AFRM Stock: Q1 Earnings Beat and GMV Guidance – What We Know

Okay, so Affirm (AFRM) shares jumped 10% after hours. The headline? They "beat" estimates on Q1 earnings and revenue, and upped their FY26 gross merchandise volume (GMV) guidance. Let's unpack this, because "beat the band," as CEO Max Levchin put it, sounds a little too…enthusiastic.

Digging Into the Numbers

First, the good news. Affirm reported $933.33 million in quarterly revenue. That's up from $698.47 million year-over-year. Not bad. Earnings per share came in at 23 cents, above the expected 11 cents. But here's where my internal alarms start buzzing. How much of this "beat" is genuine growth, and how much is clever accounting or, frankly, just the market finally catching up?

Affirm is guiding for Q2 revenue between $1.03 billion and $1.06 billion. The street was already expecting $1.05 billion. Is that really a reason for a 10% after-hours surge? Feels…manufactured. Maybe people are just excited by the idea of BNPL (Buy Now, Pay Later) recovering.

The real kicker is the FY26 GMV guidance lift. The specific number isn't mentioned in these reports, which is annoying, but the market clearly liked it. Still, I'm wary of projections that far out. A lot can happen in a year.

The Cookie Conundrum and Real User Growth

Now, let's talk about something less obvious: cookies. One of the articles mentions cookies and tracking technologies used by NBCUniversal. Why is this relevant? Because Affirm, like many online platforms, relies on tracking user behavior to personalize offers and, ultimately, drive GMV. The increasing push for privacy and cookie restrictions will impact their ability to target effectively. It's like trying to sell shoes to people you can't see anymore.

And this is the part I find genuinely puzzling. If privacy regulations are tightening (and they are), how can Affirm confidently project increased GMV in the long term? Are they factoring in the cost of adapting to a cookieless world? Are they betting on some proprietary, privacy-compliant tracking method? The reports don't say. Details on how they plan to navigate this change remain scarce, but the impact is clear.

Here's a thought leap – a methodological critique if you will. How are they even measuring GMV? Are they counting every transaction, regardless of whether the loan is ultimately repaid? What's the default rate baked into these projections? I've looked at hundreds of these filings, and this particular lack of transparency is unusual.

I saw some chatter online suggesting that Affirm's growth is fueled by partnerships with major retailers. That's probably true, but partnerships are a double-edged sword. They provide a boost, sure, but they also make Affirm dependent on the retailer's success. If a major partner falters (and retail is a brutal business), Affirm's GMV takes a hit. Affirm stock gains on GMV guidance lift, Q1 earnings, revenue beats (AFRM:NASDAQ)

So, What's the Real Story?

The "beat the band" narrative is… premature. Affirm had a decent quarter, sure. Revenue is up. But the market's reaction feels overblown, especially given the looming challenges of privacy regulations and the lack of clarity on their long-term strategy. I'm not saying Affirm is doomed, but I am saying that a 10% jump based on slightly better-than-expected earnings and vague guidance is irrational exuberance at its finest.