Affirm reported its fiscal year-end quarter — the three months ended 30 June 2026 — after the US close on 27 August. Revenue was $1,166 million, up 33%. GAAP diluted EPS was $4.62 against a $0.33 consensus. That is not a 1,300% operating beat, and no reader should treat it as one: $1,447.5 million of the $1,617 million of net income is a non-cash income tax benefit from releasing the deferred tax valuation allowance. Pre-tax income was $169.1 million, or about $0.48 per diluted share. The shares closed at $77.49 on the day of the print and traded at $83.95 after hours, up 8.3% — on the operating result, not the tax line.
Our preview said the tax line would be the largest item in the release, that it would be non-cash, and that any headline not separating EPS before and after it was unusable. It landed exactly there.
What the preview asked, and what the print answered
The fiscal 2027 guide, not the quarter — and it is the number that moved. Affirm guided fiscal 2027 to more than $64.0 billion of GMV, revenue at roughly 8.49% of GMV, RLTC at about 4.16%, and an operating margin of more than 14.5% with adjusted operating margin above 30.5%. For the September quarter: GMV $13.7–14.0 billion, revenue $1,190–1,220 million, operating margin 11.5–13.5%. On the company's own arithmetic, $64 billion at 8.49% is roughly $5.4 billion of revenue, against $4,261 million in fiscal 2026.
The income tax line — released, as flagged. The $1,447.5 million benefit is the release of the US deferred tax valuation allowance, which Affirm's March 10-Q had said might fall within the year ending 30 June 2026. It is non-cash and it does not repeat. Fiscal-year GAAP diluted EPS of $5.53 carries the same distortion; fiscal 2026 pre-tax income was $492.7 million.
Operating margin against the guided 9.5–11.5% — beaten. Operating income was $147 million, an $89 million improvement, and operating margin was 12.6% against 6.6% a year ago. That is above the top of the guide, and it is where the real beat is. The preview said the Street's high estimate needed roughly 15%; it did not get that, but the company cleared its own ceiling. Adjusted operating income was $353 million, a 30% margin against 27%.
GMV against $13.15–13.45B, and the take rate — both ahead. GMV grew 36% to $14.1 billion, above the top of the guide, with transactions up 41% to 53 million. Revenue as a percentage of GMV was 8.29%, near the high end of the company's own range, and RLTC grew 39% to $589 million, or 4.19% of GMV, above the high end. The preview's worry — that the guide implied the first sub-30% growth quarter in eleven — did not happen.
Delinquencies and funding costs — the good half held. Average annualised cost of funds fell about 103 basis points year over year and 5 sequentially, to 5.8%. 30+ day delinquencies excluding Peloton and Pay in X loans rose 19 basis points year over year but fell 26 basis points sequentially, to 2.5%; allowance for credit losses was 5.9% of loans held for investment, up from 5.6% a year ago and down from 6.0% in March. With no tax-refund seasonality to point at, the sequential improvement is the more meaningful of the two comparisons.
What changed in the story
Two things, and only one of them is the tax benefit.
The first is that Affirm's own guide now assumes operating leverage, not just growth. Fiscal 2026 finished at a 9.8% operating margin on $4,261 million of revenue; fiscal 2027 is guided above 14.5% on roughly $5.4 billion. That is a company saying the fixed-cost base is built. The tax benefit says nothing about that; the margin guide does.
Max Levchin's own framing on the call was the same one: the June quarter "was our most profitable quarter ever, even without the tax allowance release." He then spent the hour in Q&A rather than on prepared remarks, announcing Michael Linford's promotion to President and Pat Suh's to SVP and GM of Global Markets, and refusing the macro read on credit — Affirm underwrites "roughly 100 million times a quarter" and, in his words, is "in control of the credit reality" rather than a proxy for the US consumer.
The second change is that the earnings series this site stores is now distorted for four quarters. GAAP diluted EPS of $4.62 enters the trailing window and takes trailing-twelve-month GAAP EPS to $5.52, which drops the P/E from 41.65 to 14.77 on the 30 June close of $81.55. Affirm did not get two-thirds cheaper in a quarter. That multiple unwinds mechanically when the June quarter rolls out of the trailing window, and any comparison drawn from it before then is measuring an accounting event.
What is coming
Earnings normalise from here, and the company said by how much. CFO Rob O'Hare, asked directly how to model GAAP EPS for fiscal 2027, pointed at the guided operating income and share count and supplied the missing input: on a run-rate basis the GAAP tax rate lands in the mid-to-high 20% range, with volatility from stock-based compensation and other book-tax differences. That is the arithmetic that turns this quarter's $4.62 back into an ordinary number.
The September quarter is guided to $13.7–14.0 billion of GMV and $1,190–1,220 million of revenue at an 11.5–13.5% operating margin, with a stated headwind: a promotional event with a large enterprise merchant that ran in the September 2025 quarter does not repeat, and a separate enterprise merchant intends to move its Pay Later volumes in-house. The outlook also assumes short-term benchmark rates rise through fiscal 2027, which puts the 5.8% cost of funds — the largest tailwind to RLTC this year — on the other side of the ledger. O'Hare's answer on why the 4.16% RLTC guide sits above the 3.25–4% mid-term range was funding, not pricing: execution in the debt capital markets has "brought on a capital base that gives us a profile and a funding cost that we think should carry on through FY 2027", with a slight mix shift toward interest-bearing loans. Affirm has not yet announced its next report date; our calendar carries an estimate of 5 November 2026.
What we learned
- The valuation allowance released, and it is 90% of the headline. A $1,447.5 million non-cash tax benefit turned $169.1 million of pre-tax income into $1,617 million of net income and $4.62 of GAAP diluted EPS. Pre-tax income per diluted share was about $0.48 against a $0.33 consensus.
- The operating beat is real and separate from it. Operating income $147 million, margin 12.6% against a guided 9.5–11.5% and 6.6% a year ago; adjusted operating margin 30% against 27%.
- GMV grew 36% to $14.1 billion, above the top of the guide, on 53 million transactions (+41%). Revenue was 8.29% of GMV and RLTC 4.19%, both near or above the high end of the company's own ranges.
- Fiscal 2027 is guided to operating leverage: more than $64 billion of GMV and an operating margin above 14.5%, against 9.8% in fiscal 2026 — while the outlook assumes benchmark rates rise, putting the 5.8% cost of funds at risk.
- Earnings normalise from here at a mid-to-high-20s GAAP tax rate, the CFO's own run-rate guidance — and the P/E series stays distorted until this quarter rolls off: trailing GAAP EPS of $5.52 takes the multiple from 41.65 to 14.77, which is the tax benefit, not a re-rating.
Affirm Holdings (Nasdaq: AFRM) reported its fourth fiscal quarter and fiscal year 2026 — the three months and year ended 30 June 2026 — after the US close on 27 August 2026, in a shareholder letter furnished as Exhibit 99.1 to the Form 8-K of the same date. Revenue, GMV, transactions, RLTC, operating income, adjusted operating income, the income tax benefit, the credit and funding-cost figures and all guidance are the company's own, as reported; the full figure set is on the Affirm Q4 FY2026 earnings page. Pre-tax income per diluted share of about $0.48, the roughly $5.4 billion of fiscal 2027 revenue implied by $64 billion of GMV at 8.49%, the fiscal 2026 operating margin of 9.8%, and the trailing-twelve-month EPS and P/E arithmetic are ours. The $0.33 EPS and $1.11B revenue consensus figures are press-reported on a Zacks basis, carried in our preview, and are not series this site verifies. Prices are closes: $77.49 on 27 August 2026, before the release, and $81.55 on 30 June 2026, the date the P/E convention uses. Quotations, the run-rate GAAP tax-rate guidance and the RLTC commentary are from the earnings call held the same afternoon, 27 August 2026, and sit alongside the rest of the call on the earnings call page; the transcription of that call carries no speaker attribution, so speakers are attributed from the questions they answer and from the host introduction. The after-hours price of $83.95, up 8.3%, is as at 6:40 p.m. Eastern on 27 August 2026, sourced to stockanalysis.com. Fiscal 2027 guidance is a forward-looking statement by the company, not a forecast by this site.
