pay interest on most volume. The balance-sheet trick is velocity: short loans are sold or securitized ($21.9B sold in FY26), so a thin slice of equity supports a large portfolio, but that depends on capital markets staying open (the 10-K flags stress at some private credit funds). The biggest risks are concentration (Amazon alone 22% of GMV, top five 44%) and the bank-partner model that lets Affirm charge up to 36% APR across states.
# Affirm — research brief **Slug:** affirm **Date:** 2026-10-06 **Industry:** BNPL / Consumer Credit **Accent:** `#4A4AF4` **Status:** Public (NASDAQ: AFRM). Fiscal year ends June 30. All figures are from the audited fiscal 2026 Form 10-K (fiscal year ended June 30, 2026; filed Aug 27, 2026). Fiscal Q1 2027 results had not been reported as of Oct 6, 2026. The Q4 FY26 shareholder letter (8-K Ex. 99.1, Aug 2026) is filed as images only and was not used for figures. ## Label key - **FACT** — Affirm's fiscal 2026 Form 10-K (SEC). Company descriptions inside the filing (e.g. "no late fees") are labeled FACT (company claim). - **SECONDARY** — none used on this canvas. - **INFERENCE** — teaching ratios computed from FACT figures (labeled; not reported metrics). ## Primary sources (FACT) 1. Fiscal 2026 Form 10-K (filed Aug 27, 2026): https://www.sec.gov/Archives/edgar/data/1820953/000162828026059279/afrm-20260630.htm 2. Q4 FY26 results 8-K (Aug 2026): https://www.sec.gov/Archives/edgar/data/1820953/000162828026059271/afrm-20260825.htm ## Key figures used on canvas | Metric | Value | Label | Source | |---|---|---|---| | GMV FY26 | $50.2B (+37% vs FY25; +88% vs FY24) | FACT | 10-K | | GMV mix FY26 | Interest-bearing monthly installments 70% (72% FY25); Pay-in-X 16%; 0% APR monthly installments 14% | FACT | 10-K | | Concentration | Amazon 22% of GMV (22% FY25, 21% FY24); top five merchants/platform partners 44% (47% FY25) | FACT | 10-K | | Revenue FY26 | Total revenue, net $4,261M (+32%): merchant network $1,150M; card network $294M; interest income $2,047M; gain on sales of loans $597M; servicing income $173M | FACT | 10-K | | Operating expenses FY26 | Total $3,844M: loss on loan purchase commitment $312M; provision for credit losses $797M; funding costs $454M; processing & servicing $614M; technology & data analytics $747M; sales & marketing $343M (−21%); G&A $578M | FACT | 10-K | | Profit FY26 | Operating income $417M (vs −$87M FY25, −$616M FY24); pre-tax income $493M; net income $1,930M including a ~$1.4B non-cash income tax benefit from releasing most of the domestic valuation allowance | FACT | 10-K | | Amazon warrants | Sales & marketing includes $199.9M Amazon warrant expense (vs $292.3M); in Nov 2025 Affirm and Amazon signed a Second Amended and Restated Installment Financing Services Agreement, the asset's benefit period was extended from four to nine years, and later-vesting warrants were repriced from $100 to $63.06 | FACT | 10-K | | Shopify | Warrants granted FY21 for the commercial agreement; Global Customer Installment Program Agreement dated Feb 14, 2025 | FACT | 10-K | | Network | Active consumers 27.8M (+21%); transactions per active consumer 7.0 (5.8 FY25; 4.9 FY24); ~571K active merchants | FACT | 10-K | | Affirm Card | ~15% of transactions at Jun 30, 2026 (10% in 2025, 8% in 2024); 25% of FY26 transactions initiated via app, website and Affirm Card | FACT | 10-K | | Banks | U.S. loans substantially all originated by Celtic Bank and Lead Bank (APR up to 36%); Cross River Bank (up to 30%) and the FDIC-insured Affirm Money Account | FACT | 10-K | | Funding | Sold loans with $21.9B unpaid principal in FY26 (+39%); equity capital ≈4% of total platform portfolio; warehouse lines, securitizations, forward-flow sales | FACT | 10-K | | Balance sheet | Loans held for investment $9.56B (allowance $563M); cash $1.63B; total assets $15.79B | FACT | 10-K | | People | 2,358 employees at Jun 30, 2026 | FACT | 10-K | | Markets | U.S., Canada, U.K.; limited Australia launch in fiscal Q1 2027; plans for continental Europe | FACT | 10-K | | Revenue ÷ GMV | ≈8.5% ($4.26B ÷ $50.2B) | INFERENCE | 10-K | | Merchant network revenue ÷ GMV | ≈2.3% | INFERENCE | 10-K | | Revenue less transaction costs | ≈$2.08B (≈4.2% of GMV), computed as revenue minus loss on loan purchase commitment, provision, funding costs, processing & servicing (Affirm's usual definition) | INFERENCE | 10-K | | Interest share | Interest income ≈48% of revenue | INFERENCE | 10-K | ## Model read (teaching arc) **Merchants pay Affirm to close bigger sales (merchant fees, highest on 0% APR promos) → consumers pay simple interest on 70% of GMV, with no late fees → Affirm sells most loans to capital partners and keeps about 4% equity in the portfolio → Amazon is 22% of GMV, so the Affirm Card (15% of transactions) is the push to own the customer directly → FY26 operating income flipped to +$417M on $4.26B revenue.** The lesson is "a lender dressed as a checkout button." Affirm earns from both sides of a purchase: merchants pay because a clear monthly price lifts conversion and basket size, and borrowers pay interest on most volume. The balance-sheet trick is velocity: short loans are sold or securitized ($21.9B sold in FY26), so a thin slice of equity supports a large portfolio, but that depends on capital markets staying open (the 10-K flags stress at some private credit funds). The biggest risks are concentration (Amazon alone 22% of GMV, top five 44%) and the bank-partner model that lets Affirm charge up to 36% APR across states. ## Do not invent - FY27 guidance or fiscal Q1 2027 results (not used / not reported as of Oct 6, 2026) - Exact merchant fee rates per merchant - Delinquency rates (not extracted on this pass) - Share price, market cap, or valuation - Number of Affirm Card holders (only transaction share disclosed here)