The news: Affirm notched strong growth in fiscal Q2 2026 (ended December 31, 2025) with gross merchandise volume up 36% YoY to $13.8 billion, per the company’s earnings release.

• Revenues increased 30% YoY to $1.1 billion, exceeding analysts’ anticipation of $1.06 billion, per FactSet.
• Active customers rose 23% to 23.5 million.
• Transactions per active customer increased 20% to 6.4.
• And active merchant count increased to 42% to 478,000.

Rising active customers, repeat purchase behaviors, and active merchants point to Affirm’s increasing engagement on both sides of the platform—consumers using Affirm for routine transactions and more merchants adding buy now, pay later (BNPL) at checkout to boost conversion rates. 

Growth levers: The Affirm Card and a 0% interest holiday promotion fueled big jumps in volume and active users.

• The Affirm Card generated $2.186 billion in GMV, surging 159% YoY.
• Active cardholders grew 121% YoY to 3.7 million.
• During the Cyber Five, US 0% APR monthly installment GMV grew 62% YoY.
• Across the entire quarter, Card 0% APR GMV rocketed up 190% YoY—making up 20% of all card volume.

During the earnings call, CEO Max Levchin described how Affirm Card is moving out of its infancy as “a cool novelty product for our die-hard users” and into a tool that “creates more die-hard fans.”

Warning signs: While the fintech netted some wins with its debit card products and promotion, consumer health metrics waned.

• 30-day delinquencies struck a six-year high during the quarter and ended at 2.7%—up YoY and QoQ. 
• Charge-offs rose YoY and QoQ for interest-bearing loans
• Revenue as a portion of GMV is also down on the quarter and the year.

Affirm still argues that its delinquencies are better than select, unnamed consumer lenders, but the combination of rising credit costs and lower interest income as more of its loan mix shifts back toward interest-free options (up from 28% a year ago to 33%) will weigh heavily on Affirm’s profitability. 

Implications for installment providers: Promotions hold weight. Affirm’s 0% interest holidays and PayPal’s 5% cash-back offers have captured new consumers.

As US BNPL firms fight for dominance, the fintech provider that can establish loyalty after these promotions elapse—through membership rewards or rewards for deposits for future banking ambitions—stand to emerge the winner. However, thin margins will make credit card-style rewards difficult to recreate.