Affirm Holdings Inc at FT Partners FinTech Conference Transcript

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

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Great. Since the time of the IPO, as we were actually just discussing a little bit outside, there's been a lot of changes at Affirm or a lot of evolutions. There were some key partnerships earlier on in the Affirm's life cycle, and some of those partnerships have changed; they've evolved. Maybe you could talk about the current slate of some of the world-class partners that Affirm has between Apple, Amazon, Shopify, maybe the strategic vision behind what these partnerships all collectively mean to Affirm. And then on the flip side, why are these best-in-class, world-class, global players choosing Affirm to be their partner?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. And when you think about these partnerships, I think it's easy for the investment community to think about the economics and those dynamics. But I don't get the sense that the retail or the wallet partners are necessarily thinking about it through the same lens. I think they're thinking about what is going to help in the sense of a retailer drive increased conversion, right? Or make that cart that may have otherwise been abandoned, not get abandoned, right? Can you talk about some of the nuances around that? And what feels most important to some of those retailers? Because like I said -- and feel free to disagree, but it doesn't always feel like it's just a hard and fast, this is the best economic decision and so forth. But it's really helping expand the business, expand sales and so forth.

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. That makes sense. Thinking about another type of partnerships, maybe we could dig in a little bit on the importance of partnerships with the likes of some of the biggest e-comm acquirers, right? So the Adyens, the Stripes. Can you talk about the road map for those types of relationships going forward, what that can bring in a mutually beneficial way and so forth?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. And is that a dynamic where if you go back so many years, there were questions around, is buy now, pay later here to stay? Is it a real thing? Is there really going to be consumer adoption of this today? And when you're thinking about those discussions, this is table stakes, right? This is a necessary percentage of our GMV. We know it's going to be there. And so is it less of a sale and more of a how are we going to partner and integrate?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : An area that's maybe a little bit newer, thinking about the broader whitespace for where Affirm could, should, likely very much will be in a more meaningful way going forward is this concept of platforms on platforms. And maybe you could sort of explain that a little bit more to the audience. I think there's a tech metric in the auto repair space as an example of a win here. And maybe you can use that as kind of the case study. But can you help walk us through that distribution channel and that captive audience if you will? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 9:00PM, AFRM.OQ - Affirm Holdings Inc at FT Partners FinTech Conference

Question: Matthew O'Neill - FTP Securities LLC - Analyst : And I would imagine a lot of those are serving end market sort of niches and verticals that you might have a much higher attach rate of an Affirm payment option than sort of general mass commerce would [because] either it's more of a payment that wasn't necessarily expected; if it's an auto repair, it's a larger ticket item where while having the ability to put this on a multi-payment plan is really more of a need than a luxury in some cases. Is that the case? And are these deeper penetrations off the bat?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah, got it. Sort of circling back on the broader wallet partnership opportunity and the reason for selecting Affirm, if I lead the witness a little bit, I think one of the biggest differentiators is the flexibility around duration versus just the Pay in 4 option. Affirm is a true underwriter at the product or purchase level, and you're able to structure payments for people on different timeframes. Is that all a big component of it in addition to some

Question: Matthew O'Neill - FTP Securities LLC - Analyst : And that's really unique to Affirm from the DNA of the company, how it was built. This is not a Pay in 4 sort of marketing experiment. This is very much an underwriting business, and that's why you're able to do that, but that's a durable competitive advantage in many respects.

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. So I think speaking of whitespace, right, offline commerce in general is still many multiples the size of online commerce, even if online is growing faster and taking share. Can you talk a little bit about in particular where some of these wallet integrations over time may allow for them to almost be the Trojan horse to bring Affirm in many respects into the offline world and how sort of focused the team is on that opportunity?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. That makes a lot of sense. I guess, bridging that gap between your longer, existing online business and the increasingly growing offline, there's been, I think, a focus -- and you can probably sort of explain this better than I will, but around sort of merchant offer harmonization and things working very much identically as they would if I was checking out in the merchant in an online experience versus at their store. Can you talk a little bit about that and kind of the importance, I think, that merchants really feel to have that ubiquity or consistency?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. I think that definitely is something that they prioritize and I'm sure consumers will be very happy to increasingly know and see going forward. You mentioned Affirm Card as we were talking about the opportunities to move offline. You mentioned 45% in this last quarter, which I believe was a pretty marked increase from even just the last quarter of GMV on the Affirm Cards offline. But just a few other stats, right? 1.4 million cards out there and their spend on average, up to $3,000 per year. I think that was also a pretty big increase from $2,500 either last quarter or quite recently. What's the longer-term vision for the card? I think if we go way back to well before the IPO and you listen to Max talking about the vision for what Affirm could do. The way the card exists today is very integral to the story, but I think it's maybe a little bit different than the 20-year-from-now vision. But if we think about the next 5 to 10, I think the opportunity is huge. So can we talk about how you're thinking about that?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. I'm sure there are some early adopters and devoted Affirm users that it's already very much the top of wallet for them. Is there any learnings from them, how they're approaching it, or when you get feedback from those types of users as far as how that would apply to a much broader base of the broader Affirm 20 million and to deploy more broadly, I guess. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 9:00PM, AFRM.OQ - Affirm Holdings Inc at FT Partners FinTech Conference

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. I mean, a number of card issuers -- legacy card issuers, have put options out to sort of put a payment that you put on your card into an installment sort of in arrears, but I don't think adoption rate or sort of consumer focus on that makes a lot of sense. But clearly, this is, I think, the only product in market like this from what I know. And so, yeah, it seems like as people really get to learn how it works, it's going to very much take off. I guess, maybe if I change topics a little bit, I was hoping we could focus on competition -- sort of competitive environment. Yeah, I think most people in the room probably took notice of Klarna having filed confidentially a week or so ago. And really, regardless of them being public or private, if you look at the metrics they published, they've been growing faster off a smaller base in the US. Conversely, Affirm has expanded into the UK, and I suspect I'll come back to this, but with aspirations beyond that longer term. Would you say the competition is heating up, or is this such an expanding sort of TAM that given the geographical differences and some of the product differences, there's a long way to go before we're thinking about this as a BNPL sort of competitive market?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : That makes sense. How about just broadly some of the smaller players that are out there that have kind of survived, if you will? Is it increasingly hard for them to be kind of competitive given the scale of the balance sheets and capabilities from technical integrations? Or is there room still for a lot of these players, I think, to kind of persist and be successful? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 9:00PM, AFRM.OQ - Affirm Holdings Inc at FT Partners FinTech Conference

Question: Matthew O'Neill - FTP Securities LLC - Analyst : And then maybe thinking about the competitive environment more broadly for kind of lending wallet share, if you will, not going all the way up to the big large traditional banks necessarily, but more specifically in like the private label credit card space, those are companies that have been very successful in places like airlines and home improvement and apparel. How do you think about private label credit cards as an increasing kind of competitive set, if you will? And maybe some things like the move to offline, wallet integrations, the card, they're not even a competitor, they're just another area to potentially take share.

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. I was thinking of it more as an opportunity, but yeah. We mentioned the UK a moment ago. Could you walk us through a little bit, that's kind of the first international big push. There are similarities. There are, no doubt, differences. I think you are definitely advantaged by going there with some large, more global partners at the retail level. Can you give us a little bit of the lay of the land there in kind of how that's going? I know it's like literally first earliest days, transactions were counted in the dozens or something on the earnings call. So I know it's early to have too much but just curious to dig in there a little bit more.

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah, that makes sense. Presumably, these merchants that you'll likely be growing with and into the UK market are not just in the US, UK, Canada; they're likely elsewhere. I think the UK is a natural kind of jumping off point for predominantly US business to expand into the broader kind of Continental Europe. Or is that what we could expect to think about hearing next in markets like that? Is there presumably even more global kind of longer-term vision?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah. Coming back to where we started at the beginning, Chief Revenue Officer, not a CEO, not a CFO, where are you and your team kind of spending the most sort of time? Where is the most focus? What are you really kind of excited about in the year and three and five years ahead?

Question: Matthew O'Neill - FTP Securities LLC - Analyst : Yeah, that makes a lot of sense. I know we're the last slot here before a cocktail reception, at least for those of us at the conference. I just wanted to make sure if there are any closing thoughts you want to leave the group with here before we sign off. I'll let you have at it.