"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."
— Max Levchin
03Detailed Report
AFRM
Company AFRM
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 20, 2026
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Executive Summary
Affirm Holdings reported QQ3 2025 results with solid top‑line momentum and improving profitability dynamics, supported by robust gross margins and strong cash generation. Revenue of $783.1 million and gross profit of $512.1 million yielded a gross margin of approximately 65.4%, while operating income remained near breakeven at a negative $8.4 million. Net income was $2.8 million, reflecting a transition toward profitability as the company leans into growth opportunities and selective investments in brand and partnerships. Operating cash flow was $210.4 million and free cash flow was $157.4 million, underscoring a healthy cash-generating core despite an elevated long‑term debt burden.
Key Performance Indicators
Revenue
Increasing
783.13M
QoQ: -9.61% | YoY: 35.92%
Gross Profit
Increasing
512.12M
65.39% margin
QoQ: -14.96% | YoY: 4.95%
Operating Income
Increasing
-8.39M
QoQ: -94.19% | YoY: 60.02%
Net Income
Increasing
2.80M
QoQ: -96.51% | YoY: 102.09%
EPS
Increasing
0.01
QoQ: -96.00% | YoY: 102.33%
Revenue Trend
Margin Analysis
Financial Highlights
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.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
783.13M
35.92%
-9.61%
Gross Profit
512.12M
4.95%
-14.96%
Operating Income
-8.39M
60.02%
-94.19%
Net Income
2.80M
102.09%
-96.51%
EPS
0.01
102.33%
-96.00%
Key Financial Ratios
Gross Profit Margin
Excellent
65.40%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
-0.01%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
0.36%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.03%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
0.10%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
63.09
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
High Risk
2.56
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
High Growth
1,305.63x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
Premium
5.09x
Trading at premium to book value, reflects strong intangibles or growth
Management Insights Available for Members
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