AFRM · Forward model · Merchant network revenue · Bull case
What has to happen in Merchant network revenue
Model as of
This page changes Merchant network revenue inside the complete AFRM model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
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Merchant network revenue
Basis quarter$302M
Final quarter$767M
Implied CAGR+20%
Final revenue mix21%
The fee merchants pay Affirm for the sale, and the closest thing this company has to a pure take rate on volume. It is highest on 0% promotional and Pay-in-X plans, where the merchant is buying the conversion rather than the consumer buying the credit, so this line rises and falls with how much of the marketplace is merchant-funded rather than with GMV alone.
Last four quarters
2026 Q1
$251M
Reported
2026 Q2
$328M
Reported
2026 Q3
$268M
Reported
2026 Q4
$302M
Reported
Merchant fees on 0% APR monthly installmentsMerchant fees on Pay-in-XMerchant fees on interest-bearing installmentsPlatform and PSP integrations
Units
14057/qtr
growing +6.5% per quarter
$14,057M of GMV in FQ4'26, as reported ($14.1B in the headline). The unit is one million dollars of volume.
Price per unit
$21510
drifting −0.8% per quarter
$21,510 per $1M of GMV: a 2.151% merchant fee, the rate implied by $302.4M on $14,057M. Down from 2.310% in March and below the 2.30-2.49% band of the previous six quarters.
Merchant network revenue
Latest: $767M (2031Q4E)
| Period | Value |
|---|---|
| 2025Q2 | $245M |
| 2025Q3 | $214M |
| 2025Q4 | $239M |
| 2026Q1 | $251M |
| 2026Q2 | $328M |
| 2026Q3 | $268M |
| 2026Q4 | $302M |
| 2027Q1E | $324M |
| 2027Q2E | $347M |
| 2027Q3E | $371M |
| 2027Q4E | $398M |
| 2028Q1E | $427M |
| 2028Q2E | $459M |
| 2028Q3E | $492M |
| 2028Q4E | $529M |
| 2029Q1E | $568M |
| 2029Q2E | $611M |
| 2029Q3E | $656M |
| 2029Q4E | $706M |
| 2030Q1E | $714M |
| 2030Q2E | $721M |
| 2030Q3E | $728M |
| 2030Q4E | $736M |
| 2031Q1E | $743M |
| 2031Q2E | $751M |
| 2031Q3E | $759M |
| 2031Q4E | $767M |
Assumptions & reasoning
- The unit here is one million dollars of GMV, so this line is Affirm's volume multiplied by the merchant fee it earns per million. Both halves are disclosed: GMV every quarter in the headline - $14,057M in FQ4'26 - and the fee derived by division.
- THE FEE RATE BROKE ITS BAND THIS QUARTER. It has run 2.30% to 2.49% across the six quarters to March; FQ4'26 came in at 2.151%, below the bottom of that range and 6.5% below the 2.30% of the June quarter a year ago. The model still drifts the rate down 0.75% a quarter, which is a 3.0% annual decline - about half the erosion the print just delivered. That assumption has been left alone deliberately: one quarter carrying a large enterprise promotional event is not a trend, and Affirm says that event does not repeat in FQ1'27. If the rate prints below 2.2% again in September, this drift is wrong and the merchant line has to be re-cut on a steeper one.
- The company's own explanation is mix, and it is in the letter: network revenue grew 26% against 36% GMV growth, in part due to a mix shift towards direct-to-consumer GMV, which carries lower network revenue as a percentage of GMV. D2C GMV grew 49% to $4.7B and was driven entirely by the Affirm Card. That is the cannibalisation this line was always going to face, arriving on schedule.
- GMV grows 6.5% a quarter here, unchanged. That is a 28.6% annual run rate against the more-than-$64B FY2027 guide, which is 27.5% growth on the $50.2B just delivered. It is deliberately above the guide and below the 36-37% Affirm actually delivered in FQ4'26 and in FY2026 as a whole.
- The ceiling of $30B of GMV a quarter - $120B a year - is what stops a 6.5% compound running to infinity. Rolling the basis forward from $11.6B to $14.1B pulls that ceiling forward by roughly two quarters: it now binds inside the projected fourth year rather than at the end of it, which is a mechanical consequence of a bigger starting quarter and not a change of view. The ceiling was not moved to hide it. Affirm now reports $30.0B of committed funding capacity against a $20.2B platform portfolio, so a $120B annual ceiling still assumes that capacity roughly doubles again.
- This is the same GMV that drives the gain-on-sale line, and the two carry it separately: moving volume here without moving it there breaks the arithmetic that ties both to one company.