The news: Affirm’s gross merchandise volume (GMV) increased 42% YoY to $10.8 billion during its fiscal Q1 2026 (ended September 30, 2025). 

The buy now, pay later (BNPL) provider demonstrated strength across other key metrics:

• Revenues jumped 34% YoY to $933 million.
• Active consumers grew 24% YoY to 24.1 million.
• Monthly transactions per active consumer increased 20% to 6.1.
• And the number of active merchants leapt up 30% YoY to 419,000.

How we got here: Direct merchant point-of-sale (POS) integrations drove about half of Affirm’s GMV growth.

• The number of merchants funding Affirm’s popular 0% APR offers tripled to 40,000 vendors.
• 95% of all GMV from monthly 0% APR installment plans in Q1 2026 were from merchant-funded offers.

The Affirm Card powered approximately one-third of GMV over the quarter.

• Card GMV soared 135% YoY to $1.5 billion.
• GMV from in-store spend with the Affirm Card jumped 170% YoY.
• 0% APR GMV on the Affirm Card grew 158% YoY.
• And active cardholders increased roughly 12% YoY to 2.8 million cardholders.

Our take: Healthy performance across its POS integrations and its debit card is key to why we forecast Affirm will  remain the dominant US BNPL player against its chief competitor, Klarna, by a margin of $4.7 billion in US volume.

However, PayPal’s rise as a major player in the BNPL space should be a cause for concern for Affirm. The fintech said it will crack $40 billion in BNPL volume by year’s end, which could unseat Affirm’s lead. While Affirm notched its second quarter of profitability at $81 million in net income, it’s going to need to widen its margins to compete with the rewards PayPal can offer consumers, such as 5% cash back on Pay Monthly loans.