Affirm (AFRM) 6 Feb 252025 Q2 Earnings call transcript

Company Profile

Participants

Zane Keller	executive
Max Levchin	executive
Ramsey El-Assal	analyst
Robert O'Hare	executive
William Nance	analyst
Michael Linford	executive
Matthew O'Neill	analyst
Dan Dolev	analyst
Kyle Peterson	analyst
Robert Wildhack	analyst
Reginald Smith	analyst
Andrew Bauch	analyst
Jason Kupferberg	analyst
Vincent Caintic	analyst
John Hecht	analyst
Andrew Jeffrey	analyst
Timothy Chiodo	analyst
James Friedman	analyst
James Faucette	analyst

Call transcript

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Operator

Good afternoon. Welcome to Affirm Holdings, Inc.

Second Quarter Fiscal 2025 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. [Operator Instructions]

to Investor call Relations. like Keller, to now of Director would turn over the Zane I Thank you.

begin. may You

Zane Keller

Thank you, operator.

and Before make we These today's including only the call subject Actual begin, SEC, from listening numerous assume those or may any that required everyone today, we I to available materially our contain as would set like not which forth results forward-looking speak forward-looking by filings and statements differ today. are company statements. may website. forward-looking risks forward-looking any Relations in are to statements intent uncertainties, Investor remind with that them, These our does to law. the of except statements obligation update as on

measures not as supplement In addition, today's substitute call a may measures. These be to a should include and GAAP measures. non-GAAP financial for considered financial

the financial is comparable in earnings supplement to For slide be Investor historical website. measures reconciliations our found which most non-GAAP can on Relations our directly deck, measures, GAAP available

Hosting from Michael Linford, immediately are today's prior will brief Officer; O'Hare, Operating practice and Officer; In with Chief Chief questions Affirm's remarks proceeding our begin Max Founder Rob and answers. we line call opening in Levchin, Financial Affirm's Max Executive Officer. Affirm's before quarters, with Chief into with me and

that I call On will over the to turn note, Max to begin.

Max Levchin

Thank you, Zane.

quarter. great Another

to for years. I an not, at been partner epic XX want at only thank together, a of expound first length for ago, not frequent I in that the both Libor, LIBOR, Urbana-Champaign. be isn't Affirm our make on with name years, but any and him do importantly, keeping Libor. Affirm And for us our taking moment me though Computer met Illinois need a to the and rodeo along product thank perhaps here at is even So speak And grumpy President, over XX University pronounced with operations He's fact, do he remiss to Science a years studying typical They but for feel whose crime call. our of I for not themselves. you, XX importantly, his strong European engineering in not putting moment up joke. humming most and Eastern would efforts more in numbers. credit my take Thank to

years many to to Here's more together. Zane. Back you,

Zane Keller

now you, will take please your our Operator, the question. Thank line open With that, Max. questions. first for we

Operator

El-Assal [Operator Ramsey with Instructions] question Our first is from Barclays.

Ramsey El-Assal

you in the is you're ask broad-based? Like loans Terrific how results. increase particular and merchant for just it doors verticals it? noticeable with Are them? is wanted Or deploying those? behind I opening to Are X% sort of partners? about a it targeting? strategy about existing new ask more you just a Is you're there there

Max Levchin

question the all thank for above, short of you, answer The it's a is it. asking Ramsey, very and great but

First And powerful same -- at interest-free not reason, price, of the our will, if at interest manufacturers we're allows for reduced paying the parts other while all, loans. very these essentially powerful sometimes the of to or them XX% you is are programs because, one donate, X% not margin Channeling such reduced to teaches sale. XX% give One APR it's where for reason the towards consumers merchants of of compelling off, APRs discounting. to so on borrowers the and good integrity and wait time the ways to hey, compromises -- a look very the buy here's say, them their the a buying. merchants promotions. to is for same it. promotional they our to someone When growth, are way XX%, do a trigger interest is a There turn they for to in doing at do ways all, obviously, quarter, sometimes price well-understood fourth frequently discounts, on hand, handful pull calendar or like saying reason pricing dollars same which your is the typical hand into on next

this long-term And well. merchants really know so our

earliest do Some We've since creating little tools of practice. part. this merchants on with pioneered industrialized really essentially where they this really by our work this our very can

so what's And that's on display.

audience think, last our strongly. have card. sale here I lean said, The delivered we've worth on highlighting is with now and And direct-to-consumer We were that's of our a of quarterly people and largely in online. that these going immediately. our that that's eye it promotions call that sort we're thing very a sizable we've app for into, long merchants' really in to time, the doesn't that thing point maybe the mean available And very a on

them offered to card Affirm and to across essentially they're now many across of the syndicate is promotions our to these our them opportunity an say the in have We integrated. which surfaces, bring app, available we're wallets where entirety on of

-- is talk we'll about every aware where of of surface buy out for reasons and you'll play offers financing we network beginning I'm aware buy that transactions are for delivers syndication of we valuable with universal can The behalf really, you all And across on sure really unique the consumers' is the on programs. strategy consumers So a to the this programs because in it narrative network repeat negotiate important like it's sort see the the things But Affirm second. to to the where our us. people great, merchants it available see that SKUs, play. of really in

more we'll So of see this.

that the things see naked visible immediately You'll lead into to the we not are eye strategy. as

Ramsey El-Assal

me. for One follow-up

to in some X% for terms credit excess in out volumes? a move P&L to rather flow it box through of Does to Like X% came now? we the RLTC? you've X% you'd the just letting be than to does think of past Does right these of look What above up through flow more, the reinvestment bit reinvest then RLTC that that indicated subsidizing that I And opening loans? in should the quarter. RLTC excess that impact profits. like You guide this mean maybe of looking higher what that your

Robert O'Hare

Yes.

the some lower our in margin products. into subsidizing X% leaning certainly interest-bearing than even slightly and cases, X%, and, us for is think X% product I

So think taking but X% cross-section been dilutive, historically a great be does some broader thing for what would a for we interest-bearing and slightly network introducing terms margin that into has it reaching that program a of program of consumers. our in

RLTC in we're not of. a So I something mean think had actively where the do that's quarter in yes, strong a I more really coincidence. growth that really, That's to we margins, trying X%

Operator

Will Sachs. Goldman is from with next question Our Nance

William Nance

profile of have questions X% X bit talking if you're to about I talk some And that margin. combined. the the I little RLTC manage last guys that know growth. a wanted into on up leaning kind to of know just incremental I I'm of sort wondering loans. the that's you could of margin a about follow you lever

are the out where of But of of And was harder? to of these perspective point a kind from you I see obviously, that? function lean benefits a from of margin the that the of couple merchant-driven a Or some ramp are was a of guess you start this where And X% margin Just in quarter? tipping some you loan in of kind think you promotions to kind in lot doing where there just sales you quarter. strategy? do some called -- I this more a kind

Michael Linford

on. Rob I'll can start, pile and then

think I to doesn't we do business. think between mean that think want the we definitely and that X% for would long we X%. in term, good don't be we That things are

good drive incremental trying think to we or in investing sense. financial it do to growth. that dollars makes about so way And want still We a

well So a us earlier, we dilute thing to credit that's allowed overall capital we've learned think the over to it's And important when in the and our to question the markets depreciation that's that execution past was value our on don't there. have about so execute performance years for that credit capital as we how the is us really come asked several important that markets.

that be that of the the ways important above investment X% really to doesn't putting framework We a want make X% of think in high. dollars for and It really mean The to that term. it's sense. so we're bar that is we do. And about we're still things might quarter quarter to work do remains long inside thoughtful really

X% do get we The reason in really APR like expanding offers that offers compelling credit. investing APR fixed is selection for and example, we from like positive the of because

the as a loss mentioned, are Rob lower also overall, lower is So attractive portfolio. profile, with but overall obviously actually those -- credit lower a to profile, which profile slightly credit lower

Robert O'Hare

long-term we're on for that X% and also attract don't we huge the we sorts setting sure set still need make a run can grained fine cutoffs that bet. can make programs the at. consumers where of right want these approval think we're to we're We thresholds I terms to in that we margin of we iterate or to the attracting at running profile want to that And

Operator

Our next Matt question O'Neill from with FT is Partners.

Matthew O'Neill

just of the to the expected? Or realized X contribute between I'm loan amounts that RLTC was were securitization the and Did expected was quarter, just come kind together and quarter million a versus of collectively a and I as the sort entering I quarter? X.X% pointing in margin, impact you the parse margin to to trying from bigger-than-expected benefit? believe benefited curious, $XX sales. those this

Michael Linford

Thanks question. for that

markets in And on guidance, When it's were we being as would pipeline recall. working clear in to talked a that part on our think the that to really confidence capital this. important was execute. November, deals talked of I the be confidence that had you the we if really guide, we in and reference about we gave key we

that planned set, of of but of a were that we that of why we in portion all execute those our those range. explain transactions, We to we we associated the not end ahead the It the were doing goals, But all was deals which those we thought, the unexpected. already was high helps with So think, had were to benefit of deals than at not certain already it better on pricing is incremental our and were meaningful the we have case able the outlook. on number.

Matthew O'Neill

partners? on follow-up, release, that always in anything a figured came respect I quotes. is a delicate I any the of or ask of subject or know all -- was plan there And into was here appreciate partners, there in turn wallet but as movie 'XX I the mentioned calendar And we I with to outlook than it expectation as it's sort would sort better revised

Max Levchin

cares. who someone Finally,

a very good the on integrated credit they with be integrations. the accretive generally adds the board, the the They're these quality metrics the of pleased up shaping we that are user are of We They per equation. internally, repeats. conversion transaction add side averages, to they to see on wallets the wallet speaking, really strong. to really meaningful metrics part So Across business. track

in all quite So happening what's with all, happy there.

that purpose if they're the really going of of get wallet harmonized consumer answer quietly that wallets same sort A just that piece little course, work consumers nice quality that echoing Affirm that, an get of to a to going offers of a busy our et integrations, cetera. across on they're question, quite and make sure to the making are rates, not within same bit is logo And same important service, to engagement. of they Ramsey's our the that's there's driving door lot the choose, understand and door, really offers, been to whatever sure of

to think And we that models thing, with but also certainly to important, the to although kind any of this far. are somewhat what's behind-the-scenes a don't so the liberty efforts. effort so wallet contributed been happening updates we're to pleased at quite forecaster related really I offer that's

Operator

Mizuho. question with Our Dolev next Dan from is

Dan Dolev

us market launch? U.K. Amazing an Max update quarter, territory into on moving your leader. always. you a Specifically, the and is a where give team, as incumbent you're can

the that evolution So the take share paying is for, go time? And over from can over time diverse think do share, you how much there share than more given incumbent much product just Europe? you how can market your in

Max Levchin

here competitors prognosticate at all I we the think U.S. well. public nicely share our least note that share taking. will by sources, a took it's to little quite from I bodes so past experience early various in

There's have we term real of terms. You're diverse longer do a very to subsidized definitely totally even deliver is and pull. really right, offerings the array market sophisticated ability APRs for

the our I'm quite of the And of sort XX-month but the player way. is And value loaded play in today market excited One meaningful who very to meetings we're XX-month provide product because asking impatiently get to any like coming that quickly most how that's incumbent it's but a but and meaningful for and things that actually in like and all, deliver much that loans my you, can for competitors what are will pure us, people sure And a are merchant, are hungry prospective in loan, with from not we I don't. do seems some tell effort in of not the U.K. space kind banks just clear and loans it can willing really just merchants was how at a approve a that our not together.

So very opportunity. the about excited

a we of we transactions dozens last joked better still dozens, that many, dozens merchants of talked, I think point. dozens now. handful and I at have this so and and more than It's but that's

Shopify in we're is In need live confident to major that's we're to a we U.K. track phase, it I soon. you'll metrics first to that in integration still that going So relatively seeing the letter, note testing enterprise the scale our widely. the out be that all feel mentioned rolling

And on wide [ I uptake I now. of goes. soon anything check group time a ]. to so with we're speak merchants definitely as in don't to it as the freely that can right preannounce

Operator

Our next question Needham Company. & from with Kyle Peterson is

Kyle Peterson

win. good of we how think Or and here. of guys you of deals agreements? add guys partnership? warehouse, like to these deals Are at like looking on and Sixth kind Wanted of these seems forward this? more of mix Street looking mix some flow to kind the results the It similar Nice you the should funding really moving a forward. funding about between more forward ask moving ABS expand to Are

Michael Linford

Yes.

progress really the made proud that are of in markets. we've capital We

The incredible This our though. really team well with an really Sixth our partnership Street has for executed there. quarter, program. It's out forward is big very leap program a

about and us near do super size of expect how wouldn't bunch partnership to the lot a like going time and we we pretty a big a I spent and that term, to who It's thinking in scale. that more there. were So partner in

of said, market asset a the it think is does that reflective that being I that value Now really we create. very constructive

going so And that. of to continue to advantage we're take

around make we're the enabling thoughtful XX are and kind very towards X to. program. we'll X years in are about be maybe decisions capital scaling that of We that even where our constructive We building think and and scale

at Forum So the getting $XX X.X talked to Investor years GMV. ago, about November, we last in billion

it. capital capital to to towards I'll program hard continue allow that work before is scale in goal. know we'll And against take eye so milestone And here the enabling is, at team then the be when us scale the deliver and an program. it And we the next to

capital continue those means around scenarios as kind to And to the sure survive the to particular, aren't economic and And thoughtful as we in market, going a towards to leaning to points, And making scale partnerships year the that of good the we we with get credit have good it's can also flow program now, the forward designing can one durable in yes, and right really important we that the is reputation advantage what execution multiple are take much insurance we're that those markets flavor markets really and and are with respect private X conditions. another. and we're ABS it consistently. thoughtful of companies do are but with that work attractive a and is, of

And less forward have is financing the program a economics mostly world. in for good scale market flow the warehouse of piece About enablement us that that the the that's combined real is in our obviously, we only the attractive with business. we ABS get of because

Kyle Peterson

Street, just a follow-up And on guess particular. then in Sixth quick I

how Or is about second 'XX. that ramp? will half launch the mentioned time a volume ramp that we -- and and like smaller of that shareholder phased the once fairly the letter start start Street? will ramping that's the a in you start, in with Is So up Or expected steady volumes we should they rate? the to think run contribution should guys Sixth

Michael Linford

it the year. of next should Yes, the over ramp course

overnight. year. course planning the we're over all up on very turning its about it next way carefully of to thoughtful not scaling So We'll maximum the it be levels

Operator

Our next from Research. with question Rob Autonomous Wildhack is

Robert Wildhack

XX% Active customers were up year-over-year.

the I c, that things quarters benefits where and accelerating you APR X% it noted ask, growth. XX% the you how from that that's in the to I in guess, is much letter range? then, is X a, of coming from; think wanted growth; like b, how do sustainable I think plus

Max Levchin

maybe project effort I actually results compound. focused accelerations making. think on in to the even that the multiple were Probably in these see We are impactful root focus causes multiple it's quarters, were direct-to-consumer. consumers, increasing on our the quite the most of and active gratifying our years

So you used with really that have bringing product to this increase will, great a but a past them in haven't some transacted dormant us back time if the is awaken, the obviously, engagement. a effort. card, while, Be in consumers is important

to not that product. use a does "Hey, conversion, should that will, again." used to on the say, more who bit So better if all counters, It more Affirm bit card. coverage, probability were better things those better hurt than add I little you the a of reengagement. before just great, I someone my the just little also was the expanding credit It them more up checkouts continue e-commerce remember will

machinations a second, of the for avoidance and handed steady in it very box on should the some up opened credit suspect, but the credits. the not been doubt, of scenes, credit just always For behind have it avoidance sort which doubt, people apparent you is results, a of be the dramatic we wait

everything focus to typically on while, Yes. the something, The about deliberate here focus on but active when compound. results year it on a consumers prioritization offer we do I is, very was it ago like a little and can else takes we a part best our

Robert Wildhack

operating the particular, that was like sales on sequentially. quite a up marketing, and then non-GAAP And it in bit expenses, looks

a not direct lot typically You've of done and marketing. sales

And sales what the that you forward? like and So there? expect marketing just was non-GAAP $XX wondering if stay at level million driver to going

Robert O'Hare

make support that marketing spend the on wasn't focused direct earlier program some user we acquisition. really we it some the to Rob, quarter investments to new in but launches, did Max's had, point,

see continue Max from user alluded most of coming to. the as acquisition to We point-of-sale,

change So really not strategy. in a

to we go-forward In the QX into spend, the can haven't the various with the and QX expect do terms OpEx broken both centers. cost guide, in But see roughly OpEx QX. of line you in out from we be

going a envelope quarters. the similar be to to look it's OpEx So we next pretty X as ahead

Operator

question next Our is Reginald from with JPMorgan. Smith

Reginald Smith

I hoping in on a dig to bit some little was AI.

with that second You mentioned, how don't the thinking I are over changed letter. I the be was used it of face in chatbot that question how then And your size off done the can I staff get know, headcount guess, your about has whether AI XX that's against which last piece consumers. guys if more current curious the AI commercial and thinking and your on is products and you you changed of purposes, months? shareholder can for

Max Levchin

Thank you, both. Regie. Good questions

mean here. to I all try we we're -- So contrarians

zigs, is what industry all much artificial zag. learning fighting inception, we intelligence AI, underwriting and AI. the all We machine and called built been when now on broad So but of don't our using we've is talk that about since

to fraud. some to of morning that love worth, into the part too call accomplished a have we of that it my novel the internally we're I very But it's completely and machine we're things innovative that it's architectural at model is going of rants. what really we to dig in fighting actively spent something of bored And much. the even more the investing for don't learning modern sort interesting approaches my We some cool stuff. results probably kind we of of would a transformer where looking literally get brag up and I'd a lot all pick architecture doesn't about a with building from just -- really most traditional meet same transform think lot have for thing in design stuff But eye really

terms of anti-fraud in the actually, type So -- underwriting and that's stuff. internally

focus AI versus deploying us cetera, across We are us team, a absolutely sort allowing but tools or et engaged choices productivity just of purposes, which hiring not enhancer engineering, is higher and operating productivity specialists more et caliber service, to leverage for giving in in entry-level on in cetera. thereby the customer jobs, things in hiring like

that. excited but think I before, so Fine have I about And example favorite one ones. may given of pretty my

we Any have thousand that. total product, allow thousands. this We in do is have us new ourselves, our launch can merchant contract do active The XXX-something hundreds merchants. number to we're contracts merchant asking of time of we signed

in not some of answer easy that's somewhere second. So be up if equivalent XXX,XXX to you And to human ask an is a going well-trained open can going LLM, you that documents. a question

that's our a generative example headcount. from need the so expand team And fine AI the to without benefits legal where of

we're in that So cetera. in doing We're that it doing compliance. et legal, marketing, doing we're in accounting,

of and all happening. is So that exciting

-- the my I'm are anything. the and we're to of out come that preannounce going it And say pretty the products when have side, that to consumer not we'll awesome, then show GenAI our and tools bite ready. opportunities But for tongue obviously, on and to

Reginald Smith

could if And just a I get final I if point. kind of you follow guess up

and Day, this of operating how -- like question? we Do year. how that baked much some much gave should leverage Analyst that I leverage? even -- my this guess how Is fully? your about you you follow into guys is Or did at that? kind still You contemplate targets AI think

Max Levchin

to do Rob, so. think I you want opine?

Robert O'Hare

again, an think, Yes, we're since the what And inception. how operated sort business. we've of AI of Max doing been has said, part I as with inherent

And now. the operating every did for really asked a was built. in so look that operating X driving And efficiency leverage years plan that we over at demanded we've we've and take hard in ago business

is we've part do And with been how to just of more so operating. I think finding less ways

tons to and business to but of always looking Regie, hard to it's we So can scale we're of efficient be really adding as without quantify, employees. sort the as

Operator

with Bauch is Fargo. Wells question Andrew Our from next

Andrew Bauch

the redesign of Affirm Maybe about Affirm the letter longer reuse learned utility. Nice more on think redesign the you just the give and and bit we In you us what shareholder what that of term, focusing on about talked color in to marketplace? app here. if about can little more of and opportunities the a set that talk leading you you've other that's how getting is about becoming Affirm scale the the of past? of to kind of when a kind And level Card results

Max Levchin

bit And are the referring we it the only final got of a now letter changes change last edited have is this many built the little out. one, but rolled the in of writing hours out We what quarter, for still which letter UX is rolling to, willy-nilly. don't

And It changes more app example. looks obvious see different, happen the like same the some front. today, you'll are will will look few different, more but -- almost for on so bits the still UX a

collection is the any follow the deals I kind are of read At would retailer can X% people leaning idea deal?" that in we an together the of offering to or organic put really more asking place. while, by can point, people for Affirm our that Affirm sort go thing really maybe merchants expect be it rich X% time to both. place and good is the -- these on be asked And the Affirm carefully, deals. staggering network Reddit manufacturer have a the sort it able to where this should question, "Hey, Affirm at of because was notion of where into we X% app used either you Affirm gave come you'll or consumers find these you that they that the app app, find -- find the that me that If I an deals that we're a given funded see in and this more And

it a searches started app and rapidly an of catalog that, close in opportunity we anything a our our Obviously, the to little hundreds So hey, a to of the someone Affirm very or not now we're there retailers merchants a leads shoppers. per go It's say, each that. week And deals. X% bit is would to for exciting are careful not bringing It's in and to really shopping rising out of to looking be these featured fielding to with and offers app for a tab naturally that engine place pit comparison deals other. want there. to against thousands our we're bit showcase the like

on so to keep we conversion. keep we it better seeing that, And leading

or I search I rattled transaction think initiation clipped off a rate XX%. quarter Last looked, XX%. the it's X ago, to like I is

say are this using people So buy. to find to really reasons effectively to yes

And that. so doing we'll keep

are described me. things better probably that are a more app coming into the There couple than by experience

much much upfront, So flow I'll a little stop the for power a myself purchasing the as about your is if transaction too thing. past without from still you interface asking et the to will it's figure just I what bit as user of of really planning what card talked updated happen so the convenient quickly Like card revealing can in improvements. just terms making out more loan cetera. love you swipe much, so We and a my the do but entirely that in about I've favorite child, Card, there's

going So is of it all long really of But just it's about list if X, already not that -- happy well, features that, all to a all we're It's down. obviously of we're X of finding be it I the building. but growth be card. slows more wouldn't for X, growing points

we just to it. on keep working have So

Andrew Bauch

EPS. the exciting GAAP on stuff, and Really congrats

Operator

America. with from Bank of question next Jason Our Kupferberg is

Jason Kupferberg

the speak you the I which Well, they kind outset, at for said of Max, themselves, know, numbers do.

spending growth really, driving So your what I'm time in? are X funding improvement you're curious, the like with and biggest items things that and volume are on going profitability, X and bulk credit on of well or focusing the

Max Levchin

list long. is That

Jason Kupferberg

You more or than X can X. give me

Max Levchin

prioritize. I'm trying to

a mean to purchasing you see. to conversion having where Let's blanket ultimately et someone, terms enough not have and to die great and of power it's say up by live sort personalize some this do point, I to more and uptake. increased. point, by And your At we're X%, you can cetera.

your purchasing power is cetera. waiting that to speak You have you, particular for et to merchant a

And without always frontier efficient that overextending opportunity to find access someone credit so them. offering to there's

Like I'm myself the consumers more we're one thing repeating again, of not point, in at making business -- that spend this sure I'm but money.

they I In of more take access we fact, to card that number, we pay we're the want in to million we're multiply letter, get and I to cardholders excited more numbers, spend. bigger credit, a they're hopefully to last but -- and In of to big over get than bigger. are hoping year are for averaging consumers of to business $X,XXX Those just arbitrary our somewhat think the consumer XX less spend. helping per out said a

anything a to doing are That's lots U.S. than can obviously, in the but a like card best to are Internationally, to is there's feel busy results give we're the the with. well or do experience have but initial So their the we there, satisfied. they credit we alternative and In what really to debit chance to there's is more U.K., to do, personalize people their little do. pleased this the not

I internal used, think terminology the it's I et cetera. and

Again, answered GenAI good product. bit that time I out little pretty something spent -- on. Regie's are exciting set do any of just but happening. in mind. of time, to I those of things maybe always fascinating given the anything, kind financial There's going think service my the there's on here. At have a a question definitely I some with So top that build things are of not we

new there's categories. build lot in just product a So to

Jason Kupferberg

Later any in just I over the just of newer total versus seeing Now mean maybe of with product up wondering that you've terms terms consumer of to follow-up any of Card? Pay Pay usage or Card. GMV. you're in seen it's traction X% I'm if now merchant on or categories a increased in And change behavior X% the

Max Levchin

No, we it. on we're have actively not, very but working expanding

card as So the is optimal be should the that or not for really other transactions of it's kinds. covers anyway for all at today, good and it great as it some not

year. bicycles to answer transactions. going And question lot user. meaningful amount my you're There's spent of a do $X,XXX to get couches kinds of that And per and of per there's a so we other I obviously, of so only to trying time the buy many how

in financial in interest do useful do you? And else charge service card can the have is be we in else honest that we we an the how charge question, all Where so the interested the you you getting doesn't answering to at we all good for things compound everything any can the particular, here if late doesn't you merchants doesn't yes. product fees, to say

we -- so we that's just answer to groceries? you can with in And way useful launched is I you how letter, buying that's to really is medicine? How GoodRx we it's useful the a be be you're important. think when one think, in And this that very question and we to can category

more what and life proud is more. do that of expensive a their progressively to part excited about people Helping medication buy is quite we're something

these can And you so each of categories purchase of different. through one have think that modalities is and be to something the

store restaurant versus a of versus can sort imagine general to at electronics use merchandise a store. Card looks a specialty Affirm You it easily what like

the improve to a we are uptake not I'm where conversion usage. is are we of So of can to excited ourselves improve probably trying But can the anticipate where where improve how high actually do as about experience. time point, what and of areas on areas the places and it is as possible impact as can can that -- Find be. we X most is seeing it's and lot conversion, observe as spending in high that's areas not Card the enough big this it ask at other we in those my

Operator

next Our Caintic BTIG. from Vincent question with is

Vincent Caintic

these about the instance, it's share other cards, quarter. versus pull some of and And interesting credit that seeing out earlier when I spoke XXXX. behaviors seeing and growth the in lenders underwriting. terms providing I XXXX tighter with capture you're different maybe wondering maybe through Affirm's strong RLTC of I'm even your as calling How of U.S. share and this you think margin course for in over back? credit I maybe in what XXXX? cover from play you you for contrast taking this And being the of weaker the will calendar to able guidance Max, GMV course what are customers opportunities expecting? more Are merchants

Max Levchin

like lens moving world in slow right? These through easiest thing bit and -- a time as things to both lenders credit view to space about any predict, dynamic, they're things often not of is a are of Obviously, them in especially at the is related it Definitely back their the a pulled forward-looking little quite as card credit reporting. seen least mistakes their with dealing past.

their not, that they loss guidance credit reasonable issuance, they're consumer, to and or to as of be yield in overextended. are consumer that spend people and now overall portfolio may conservative dealing also be speaking speaking less their with average the overextended view about having rates. thinking often going money So somebody they into a any But to time are the that may they're on as offers fact

our term have shorter. financial Because to themselves, if every underwrite do damage. less think of the be, how that that much can't revolve product best the the in and is into the away. works, to bucket our sure, consumers' all they're just and a get But we sending answer concern transaction, moment much the we big in We put of typical help health We them. assess it

state a past have of our because we to to past borrower, given lot try we feel us about we're for the mistakes because our apologizing and it to not So looking. the the extend easier good discipline the numbers, of it's consumer, the this for

to Again, if and hesitating, product are to out be might whatever picked lenders -- not these macroeconomic some be. and confidence It's and specifically that don't ability, our our if these we'll very I think figure we next wins because go the I'm the believed, very back it's to it's what's as to like I this react quickly bring. sound our that forecast have reports So job. of going that in the there structure can difficult happen I business should we always so will and to we be do of the help customers

successfully. are not at is hire healthy. We're basically able solid. They consumers They're shopping. we've to employed, longer these really operate afraid for fully Right because now, is been which U.S. of quite paying rates economy their loans really back. The

don't issue So seems there We capital partners. grow good Should change, us. lending credit things business for decision good. like our We continue healthy pull really it we will print because on to for was to based needs We'll based credit. everything on be back a our smartly. results credit

Vincent Caintic

very follow-up that. And a That's helpful. actually, on

it's Director for impactful new get to we CFPB tariffs longer. longer. interest or Affirm instance, think and about day from were to political or of what's use departure Wanted not You the every you're your of hire like some coming thoughts macro on It out afraid get said, seems or Washington? what's whether rates important for to higher for maybe

Max Levchin

sufficiently are are Washington. end self-aware that coming to we receiving we what's the out think on I of of know

the sense late in charging are and against is are unnatural to do the and says So new to seen and our think what's consumers and we good expect and like and of fees help something at thrive we not continue guided lending, have things compounding latest administration Regulatorily, sell mission don't and we're pretty back do and job based that we'll by who that. rates to that's buy in nor we that interest not wrong we job. we headlines, shown merchants far. versus rate again, and environment internal will we've we'll a this ranging interest I The any so we've right to continue on on deferred because not a held

absolutely And there's to our us any so need core values. none for and change to is going reexamine that of no of

buy have to like economy. the there Things they they and but tend super that continue there to are et the was our to raging, we'll tariffs we be cetera. when them, on things were impact help afford customers And hard predict, inflation for inflationary to needed to

change if mean sound red in to all and every them that. of I but administrations new day -- don't put and I have think the Republican certainly no eyes a lend a states dials we and and at sanguine we on day wheel, our blue to because I any the time keep overly is hence, So Democratic in plans and steering

Operator

John Our next question Hecht Jefferies. from is with

John Hecht

have But You I'm might about Now, when and interaction did segment I comes Card wondering it the the layered goals debt. RevPAR talk the brought is, Later Buy learned into customer what within of overall so comes upon when per it customer Pay that them guess to far that some kind of have what the and product to network? you products

Max Levchin

eventually bears of essentially in leaning really repeating. the into for, to everything you that of not a usage. consumers, I've filter if our APRs, think lifetime It's to fees proposition into opt best is that buy you're Affirm that become the value a relationship. I Affirm, our and like sense a a into be the discounted is people Card we it and deals, the no said itself stand X% will and booster think we going what become in card people to choosing it before

the And it Affirm embrace it. is to go for this, you fully? do Please so card want is. Here

it's no eventually we and But of us. our everyone, customers, good that's is with will to more see for think it And And important so don't maybe that all shortage I the be but it thing. of an best choosing those, do is our customers news consumers. just

transactions stats, all the best it's look our they're best Card engagement, our economics, So year. as our strong. we it's It's at staggeringly per margin, best it's best our

strong. So also all that like, were card really a it's oh, be they people best already amazing. that on It's discovered track we of not Like are not our is these to But surprise. customers.

customers becoming much just they're our Now best faster. that

that's think consumer. an that about to I understand So important background

never in they making choice. are regret We their that into sure heavily very leaning

program. about the things there will be So and Card more like more to

that the folks slightly Card. products different are the card have another takes of the We to in up consumer offer that have -- of in think to are that program we of to offer today's program We mind. variants other available than types type

as So We But generally to the know the And these take beginning. we a for best things we're build. know they're long card, the up serve are excited just them. consumers. we speaking, is as didn't time, and here journey they more There's have. necessarily soon to many

John Hecht

and very good Okay. helpful. context That's

fact I on ton in scaled I expected. quarters about especially just in the think scaling past of you and in better, scale? growth margins related some expenses. side given anybody think the that do think guess reinvest we is And the the question now are are that How a better I the have an you expenses that the margins is initiatives. side. have longer-term year, how so trajectory next would tech the do G&A mean opportunity about of than to question to Second trajectory we few maybe

Robert O'Hare

Thanks question, John. the for

to support of investments, made launches We like example. have for course, the U.K.,

a And happens so several that work before getting quarters that is goes or product find the typically, into public reaches product availability. that live Affirm with a program what you'll

a with the So good we definitely term. really case job ahead the programs really medium and like growth that done maintain of we've U.K. healthy long the that investing make feel I rates was sure of these to in

non-GAAP and QX, I we pretty also you the that guide a it would the both say, they're I second puts operating in mean level consistent to with can we the you quarter. expenses, the mean, for QX had implied couple of just things. of I gave that spend see

be levels. that business. is flat to There the activity QX of variable of operating is our fixed GMV, going the in sort So from we in expect trajectory with relatively expenses just transactions do of portion and/or the forward, a terms general it

does sense expenses growth. operating a GMV the scale with make it think I some bit will that So of

to and to make are the business as up running. more to support customers our sites good the spend spend. those our So is infrastructure grows a We're sure for and merchants of and bit happy all for

how it. about that's thinking yes, we're So

Operator

Jeffrey next Our is with question from William Blair. Andrew

Andrew Jeffrey

much economic sort is are of seeing or comments sale a in a In firm's How through loan of you other How costs. it's what funding Obviously, seeing. demonstrated sort and ability to improve execution carry cyclical you're today think is much ask about we you've environment to improvements recession a would wanted structural? funding currently and do what durability I the economy? good sign cost the consumer little overall where made bit through, recession? we're of a and the of next words,

Michael Linford

Yes.

we're of conditions. I the think market definitely the beneficiaries humbly,

we've investors, credit the and our able favorable stripes differentiated. is of demonstrate both who focused deliver commitment we job equity the think do results now and those environment And commitment that debt that can't And and through credit that to any we're capital as But our we're commitments. we and ignore depth to that against #X is, always that's so it has around says, definitely the generates can't. going very It's commitment the Max are. how with for We think do. changed operate And that us cycle, of our really for conversations just is we that what made favorable to been seeing combined really We delivering, right execution-wise. and the in we've volatility. you're that results performance any macro conditions credit kind market we're very think on for excellent that's conditions resulting both of to The partners, what execution all with on tone we durable. the

to And think case we so it and be dismissive because good that but durable. that's the work, I want get pretty the is we don't advantages we're of of beneficiaries, the that

that fiscal show we specifically of the benefit of just course, our worth numbers our Of note, it's some from I we QX, originations. in the a cost do funding average materials timing will terms bit in little in

the to and the And can there trends, math just so I real, future ignoring of as don't quarter, -- do I very we fundamental the wouldn't think sustain continue the the those. fundamental expect are it we same quarters. calculation But in to the be trends we really, kind the in

think the a impact about capability much right it's the and of question overall how a we're of the truly any rate I rates get And not and credit seeing execution think I And in the now business. actually more just driven. of asset. much We lot about spreads is

Andrew Jeffrey

to Card, know And on of what to of which as lift a Affirm, efforts get That's can baby, potentially percentage those use kind the a your many Max, one as could ask talk by still of guess, How of expand I'm comments as if million those early, banking appreciate you about percentage, super I I primary then, I is so. And well. of very too. sort Affirm cases. or holders helpful. I it's on the sense X.X performing is sort are measured trying the of direct but card relationships a deposit? there, for on

Max Levchin

consumers. -- a for, services not relationship offer engaged depository total in better form which benefit to from I'm especially really money, room their of right now. borrow understanding many with guess with their because these not direct to particularly ones the not in bank. up. of deposits add goes willing do sure said, looking and a of a you're busy of I We're us. It's state that to from one much majority the to their not That plenty that deposit, news, bad some them financial ability are there's We're us a news, us or but trust the gathering good Not we to have consumer

we'll and credit So able to expand with that your -- be if much that it's you'd you a and we'll take natural thing access understand understanding. we do where to with money deposit like better, to your us we'll

that's definitely change there, in So updating but the little there's to the we're doing progress we're more remiss few next quarters. do the a Street going to in bit on there, and

Operator

Our with next UBS. Timothy from Chiodo question is

Timothy Chiodo

agreements many longer in Shopify? have be But really outside than better not of list I of to doesn't being there's discuss factors, it's more some maybe at Expedia. of able if constructive Walmart, put those enterprise customers. international with that. really, just or those the there's terms are that answer discussions obviously, your look partners you Amazon, that of exclusive already you're else the preclude realize to really And And the next. be you there you is, with question Often, the large term limiting to you of if with able partners the might opportunity anything often, could that many with go could from in It opportunity and them. And likely you having get any strong addition investors Apple, who some if around maybe would that U.S. have, of start any this Shopify, context much

Max Levchin

cannot contracts target-rich frequently don't confidential. just is to to a exact I and these is term. short -- or use a it sorry, sure things currently answer are such, The to think am speak because flip is environment, it understandably around, military I this I

not we we're from will. because we benefit But e-commerce, both. a there, to Affirm that few of conversations but online and the the get a also card just Obviously, any very well are sales I in aspire internationally, and offline about dangerously think of we currently internationally, we are certainly and feel more we offline is to we have to quite card domestically, team precious of checkouts, we to at good XXX% opportunity But consumers player filled, close And we of the works about be on can our the pipelines meaningful there's do aspire lots still and review lot accepted. and have. number.

Michael Linford

geographies to except relationships I And -- those And maybe we that anything think get we add I'd go to think get as have limits them. thing. as there's a go small don't about going ability our have much good really the are do relationships we unique that we're in other U.K., to live the something is us our partners, of today and those and and only talking so for really reality lots really there's into. partners disparately

So we have there. to get

We have to get live.

your ability everywhere. prove of question We in to same limiting deliver factor experience scale there that no directly kind we our U.S. partners can have would that is those the in But do I answer the with to we

Operator

Friedman Jamie from Susquehanna. is question next Our with

James Friedman

what like the is share face? offline you now face Did of GMV percentage to made up

Max Levchin

think don't I we break that out.

James Friedman

Okay.

a wait share. future market wanted to that for So maybe I for time. we'll ask about

you own about your do, market Max, periodically, So share. though, share observations

shared a talk ago. know, you you the now? And number how X, not, months you in that to I don't could maybe if think you qualitatively, share if had market quarter? saw X have I Do shift

Michael Linford

I grab Yes. Why that don't one.

do it our time to So not We we estimates share time. break did out quantitatively. from

traction the competitors. As break with out know, we bit businesses, the we believe said, fastest We We market. we our who taking probably of share to growing it's in of versus And you to difficult we where down. do had think more their we're North think this are able being grow all pin a were competitors number a them. much quickly real of large that American that

is good to, a when I something of think of a is best not of but number with I And function partner least North that which the the quarter holiday you last quite periods, think which market in think did it's alluded versus have you who are factors, is, in America. of bit out the terms beneficiary of our stand really competition I help us share. a our distribution and Tim

Operator

Stanley. next Our Morgan James from question is Faucette with

James Faucette

ask I these have a lot quickly appreciate to answered guys and wanted I already, to -- approach knowing you calls. your

So I appreciate that.

Looking at return to seasonal also that or and the December, be through the improvement delinquency expect benefit in typical. some would season at tax get you to be that continued least seems

is? thinking rate? you some, You've can way your like whatever how the target also for GMV to risk delinquency that do to exposure how watermark much but like -- be along increase you think intend should been clear a that at And high you target least KPI we unlock about incremental

Max Levchin

our us conversation. those good. more what and numbers, it are we X and we partners And always require anything et fundamentally in is our for the determined of So of a us yield, partners are matter. to uncertainty. targets constant by and there's probably about kind capital both numbers doesn't at or for look bears by of to start saying, There's signal either understand our then delinquencies safety relationships. delinquencies, are of right? in defaults feel than Like that internally cetera, for There us concert And them,

to bit let's context think and And the we are They because care by of grew of don't numbers, able partners about stability grow determined so we they're so capital and we of little don't in if the our hey, stewardship deploy stop. are are is great The as yield grow. a conversations. safety capital risk for those just feel of and don't more. The XX% money. in or the ever very the take The our credit, of, little the entirely here They risk take a how terms frankly, we clear. more long settings XX% conversations care fast returns for really their they full our successfully, bit

should of be. that's how so that our entirely it And independently It's exactly growth.

won't saying here. management, the a we little think is do need in the I the looser company grow of let step just to first bit trouble bad happen many and to preverbal that the past of down standards. in ever got into be all credit That's by hell the we with credit

right move it goes. see how totally of numbers, the fluctuate the to seasonality you're based there's down So and credit DQs going. approvals number We we the and keep that wheel and hands the the in typical and a that improvements that -- year on you sort supplement up down feel show in as seasonality can as we up and our seeing we what on is up we're down chart the

conversations. sense. Sometimes the delayed, again, are which that was this sort last But seasonality can is year separate be of a bit X in little weird like

way, love oh, will at does happens, credit just with the Libor at feeling his really shouldn't we Who of by we program looser aren't? pushing get ever a Like the wants bit that X% the a where topic conversation help context it's is grade to what am way entirely wants can and enjoy app? run It and that a is we do sooner? major January. and day never doing are in we and growth. a growth job, the through not selling checkout Our we Where the holidays, in can merchants is internally -- my through with? Who ran that, little a Who to program deal? our our get because They can that X% the Those I initiatives extend launch that. in and happen. all all into failing growth

everyone contemplate not because strongly X it false creates in concert I to the correlation So one. just a where isn't encourage there

Operator

reached to question-and-answer to back would like have session. I of turn We Zane end over the our the for closing conference remarks.

Zane Keller

all for forward speaking you you thank again to today. with then. to Talk Well, all call you quarter. next look joining We the

Operator

today's conference. conclude will This you. Thank

may for this you your You thank disconnect at lines time, participation. and your

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