AFRM · Forward model · Servicing income
What has to happen in Servicing income
Model as of
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Servicing income
Basis quarter$46M
Final quarter$111M
Implied CAGR+19%
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: $111M (2031Q4E)
| Period | Value |
|---|---|
| 2025Q2 | $29M |
| 2025Q3 | $32M |
| 2025Q4 | $34M |
| 2026Q1 | $40M |
| 2026Q2 | $43M |
| 2026Q3 | $45M |
| 2026Q4 | $46M |
| 2027Q1E | $48M |
| 2027Q2E | $51M |
| 2027Q3E | $53M |
| 2027Q4E | $56M |
| 2028Q1E | $58M |
| 2028Q2E | $61M |
| 2028Q3E | $64M |
| 2028Q4E | $67M |
| 2029Q1E | $70M |
| 2029Q2E | $73M |
| 2029Q3E | $76M |
| 2029Q4E | $80M |
| 2030Q1E | $83M |
| 2030Q2E | $87M |
| 2030Q3E | $90M |
| 2030Q4E | $94M |
| 2031Q1E | $98M |
| 2031Q2E | $102M |
| 2031Q3E | $107M |
| 2031Q4E | $111M |
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.