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Dec 31, 2024
Affirm Q2 2025 Earnings Report
Key Takeaways
Affirm reported strong financial performance for FQ2'25, surpassing expectations across all key metrics. The company achieved $866 million in revenue (up 47% YoY), $80.4 million in net income, and nearly break-even operating income. Gross Merchandise Volume (GMV) grew 35% to $10.1 billion, driven by increased merchant adoption and 0% APR offers. Adjusted Operating Income reached $237.8 million with a 27.4% margin. Affirm also expanded into new markets, including the UK, and strengthened partnerships in travel, healthcare, and electronics.
Revenue by Segment
Forward Guidance
Affirm expects continued GMV growth, targeting $8.00-$8.30 billion in FQ3'25 and $9.00-$9.30 billion in FQ4'25. Revenue is forecasted between $755-$785 million in FQ3 and $810-$840 million in FQ4. The company aims to achieve GAAP operating profitability by FQ4'25, with adjusted operating margins projected at 20-25%.
Positive Outlook
- Affirm expects GMV growth to remain strong, reaching $35B for FY25.
- Revenue is projected to surpass $3.1 billion in FY25, up from $2.6 billion in FY24.
- Adjusted operating margins are expected to improve further, reaching 23-25% in Q4 FY25.
- The company has expanded funding capacity to $22.6 billion, ensuring liquidity for future growth.
- Expansion in the UK and new merchant partnerships are expected to drive further adoption.
Challenges Ahead
- Operating income remains slightly negative, though breakeven is expected in FQ4'25.
- Higher transaction costs, particularly related to funding costs and credit losses, could impact profitability.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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