Article Directory
The Numbers Don't Lie: Affirm's Q1 2026 Looks Rosy, But Dig Deeper
Affirm Holdings, Inc. (NASDAQ: AFRM) just released its fiscal first quarter 2026 results, and on the surface, things look pretty good. The company reported earnings of $0.23 per share, soundly beating the Zacks Consensus Estimate of $0.11. Revenue also exceeded expectations, coming in at $933.34 million against an estimated $885.05 million. That's a revenue surprise of 5.46%. A year ago, they were looking at a loss of $0.31 per share. This quarter? Profit.
So, what's not to like? Well, let's take a closer look.
The Headline vs. The Fine Print
The initial headline – "Affirm Holdings (AFRM) Surpasses Q1 Earnings and Revenue Estimates" – is undeniably positive. The company's stock has also added about 17.4% since the beginning of the year (versus the S&P 500's gain of 15.6%). But as any seasoned analyst knows, headlines often mask underlying complexities.
The earnings surprise, while impressive at +109.09%, needs context. Were expectations simply set too low? Or did Affirm genuinely outperform? The answer, as usual, is somewhere in between. The surge in revenue—$933.34 million versus $698.48 million year-ago—is certainly a positive signal. But revenue alone doesn't tell the whole story. What about the cost of acquiring that revenue? Are they spending more to get each new customer? Details on customer acquisition costs during the quarter are notably absent from the press release.
Here's where I get a little skeptical. Affirm's mission, according to their press release, "is to deliver honest financial products that improve lives." That's a lofty goal. And I respect it. But how does that mission statement reconcile with the inherent risk associated with "buy now, pay later" services, particularly in a volatile economic climate? Are they truly "improving lives," or simply enabling increased consumer debt?
Cookie Conundrums and Data Privacy
Another aspect worth scrutinizing is Affirm's reliance on data collection, as outlined in their cookie notice (which, admittedly, isn't specific to Affirm but rather a general NBCUniversal policy). The notice details how cookies are used for everything from "system administration" to "ad selection and delivery."
They use cookies to track your browsing habits, your use of the Services, your preferences, and your interaction with advertisements across platforms and devices for the purpose of delivering interest-based advertising content on the Services and on third-party sites.
While cookie policies are standard practice, the sheer breadth of data collected raises questions. How transparent are Affirm (and its partners) about the use of this data? And how easily can consumers truly opt out? The cookie notice offers various opt-out mechanisms, but navigating these can be a labyrinthine process. Moreover, the notice states that even after opting out, users will still see advertisements, "but they may not be as relevant to you." Does that mean the data collection simply shifts from personalized ads to more generic ones?
I've looked at dozens of these cookie policies, and they all say essentially the same thing. The question is: do consumers really understand what they are agreeing to when they click "accept"?
What's Next? A Look at Estimates
Looking ahead, the consensus EPS estimate for the coming quarter is $0.25 on $1.04 billion in revenues, and $0.86 on $3.99 billion in revenues for the current fiscal year. These are estimates, of course (and subject to revision). But they suggest continued growth and profitability.
The key question is: can Affirm maintain this momentum? The article mentions that "the estimate revisions trend for Affirm Holdings was mixed" prior to the earnings release. This suggests some uncertainty among analysts.
And this is the part of the report that I find genuinely puzzling. Why the mixed revisions trend, given the strong earnings beat? Does the market see potential headwinds that aren't immediately apparent in the headline numbers? Perhaps concerns about increasing competition in the BNPL space? Or maybe a broader macroeconomic slowdown?
So, What's the Real Story?
Affirm's Q1 2026 results are undeniably positive on the surface. But a deeper dive reveals some lingering questions. The company's reliance on data collection and the mixed estimate revisions trend suggest a need for continued scrutiny. The key to Affirm's long-term success will be its ability to balance growth with responsible lending practices, and to navigate the evolving landscape of data privacy. The numbers look good now, but the devil, as always, is in the details.