Affirm Holdings Inc To Host CFO Fireside Chat Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ramsey El-Assal - Barclays Bank - Analyst : Thanks, Zane. And Michael, thank you so much for the opportunity to host the fireside chat. Looking forward to our conversation today. There's always a lot to talk about with Affirm , which is a good thing. And maybe we can dive right in with your recent announcement about the partnership with Apple Pay. We've definitely been getting a lot of inbound questions on the topic, so maybe we can start there. But first, just thanks again for the opportunity.

Question: Ramsey El-Assal - Barclays Bank - Analyst : I see. I mean, it sounds like obviously a super exciting partnership. How'd you do it? What were the differentiating kind of factors that had Apple kind of selecting you guys versus others?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Interesting. So the breadth of products is a differentiator, basically. I initially, when this partnership was announced, I got some questions about the relationship between like Affirm card and the wallet integration. So maybe just to clarify, do consumers need Affirm card to use Affirm and wallets, presumably this one as well that you're integrated with, or how does that work?

Question: Ramsey El-Assal - Barclays Bank - Analyst : And another question along similar lines, do the wallet partnerships, is there any tension between the wallet partnerships and the Affirm card? Meaning, can any of the wallet partnerships replace Affirm card or how does the card kind of coexist alongside the wallet partners? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 14, 2024 / 4:00PM, AFRM.OQ - Affirm Holdings Inc To Host CFO Fireside Chat

Question: Ramsey El-Assal - Barclays Bank - Analyst : Okay. And then getting a little bit into the sort of experience and maybe the technical side a little bit, how do your wallet partnerships work with merchants that don't already have the commercial relationship with Affirm? Will consumers obviously still be able to use Affirm at these merchants or how does it work?

Question: Ramsey El-Assal - Barclays Bank - Analyst : I see. From my side, it's hard not to kind of dream about the future here. So I'm going to ask you a couple of questions that you may or may not be able to comment on. But the announcement specifically indicated the integration will only support online transactions for users in the US. So the two other vectors that I'm thinking about in terms of maybe some future expansion opportunities might be offline transactions and or transactions outside the US. So I'm just curious if you have any comment on those ideas. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 14, 2024 / 4:00PM, AFRM.OQ - Affirm Holdings Inc To Host CFO Fireside Chat

Question: Ramsey El-Assal - Barclays Bank - Analyst : I see. Your 8-K mentioned that the solution would be rolled out later this year, but was not going to have a material impact, P&L impact in fiscal '25. I guess, give us a little more color on that. What will the roll look like? Why won't it have a material impact on '25?

Question: Ramsey El-Assal - Barclays Bank - Analyst : It sounds to me, paraphrasing your prior answer, is just that investors have had an experience of you guys rolling out some pretty substantial partners already. So there is some kind of precedent in terms of the long-term ramp and the success of the execution, candidly, and the integration. So I think that's probably a good thing at the end of the day.

Question: Ramsey El-Assal - Barclays Bank - Analyst : And keeping in mind, you just sort of reminded us that you're a bigger company now. And so individual deals might not have the same contribution factors they might have some years ago. But do you expect this deal to have any meaningful impact on your overall unit economics? Is your long-term 3% to 4% RLTC as a percentage of GMV target? Altered at all, still valid? What's your thoughts there?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Okay. I'm going to pivot over to some non-Apple questions now, since we've picked that one pretty clean, I think. Can you share with investors as an update since you last reported earnings in May? And more broadly, I think the second part to that question is, what does consumer health and the consumer spending environment look to you guys at this point?

Question: Ramsey El-Assal - Barclays Bank - Analyst : That makes a ton of sense. Listen, I'm going to take a related question from the say platform from someone named Justin E. And the question is as follows, is growing consumer debt a concern? And if so, how do you plan to address it with your products? And then same question on consumer credit. Feels like employment is hanging in, inflation lower on a year-over-year basis. Any changes in credit performance trends to call out?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Okay. You mentioned earlier that the secular tailwinds underpinning the business and just that there are quite a few consumer, there's a lot of consumer demand here that new customers coming into the top of the funnel effectively. Give us your updated thoughts. It's hard for investors to get that kind of market-wide view about what inning we're in and where does Buy Now, Pay Later stand as a percentage of spend or as a percentage of e-commerce or wherever you're looking at it. But give us your view about sort of where we are in the adoption cycle of Buy Now, Pay Later in the US.

Question: Ramsey El-Assal - Barclays Bank - Analyst : And let me take another question that was submitted previously on the say platform. So Josiah H asks, how has the partnership with Amazon affected Affirm's expectations of growth? So I guess the idea is here, you have a lot of great partnerships and I don't want to leave anybody out, having we talked about Apple quite a bit, a lot of great partners, including Amazon. Do you feel these improved your growth potential over time? I guess that's sort of the question.

Question: Ramsey El-Assal - Barclays Bank - Analyst : You're right.

Question: Ramsey El-Assal - Barclays Bank - Analyst : I want to ask about customer engagement in a second, but there's a question regarding your capital strategy that I've been wanting to ask you. So I might as well do it here. The question is sort of about balancing growth and capital efficiency on the one hand. And on the other hand, I just am curious, you guys have done such a good job with this diversified funding model. It's scaled very nicely with your business. As you scale, does your capital strategy or your funding mix change? Or is this something where you think that the capital strategy and structure you have now just can kind of scale in perpetuity effectively? Or not in perpetuity, but along with the growth of your business. Fast forwarding a few years, you know what I mean?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Great, thank you for that. And changing channels a little bit back to kind of customer engagement. Last quarter, I noticed that you guys saw the largest ever percentage of your transactions coming from repeat users. I guess, give us your updated view on the algorithm, growth algorithm in terms of the contribution from new versus existing users.

Question: Ramsey El-Assal - Barclays Bank - Analyst : I think the Affirm card is resonating with consumers. We had our conference a couple weeks ago and that installment credit card category and the Affirm card in particular came up quite a bit. It seems like it's a thing. So give us an update there. Where do things stand on the product in terms of anything you can share on adoption or how you guys are thinking about it at this point?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Let me pull another question from the safe platform from Justin P related question, which is as follows. What is Affirm's product roadmap for the Affirm card? Is it a rewards cashback program on the table? When might that roll out?

Question: Ramsey El-Assal - Barclays Bank - Analyst : Fantastic. We just have a couple of minutes left, so I'm going to ask you a possibly large question. No, I'm just kidding. I wanted to get your very brief response, and I think this might be something you guys have touched on, but there was that headline and or Bloomberg article about Buy Now, Pay Later as a category representing systemic economic risk and a pool of so-called phantom debt. I have my own views about that, but I just thought I'd get your on the record response to that idea.

Question: Ramsey El-Assal - Barclays Bank - Analyst : Just don't drop any [F one].

Question: Ramsey El-Assal - Barclays Bank - Analyst : Fantastic. Listen, we're out of time. Great conversation. Appreciate it. Maybe I'll turn it over to Zane for a final comment.