Strong Demand for Buy Now, Pay Later Drives Higher Volume and Improving Margins

Like its peers, Affirm is focused on getting as many merchants as possible onto its platform, seeking to expand its reach through either direct agreements or partnerships with payment service providers. This approach has been unquestionably effective as both transaction volume and the number of merchants using Affirm saw accelerating growth in fiscal 2025. While we do expect transaction volume growth to slow over time, we see a long runway for growth for Affirm, with our projections calling for average spending volume growth of 24.2% over the next five years. Case in point, Affirm has seen only minimal growth deceleration in the first three quarters of its fiscal 2026.