Affirm Holdings Inc Q3 2025 Earnings Call Transcript

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

Question: Andrew Jeffrey - William Blair - Analyst : Hi, good afternoon. Appreciate you taking the questions this afternoon. Max, I noticed the call again on the zero APR product in the shareholder letter where you're having excellent traction. Can you talk a little bit about sort of the, how you balance the economics of those loans versus interest bearing loans, and whether or not you're going to see or you think you can see more merchant sort of contribution to that product as you go forward, because I think you noted it's a little bit lower RLTC than interest-bearing? So, I'm just wondering about the mixed implications and any other comments on zero interest going forward.

Question: Andrew Jeffrey - William Blair - Analyst : That's super helpful. Thank you.

Question: Dan Dolev - Mizuho Securities USA - Analyst : Hey guys, excellent results as always. So, Max, and the team, can you maybe elaborate a little bit on the pockets of strength in GMV that we're seeing right now, and maybe some comments on Apple Pay and how much of this is sustainable on the April strength. We'd really appreciate some comments. Thank you.

Question: Dan Dolev - Mizuho Securities USA - Analyst : Got it. Excellent results. Thank you so much.

Question: Moshe Orenbuch - TD Cowen - Analyst : Sorry about that. I was hoping you could perhaps flesh out the commentary on the 0%. You mentioned that there are generally much higher credit quality. And is this sort of the way to think about a kind of an acquisition channel for the Affirm card and just a different -- and if that's the case, then maybe could you talk a little bit about when you're going to be willing to do more of it and how we should kind of think about that?

Question: Robert Wildhack - Autonomous Research - Analyst : Got it, okay. And then you've had a series of headlines recently highlighting integration and reporting back into the credit bureaus. And you do seem to be at the forefront of your industry in doing that. So, I just wanted to ask, why is that something that's so important to you? And then is it challenging from like a tech perspective to build out that reporting and integration?

Question: Adam Frisch - Evercore ISI - Analyst : Thanks. Quick housekeeping, and then I have a question on the AC card. If zeros didn't grow so fast, we're more in line with the prior mix. What do you think RLTC would have been in the quarter?

Question: Adam Frisch - Evercore ISI - Analyst : Okay, no worries. I just want to ask also about any specific initiatives or incentives that you can speak to in order to get people using the Affirm Card more like a debit card, so you see them more, get an even better understanding of their finances, et cetera? And if not, maybe provide some color on whether banking or debit or other financial services are on your roadmap. Max, I think you alluded to that very slightly in the last call. So, I was hoping maybe to get a little more color on that. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 9:00PM, AFRM.OQ - Q3 2025 Affirm Holdings Inc Earnings Call

Question: Adam Frisch - Evercore ISI - Analyst : Got it. Okay, thanks guys.

Question: Andrew Bauch - Wells Fargo Securities LLC - Analyst : Hi guys, it's Lamar on for Andrew. On the recent headlines this week around student loan enforcement by the administration and the likely wage garnishment which potentially could affect 5.3 million defaulted student loan borrowers this summer, are you guys internally thinking about the potential implications for Affirm?

Question: Andrew Bauch - Wells Fargo Securities LLC - Analyst : Okay, makes sense. And then a quick follow-up. In your prior shareholder letter, you had mentioned work done around the redesign of the Affirm app, just focusing on increasing the utility there. And so I wanted to ask you if there's anything that you may be seeing so far in terms of the impact of these changes, maybe in terms of driving conversion and incremental user engagement? Thank you.

Question: Andrew Bauch - Wells Fargo Securities LLC - Analyst : Okay, I'll take a look, Thanks.

Question: Ramsey El-Assal - Barclays - Analyst : Hi, thank you so much for taking my question. Could you comment on the online partnership with Costco, that announcement, maybe in terms of impact, timing of the implementation, and then could this move in-store at any point? Maybe that's wishful thinking, but thought I'd ask.

Question: Ramsey El-Assal - Barclays - Analyst : Fair enough. A really quick follow-up from me. Any P&L impact from the Shopify renewal? I saw that was impressive that you renewed that through 2028. Was there any concessions on the economic front or any P&L impact we should think through on that renewal?

Question: Ramsey El-Assal - Barclays - Analyst : Got it. Thank you very much.

Question: Will Nance - Goldman Sachs - Analyst : Hey guys, appreciate you taking the question. Nice results as always. I also wanted to congratulate you on the Costco partnership. I thought that was great. I was wondering if you could provide any details on sort of your latest understanding about how the Walmart relationship will be evolving over the remainder of the year given some of the headlines out recently? Thank you.

Question: James Faucette - Morgan Stanley - Analyst : Thank you very much. I wanted to go back to the app. Interesting comments there, asked about kind of using that to drive and make sure that you have good repayment engagement. But just wondering then how we should fit that together with some of the promotional and deal offers that come through the app. And I guess I would expect those to grow. So just help us think about it. I know that there are future improvements coming, but how should we think about the long-term objective of the app? Is it still a repayment engagement mechanism or it seems like there's also opportunity to go after kind of your better hire on quality customers that you're attracting initially is 0%. So just trying to help us think through the long-term scope of the app and that endeavor?

Question: James Faucette - Morgan Stanley - Analyst : Got it. That's helpful context. Thanks, Max.

Question: Matthew O'Neill - FT Partners - Analyst : Yeah, good afternoon. Thanks for taking my questions. I was curious if you could give us a little bit of an update on the international expansion, particularly in the UK, notably following the partnership with Adyen. Is that something you should expect to be somewhat step functional or maybe just kind of how to dimensionize that as well as other partnerships like the one with J.P. Morgan? Thanks.

Question: Matthew O'Neill - FT Partners - Analyst : Thanks, Max. Maybe as a follow-up, speaking of large international incumbents, one that has a particularly aggressive posture on AI historically took a bit of a turn today. I was wondering if you can address where AI is working, I noticed in the note the dispute resolution process for example, but maybe where you found the most success and you've been a proponent of machine learning and AI for a long time and maybe where the human touch still reigns supreme. Thanks.

Question: Matthew O'Neill - FT Partners - Analyst : Appreciate it. Thank you.

Question: Kyle Peterson - Needham & Co - Analyst : Great. Good afternoon, guys, and nice results. I wanted to ask a little bit about credit and what you guys are seeing there. Obviously, the liquidity trends look to be pretty healthy, but I noticed you guys did take up the reserve on loan losses and balance sheet up a bit sequentially. So, was there anything in terms of like concern or is there mix or anything, like, just I guess how should we think about the allowance creeping up and how should we think about that?

Question: Kyle Peterson - Needham & Co - Analyst : Okay. That's helpful. Thank you.

Question: Vincent Caintic - BTIG - Analyst : Hi, good afternoon, Thanks for taking my questions. I wanted to get updates on two topics. I'll just ask both of them now. So the first one about competition, so kind of related to that discussion earlier related to Walmart, in this environment where maybe you have competition willing to give back economics to win merchants. Just wondering if you're seeing a lot of that sort of competition. And then second update, if you could talk about your funding structure and actually specifically, if you had any updated thoughts about becoming a bank. And the reason I asked is it does seem like the regulatory environment is more conducive to becoming a bank, whether it's build or buy. So just wanted to see if there's any updated thoughts there. Thank you.

Question: David Scharf - Citizens Capital Markets - Analyst : Hey, good afternoon. Thanks for taking my questions as well. Hey, Max, just wanted to circle back to the 0% loan focus in mix. I appreciate the commentary that it's been more reactive to what partners are asking for as opposed to proactive. I guess the main question I have is maybe you can give us a little more color on just why. I mean, what do we generally take away in periods where you see particularly some of the larger enterprise partners want to lean into it? Is it a statement about what they're seeing on retail sales and worries and concerns, trying to drive more volume? Is REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 9:00PM, AFRM.OQ - Q3 2025 Affirm Holdings Inc Earnings Call it competitive in terms of playing you off of, let's say, another competitor? What should we basically take away from kind of this uptick in interest and promotional activity?

Question: David Scharf - Citizens Capital Markets - Analyst : That's terrific color. Thank you.

Question: Giuliano Bologna - Point Research & Trading LLC - Analyst : Congrats on continued perfect overall results. One thing I was curious about asking you was when I looked at the outlook, it kind of implies a continued acceleration in GMV growth. And I'm curious to ask you if there's any, if you have any sense of any potential pull forward that may or may not have happened related to the whole discussion and how you think about that because you probably have a lot more insight being a month plus beyond that, and I'm curious how you think about that, and what you'll think about the outlook for the rest of the year, what that implies for GMV growth acceleration? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 9:00PM, AFRM.OQ - Q3 2025 Affirm Holdings Inc Earnings Call

Question: Giuliano Bologna - Point Research & Trading LLC - Analyst : That's very helpful. And then, you obviously set up a pretty incredible funding structure. But when you think about the percentage of loans that you might sell on a quarter-to-quarter basis, should we think about that running at the high end of the historical range for a while in the near future, just because of the volume of partnerships that are out there and the demand for private credit, and just how that should flow through, at least in the near term?

Question: Giuliano Bologna - Point Research & Trading LLC - Analyst : That's very helpful. I appreciate it. I'll jump back in the queue.

Question: Reggie Smith - JPMorgan - Analyst : Hey, guys. Appreciate you taking the question. I've got, I guess one more, and I hate to beat a dead horse, but I have a question about the zero coupon offers. I'm specifically interested in the ones where you guys are doing the funding. I was hoping you could share, typically when I think about those zero financing, my mind always goes back to kind of the Peloton bikes. And I'm guessing that's not either the price point or the duration for those loans. So maybe if you talk a little bit about those loans in particular, the zero coupon loans that you guys are financing yourselves. And then again, just reading the note, it sounds like those are primarily showing up in your app. Maybe talk about where, like, how you deploy them a little bit. Thank you.

Question: Reggie Smith - JPMorgan - Analyst : Got it. So it sounds like for those zeroes in particular, those are people that you know they already have the card. It's almost like a reward to them as opposed to in the case of you self-funding, those aren't you acquiring new customers. It's primarily people that you already know.

Question: Reggie Smith - JPMorgan - Analyst : That makes sense. I'm glad you guys clarified that because there may have been some confusion about that. So, thanks.