Investment Thesis
Affirm demonstrates exceptional revenue growth (189.5% YoY) and strong free cash flow generation ($438.2M), indicating successful business scaling and cash conversion. However, the company faces significant financial leverage (2.54x Debt/Equity, 0.8x Interest Coverage) that constrains profitability metrics (5.9% ROE, 1.6% ROA) and creates refinancing risk despite positive net income growth.
AFRM Strengths
- Strong revenue growth of 189.5% YoY demonstrates robust market demand and successful business expansion
- Impressive free cash flow of $438.2M with 21.3% FCF margin shows the core business generates substantial cash despite capital requirements
- Net income profitability of $210.3M (+110.1% YoY) and 10.2% net margin indicate the business model is achieving scale profitability
AFRM Risks
- Dangerously low interest coverage ratio of 0.8x indicates debt service obligations exceed operating income, creating acute refinancing and solvency risk
- High leverage with 2.54x Debt/Equity ratio and $9.0B long-term debt against only $3.5B equity limits financial flexibility and increases distress risk
- Weak return metrics (5.9% ROE, 1.6% ROA) despite strong revenue growth suggest asset-heavy business model with capital intensity and operational challenges relative to equity base
Key Metrics to Watch
- Interest coverage ratio trend - must improve above 1.5x to indicate sustainable debt service capability
- Operating margin expansion - critical to validate profitability gains and assess operating leverage
- Debt/Equity ratio - needs reduction below 2.0x to demonstrate deleveraging and improved financial stability
AFRM Financial Metrics
AFRM Profitability Ratios
AFRM Balance Sheet & Liquidity
AFRM 5-Year Financial Trend
5-Year Trend Summary: Affirm Holdings, Inc.'s revenue has grown significantly by 159% over the 5-year period, indicating strong business expansion. The most recent EPS of $-3.34 indicates the company is currently unprofitable.
AFRM Growth Metrics (YoY)
AFRM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $303.0M | -$19.9M | $-0.06 |
| Q1 2026 | $231.8M | $80.7M | $0.23 |
| Q3 2025 | $195.0M | $2.8M | $0.01 |
| Q2 2025 | $227.6M | -$19.9M | $-0.06 |
| Q1 2025 | $179.4M | -$100.2M | $-0.31 |
| Q3 2024 | $148.5M | -$133.9M | $-0.43 |
| Q2 2024 | $163.1M | -$166.9M | $-0.54 |
| Q1 2024 | $139.9M | -$171.8M | $-0.57 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AFRM Capital Allocation
AFRM SEC Filings
Access official SEC EDGAR filings for Affirm Holdings, Inc. (CIK: 0001820953)