AFRM · Forward model · Servicing income · Bull case
What has to happen in Servicing income
Model as of
This page changes Servicing income inside the complete AFRM model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
Shares this vertical and portfolio case. Slider and horizon edits stay in your browser.
Servicing income
Basis quarter$46M
Final quarter$143M
Implied CAGR+25%
Final revenue mix4%
The fee Affirm earns for collecting on loans other people own. It is the annuity attached to the sold book - small, boringly consistent, and the one line that keeps paying after Affirm has stopped taking the credit risk.
Last four quarters
2026 Q1
$40M
Reported
2026 Q2
$43M
Reported
2026 Q3
$45M
Reported
2026 Q4
$46M
Reported
Servicing fees on third-party owned loansServicing on securitisation trusts
Sequential growth
+5.0%/qtr
decaying toward +4.0%
5.0% a quarter, down from 6.5%. The last three sequential moves were 7.7%, 4.4% and 3.2%, so the published rate was above every recent print.
Servicing income
Latest: $143M (2031Q4E)
| Period | Value |
|---|---|
| 2025Q2 | $29M |
| 2025Q3 | $32M |
| 2025Q4 | $34M |
| 2026Q1 | $40M |
| 2026Q2 | $43M |
| 2026Q3 | $45M |
| 2026Q4 | $46M |
| 2027Q1E | $49M |
| 2027Q2E | $52M |
| 2027Q3E | $55M |
| 2027Q4E | $59M |
| 2028Q1E | $62M |
| 2028Q2E | $66M |
| 2028Q3E | $70M |
| 2028Q4E | $74M |
| 2029Q1E | $78M |
| 2029Q2E | $83M |
| 2029Q3E | $87M |
| 2029Q4E | $92M |
| 2030Q1E | $98M |
| 2030Q2E | $103M |
| 2030Q3E | $109M |
| 2030Q4E | $115M |
| 2031Q1E | $121M |
| 2031Q2E | $128M |
| 2031Q3E | $135M |
| 2031Q4E | $143M |
Assumptions & reasoning
- This is the one line in the model with no driver behind it, and that is the honest answer rather than a lazy one: the thing that decides servicing income is the balance of third-party-owned loans Affirm services, and Affirm does not publish that balance quarterly. It does now disclose the platform portfolio - $20.2B against $15.1B a year ago - and says servicing income stayed at approximately 2% of the average off-balance-sheet portfolio, which is the closest thing to a rate this line has ever had.
- The growth rate is cut from 6.5% to 5.0% a quarter, decaying toward 4%. It is the only growth rate in this roll-forward that moved. The last three sequential prints were 7.7%, 4.4% and 3.2%; 5.0% is roughly their average and still above the two most recent. Year over year the line grew 36%, so this is a deceleration the quarters themselves are already showing rather than a call on the future.
- At 4.0% of revenue this is the smallest line in the model, and a wrong growth rate here changes the fair value by cents. It earns its place because leaving it out would break the reconciliation to reported total revenue.
- The margin near 55% is a guess constrained by arithmetic. It was set so the five lines together summed to the $498M of RLTC Affirm reported for FQ3'26; against the $589M reported for FQ4'26 the five now sum to $569M, and this line's share of that gap has not been re-cut. See the model note.
- The direction of risk is upward. Every quarter Affirm sells more paper than it holds, the serviced book that pays this fee gets larger - which is why a bear case for gain on sale is not automatically a bear case here.