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Affirm just told investors to expect more. The buy now, pay later provider raised its full-year growth floor for fiscal 2027 to at least 30%, after a first quarter in which gross merchandise volume climbed 34% year over year.
The company also introduced a new AI underwriting model that it says approves more borrowers while keeping credit losses flat.
The numbers behind the raise
Gross merchandise volume, or GMV, measures the total dollar value of purchases running through Affirm’s platform. It grew 34% in fiscal Q1 2027 compared with the same quarter a year earlier.
That performance gave management enough confidence to lift the floor on its full-year outlook to a minimum of 30%. Early second-quarter trends point to GMV growth in the high-30% range, according to the company’s results discussion.
Revenue rose 35% for the quarter, landing at approximately between $1.26 billion and $1.3 billion.
The merchant side looked even stronger. Active merchants jumped 48% year over year to 621,000.
A transformer for your credit file
The headline technology this quarter is a new transformer-based underwriting model. The model is trained on 14 years of transactional data and is now running in the US. Affirm says it delivered a 3.4% incremental conversion lift through higher credit approvals, with credit losses holding flat.
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The company expects the model to improve approval rates by roughly 2 to 3 percentage points without adding risk. It said the new system outperformed its traditional underwriting methods.
Room to run, according to management
CEO Max Levchin and CFO Rob O’Hare laid out a long-term growth target exceeding 30%. They pointed to market expansion as the engine.
Affirm’s share of e-commerce currently sits under 4%, and the company operates in only four markets.
Beyond online checkout, Affirm is pushing into artificial intelligence integrations and software for offline merchants.
What this means for investors and the BNPL race
For shareholders, the raised floor matters more than the beat. A company that raises guidance after one quarter is signaling that it sees demand holding up, not just a lucky stretch.
The early Q2 read in the high-30% range adds weight to that signal.
What is harder to copy is a credit engine built on 14 years of repayment behavior. If Affirm’s model genuinely approves more shoppers at the same loss rate, that becomes a moat competitors cannot buy off the shelf.
It also changes the conversation with merchants. Affirm can pitch a measurable conversion lift, which is a far easier sale than “trust us, consumers like installments.”
