Affirm Holdings Inc (AFRM) Q3 2025 Earnings Report

Overview of key metrics and drivers for QQ3 2025:
- Revenue: $783.134 million; QoQ change: -9.6% (versus Q2 2025); Trailing four-quarter revenue shows a healthy growth trajectory with LTM growth of ~35.9% per the earnings metrics, reflecting sustained scale and merchant network expansion.
- Gross Profit / Margin: $512.116 million; gross margin ≈ 65.39% (0.654). Margin strength driven by favorable mix and scalable platform economics.
- Operating Income / Margin: -$8.393 million; operating margin ≈ -1.07%. Despite the quarterly loss, the trajectory points to narrowing losses as revenue mix shifts and operating leverage improves.
- Net Income / Margin: $2.804 million; net margin ≈ 0.36%. Net income benefited from mix, financial structuring, and one-time/integration effects across activities.
- Earnings per Share: $0.01 basic and diluted; weighted-average shares ~324.1–344.2 million (diluted).
- Cash Flow: Net cash provided by operating activities $210.4 million; capital expenditures $53.0 million; free cash flow (FCF) $157.4 million.
- Balance Sheet: Total assets $10.437 billion; cash and cash equivalents $1.351 billion; short-term investments $0.781 billion; total current assets $9.081 billion. Long-term debt $7.358 billion; total liabilities $7.561 billion; stockholders’ equity $2.875 billion. Net debt ≈ $6.008 billion; debt-to-capitalization ≈ 0.719.
- Cash Position & Liquidity: Strong liquidity with substantial cash and marketable securities; current ratio ≈ 63.1 and cash ratio ≈ 9.39, reflecting cushion against near-term volatility and ample capacity to fund growth initiatives.
- Efficiency & Returns: Gross margin ~65.4%; operating margin ~-1.07%; net margin ~0.36%; ROA ~0.027% and ROE ~9.75e-4% (nearly breakeven on equity). Free cash flow per share ≈ $0.486; operating cash flow per share ≈ $0.649.
- Guidance & Momentum: Management signaled a continued emphasis on growth opportunities with “excellent credit quality and LTV characteristics,” aiming to move toward a gapped profitable model while balancing investment with profitability. GMV growth guidance indicates a high-end target around low- to mid-30% year-over-year.

Key takeaways from the QQ3 2025 earnings call:
- Strategy and growth orientation: Max Levchin described a data-driven, brand‑oriented push into growth opportunities, noting that Affirm is “leaning into growth opportunities with excellent credit quality and LTV characteristics while hitting our targets” and positioning the business as a “soon-to-be-gapped profitable” enterprise. He emphasized the strategic value of 0% APR promotions as a long-term growth engine and brand builder.
- 0% APR promotions: Management highlighted the defensible quality of zero-percent financing, with Max stating, “0% APR… it is in fact a 0% APR. At this point, we’ve actually earned our right/brand. People know when Affirm says it’s a 0% deal, it is in fact you will pay no interest for as long as the number of months says.” The team views these offers as a high-converting acquisition channel with favorable credit quality and long-term value through higher card eligibility rates.
- GMV and mix dynamics: Rob O’Hare and others noted broad-based GMV strength across categories with March as the strongest month, citing “40% GMV growth year-on-year” in March and broad-based gains across the merchant base. Direct-to-consumer growth, led by card, was highlighted as a key driver of GMV expansion.
- Partnerships and international expansion: The call underscored ongoing ramp with Costco, Walmart, Shopify renewal through 2028, and international expansion plans—UK go-to-market aided by Adyen for faster integrations, Canada beta ongoing, and Shopify in Canada expected to come online. The leadership emphasized speed to go‑live through Adyen and the importance of merchant relationships to scale globally.
- Credit and risk framework: The team described recession preparedness and proactive underwriting adjustments, focusing on front-end credit posture and back-end portfolio balance to preserve capital markets obligations. They reiterated that the loan book turns over quickly, with early stress signals driving timely actions.
- Technology and AI: Affirm articulated a strong emphasis on AI, machine learning for underwriting and operations, and GenAI for internal tasks and customer resolution capabilities. Management stressed that ML is the backbone for credit decisions, while GenAI enhances efficiency and customer service when used responsibly and with guardrails.

Affirm’s QQ3 2025 results reinforce a growth-oriented trajectory with meaningful top-line expansion, improving profitability dynamics, and a robust liquidity position. The company’s strategic leverage from 0% APR promotions, broad merchant partnerships (Costco, Walmart), and international expansion (UK/Canada) provides multiple catalysts for sustained GMV growth. Management’s emphasis on maintaining credit quality and prudent cost discipline signals a pathway toward profitability, though the company remains sensitive to macroeconomic shifts and funding-market conditions. The balance between accelerating growth and delivering margin expansion will hinge on successful international go-lives, optimization of funding mix (on/off-balance sheet), and continued AI-driven efficiency gains. Given the breadth of partnerships and the scalable nature of Affirm’s platform, the investment thesis centers on continued GMV expansion, monetization across the card and financing ecosystem, and the potential for enhanced profitability as mix shifts and operating leverage materializes, supported by a strong cash position and disciplined capital allocation.