Affirm Holdings, Inc. (AFRM) Business Profile

What it does

Affirm is a payment network that lets consumers pay for purchases over time and helps merchants offer financing at checkout. Founded in 2012 and headquartered in San Francisco, the company is led by chief executive Max Levchin.

Its main loan products are Pay-in-X, which primarily splits a purchase into short-term, interest-free installments; interest-free monthly installment loans; and interest-bearing monthly installment loans. Consumers apply for financing and, if approved, choose from the available repayment options. Affirm assesses risk for each transaction and does not charge late fees, deferred interest or compounding interest.

Merchants can add Affirm to their checkout through a direct software connection or a platform partner. They can offer interest-free financing, interest-bearing financing or a combination, and may subsidize the interest rate offered to shoppers. Affirm also provides merchant tools for prequalification, transaction management, analytics and promotions.

The Affirm Card is a physical or virtual debit card. Consumers can link a bank account to pay in full or apply through the Affirm App to pay over time. Virtual cards also let consumers shop with merchants that are not integrated with Affirm. The app and website provide shopping offers, and Affirm offers a savings account through a bank partner.

Affirm facilitates loans originated by bank partners and also originates loans directly through its own licensed subsidiaries. It services the loans it originates or purchases, including loans it subsequently sells to third parties.

How it makes money

Affirm earns money from merchants, borrowers and card transactions. It typically charges a merchant fee when it facilitates a transaction. The fee depends on the merchant agreement, loan terms and product; Affirm generally earns larger merchant fees on interest-free financing. Merchants can choose to subsidize the rates offered to consumers.

Affirm also earns interest on interest-bearing loans it originates or purchases from bank partners. The rate varies with factors including transaction risk, the consumer’s creditworthiness, loan size and repayment term. The loans carry simple interest rather than deferred or compounding interest, and Affirm does not charge late fees or penalties.

When consumers or merchants use cards facilitated by Affirm over card networks, card-issuing partners share a portion of the interchange fee with Affirm. Affirm also services loans it originates or buys and earns servicing fees on loans held by third parties, including loans it has sold. Loan sales and servicing therefore connect its funding arrangements to its revenue model.

For FY2026, merchant network revenue was $1.1 billion, while card network revenue was $294.0 million. The company facilitated $50.2 billion in gross merchandise volume—the value of consumer purchases made through its platform—for the fiscal year ended June 30, 2026. That purchase volume is not the same as Affirm’s revenue.

Product and merchant mix affect the economics of each transaction. The company’s results also depend on whether it holds loans on its balance sheet or sells them to investors, and on the terms and availability of funding. Its servicing role continues after a loan sale, while the proportion of interest-bearing and interest-free loans affects the mix of merchant fees and consumer interest.

Product or service	Revenue, FY2026	Share	Change on the year
Merchant network revenue	$1.1 billion	79.6%	30.3%
Card network revenue	$294.0 million	20.4%	27.1%

Customers and how it sells

Affirm serves consumers seeking to pay for purchases over time and merchants seeking to offer financing and promote their products. Its merchants include small businesses and large enterprises, direct-to-consumer brands, physical stores and businesses selling through multiple channels. They operate in areas including electronics, fashion and beauty, home goods, services, sporting goods and travel.

As of June 30, 2026, Affirm had approximately 571 thousand active merchants. Consumers can encounter Affirm at an integrated merchant’s checkout, apply through its app or website, or use its physical and virtual cards. The company also makes pay-over-time functionality available through select third-party payment and digital wallet channels.

The United States accounted for $4.1 billion of revenue, or 96.5%, in FY2026. Canada accounted for $142.8 million, or 3.35%. Affirm’s platform is broadly available to eligible consumers and merchants in the United States, Canada and the United Kingdom. The company began a limited launch in Australia in the first quarter of fiscal year 2027.

For the fiscal year ended June 30, 2026, 96% of transactions facilitated through the platform were driven by repeat consumers. Affirm also uses its app and marketplace to connect shoppers with merchant offers based on their preferences.

Region	Revenue, FY2026	Share	Change on the year
United States	$4.1 billion	96.5%	32.4%
Canada	$142.8 million	3.35%	20.0%
Other	$6.3 million	0.15%	2,135.5%

Suppliers and costs

Affirm relies on bank partners to originate many loans and on funding partners to finance the loans its platform facilitates. Substantially all loans facilitated through its platform in the United States are originated through Celtic Bank and Lead Bank, although Affirm also originates loans directly under its own licenses.

When a bank partner originates a loan, it initially funds it and may offer to sell it to Affirm. Affirm is obligated to purchase loans offered under its agreements, with the obligation secured by cash deposits. The purchase price includes outstanding principal, a fee and accrued interest; the originating bank also receives a performance fee tied to principal repaid by the consumer.

Affirm’s funding channels include warehouse credit facilities, securitizations, loan sales and forward-flow loan sale arrangements. It works with financial counterparties including banks, investment banks, asset managers, pension funds and insurers. Funding terms and the availability of capital influence how much loan volume Affirm holds or sells.

Other operating needs include technology, underwriting, processing, servicing and collections. Affirm uses sub-servicers for consumer care and collections to help manage overflow and seasonal traffic. As of June 30, 2026, it had 2,358 employees, primarily in the United States.

1. Revenue$4.3B
2. Cost of revenue−$1.8B
3. Selling, general and administrative−$920.8M
4. Other operating costs−$1.1B
5. Operating income$417.0M

Competitive position

Affirm competes with conventional credit and debit cards, including cards issued by Synchrony, J.P. Morgan Chase, Citibank, Bank of America, Capital One, Bread Financial and American Express. It also competes with mobile wallets and pay-over-time services from PayPal, Block and Klarna. Some merchants offer their own pay-over-time options alongside Affirm at checkout.

Affirm’s network connects merchants with consumers, and its risk models use transaction and repayment data to assess individual purchases. The models have been built using data from approximately 553 million loans to date. The company says repeat consumers generally produce lower credit-loss provisions and processing and servicing expenses than first-time consumers.

Our reading: The merchant and consumer network offers a meaningful competitive advantage because repeat use brings both transactions and data, but it does not prevent merchants from presenting competing options at checkout. Our reading: Transaction-level underwriting and accumulated loan data are another source of advantage, although the company still faces competitors with their own established customer relationships and resources.

Affirm notes that many competitors are substantially larger and may have broader product offerings, larger customer bases, operating efficiencies and lower-cost funding. It also competes with new pay-over-time offerings from established financial and payments companies.

Competitor	Where they compete	Threat (our reading)
Synchrony	Credit and debit cards	Medium
J.P. Morgan Chase	Credit and debit cards	Medium
Citibank	Credit and debit cards	Medium
Bank of America	Credit and debit cards	Medium
Capital One	Credit and debit cards	Medium
Bread Financial	Credit and debit cards	Medium
American Express	Credit and debit cards	Medium
PayPal	Mobile wallets and pay-over-time services	Medium

Growth opportunities

Affirm’s growth strategy includes expanding the products and tools it offers consumers and merchants, increasing purchase frequency and adding merchant partnerships. It is developing consumer experiences and merchant features, including AdaptAI, its AI-powered personalized promotion platform.

The company aims to increase use beyond a consumer’s initial purchase and across a broader range of online and in-store transactions. Affirm Card is part of that strategy: the company says card users to date often transact more frequently, use Affirm more in stores and shop across new and existing merchant categories. As of June 30, 2026, there were approximately 7.0 transactions per active consumer, an increase of approximately 20% compared with June 30, 2025.

Affirm also intends to deepen its relationships with existing merchants by expanding across more of their channels and platforms. It plans to add integrated merchants through its sales team and partnerships with platforms and merchant acquirers. Marketing and direct-to-consumer channels are intended to bring more consumers to the network.

International expansion is another company objective. Affirm expects to continue expanding in continental Europe and Australia, following its limited Australian launch in the first quarter of fiscal year 2027. It also expects that adding consumers will help its models assess risk and support approvals across a broader spectrum of consumers. The company’s strategy includes offering merchants additional ways to reach shoppers through promotions and its marketplace.

1. $1.3BFY2022
2. $1.6BFY2023
3. $2.3BFY2024
4. $3.2BFY2025
5. $4.3BFY2026

Structural risks

• Commercial partners: Affirm depends on attracting and retaining merchants, e-commerce platforms and payment platforms. Its results also depend on how prominently partners present, integrate and support its service.

• Credit performance: If consumers default, Affirm may be unable to collect loans. Higher defaults could also cause originating bank partners to originate fewer loans through the platform.

• Regulation: Consumer credit and licensing rules apply across Affirm’s markets, and the application of some licensing laws to its platform is unclear. New or amended rules could restrict loan charges or require additional licenses and operating changes.

• Funding and debt: Affirm’s loan funding depends on capital-market conditions and the supply of capital available through its funding channels. Servicing its debt requires significant cash, and its business may not generate sufficient cash flow to pay that debt.

• Technology and third parties: Software errors, defects or outages could affect the business. Certain installment loans also rely on an issuer processor and an issuing bank partner to move transactions over card networks.

• Control: The dual-class share structure concentrates voting control among holders of Class B shares, including executive officers, directors, employees and their affiliates.

Leadership

Affirm has a dual-class share structure that concentrates voting control among Class B holders, including executive officers, directors, employees and their affiliates.

Name	Role	Since	Total pay, FY2026
Max Levchin		—	$25.9 million
Rob O’Hare		—	$7.0 million
Michael Linford		—	$9.1 million
Libor Michalek		—	$9.1 million
Katherine Adkins		—	$4.3 million

Bottom line

Our reading

Affirm combines a merchant payment network with a consumer lending and loan-servicing business: its economics depend on both transaction activity and how loans are funded, held or sold. Its repeat users and underwriting data support the network, while credit performance, access to funding and relationships with merchants and bank partners remain central exposures. Competition from established payment and credit providers adds pressure as the company seeks more frequent use and international growth.