AFRM · Forward model · Gain on sales of loans · Bear case
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Gain on sales of loans
Basis quarter$165M
Final quarter$173M
Implied CAGR+1%
Final revenue mix9%
What Affirm books when it sells originated paper to forward-flow buyers and securitisation trusts instead of holding it. It is the release valve on the balance sheet: every loan sold is capital freed to originate again, and the price it fetches is the market's live opinion of Affirm's underwriting.
Last four quarters
2026 Q1
$119M
Reported
2026 Q2
$185M
Reported
2026 Q3
$127M
Reported
2026 Q4
$165M
Reported
Forward-flow loan sales to third-party buyersSecuritisation trust sales
Units
14057/qtr
growing +6.5% per quarter
The same $14,057M of GMV that drives merchant network revenue. Move both together or neither.
Price per unit
$11744
drifting 0.0% per quarter
$11,744 per $1M of GMV: 1.174%, derived from $165.1M on $14,057M. Affirm discloses no sale volumes.
Gain on sales of loans
Latest: $173M (2031Q4E)
| Period | Value |
|---|---|
| 2025Q2 | $125M |
| 2025Q3 | $76M |
| 2025Q4 | $117M |
| 2026Q1 | $119M |
| 2026Q2 | $185M |
| 2026Q3 | $127M |
| 2026Q4 | $165M |
| 2027Q1E | $170M |
| 2027Q2E | $174M |
| 2027Q3E | $179M |
| 2027Q4E | $184M |
| 2028Q1E | $189M |
| 2028Q2E | $195M |
| 2028Q3E | $200M |
| 2028Q4E | $205M |
| 2029Q1E | $211M |
| 2029Q2E | $217M |
| 2029Q3E | $223M |
| 2029Q4E | $229M |
| 2030Q1E | $222M |
| 2030Q2E | $214M |
| 2030Q3E | $206M |
| 2030Q4E | $199M |
| 2031Q1E | $192M |
| 2031Q2E | $186M |
| 2031Q3E | $179M |
| 2031Q4E | $173M |
Assumptions & reasoning
- Affirm does not disclose how much paper it sells in a quarter or at what price, so this line is modelled on the denominator it does disclose: GMV. The unit is one million dollars of volume, and the $11,744 it earns per million is a derived rate, not a published one.
- That rate has now run between $8,814 and $13,422 per $1M of GMV across seven reported quarters with no trend, which is why the drift is still zero. FQ4'26 landed at 1.174%, inside the range and above the 1.10% of March. The letter attributes the increase to a 26% growth in loans sold plus 29 bp of more favourable loan sale pricing.
- THE LUMPINESS IS NOW ON THE RECORD AND IT IS STRUCTURAL. On the call, management said that quarters carrying a non-consolidated ABS deal show 'a bit more gain on sale revenue', that Affirm did two such deals in FY2026 - one of them in FQ4 - and that it has stopped publishing the schedule for FY2027. So this line is not merely seasonal, it is deal-timed, and a smooth quarterly rate applied to GMV will be wrong every single quarter in a direction nobody outside the company can predict. The zero drift is the honest response to that, not a forecast.
- GMV growth and the ceiling here are identical to the merchant network line by construction, because it is the same volume. If you move one, move the other, or the model is describing two different companies.
- The margin near 91% is the highest in the model and the most fragile assumption in it: the credit cost of sold loans sits with the buyer, so almost nothing lands against this revenue except a share of processing. A forward-flow market that reprices does not lower this margin, it removes the revenue.
- This is the line that goes first in a funding shock. In 2022 the securitisation market closed to consumer paper for months, and a company with $30.0B of committed capacity still needs a bid for what it originates beyond what it can hold.