Affirm Holdings Inc at UBS Fintech Leaders Conference Transcript

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

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : So Rob, if we could start with you. For audience members who are unfamiliar with you, can you please introduce yourself and tell us a little bit about...

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Great. Okay. So starting at a high level, we're now 9 months into the calendar year. Macro has remained fairly resilient, but there are some signs of consumer stress. Would love to just hear how you're thinking (inaudible) key items.

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : On the U.S. side, core product offerings, long, short interest bearing and 0% APR Pay in 4 parts, interest-bearing products now represent about 70% of your GMV mix. Can you talk about the trends in your product mix and corresponding merchant fee rates over the past year?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Got it. You're currently in the process of implementing a higher 36% APR cap across your merchant base. As of July, approximately 70% of interest-bearing GMV was offered at the 36% rate. Can you quantify the economic or potential from this pricing act?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Got it. That's very helpful. Pat, let's go over to you and maybe just like Rob, if you can just introduce yourself, give us a brief background and tell us a little bit about your role.

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : So Pat, maybe just talk about some of your initiative that you're focused on in the near term?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. Can you talk a little bit about...

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Could you see as your competitive (technical difficulty).

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Okay. (inaudible) international expansion opportunity and how do (inaudible) international markets that you're looking at compared to that as well? Yes.

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. Okay. So Affirm recently announced partnership with WorldPay and Amazon Pay, how does Affirm think about distribution partnerships on longer term.

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. (inaudible) spending for Affirm? And how does Affirm start to win.

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Got it. Rob, I want to move over to you and this is also about the bank card represent some meaningful opportunity for you as Pat has mentioned as well. You had in the quarter an increase in the card users (inaudible). REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 14, 2023 / 11:30AM, AFRM.OQ - Affirm Holdings Inc at UBS Fintech Leaders Conference

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Got it. And do you think this is sustainable going forward that we saw in the previous quarter?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. As of the fourth quarter, 80% of Affirm cards are GMV and 50% transactions were in the form of interest-bearing loans, how do you expect the Pay Now versus Pay Later mix to evolve over time? And how should this impact your RLTC margins?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Got it. Okay. With the exception of Affirm card, Affirm has primarily focused on consumer lending products for some of your competitors like PayPal and Block, so Buy Now Pay Later product offerings are just 1 part of a broader financial services ecosystem. Have you contemplated making big portions and more traditional financial services and payment solutions there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 14, 2023 / 11:30AM, AFRM.OQ - Affirm Holdings Inc at UBS Fintech Leaders Conference

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. The direct-to-consumer business represented about 25% of your GMV in FY '23. Can you talk about the importance of your

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. Enterprise partnerships are obviously a key component of Affirm's growth strategy. Looking specifically at Amazon, Shopify, you've now been with the platform for a few years. Can you talk about how these relationships are progressing? And what is the remaining (inaudible) with Amazon and Shopify?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : There are other large partnerships that we can expect to hear about in the near future and replicate some of the work you've done with Amazon, Shopify?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Understood. Sticking with enterprise, can you talk about how the economics and product offerings differs with these large e-commerce platforms compared to some of the smaller individual merchants?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Okay. We can now open the floor for questions from the audience. We have a mic going around? If anyone has any questions, please raise your hand and we'll bring over the mic. Okay. Hence we don''t have, I have plenty of more questions, that's fine as well. More time for me. Rob, your 2024 GMV guide implies a deceleration in growth, the same low improvement rate like (inaudible)? Are there any macro indicators that would make you more constructive on your approval rates. For example, if that pivoting is interest rate policy, we think investors are looking for catalysts to drive GMV acceleration here?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : I know you have the upcoming Investor Day. Can you talk a little bit about what we should expect to hear? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 14, 2023 / 11:30AM, AFRM.OQ - Affirm Holdings Inc at UBS Fintech Leaders Conference

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Okay. And both of you have spoken about some (technical difficulty) that are important at Affirm, do you openly maybe answer on how this M&A potentially play to some of your strategies?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Okay. Fair enough. I want to go back to the competitive landscape. And you both explained really well that the advantages that Affirm has in the market. Can you talk a little bit about who you actually view as your main competitors there in the different segments of your market? And how often do you run into blocks after that?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : And Rob, you alluded to this before, as we both mentioned, some of your competitors were offering more (technical difficulty) financial products, and you said in FY '24, you have a key initiative. Could we expect announcements of newer consumer products throughout the coming months?

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Okay, fair. All right. I know we only have a few minutes up, so I just want to ask both of you a final question. This is actually, maybe it's 2 questions. What are your thoughts to most excited about is coming in on Pay in 4 or (inaudible).

Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst : Great. Well, it's wonderful having both of you. Very insightful. Thank you.