Affirm Holdings Inc Q4 2025 Earnings Call Transcript

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

Question: Dan Dolev - Mizuho Securities USA LLC - Analyst : Hey, guys, Max, Rob, Michael, great results as always. So obviously a really strong quarter, amazing guide for next year. It sounds like last quarter you were talking a little bit about the potential stress and the impact on Affirm. It sounds like things have gotten a little better for you from when you reported last time to now. And what is your best take on how things stand now and some of the reasons for that optimism and the nice uptick in the guidance? Again, really strong stuff. It's very good. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, AFRM.OQ - Q4 2025 Affirm Holdings Inc Earnings Call

Question: Daniel Perlin - RBC Capital Markets Inc - Analyst : Good evening, everyone. So I want to go back to the 0% APRs. With the first-time users coming in, I think you said that was like 50%, which is, again, a very, very strong number. So the question is, it's bringing in a lot of new users. I'm wondering, when you look at kind of prior quarters, obviously you look at it this quarter, but prior quarters, what kind of repeat rates are you able to, I guess, glean from those initial users coming in? And the real crux of the question is, are they coming on the platform because of the 0% APR but then not using it again, or are they behaving similar to maybe more traditional Affirm users?

Question: Daniel Perlin - RBC Capital Markets Inc - Analyst : That's great. I figured I'd throw the dig in early, so thanks. When I was reading it, I was like, what would I stick my finger around and be like, how good is that? And this is a good one to ask, and the answer is positive.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Nice results today, as always. I wanted to ask a question just on the funding environment. Max, we've continued to see the capital markets be wide open for consumer lenders. Your funding capacity was up roughly 55% year over year. Utilization is way down. We've also seen that in pretty much every other lender in the space. With the rise of kind of alternative credit coming into the space, how do you think about the incentives that this creates in the market and the risk of credit issues that result from more of an oversupply of funding from some of the lower-quality competitors in the space, or people who are kind of flush with funding and have incentives to make a lot of loans because of that?

Question: Moshe Orenbuch - Cowen and Company LLC - Analyst : I was hoping we could talk a little bit about the Affirm Card. You gave some statistics, talking about it being a billion in volume with 10% attach rate, and also that the 0% volume on the card kind of tripled. Can you talk a little bit about the current strategy with respect to the card, how you think it's going to impact Affirm's customers and volume going forward, and maybe is there any special significance to the 0% on that product? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, AFRM.OQ - Q4 2025 Affirm Holdings Inc Earnings Call

Question: Robert Wildhack - Bernstein Autonomous LLP - Analyst : Hey, guys. You've been extolling the virtues of the 0% APR product for several quarters now. And as far as I can tell, we haven't really seen your peers lean into that product in the same way. I appreciate that you're not them, but even so, why do you think that is? Why has no one else, be it fintech or legacy, gone into the 0% APRs with the same kind of vigor that you have?

Question: Robert Wildhack - Bernstein Autonomous LLP - Analyst : And just quickly on the guidance and the comment that the enterprise merchant will transition off in the fiscal second quarter, kind of an important time with the holiday season, so a little in the weeds, but do you think that happens at the end or the beginning of that quarter? I guess I'm asking if you're going to get the holiday spend there or not.

Question: Kyle Peterson - Needham & Company LLC - Analyst : Great. Nice results. I wanted to touch on the outlook and the take rate. It looks like it's going to be kind of fairly stable with at least the run rated 4Q level. I guess does that imply the mix -- the product mix that we saw in the fourth quarter should be fairly steady? Or are there any other take rate impacts that we should be mindful of, like, for example, with the enterprise partner, anything that might influence some of these numbers as well?

Question: Kyle Peterson - Needham & Company LLC - Analyst : Okay, that's really helpful. And then I guess just a follow-up following up on Will's question around funding. I wanted to ask, are you guys seeing, just given that the funding environment is the best it's been in quite some time, have you guys seen any uptick in competition or irrational players that might be kind of spoiling the water? And I guess if so, how are you guys kind of dealing with that and continuing to grow while maintaining really solid credit? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, AFRM.OQ - Q4 2025 Affirm Holdings Inc Earnings Call

Question: Kyle Peterson - Needham & Company LLC - Analyst : Great. Good to hear. Nice results.

Question: Adib Choudhury - William Blair Capital Partners - Analyst : This is Adib Choudhury on for Andrew. We wanted to ask on the international strategy in the UK but also in other geos you might be looking at and kind of the opportunity for Affirm to bring its underwriting product to the rest of world. And then secondly, how the mix of GMV might look differently internationally kind of versus Affirm's core domestic business?

Question: Adib Choudhury - William Blair Capital Partners - Analyst : Got it. And if I could ask a quick follow-up. Can we just get a high-level update on the Apple Pay partnership and if there's anything kind of incremental to share there?

Question: John Hecht - Jefferies LLC - Analyst : Good quarter. And I'm looking at a globe, but I can't find anything that looks like Europe other than Europe, so thank you for that.

Question: John Hecht - Jefferies LLC - Analyst : The question on, I guess, customer engagement. Higher frequency of engagements. I guess as a customer seasons on the platform, do the dynamics or characteristics of their typical transaction change as they kind of mature?

Question: John Hecht - Jefferies LLC - Analyst : Okay, that's very helpful. And then you guys provided the general framework to think about the impact of rising rates. I mean, the futures curve or the forward curve looks like there's a high probability of lower rates. So maybe can you guys give us a framework to think about the impact of lower rates on the business?

Question: Matthew Coad - Truist Securities - Analyst : Wanted to go back to the 0% topic, but I wanted to address it from the merchant side. So you talked about the number of merchants funding this offering doubling year-over-year. And I believe that's up to 7% of your total merchant base now that's funding the 0% APRs. Curious, like as we look forward, what you think that penetration rate can get to.

Question: Matthew Coad - Truist Securities - Analyst : If I could just sneak in a follow-up, Max. You addressed this in the shareholder letter. You touched a lot on AI. I was hoping you could just talk about it on the call here, too. Just kind of like how you're thinking about the future for agentic commerce and Affirm's role in it.

Question: James Faucette - Morgan Stanley & Co Ltd - Analyst : I wanted to ask on the PSP integration, pretty interesting announcement of BNPL with Stripe Terminal. I think we -- there's potential for that to -- or similar type announcements to be made with other payment service providers. I'd be curious if there's any framing you would provide in terms of how important you think the PSP channel will be for your business, particularly when we think about the business overall, excluding Amazon and Shopify, and as a way to add additional merchants. And how do you intend to lean into that channel, et cetera?

Question: James Faucette - Morgan Stanley & Co Ltd - Analyst : Got it. That's really helpful. And then just a quick clarification on 0%. I certainly think that it's a push there and the benefits you get are pretty clear. But I'm wondering in terms of the shorter duration of 0% that you called out and how that evolved during the course of the June quarter. Is that a seasonal thing? Is that just an expansion of availability, a change in the type of customers that are eligible in opting for 0%? Just trying to get a little bit of color on how to think about that component on a go-forward basis.

Question: Reginald Smith - JPMorgan Chase & Co - Analyst : It's funny, I wanted to follow up on the question that James just asked but taken in a slightly different direction. So I'm thinking about PSP's primarily online e-commerce not named Shopify. Is there a way to kind of frame -- how do you guys think about your penetration within that channel, and I guess, the maturity of that channel? And so like if you were to look at the volumes in that segment, are they growing faster than the line average, slower? Like help kind of frame that channel for us to the extent that you can. And then whether or not you guys often have default on status or how that works. And then my last question, just or the follow-up to that is just quickly on that merchant that's leaving at the end of the first fiscal quarter, is the thinking that you'll still -- your logo will still be available on the website or has that changed at all?

Question: Reginald Smith - JPMorgan Chase & Co - Analyst : Got it. And not to belabor, when you say go away, does that mean zero volume from that merchant or that will go away? What does that mean exactly?

Question: Harry Bartlett - Redburn Partners LLP - Analyst : I just wanted to touch on international again. So I mean, I'm just thinking about Shop Pay, you talked about going to the UK, but in terms of how quickly you can roll out to other geographies. Is it now a case of you have a playbook and then you'll be able to kind of move a bit faster if you look in to move in other areas of Europe? And also, I guess just outside of Shop, do you have any, I guess, difference in your approach to how you're going to expand internationally? I guess, I'm just coming from this from the point of brand awareness maybe isn't quite as strong as it is in the US and there are some incumbent players at checkout. So I just wonder if you have a different approach here on maybe the sales and marketing or consumer.

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : Back to the AI conversation, I know Max, you actually want to keep it pithy, but I want to ask specifically about what you call out here in Adaptive Checkout and specifically the AdaptAI deployments that show an average 5% increase in GMV. What is that about? Can you like unpack the business process of how that works?

Question: Giuliano Bologna - Compass Point Research and Trading LLC - Analyst : Congratulations on another incredible quarter. As a question, and this is somewhat of a high-level concept, but I'm curious when you look at a lot of the wallet partnerships if there's kind of a new frontier where some of the wallet partnerships could enable offline transactions in the future, and how you plan for that and how material that could be in terms of driving incremental GMV growth. And then maybe how you think about the underwriting because you have an interesting opportunity to continue to differentiate and increase your lead ahead of your competitors with a product like that.

Question: Giuliano Bologna - Compass Point Research and Trading LLC - Analyst : That is extremely helpful.