Affirm Holdings, Inc. — Call Transcript 2026

Us today. Yeah, great to see you. Thanks for hosting this. Pleasure. Now, look, in terms of the format of the call, so the firm give the opportunity to retail investors to also put their questions to Rob. The questions today are gonna be a mix of my own and also some retail questions. Rob, if you're happy, we'll crack on. Yeah, sounds great. Great. Look, it's kinda hard to avoid the current environment at the moment. Maybe I'll start there, looking at the consumer. I guess given we're seeing kind of increasing geopolitical risk, and I guess depending on how long this lasts, and we could see some spillover effects. I mean, I guess in terms of what you're seeing from the consumer, you know, in terms of demand, in the credit side, maybe you can talk us through there. I guess, Sanket has asked, how do you anticipate inflation and unemployment affecting your business? Sure. You know, maybe taking the questions in order. I mean, in terms of the elevated oil prices, it's really too early for us to see any sort of discernible trend coming out of this heightened environment that we're in. Demand continues to sort of pace along, you know, with sort of steady growth rates consistent. It's been pretty consistent throughout the quarter. Really nothing that we can point to that would say the current elevated fuel prices are causing stress with the consumer. Although, you know, in the long run, we would expect that this could have an impact if you know, if the current prices stay elevated. I think that's the question mark that we have on our side is just we don't know the severity or the you know how long sort of this heightened environment will persist. You know in terms of how we operate our business I mean we underwrite every single transaction with every consumer every time and so that allows us to stay current with our consumers and we think that allows us to be really nimble if we do find ourselves in an environment where the consumer is seeing stress. Again that's not what we're seeing today but we're confident that we'll be able to operate in that environment if that's what happens next. You know, that gives us a lot of confidence that we don't necessarily need to predict what the impact of rising oil prices will be in six months. We can continue to be iterative and course correct and make sure that we set the right underwriting posture as we go. You know, we're large enough now that we originate on average like $150 million of loans a day. Really looking at the early repayment signals that we see when the consumer gets to their first repayment event, which for us is typically 30 days after origination. That's the best leading indicator that we have in looking at sort of that first payment event and the level of delinquencies that we see that tells us if we have the right underwriting posture or not. Sure. Yeah, I mean, I guess you've kind of touched on it there, but maybe you could talk about, you know, I guess if we're thinking about going into maybe a slightly more contractionary period, some of the tools, other tools you might have in that scenario. I know you've, you very helpfully disclosed in the past that you would expect kind of a 50% increase in credit stress leading to about a 10% point reduction in GMV growth. Maybe for some of the investors, you could help to kinda contextualize that in terms of, you know, how you're thinking about the assumptions there and how that scenario might manifest. Sure. I mean, maybe to level set, we run most of our merchant, large merchant programs in a way where the sort of last loan that we would approve from a credit spectrum perspective is gonna be break even or better. When we're thinking about a situation where we feel like we need to tighten our underwriting posture, the loans that we're taking out of the system are not huge contributors to our profitability, right? We're sort of starting with break even loans at the low end of the spectrum, and we're gonna find a new equilibrium point where with the added theoretical stress in the system, we'll set a new break even point and we'll underwrite and run the business to those levels. What that means is that we would expect to see some sort of slowdown in GMV, but in terms of the profitability headwinds, those should be pretty minimal. Because again, most of our profitability is coming from sort of the middle to the upper part of our credit spectrum. Taking sort of loans that were previously break even out of the system and finding a new break even point, that again, there's not gonna be as much impact to the business at large. In terms of how we would implement those tightenings, you know, there's a lot of levers that we have at our disposal. We can do things like asking the consumer to make a down payment upfront as part of the transaction. That helps us take risk out of the system, if the consumer has some skin in the game, so to speak, and is paying down a portion of the loan on day one. We can play with term lengths. You know, shortening term lengths is another way to take risk out of the system for us. You know, again, we can ask the consumer to give us more information as well. That's something increasingly that we're doing, especially for consumers that are sort of at that marginal point in our underwriting. If we can get some more information about the consumer's financial health, that can allow us to get to a yes or present a set of terms that would be, you know, sort of putting our best foot forward and making sure that we maximize conversion for the merchant partner there. Then, you know, again, after all of those, we can also just adjust the minimum credit score that we would say yes to within a given merchant program. Sure. No, it's very helpful context. I guess one of the other areas of focus we're seeing in the market at the moment is this private credit narrative. You know, you've talked a lot about your kind of consistency of underwriting performance and the benefits that's given you from a funding perspective, not just in terms of demand, but also pricing. We have seen obviously some concerns there. I guess given that, you know, what would you say around the kind of interest of buyers in the market for Affirm loans? And is there kind of a plan B, if that interest dwindles? Maybe you could just talk about, yeah, how Affirm's positioned from a funding perspective and across the various channels. I think I'd be remiss if I didn't call out our 2026-2 securitization, which literally just closed yesterday. Really a fantastic outcome in terms of what we saw and heard from the market. We launched with a $500 million deal. There was enough demand in the book for us to upsize that to a $750 million deal. We were still something like 2.5 times oversubscribed against that bigger quantum. We only did 3 days of marketing, you know, versus what typically we would do a 5-day marketing period. With all that, we were able to price at an all-in spread of 116 basis points for what is a 3-year offering. You know, if you compare that to our last 3-year offering, we actually brought spreads in by 8 basis points versus the deal we did in late 2025. Like for like, I would say the demand for our ABS issuances is as strong as it's been. We were really happy with that outcome and we of course acknowledge, you know, all of the volatility and turbulence out there from a macro perspective. In terms of the deal, we were just able to price, we came away really happy and I think it's a testament to how we've been able to build our program on the capital side. We look for partners that are gonna be here throughout the cycle and can work with us in size. Typically, ABS can be a way to start the relationship with a funding partner, and we look to deepen those relationships into forward flow and other formats as well. We feel really good about the health of the ABS market, despite the headlines. Again, I think we've got a very recent data point here that supports that confidence. If we were to see some sort of dislocation in the ABS market, you know, we've been really thoughtful about how we've crafted our capital program. ABS is just one channel that we utilize to fund the business. We also have committed forward flow loan buying relationships with several counterparties. We typically ask for at least a two-year commitment from those counterparties, so we know that, you know, there's capacity there when we need it. Lastly, we utilize warehouse loans from several large bank counterparties. Warehouses, you know, to get to the second part of your question, is where we tend to keep most of our unused capacity. If you look at the disclosures we have in our 12/31 filing, I think we had something like $4 billion of untapped warehouse capacity. If we were to see a dislocation in ABS, that's likely the channel that we would utilize a bit more to absorb the dislocation that we're seeing in ABS. You know, it's important to remember our ABS facilities typically have a 2-year or 3-year revolving period. You know, we're gonna be able to utilize the funding vehicle that we just closed. We're gonna be able to utilize that capacity for the next 3 years before the facility starts to amortize. We feel really, really good about our funding capacity. I think we've built the program in a way where we can utilize, we can sort of move in and out of various channels if for whatever reason, the market does experience a dislocation. Sure. Maybe just as an extension to that, I mean, I guess, how are you thinking about kind of the on versus off balance sheet, you know, strategy? I know you've kind of moved a bit more towards off balance sheet given the funding conditions and how favorable they've been, but how are you kind of thinking about that over the next 12 months or so? Yeah, we really haven't given any sort of forward guidance around on versus off. I think if you look at our business historically, we've been roughly 50/50 between on and off. The ABS deal that I just spoke to, you know, that's an on-balance-sheet funding vehicle. The advance rates, though, are really healthy. I mean, we're approaching, I think, 96.5% advance rate. It's a really capital-efficient way for us to fund the business. We retain a bit more of the loan economics than we would if we were to move a loan off-balance-sheet through a loan sale. I think there's always pluses and minuses. I think what's important to us is that we're able to fund the business through sort of any kind of economic cycle. I think as we sit here today, we feel really good about the capacity we have and just the low overall levels of utilization that we have against that total capacity. Sure. Great. Let's move on to the card. We saw yet another strong quarter. It's up to kind of 16% of the GMV now, growing at 150% year-on-year. Can you talk about some of the factors that have caused GMV growth from the card to kind of accelerate over the last few quarters? Yeah, I mean, I think we're continuing to really tap into the core of our user base, and I think the functionality that we bring with Affirm Card of making it, you know, very seamless and easy to transact anywhere that accepts Visa. I think that's sort of the killer feature of the card. We did make a small change on the product side starting 1st of October, where transactions that are facilitated through a permanent PAN, a permanent card on one wallet partner in particular, those are now being counted as card transactions and as card volume because we moved that program from being one-time card driven to being a permanent PAN. In order to be consistent with what we've called Card historically, the transactions from that program are now being counted. That did help drive a bit of a bend upward in the curve in terms of growth in users and in GMV. Yeah, I mean, we've been really happy with the attraction that we've seen with Card. I think Card is a great unlock for offline spend. You know, historically, both Affirm, but even BNPL at large has been very heavily concentrated within e-commerce. And what we're seeing with the Card usage is that we see more than an order of magnitude more mix from in-store purchases. We feel like we found a product that resonates with our base, and we're really excited to see it continue to scale. I guess, you know, you talked about maybe the uptake of the card has exceeded some of your earlier expectations. I mean, how do you see penetration evolving over the medium term? Is it a situation where, you know, long term Affirm Card is the primary distribution channel? I think we're still a ways from it ever being the primary distribution channel. I still think our model of continuing to win as much coverage of checkout as we can, you know, we work with some of the largest and most sophisticated players in commerce generally, and that approach has served us really well. We're able to build profitable financing programs at our merchants, and that's served as an on-ramp from a consumer perspective into our network. Right now, Card continues to almost exclusively be sort of a second-use product within our user base. I think that model is serving us well. When you look at the growth rates of Card that we posted in the December quarter and have posted, you know, pretty consistently here for the last several quarters, I don't get the sense that we're at any sort of saturation point, you know, far from it. I don't want to hazard a guess in terms of what ultimate penetration of our user base can be, but I think the good news is we continue to grow the overall user base at really, really healthy levels, and we're continuing to see more and more penetration of that user base and more and more of those individuals taking Card out and using Card pretty frequently as well. Again, I think that tells us that we're on the right path and in the long run, I you know again I don't know what the ultimate ceiling is here, but again it feels like we have a lot of headroom just given the growth we're seeing today. Yeah. I mean, you touched on the, I guess, the penetration of the user base, but I think one stat you talked about in the past is the kind of trying to reach that $7,500- Yeah spend per user. Maybe you can just talk a bit about how you bridge to that point. I mean, how do you go from, I guess, a product that's used maybe once or twice a month to kind of a regular top-of-wallet product and the sorts of product innovations you might see there? Yeah. I mean, really that the target that we have of $7,500 per cardholder of Affirm spend, that really is rooted in some industry data and some survey data that we've done within around sort of what we believe our core user is, and that's the rough discretionary spend that we would expect in a given year from a user with sort of the profile that we see in our business. I think that's a target that just is focused on capturing as much of the discretionary spend that we can within our users. I think the way that we do that is just continuing to put the right offers in front of our users. You know, increasingly, that's a mix of 0% loans and interest-bearing loans. I think our ability to go from 30 days out to 36 or in some cases 48 months, and then also on the other axis to do anything from a 0% APR up to a 36% APR, that allows us to be incredibly flexible in terms of the offers that we put in front of consumers. Thus far, that's served us really, really well to make sure that whatever the consumer rather is solving for, whether it's a low APR or, you know, longer terms that may help smooth out their monthly cash flow and help them manage their personal budgets, we can sort of be there with the right offers. Increasingly we're using the data sets that we've been able to compile over almost 15 years to make sure that we're optimized as much as we can be in terms of that offer set that we're presenting to the consumer. You know, I think we're still very early, both in terms of overall card users, but even in terms of annual spend. You know, that's how we arrived at that target, is really just looking at getting to a much higher percentage of share of wallet with our consumer. Sure. Very clear. If we move on now to talk about the 0% APR, again, another very strong driver of growth, strongest growth in terms of the product across your kind of three main products. In terms of penetration, you know, where are you in terms of the number of merchants or I guess volume of merchants in terms of those offering 0% APRs? You know, again, I think that we're never done there. You know, as much as we've made a push to drive more 0% volume within our network, we still have, you know, several large merchants that aren't utilizing 0%. That tells me that there's definitely more room to go. You know, I think it's important to remember that we really believe that 0% are a great complement to the very profitable and the very nice and high growth interest-bearing program that we have as well. You know, I heard a little bit in your question. I don't think we're pivoting away from interest-bearing. We're looking to add more 0% as a complement to interest-bearing. What we see in the consumer uptake is that even if a consumer starts with a 0% loan, there is still a high propensity for them to utilize an interest-bearing loan in their life cycle. I think it's about finding the right mix of offers for consumers and understanding what works for a consumer for a specific transaction. Again, for smaller dollar transactions, Pay in 4, you know, may be the best offering for them. It's zero interest when we do it. There's no late fees. It is a very short-dated loan. For larger ticket items and more considered purchases, our consumers tell us that they really value the term length that we can go out to just because that allows them to get that monthly payment down to an affordable level. Again, it's there. There's definitely not a one size fits all, and I think given where Affirm is in its life cycle, we really wanna make sure that we have a full set of offerings that can resonate with any consumer. Yeah. I mean, maybe just kind of touching on that. I mean, I guess as a product, do you think that arguably 0% kind of open you up to a wider customer base? I'm thinking maybe, you know, the higher income user who may not typically use interest-bearing or maybe if we think about international markets where maybe there's less kind of propensity to use credit products. You know, do you think that has a wider product market fit? Yeah, again, I think it's a really important ingredient, you know. I think given where we were coming from in terms of our interest-bearing mix in the program when we started to lean a bit more into 0%, I think it felt like adding more 0% made sense for the network overall. It's really hard for us to pick, you know, one single loan product and say, "That's the best one for any given market," just because we really do aim to support such a wide breadth of transactions and average order values. I think in the context of the merchants that we work with today and the merchants we hope to work with in the future, you know, really having that flexibility around being able to support transactions across the spectrum and also flexibility around, frankly, how we construct the financing programs at a given merchant. You know, some of our largest merchants are very cost of acceptance focused and driving an interest-bearing program allows us to monetize the consumer side of the equation and craft a program that allows us to get that prominence at the point of sale with a large merchant and make it cost-effective and help them reach both their cost and their conversion targets in their business. We really try to craft programs that work for our consumers and work for our merchants, and it's really not. We're not ever focused on one single product as the end all be all. Again, I think it's always sort of a multivariate calculus here to make sure we have the right program that works across a wide range of transactions. Sure. Maybe let's move on to kind of margins. I think one of the areas that people have been talking about quite a lot is the kind of mix shift to 0% and the kind of potentially dilutive effect that has on net take rates and obviously there's a lot of offsets in there. I guess if you're thinking about the business and the mix going forward, how do you balance some of those lower net take rate products versus growth? Again, I think we've got a long-term range that we've established of wanting to be in the 3%-4% Revenue Less Transaction Cost as a percentage of GMV. That's a mouthful. You know, for the last several quarters, we've been operating sort of at or above the high end of that range, you know, pretty close to 4% for most of the recent quarters. 0% to your framing, right? 0% can be a way to forego some income. We're not getting interest income in those transactions from the consumer. It's a way for us to mix into you know, a slightly dilutive loan product. We do think it's an important part of having a full product offering to a range of consumers. You know, as I said previously, we think it's a really important ingredient to the overall business. You know, when I look at the business from a financial perspective, again, we're printing unit economics that are at or above the high end of our long-term range of 4%. Then, you know, as you go down the P&L as well, we've driven really nice operating leverage in the business over the last several years as well. I think the business, you know, the business is performing very well from a financial perspective. For us, it's really making sure that we, you know, drive strong units and drive operating leverage, of course, but also that we maximize the opportunity that we think we have as a market leader in the U.S. Making sure that we continue to reach as many merchants and as many consumers as possible, you know, just given everything that we're able to bring to bear in various financing offers. Sure. One of the things you talked about previously is within the card, you know, the very strong weighting of the card towards interest-bearing products. Yeah. Which helps to kind of, I guess, offset some of the lower MDRs. I guess when we look to the latest quarter, the card seems becoming a really strong vehicle for distributing 0%. Maybe you could just give some color there and how this kind of plays into your thinking and, I guess, the overall economics. Yeah. I mean, card is obviously one of the fastest, if not the fastest-growing part of our business. To your point, the mix of interest-bearing loans within card has historically, you know, always been above our overall company mix of interest-bearing. Really product mix is probably the single biggest driver of product economics or product profitability and card benefits from a very high interest-bearing mix and that was still true in the December quarter as well. As much as we are leaning a bit more into 0%, I think we also have card with really strong growth rates sort of bringing that interest-bearing mix back a bit too. You know, the interchange that we collect on card transactions is very healthy. On an all-in basis, I mean, card is arguably our most profitable product, depending on how you define products at Affirm. That collection, those loans. The other thing that's important to remember, because it is almost exclusively a repeat use product, getting through that first transaction with a new consumer tends to be the riskiest from a, you know, from an empirical basis. Because we're benefiting from positively selected and repeat borrowers that we've already underwritten once, that does help take some of the credit losses out of the product as well. That combination of a really high interest-bearing mix and then a pretty favorable credit setup, those two things contribute to a really, really nice profitability in the card. Sure. Yeah. I guess just on the subject of pricing, we've had a question here from Amanda, and she says, "What's Affirm's long-term strategy to maintain competitive advantage and continue growing market share? You know, I think for us, I think that one of the things that is unique about Affirm, particularly in the U.S., is the breadth of loan products that we offer. Most of our competitors are very highly concentrated within Pay in 4 transactions. There's a lot to like about Pay in 4 transactions. If you just look at how the product works, you really are dependent on a relatively high merchant discount rate. You know, the merchant is driving the lion's share of the revenue in those transactions. I think it can be difficult to penetrate some of the more cost of acceptance-focused large retailers in the U.S. if Pay in 4 is your only product offering. I think what's been really advantageous to Affirm is our ability to craft financing programs that meet the merchant's cost of acceptance needs, but are also, you know, nicely profitable for us and also convert well and put offers in front of consumers that resonate with those consumers as well. I think that, you know, sort of that triangle of conversion, cost of acceptance for the merchant, and profitability for us, I think we've been able to win across all three of those considerations. We do it by crafting a program that has maybe some 0% volume to drive conversion for the merchant. Also, we can build an all interest-bearing program if we need to, that'll still convert, you know, plenty well for the merchant, and help them lower their cost of acceptance. Again, similar to the 0% question, we can sort of build a program that optimizes for the merchant's needs, and we have a lot of confidence that we'll figure out ways to make that program, you know, drive growth for the merchant and can drive increased levels of conversion over time too through optimizations. Yeah. That's great. I mean, I guess just on the subject of kind of competition and some of the areas where, you know, you have innovated, I guess, on product, be interested to talk about, you know, AdaptAI and BoostAI, the sort of uptake you're seeing from merchants and I guess how important those tools have been in terms of when you're, you know, having conversations with new merchants. Yeah. You know, AdaptAI is sort of on our direct-to-consumer side of the house and those optimizations are live and running and, you know, we control those surfaces and the AdaptAI really helps us optimize the set of offers that we present to a consumer for any given transaction, and making sure that we're driving as much conversion and as much take-up is the term we use, take-up by the consumer. Those are live today and helpful. On the BoostAI side, I think we're still relatively early in that market opportunity. Really what BoostAI is doing is it's taking a pretty static financing program that was hard-coded into our historical merchant agreements, and we're partnering with merchants to find ways to dynamically optimize the offer set. Maybe moving away from a static 3 months, 6 months, and 12-month set of offers that the merchant might be presenting on their sites to finding the right set of offers across a range of AOVs. It's sort of a dynamic calculus to make sure that we drive as much conversion for the merchant, as much GMV as possible, and also making sure that, you know, we drive strong unit economics throughout those optimizations on the Affirm side too. It does take, you know, a lot of trust with the merchant and just it does require repapering our contracts. We're in the early innings of getting that rolled out. It's something that's really exciting because what we've seen in the early data is its GMV lift for the merchants, it's higher take-up for our consumers, which means we're putting a, you know, a better offer in front of them. It's, you know, we're benefiting from the increased GMV, but it's also better unit economics for us as well. It really is a win-win-win across merchants, consumers, and Affirm. We're confident that we're on the right track. It just, there is a lot of blocking and tackling with merchants to just get through some of these amendments that we need to get this fully rolled out. Sure. Let's move on to talk about some of the longer-term trends. Agentic commerce, I know it's received a lot of attention. I know we're still kind of in the foothills of that. You know, quite recently, we heard that OpenAI was kind of retreating from its instant checkout within ChatGPT after only five months. It seems like we're kind of shifting back to a world where transactions may be completed in websites or in apps, rather than this kind of new model that people are expecting. I guess, did that news surprise you? You know, how does that change how you're thinking about the agentic commerce opportunity? I don't think it changes anything on our side. We fully expect to have a seat at the table if consumer demand moves to agentic to facilitate transactions. I think looking at the size of our consumer base in the U.S., right? Affirm is clearly a financing option that consumers want and that consumers need. We would expect to be a player in any sort of updated protocol that does roll out or, you know, there may be multiple protocols for a while here as well. You know, I think if you look at what we've been able to do in terms of e-commerce, you know, we use the term internally, we embrace channel conflict. We've been able to partner directly with merchants. We also have large partnerships like Shopify, where we're able to leverage you know existing platforms, merchant base and distribution to accelerate our growth. We fully expect to be, you know, we've done similar things with Apple Wallet, you know, the Apple Pay Later program as well. You know, we would expect to be anywhere that consumers are shopping, and if that moves into an agentic world, then we would fully expect to be a part of those transactions as well. Again, I think that's something that our merchants are gonna want, and I think it's also something that consumers will want. Sure. Well, nice Shopify reference. That was a segue onto my next question. We think about international. You know, you launched in the U.K. in 2024. You started ramping throughout last year. I mean, where are you with your ramp with Shop Pay Installments in the U.K.? And I guess, you know, what needs to be done in terms of going to that automatically switched on for new merchants? Yeah. You know, I think we're working towards that end goal of being auto on for merchants within the Shopify platform in the U.K. I think we're at a pretty similar point in the program life cycle. You know, we went through this same phase that we're in now in the U.S. before we had the bigger launch. Right now it's just about making sure we understand how conversion works within the program and making sure that you know, the program is as optimized as it can be before we get ready for this sort of step function change in scale that would come with a broad auto on release within Shopify. I think we're right on schedule in terms of that progress. Having gone through the U.S. rollout, you know, I think this is a really important stage to make sure that we're ready for the volume that can come through a platform like Shopify. Sure. I guess maybe we think about your next leg of growth beyond the U.K. I mean, I guess to what extent can you more rapidly, you know, roll out Shop Pay across your merchants in continental Europe? I know you've talked about Australia and I guess some of the steps that need to go in place there. Yeah, I mean, obviously outside of our existing markets, which today are the U.S., Canada, and the U.K., I mean, there we will need new and different licenses to operate outside of our existing three geos. You know, that's something that we'll need to prioritize and bring in-house before we're ready to launch a new program. Yeah, we fully, you know, we don't think that we're done expanding with Shopify after the U.K. We're excited to get the U.K. right. To your point earlier, you know, there's still some work to be done to get that fully launched. We'll start to talk about new markets when they're a little bit closer to being live. Sure. Let's go on to another deal that you've announced recently, QuickBooks. I mean, it looks like a very interesting partnership. It's $175 billion online payment volumes. Maybe you could just talk a bit about this opportunity and your expectations, I guess, in terms of adoption. Yeah. I mean, it's a really exciting partnership. The first phase of the program will be bringing Affirm financing programs to business to consumer invoices through the QuickBooks platform. We wanna make it as frictionless as possible for consumers to pay those invoices with our set of financing offers. You know, I think when we look at some of the KPIs within the program that's existed historically, it's a large enough average order value that I think a lot of the strengths that Affirm has around underwriting every transaction and also being able to go longer on terms to smooth the consumer's cash flow. I think it's a really nice setup for us in terms of the sweet spot of the invoicing program that exists and what we're able to do on the Affirm side. It's really early. You know, we are live with an increasing number of merchants today, and we're hoping to continue to scale that, you know, over the course of this month. Lots to like so far, but it's so early that, you know, with our existing base of business, it won't be material this year. It's a program that we're really excited about. I think it. You know, more than anything, it's a great expansion into the services vertical, which is, I think historically an area where BNPL has been under-penetrated. I think Affirm's been under-penetrated as well. We have a lot of confidence that what Affirm does should work really, really well in that end market. We're excited to partner with, you know, a market leader like Intuit to broaden our reach. Very clear. Maybe we talk about the bank license next. You know, obviously there's a funding benefit here, but maybe you could just talk about some of the other benefits that you expect to see from a kind of cost and a product velocity perspective. Yeah. Yeah. You know, I think one of the things that we're the most excited about is just being able to have Affirm participate in more of the value chain within our product offerings. You know, if you envision a world where we do have a banking subsidiary, you know, that subsidiary could be an originator of loans, which just allows us to be that much closer to the consumer and a bigger portion of the product flow generally. You know, there's enough growth in our business, and I think the true sort of ramp of the bank and the scaling of the bank will play out over a handful of years, assuming we are granted the license. We're really not thinking about turning off any of our existing banking partners, and we would expect that with all the growth and scale that's on the come at Affirm, that the bank subsidiary would just be, you know, a part of that growth and a participant in that growth alongside our existing partners. You know, originating loans is one area. Issuing cards can be another area where we utilize bank partners, and I think over time, we may be able to bring more of that flow in-house or at least have some redundancy through the Affirm bank for those workflows. Those are some of the early things, but we are several years out from, you know, again, having a bank that's scaled, and we also wanna leave a little bit of surface area to cover at our investor forum in May, for the bank topic. Sure. Maybe we ask one question, but feel free to defer. I mean, I guess, you know, we talked about kind of costs and the benefits there, but where do you see opportunities from a revenue standpoint? I guess longer term, is the vision to position Affirm as a kind of provider of installment credit in any situation where, you know, customer is underserved or penalized by large banks beyond BNPL? I guess along those lines, we've got a question from Karen, who's asked, "Will we ever see Affirm finance vehicles or homes? I mean, right now there's a pretty bright line around secured lending. We don't wanna repossess goods from our consumers. I think autos and homes is a no today. Forever's a long time, so that may change, but today I think that's a pretty clear no for us. I think the other piece of the question I'm gonna defer to May. Okay, fine. Great. Well, let's move on to talk about the FIS and the Fiserv deals. You know, it seems like the opportunity here in terms of the overall TAM could be huge. So I guess the question really is, you know, how well you can penetrate that TAM. So maybe you can give some insight into how you go about distribution. I guess any early feedback you've had from the conversations with banks and perhaps, you know, the differences in how we should think about FIS and Fiserv. Well, I mean, I think generally, we're utilizing the same approach and would have the same vision across both platforms. There can be some differences just in terms of the average size of bank that the various platforms work with. Really, like, in a nutshell, the idea and the pitch to banks is, there's several, you know, small to medium-sized banks that have meaningful debit programs and large customer bases. We can see in our data, and the bank can probably see in theirs, that they're going elsewhere for financing, right? They're utilizing credit cards, whether it's Capital One or Citi or whomever to consummate their considered purchases. With the Affirm Card functionality, we can bring that to the bank's existing debit programs and allow them to participate in those swipes a lot more than they are today. Also, you know, again, to sort of maintain or probably grow their share of wallet with their existing consumers. I think right now, you know, we're in the very, very early stages of having conversations with banks. I think the conversations are resonating with banks, but it's a lot of work for us to do to build this functionality into the various banking cores. We're excited to continue to have the conversations on the sales side to hopefully land some early pilot bank partners here. Great. I think we've had a question here from Ajmal on a kind of capital, I guess maybe slightly longer term, but I guess how do you think about, you know, implementing share repurchase programs or dividends, you know, I guess from a distribution perspective once you reach that point? Yeah. I mean, I think today we do have an existing buyback program for our convertible bonds, and so, that's been the place historically where we've returned capital to shareholders, but just by de-leveraging and being opportunistic about how and when we buy back our convert. I think with that program and the relatively near term maturity for our 2026 convertible bonds, I think that's where you're gonna see us continue to lean in in terms of capital allocation. In the longer run, you know, again, I think we're still relatively early in being a profitable company. We're really proud of the cash flow generation that we're seeing in the business today. I think over time, we'll start to give more time and thought to capital allocation just as we see the business continue to mature. Yeah, again, right now, I think the convert is what's sort of front and center for us. Sure. I guess kind of on the same topic, I mean, how do you think about new acquisitions? I guess Felix asked here, you know. Yeah. Would you think it is a way to accelerate your expansion? I think so. I mean, I think we have a corporate development team that is very active in terms of working through inbound opportunities that we receive, but also, you know, prospecting within various sort of product expansion areas, new markets. I think it's a really nice complement. I think M&A can be a really nice complement to our existing product and engineering capabilities. You know, again, there's always a sort of could we go faster if we bought something? I think that's often a question we ask internally, and I think that'll be our program going forward as well. Sure. Well, Rob, that's been great. I think we've just about run out of time, but you know, thanks very much for your time today. Yeah, look, if anyone has any questions, please follow up with Zane or Maggie from Affirm's IR team. Awesome. Thanks, Harry. Really appreciate all the questions. Thanks.

Speaker 1: Us today. Us today. us today

Speaker 2: Yeah, great to see you. Thanks for hosting this. Yeah, great to see you. yeah great to see you Thanks for hosting this. thanks for hosting this

Speaker 1: Pleasure. Now, look, in terms of the format of the call, so the firm give the opportunity to retail investors to also put their questions to Rob. The questions today are gonna be a mix of my own and also some retail questions. Rob, if you're happy, we'll crack on. Pleasure. pleasure Now, look, in terms of the format of the call, so the firm give the opportunity to retail investors to also put their questions to Rob. now look in terms of the format of the call so the firm give the opportunity to retail investors to also put their questions to rob The questions today are gonna be a mix of my own and also some retail questions. the questions today are gonna be a mix of my own and also some retail questions Rob, if you're happy, we'll crack on. rob if you're happy we'll crack on

Speaker 2: Yeah, sounds great. Yeah, sounds great. yeah sounds great

Speaker 1: Great. Look, it's kinda hard to avoid the current environment at the moment. Maybe I'll start there, looking at the consumer. I guess given we're seeing kind of increasing geopolitical risk, and I guess depending on how long this lasts, and we could see some spillover effects. I mean, I guess in terms of what you're seeing from the consumer, you know, in terms of demand, in the credit side, maybe you can talk us through there. I guess, Sanket has asked, how do you anticipate inflation and unemployment affecting your business? Great. great Look, it's kinda hard to avoid the current environment at the moment. look it's kinda hard to avoid the current environment at the moment Maybe I'll start there, looking at the consumer. maybe i'll start there looking at the consumer I guess given we're seeing kind of increasing geopolitical risk, and I guess depending on how long this lasts, and we could see some spillover effects. i guess given we're seeing kind of increasing geopolitical risk and i guess depending on how long this lasts and we could see some spillover effects I mean, I guess in terms of what you're seeing from the consumer, you know, in terms of demand, in the credit side, maybe you can talk us through there. i mean i guess in terms of what you're seeing from the consumer you know in terms of demand in the credit side maybe you can talk us through there I guess, Sanket has asked, how do you anticipate inflation and unemployment affecting your business? i guess sanket has asked how do you anticipate inflation and unemployment affecting your business

Speaker 2: Sure. You know, maybe taking the questions in order. I mean, in terms of the elevated oil prices, it's really too early for us to see any sort of discernible trend coming out of this heightened environment that we're in. Demand continues to sort of pace along, you know, with sort of steady growth rates consistent. It's been pretty consistent throughout the quarter. Really nothing that we can point to that would say the current elevated fuel prices are causing stress with the consumer. Although, you know, in the long run, we would expect that this could have an impact if you know, if the current prices stay elevated. Sure. sure You know, maybe taking the questions in order. you know maybe taking the questions in order I mean, in terms of the elevated oil prices, it's really too early for us to see any sort of discernible trend coming out of this heightened environment that we're in. i mean in terms of the elevated oil prices it's really too early for us to see any sort of discernible trend coming out of this heightened environment that we're in Demand continues to sort of pace along, you know, with sort of steady growth rates consistent. demand continues to sort of pace along you know with sort of steady growth rates consistent It's been pretty consistent throughout the quarter. it's been pretty consistent throughout the quarter Really nothing that we can point to that would say the current elevated fuel prices are causing stress with the consumer. really nothing that we can point to that would say the current elevated fuel prices are causing stress with the consumer Although, you know, in the long run, we would expect that this could have an impact if you know, if the current prices stay elevated. although you know in the long run we would expect that this could have an impact if you know if the current prices stay elevated I think that's the question mark that we have on our side is just we don't know the severity or the you know how long sort of this heightened environment will persist. You know in terms of how we operate our business I mean we underwrite every single transaction with every consumer every time and so that allows us to stay current with our consumers and we think that allows us to be really nimble if we do find ourselves in an environment where the consumer is seeing stress. Again that's not what we're seeing today but we're confident that we'll be able to operate in that environment if that's what happens next. I think that's the question mark that we have on our side is just we don't know the severity or the you know how long sort of this heightened environment will persist. i think that's the question mark that we have on our side is just we don't know the severity or the you know how long sort of this heightened environment will persist You know in terms of how we operate our business I mean we underwrite every single transaction with every consumer every time and so that allows us to stay current with our consumers and we think that allows us to be really nimble if we do find ourselves in an environment where the consumer is seeing stress. you know in terms of how we operate our business i mean we underwrite every single transaction with every consumer every time and so that allows us to stay current with our consumers and we think that allows us to be really nimble if we do find ourselves in an environment where the consumer is seeing stress Again that's not what we're seeing today but we're confident that we'll be able to operate in that environment if that's what happens next. again that's not what we're seeing today but we're confident that we'll be able to operate in that environment if that's what happens next You know, that gives us a lot of confidence that we don't necessarily need to predict what the impact of rising oil prices will be in six months. We can continue to be iterative and course correct and make sure that we set the right underwriting posture as we go. You know, we're large enough now that we originate on average like $150 million of loans a day. Really looking at the early repayment signals that we see when the consumer gets to their first repayment event, which for us is typically 30 days after origination. You know, that gives us a lot of confidence that we don't necessarily need to predict what the impact of rising oil prices will be in six months. you know that gives us a lot of confidence that we don't necessarily need to predict what the impact of rising oil prices will be in six months We can continue to be iterative and course correct and make sure that we set the right underwriting posture as we go. we can continue to be iterative and course correct and make sure that we set the right underwriting posture as we go You know, we're large enough now that we originate on average like $150 million of loans a day. you know we're large enough now that we originate on average like $150 million of loans a day Really looking at the early repayment signals that we see when the consumer gets to their first repayment event, which for us is typically 30 days after origination. really looking at the early repayment signals that we see when the consumer gets to their first repayment event which for us is typically 30 days after origination That's the best leading indicator that we have in looking at sort of that first payment event and the level of delinquencies that we see that tells us if we have the right underwriting posture or not. That's the best leading indicator that we have in looking at sort of that first payment event and the level of delinquencies that we see that tells us if we have the right underwriting posture or not. that's the best leading indicator that we have in looking at sort of that first payment event and the level of delinquencies that we see that tells us if we have the right underwriting posture or not

Speaker 1: Sure. Yeah, I mean, I guess you've kind of touched on it there, but maybe you could talk about, you know, I guess if we're thinking about going into maybe a slightly more contractionary period, some of the tools, other tools you might have in that scenario. I know you've, you very helpfully disclosed in the past that you would expect kind of a 50% increase in credit stress leading to about a 10% point reduction in GMV growth. Maybe for some of the investors, you could help to kinda contextualize that in terms of, you know, how you're thinking about the assumptions there and how that scenario might manifest. Sure. sure Yeah, I mean, I guess you've kind of touched on it there, but maybe you could talk about, you know, I guess if we're thinking about going into maybe a slightly more contractionary period, some of the tools, other tools you might have in that scenario. yeah i mean i guess you've kind of touched on it there but maybe you could talk about you know i guess if we're thinking about going into maybe a slightly more contractionary period some of the tools other tools you might have in that scenario I know you've, you very helpfully disclosed in the past that you would expect kind of a 50% increase in credit stress leading to about a 10% point reduction in GMV growth. i know you've you very helpfully disclosed in the past that you would expect kind of a 50% increase in credit stress leading to about a 10% point reduction in gmv growth Maybe for some of the investors, you could help to kinda contextualize that in terms of, you know, how you're thinking about the assumptions there and how that scenario might manifest. maybe for some of the investors you could help to kinda contextualize that in terms of you know how you're thinking about the assumptions there and how that scenario might manifest

Speaker 2: Sure. I mean, maybe to level set, we run most of our merchant, large merchant programs in a way where the sort of last loan that we would approve from a credit spectrum perspective is gonna be break even or better. When we're thinking about a situation where we feel like we need to tighten our underwriting posture, the loans that we're taking out of the system are not huge contributors to our profitability, right? We're sort of starting with break even loans at the low end of the spectrum, and we're gonna find a new equilibrium point where with the added theoretical stress in the system, we'll set a new break even point and we'll underwrite and run the business to those levels. Sure. sure I mean, maybe to level set, we run most of our merchant, large merchant programs in a way where the sort of last loan that we would approve from a credit spectrum perspective is gonna be break even or better. i mean maybe to level set we run most of our merchant large merchant programs in a way where the sort of last loan that we would approve from a credit spectrum perspective is gonna be break even or better When we're thinking about a situation where we feel like we need to tighten our underwriting posture, the loans that we're taking out of the system are not huge contributors to our profitability, right? when we're thinking about a situation where we feel like we need to tighten our underwriting posture the loans that we're taking out of the system are not huge contributors to our profitability right We're sort of starting with break even loans at the low end of the spectrum, and we're gonna find a new equilibrium point where with the added theoretical stress in the system, we'll set a new break even point and we'll underwrite and run the business to those levels. we're sort of starting with break even loans at the low end of the spectrum and we're gonna find a new equilibrium point where with the added theoretical stress in the system we'll set a new break even point and we'll underwrite and run the business to those levels What that means is that we would expect to see some sort of slowdown in GMV, but in terms of the profitability headwinds, those should be pretty minimal. Because again, most of our profitability is coming from sort of the middle to the upper part of our credit spectrum. Taking sort of loans that were previously break even out of the system and finding a new break even point, that again, there's not gonna be as much impact to the business at large. In terms of how we would implement those tightenings, you know, there's a lot of levers that we have at our disposal. We can do things like asking the consumer to make a down payment upfront as part of the transaction. What that means is that we would expect to see some sort of slowdown in GMV, but in terms of the profitability headwinds, those should be pretty minimal. what that means is that we would expect to see some sort of slowdown in gmv but in terms of the profitability headwinds those should be pretty minimal Because again, most of our profitability is coming from sort of the middle to the upper part of our credit spectrum. because again most of our profitability is coming from sort of the middle to the upper part of our credit spectrum Taking sort of loans that were previously break even out of the system and finding a new break even point, that again, there's not gonna be as much impact to the business at large. taking sort of loans that were previously break even out of the system and finding a new break even point that again there's not gonna be as much impact to the business at large In terms of how we would implement those tightenings, you know, there's a lot of levers that we have at our disposal. in terms of how we would implement those tightenings you know there's a lot of levers that we have at our disposal We can do things like asking the consumer to make a down payment upfront as part of the transaction. we can do things like asking the consumer to make a down payment upfront as part of the transaction That helps us take risk out of the system, if the consumer has some skin in the game, so to speak, and is paying down a portion of the loan on day one. We can play with term lengths. You know, shortening term lengths is another way to take risk out of the system for us. You know, again, we can ask the consumer to give us more information as well. That's something increasingly that we're doing, especially for consumers that are sort of at that marginal point in our underwriting. That helps us take risk out of the system, if the consumer has some skin in the game, so to speak, and is paying down a portion of the loan on day one. that helps us take risk out of the system if the consumer has some skin in the game so to speak and is paying down a portion of the loan on day one We can play with term lengths. we can play with term lengths You know, shortening term lengths is another way to take risk out of the system for us. you know shortening term lengths is another way to take risk out of the system for us You know, again, we can ask the consumer to give us more information as well. you know again we can ask the consumer to give us more information as well That's something increasingly that we're doing, especially for consumers that are sort of at that marginal point in our underwriting. that's something increasingly that we're doing especially for consumers that are sort of at that marginal point in our underwriting If we can get some more information about the consumer's financial health, that can allow us to get to a yes or present a set of terms that would be, you know, sort of putting our best foot forward and making sure that we maximize conversion for the merchant partner there. Then, you know, again, after all of those, we can also just adjust the minimum credit score that we would say yes to within a given merchant program. If we can get some more information about the consumer's financial health, that can allow us to get to a yes or present a set of terms that would be, you know, sort of putting our best foot forward and making sure that we maximize conversion for the merchant partner there. if we can get some more information about the consumer's financial health that can allow us to get to a yes or present a set of terms that would be you know sort of putting our best foot forward and making sure that we maximize conversion for the merchant partner there Then, you know, again, after all of those, we can also just adjust the minimum credit score that we would say yes to within a given merchant program. then you know again after all of those we can also just adjust the minimum credit score that we would say yes to within a given merchant program

Speaker 1: Sure. No, it's very helpful context. I guess one of the other areas of focus we're seeing in the market at the moment is this private credit narrative. You know, you've talked a lot about your kind of consistency of underwriting performance and the benefits that's given you from a funding perspective, not just in terms of demand, but also pricing. We have seen obviously some concerns there. I guess given that, you know, what would you say around the kind of interest of buyers in the market for Affirm loans? And is there kind of a plan B, if that interest dwindles? Maybe you could just talk about, yeah, how Affirm's positioned from a funding perspective and across the various channels. Sure. sure No, it's very helpful context. no it's very helpful context I guess one of the other areas of focus we're seeing in the market at the moment is this private credit narrative. i guess one of the other areas of focus we're seeing in the market at the moment is this private credit narrative You know, you've talked a lot about your kind of consistency of underwriting performance and the benefits that's given you from a funding perspective, not just in terms of demand, but also pricing. you know you've talked a lot about your kind of consistency of underwriting performance and the benefits that's given you from a funding perspective not just in terms of demand but also pricing We have seen obviously some concerns there. we have seen obviously some concerns there I guess given that, you know, what would you say around the kind of interest of buyers in the market for Affirm loans? i guess given that you know what would you say around the kind of interest of buyers in the market for affirm loans And is there kind of a plan B, if that interest dwindles? and is there kind of a plan b if that interest dwindles Maybe you could just talk about, yeah, how Affirm's positioned from a funding perspective and across the various channels. maybe you could just talk about yeah how affirm's positioned from a funding perspective and across the various channels

Speaker 2: I think I'd be remiss if I didn't call out our 2026-2 securitization, which literally just closed yesterday. Really a fantastic outcome in terms of what we saw and heard from the market. We launched with a $500 million deal. There was enough demand in the book for us to upsize that to a $750 million deal. We were still something like 2.5 times oversubscribed against that bigger quantum. We only did 3 days of marketing, you know, versus what typically we would do a 5-day marketing period. With all that, we were able to price at an all-in spread of 116 basis points for what is a 3-year offering. I think I'd be remiss if I didn't call out our 2026-2 securitization, which literally just closed yesterday. i think i'd be remiss if i didn't call out our 2026-2 securitization which literally just closed yesterday Really a fantastic outcome in terms of what we saw and heard from the market. really a fantastic outcome in terms of what we saw and heard from the market We launched with a $500 million deal. we launched with a $500 million deal There was enough demand in the book for us to upsize that to a $750 million deal. there was enough demand in the book for us to upsize that to a $750 million deal We were still something like 2.5 times oversubscribed against that bigger quantum. we were still something like 2.5 times oversubscribed against that bigger quantum We only did 3 days of marketing, you know, versus what typically we would do a 5-day marketing period. we only did 3 days of marketing you know versus what typically we would do a 5-day marketing period With all that, we were able to price at an all-in spread of 116 basis points for what is a 3-year offering. with all that we were able to price at an all-in spread of 116 basis points for what is a 3-year offering You know, if you compare that to our last 3-year offering, we actually brought spreads in by 8 basis points versus the deal we did in late 2025. Like for like, I would say the demand for our ABS issuances is as strong as it's been. We were really happy with that outcome and we of course acknowledge, you know, all of the volatility and turbulence out there from a macro perspective. In terms of the deal, we were just able to price, we came away really happy and I think it's a testament to how we've been able to build our program on the capital side. We look for partners that are gonna be here throughout the cycle and can work with us in size. You know, if you compare that to our last 3-year offering, we actually brought spreads in by 8 basis points versus the deal we did in late 2025. you know if you compare that to our last 3-year offering we actually brought spreads in by 8 basis points versus the deal we did in late 2025 Like for like, I would say the demand for our ABS issuances is as strong as it's been. like for like i would say the demand for our abs issuances is as strong as it's been We were really happy with that outcome and we of course acknowledge, you know, all of the volatility and turbulence out there from a macro perspective. we were really happy with that outcome and we of course acknowledge you know all of the volatility and turbulence out there from a macro perspective In terms of the deal, we were just able to price, we came away really happy and I think it's a testament to how we've been able to build our program on the capital side. in terms of the deal we were just able to price we came away really happy and i think it's a testament to how we've been able to build our program on the capital side We look for partners that are gonna be here throughout the cycle and can work with us in size. we look for partners that are gonna be here throughout the cycle and can work with us in size Typically, ABS can be a way to start the relationship with a funding partner, and we look to deepen those relationships into forward flow and other formats as well. We feel really good about the health of the ABS market, despite the headlines. Again, I think we've got a very recent data point here that supports that confidence. If we were to see some sort of dislocation in the ABS market, you know, we've been really thoughtful about how we've crafted our capital program. ABS is just one channel that we utilize to fund the business. We also have committed forward flow loan buying relationships with several counterparties. Typically, ABS can be a way to start the relationship with a funding partner, and we look to deepen those relationships into forward flow and other formats as well. typically abs can be a way to start the relationship with a funding partner and we look to deepen those relationships into forward flow and other formats as well We feel really good about the health of the ABS market, despite the headlines. we feel really good about the health of the abs market despite the headlines Again, I think we've got a very recent data point here that supports that confidence. again i think we've got a very recent data point here that supports that confidence If we were to see some sort of dislocation in the ABS market, you know, we've been really thoughtful about how we've crafted our capital program. if we were to see some sort of dislocation in the abs market you know we've been really thoughtful about how we've crafted our capital program ABS is just one channel that we utilize to fund the business. abs is just one channel that we utilize to fund the business We also have committed forward flow loan buying relationships with several counterparties. we also have committed forward flow loan buying relationships with several counterparties We typically ask for at least a two-year commitment from those counterparties, so we know that, you know, there's capacity there when we need it. Lastly, we utilize warehouse loans from several large bank counterparties. Warehouses, you know, to get to the second part of your question, is where we tend to keep most of our unused capacity. If you look at the disclosures we have in our 12/31 filing, I think we had something like $4 billion of untapped warehouse capacity. If we were to see a dislocation in ABS, that's likely the channel that we would utilize a bit more to absorb the dislocation that we're seeing in ABS. We typically ask for at least a two-year commitment from those counterparties, so we know that, you know, there's capacity there when we need it. we typically ask for at least a two-year commitment from those counterparties so we know that you know there's capacity there when we need it Lastly, we utilize warehouse loans from several large bank counterparties. lastly we utilize warehouse loans from several large bank counterparties Warehouses, you know, to get to the second part of your question, is where we tend to keep most of our unused capacity. warehouses you know to get to the second part of your question is where we tend to keep most of our unused capacity If you look at the disclosures we have in our 12/31 filing, I think we had something like $4 billion of untapped warehouse capacity. if you look at the disclosures we have in our 12/31 filing i think we had something like $4 billion of untapped warehouse capacity If we were to see a dislocation in ABS, that's likely the channel that we would utilize a bit more to absorb the dislocation that we're seeing in ABS. if we were to see a dislocation in abs that's likely the channel that we would utilize a bit more to absorb the dislocation that we're seeing in abs You know, it's important to remember our ABS facilities typically have a 2-year or 3-year revolving period. You know, we're gonna be able to utilize the funding vehicle that we just closed. We're gonna be able to utilize that capacity for the next 3 years before the facility starts to amortize. We feel really, really good about our funding capacity. I think we've built the program in a way where we can utilize, we can sort of move in and out of various channels if for whatever reason, the market does experience a dislocation. You know, it's important to remember our ABS facilities typically have a 2-year or 3-year revolving period. you know it's important to remember our abs facilities typically have a 2-year or 3-year revolving period You know, we're gonna be able to utilize the funding vehicle that we just closed. you know we're gonna be able to utilize the funding vehicle that we just closed We're gonna be able to utilize that capacity for the next 3 years before the facility starts to amortize. we're gonna be able to utilize that capacity for the next 3 years before the facility starts to amortize We feel really, really good about our funding capacity. we feel really really good about our funding capacity I think we've built the program in a way where we can utilize, we can sort of move in and out of various channels if for whatever reason, the market does experience a dislocation. i think we've built the program in a way where we can utilize we can sort of move in and out of various channels if for whatever reason the market does experience a dislocation

Speaker 1: Sure. Maybe just as an extension to that, I mean, I guess, how are you thinking about kind of the on versus off balance sheet, you know, strategy? I know you've kind of moved a bit more towards off balance sheet given the funding conditions and how favorable they've been, but how are you kind of thinking about that over the next 12 months or so? Sure. sure Maybe just as an extension to that, I mean, I guess, how are you thinking about kind of the on versus off balance sheet, you know, strategy? maybe just as an extension to that i mean i guess how are you thinking about kind of the on versus off balance sheet you know strategy I know you've kind of moved a bit more towards off balance sheet given the funding conditions and how favorable they've been, but how are you kind of thinking about that over the next 12 months or so? i know you've kind of moved a bit more towards off balance sheet given the funding conditions and how favorable they've been but how are you kind of thinking about that over the next 12 months or so

Speaker 2: Yeah, we really haven't given any sort of forward guidance around on versus off. I think if you look at our business historically, we've been roughly 50/50 between on and off. The ABS deal that I just spoke to, you know, that's an on-balance-sheet funding vehicle. The advance rates, though, are really healthy. I mean, we're approaching, I think, 96.5% advance rate. It's a really capital-efficient way for us to fund the business. We retain a bit more of the loan economics than we would if we were to move a loan off-balance-sheet through a loan sale. I think there's always pluses and minuses. Yeah, we really haven't given any sort of forward guidance around on versus off. yeah we really haven't given any sort of forward guidance around on versus off I think if you look at our business historically, we've been roughly 50/50 between on and off. i think if you look at our business historically we've been roughly 50/50 between on and off The ABS deal that I just spoke to, you know, that's an on-balance-sheet funding vehicle. the abs deal that i just spoke to you know that's an on-balance-sheet funding vehicle The advance rates, though, are really healthy. the advance rates though are really healthy I mean, we're approaching, I think, 96.5% advance rate. i mean we're approaching i think 96.5% advance rate It's a really capital-efficient way for us to fund the business. it's a really capital-efficient way for us to fund the business We retain a bit more of the loan economics than we would if we were to move a loan off-balance-sheet through a loan sale. we retain a bit more of the loan economics than we would if we were to move a loan off-balance-sheet through a loan sale I think there's always pluses and minuses. i think there's always pluses and minuses I think what's important to us is that we're able to fund the business through sort of any kind of economic cycle. I think as we sit here today, we feel really good about the capacity we have and just the low overall levels of utilization that we have against that total capacity. I think what's important to us is that we're able to fund the business through sort of any kind of economic cycle. i think what's important to us is that we're able to fund the business through sort of any kind of economic cycle I think as we sit here today, we feel really good about the capacity we have and just the low overall levels of utilization that we have against that total capacity. i think as we sit here today we feel really good about the capacity we have and just the low overall levels of utilization that we have against that total capacity

Speaker 1: Sure. Great. Let's move on to the card. We saw yet another strong quarter. It's up to kind of 16% of the GMV now, growing at 150% year-on-year. Can you talk about some of the factors that have caused GMV growth from the card to kind of accelerate over the last few quarters? Sure. sure Great. great Let's move on to the card. let's move on to the card We saw yet another strong quarter. we saw yet another strong quarter It's up to kind of 16% of the GMV now, growing at 150% year-on-year. it's up to kind of 16% of the gmv now growing at 150% year-on-year Can you talk about some of the factors that have caused GMV growth from the card to kind of accelerate over the last few quarters? can you talk about some of the factors that have caused gmv growth from the card to kind of accelerate over the last few quarters

Speaker 2: Yeah, I mean, I think we're continuing to really tap into the core of our user base, and I think the functionality that we bring with Affirm Card of making it, you know, very seamless and easy to transact anywhere that accepts Visa. I think that's sort of the killer feature of the card. We did make a small change on the product side starting 1st of October, where transactions that are facilitated through a permanent PAN, a permanent card on one wallet partner in particular, those are now being counted as card transactions and as card volume because we moved that program from being one-time card driven to being a permanent PAN. Yeah, I mean, I think we're continuing to really tap into the core of our user base, and I think the functionality that we bring with Affirm Card of making it, you know, very seamless and easy to transact anywhere that accepts Visa. yeah i mean i think we're continuing to really tap into the core of our user base and i think the functionality that we bring with affirm card of making it you know very seamless and easy to transact anywhere that accepts visa I think that's sort of the killer feature of the card. i think that's sort of the killer feature of the card We did make a small change on the product side starting 1st of October , where transactions that are facilitated through a permanent PAN, a permanent card on one wallet partner in particular, those are now being counted as card transactions and as card volume because we moved that program from being one-time card driven to being a permanent PAN. we did make a small change on the product side starting 1st of october where transactions that are facilitated through a permanent pan a permanent card on one wallet partner in particular those are now being counted as card transactions and as card volume because we moved that program from being one-time card driven to being a permanent pan In order to be consistent with what we've called Card historically, the transactions from that program are now being counted. That did help drive a bit of a bend upward in the curve in terms of growth in users and in GMV. Yeah, I mean, we've been really happy with the attraction that we've seen with Card. I think Card is a great unlock for offline spend. You know, historically, both Affirm, but even BNPL at large has been very heavily concentrated within e-commerce. And what we're seeing with the Card usage is that we see more than an order of magnitude more mix from in-store purchases. We feel like we found a product that resonates with our base, and we're really excited to see it continue to scale. In order to be consistent with what we've called Card historically, the transactions from that program are now being counted. in order to be consistent with what we've called card historically the transactions from that program are now being counted That did help drive a bit of a bend upward in the curve in terms of growth in users and in GMV. that did help drive a bit of a bend upward in the curve in terms of growth in users and in gmv Yeah, I mean, we've been really happy with the attraction that we've seen with Card. yeah i mean we've been really happy with the attraction that we've seen with card I think Card is a great unlock for offline spend. i think card is a great unlock for offline spend You know, historically, both Affirm, but even BNPL at large has been very heavily concentrated within e-commerce. you know historically both affirm but even bnpl at large has been very heavily concentrated within e-commerce And what we're seeing with the Card usage is that we see more than an order of magnitude more mix from in-store purchases. and what we're seeing with the card usage is that we see more than an order of magnitude more mix from in-store purchases We feel like we found a product that resonates with our base, and we're really excited to see it continue to scale. we feel like we found a product that resonates with our base and we're really excited to see it continue to scale

Speaker 1: I guess, you know, you talked about maybe the uptake of the card has exceeded some of your earlier expectations. I mean, how do you see penetration evolving over the medium term? Is it a situation where, you know, long term Affirm Card is the primary distribution channel? I guess, you know, you talked about maybe the uptake of the card has exceeded some of your earlier expectations. i guess you know you talked about maybe the uptake of the card has exceeded some of your earlier expectations I mean, how do you see penetration evolving over the medium term? i mean how do you see penetration evolving over the medium term Is it a situation where, you know, long term Affirm Card is the primary distribution channel? is it a situation where you know long term affirm card is the primary distribution channel

Speaker 2: I think we're still a ways from it ever being the primary distribution channel. I still think our model of continuing to win as much coverage of checkout as we can, you know, we work with some of the largest and most sophisticated players in commerce generally, and that approach has served us really well. We're able to build profitable financing programs at our merchants, and that's served as an on-ramp from a consumer perspective into our network. Right now, Card continues to almost exclusively be sort of a second-use product within our user base. I think that model is serving us well. I think we're still a ways from it ever being the primary distribution channel. i think we're still a ways from it ever being the primary distribution channel I still think our model of continuing to win as much coverage of checkout as we can, you know, we work with some of the largest and most sophisticated players in commerce generally, and that approach has served us really well. i still think our model of continuing to win as much coverage of checkout as we can you know we work with some of the largest and most sophisticated players in commerce generally and that approach has served us really well We're able to build profitable financing programs at our merchants, and that's served as an on-ramp from a consumer perspective into our network. we're able to build profitable financing programs at our merchants and that's served as an on-ramp from a consumer perspective into our network Right now, Card continues to almost exclusively be sort of a second-use product within our user base. right now card continues to almost exclusively be sort of a second-use product within our user base I think that model is serving us well. i think that model is serving us well When you look at the growth rates of Card that we posted in the December quarter and have posted, you know, pretty consistently here for the last several quarters, I don't get the sense that we're at any sort of saturation point, you know, far from it. I don't want to hazard a guess in terms of what ultimate penetration of our user base can be, but I think the good news is we continue to grow the overall user base at really, really healthy levels, and we're continuing to see more and more penetration of that user base and more and more of those individuals taking Card out and using Card pretty frequently as well. When you look at the growth rates of Card that we posted in the December quarter and have posted, you know, pretty consistently here for the last several quarters, I don't get the sense that we're at any sort of saturation point, you know, far from it. when you look at the growth rates of card that we posted in the december quarter and have posted you know pretty consistently here for the last several quarters i don't get the sense that we're at any sort of saturation point you know far from it I don't want to hazard a guess in terms of what ultimate penetration of our user base can be, but I think the good news is we continue to grow the overall user base at really, really healthy levels, and we're continuing to see more and more penetration of that user base and more and more of those individuals taking Card out and using Card pretty frequently as well. i don't want to hazard a guess in terms of what ultimate penetration of our user base can be but i think the good news is we continue to grow the overall user base at really really healthy levels and we're continuing to see more and more penetration of that user base and more and more of those individuals taking card out and using card pretty frequently as well Again, I think that tells us that we're on the right path and in the long run, I you know again I don't know what the ultimate ceiling is here, but again it feels like we have a lot of headroom just given the growth we're seeing today. Again, I think that tells us that we're on the right path and in the long run, I you know again I don't know what the ultimate ceiling is here, but again it feels like we have a lot of headroom just given the growth we're seeing today. again i think that tells us that we're on the right path and in the long run i you know again i don't know what the ultimate ceiling is here but again it feels like we have a lot of headroom just given the growth we're seeing today

Speaker 1: Yeah. I mean, you touched on the, I guess, the penetration of the user base, but I think one stat you talked about in the past is the kind of trying to reach that $7,500- Yeah. yeah I mean, you touched on the, I guess, the penetration of the user base, but I think one stat you talked about in the past is the kind of trying to reach that $ 7,500- i mean you touched on the i guess the penetration of the user base but i think one stat you talked about in the past is the kind of trying to reach that $ 7,500-

Speaker 2: Yeah Yeah yeah

Speaker 1: spend per user. Maybe you can just talk a bit about how you bridge to that point. I mean, how do you go from, I guess, a product that's used maybe once or twice a month to kind of a regular top-of-wallet product and the sorts of product innovations you might see there? spend per user. spend per user Maybe you can just talk a bit about how you bridge to that point. maybe you can just talk a bit about how you bridge to that point I mean, how do you go from, I guess, a product that's used maybe once or twice a month to kind of a regular top-of-wallet product and the sorts of product innovations you might see there? i mean how do you go from i guess a product that's used maybe once or twice a month to kind of a regular top-of-wallet product and the sorts of product innovations you might see there

Speaker 2: Yeah. I mean, really that the target that we have of $7,500 per cardholder of Affirm spend, that really is rooted in some industry data and some survey data that we've done within around sort of what we believe our core user is, and that's the rough discretionary spend that we would expect in a given year from a user with sort of the profile that we see in our business. I think that's a target that just is focused on capturing as much of the discretionary spend that we can within our users. I think the way that we do that is just continuing to put the right offers in front of our users. You know, increasingly, that's a mix of 0% loans and interest-bearing loans. Yeah. yeah I mean, really that the target that we have of $7,500 per cardholder of Affirm spend, that really is rooted in some industry data and some survey data that we've done within around sort of what we believe our core user is, and that's the rough discretionary spend that we would expect in a given year from a user with sort of the profile that we see in our business. i mean really that the target that we have of $7,500 per cardholder of affirm spend that really is rooted in some industry data and some survey data that we've done within around sort of what we believe our core user is and that's the rough discretionary spend that we would expect in a given year from a user with sort of the profile that we see in our business I think that's a target that just is focused on capturing as much of the discretionary spend that we can within our users. i think that's a target that just is focused on capturing as much of the discretionary spend that we can within our users I think the way that we do that is just continuing to put the right offers in front of our users. i think the way that we do that is just continuing to put the right offers in front of our users You know, increasingly, that's a mix of 0% loans and interest-bearing loans. you know increasingly that's a mix of 0% loans and interest-bearing loans I think our ability to go from 30 days out to 36 or in some cases 48 months, and then also on the other axis to do anything from a 0% APR up to a 36% APR, that allows us to be incredibly flexible in terms of the offers that we put in front of consumers. Thus far, that's served us really, really well to make sure that whatever the consumer rather is solving for, whether it's a low APR or, you know, longer terms that may help smooth out their monthly cash flow and help them manage their personal budgets, we can sort of be there with the right offers. I think our ability to go from 30 days out to 36 or in some cases 48 months, and then also on the other axis to do anything from a 0% APR up to a 36% APR, that allows us to be incredibly flexible in terms of the offers that we put in front of consumers. i think our ability to go from 30 days out to 36 or in some cases 48 months and then also on the other axis to do anything from a 0% apr up to a 36% apr that allows us to be incredibly flexible in terms of the offers that we put in front of consumers Thus far, that's served us really, really well to make sure that whatever the consumer rather is solving for, whether it's a low APR or, you know, longer terms that may help smooth out their monthly cash flow and help them manage their personal budgets, we can sort of be there with the right offers. thus far that's served us really really well to make sure that whatever the consumer rather is solving for whether it's a low apr or you know longer terms that may help smooth out their monthly cash flow and help them manage their personal budgets we can sort of be there with the right offers Increasingly we're using the data sets that we've been able to compile over almost 15 years to make sure that we're optimized as much as we can be in terms of that offer set that we're presenting to the consumer. You know, I think we're still very early, both in terms of overall card users, but even in terms of annual spend. You know, that's how we arrived at that target, is really just looking at getting to a much higher percentage of share of wallet with our consumer. Increasingly we're using the data sets that we've been able to compile over almost 15 years to make sure that we're optimized as much as we can be in terms of that offer set that we're presenting to the consumer. increasingly we're using the data sets that we've been able to compile over almost 15 years to make sure that we're optimized as much as we can be in terms of that offer set that we're presenting to the consumer You know, I think we're still very early, both in terms of overall card users, but even in terms of annual spend. you know i think we're still very early both in terms of overall card users but even in terms of annual spend You know, that's how we arrived at that target, is really just looking at getting to a much higher percentage of share of wallet with our consumer. you know that's how we arrived at that target is really just looking at getting to a much higher percentage of share of wallet with our consumer

Speaker 1: Sure. Very clear. If we move on now to talk about the 0% APR, again, another very strong driver of growth, strongest growth in terms of the product across your kind of three main products. In terms of penetration, you know, where are you in terms of the number of merchants or I guess volume of merchants in terms of those offering 0% APRs? Sure. sure Very clear. very clear If we move on now to talk about the 0% APR, again, another very strong driver of growth, strongest growth in terms of the product across your kind of three main products. if we move on now to talk about the 0% apr again another very strong driver of growth strongest growth in terms of the product across your kind of three main products In terms of penetration, you know, where are you in terms of the number of merchants or I guess volume of merchants in terms of those offering 0% APRs? in terms of penetration you know where are you in terms of the number of merchants or i guess volume of merchants in terms of those offering 0% aprs

Speaker 2: You know, again, I think that we're never done there. You know, as much as we've made a push to drive more 0% volume within our network, we still have, you know, several large merchants that aren't utilizing 0%. That tells me that there's definitely more room to go. You know, I think it's important to remember that we really believe that 0% are a great complement to the very profitable and the very nice and high growth interest-bearing program that we have as well. You know, I heard a little bit in your question. I don't think we're pivoting away from interest-bearing. We're looking to add more 0% as a complement to interest-bearing. You know, again, I think that we're never done there. you know again i think that we're never done there You know, as much as we've made a push to drive more 0% volume within our network, we still have, you know, several large merchants that aren't utilizing 0%. you know as much as we've made a push to drive more 0% volume within our network we still have you know several large merchants that aren't utilizing 0% That tells me that there's definitely more room to go. that tells me that there's definitely more room to go You know, I think it's important to remember that we really believe that 0% are a great complement to the very profitable and the very nice and high growth interest-bearing program that we have as well. you know i think it's important to remember that we really believe that 0% are a great complement to the very profitable and the very nice and high growth interest-bearing program that we have as well You know, I heard a little bit in your question. you know i heard a little bit in your question I don't think we're pivoting away from interest-bearing. i don't think we're pivoting away from interest-bearing We're looking to add more 0% as a complement to interest-bearing. we're looking to add more 0% as a complement to interest-bearing What we see in the consumer uptake is that even if a consumer starts with a 0% loan, there is still a high propensity for them to utilize an interest-bearing loan in their life cycle. I think it's about finding the right mix of offers for consumers and understanding what works for a consumer for a specific transaction. Again, for smaller dollar transactions, Pay in 4, you know, may be the best offering for them. It's zero interest when we do it. There's no late fees. It is a very short-dated loan. What we see in the consumer uptake is that even if a consumer starts with a 0% loan, there is still a high propensity for them to utilize an interest-bearing loan in their life cycle. what we see in the consumer uptake is that even if a consumer starts with a 0% loan there is still a high propensity for them to utilize an interest-bearing loan in their life cycle I think it's about finding the right mix of offers for consumers and understanding what works for a consumer for a specific transaction. i think it's about finding the right mix of offers for consumers and understanding what works for a consumer for a specific transaction Again, for smaller dollar transactions, Pay in 4, you know, may be the best offering for them. again for smaller dollar transactions pay in 4 you know may be the best offering for them It's zero interest when we do it. it's zero interest when we do it There's no late fees. there's no late fees It is a very short-dated loan. it is a very short-dated loan For larger ticket items and more considered purchases, our consumers tell us that they really value the term length that we can go out to just because that allows them to get that monthly payment down to an affordable level. Again, it's there. There's definitely not a one size fits all, and I think given where Affirm is in its life cycle, we really wanna make sure that we have a full set of offerings that can resonate with any consumer. For larger ticket items and more considered purchases, our consumers tell us that they really value the term length that we can go out to just because that allows them to get that monthly payment down to an affordable level. for larger ticket items and more considered purchases our consumers tell us that they really value the term length that we can go out to just because that allows them to get that monthly payment down to an affordable level Again, it's there. again it's there There's definitely not a one size fits all, and I think given where Affirm is in its life cycle, we really wanna make sure that we have a full set of offerings that can resonate with any consumer. there's definitely not a one size fits all and i think given where affirm is in its life cycle we really wanna make sure that we have a full set of offerings that can resonate with any consumer

Speaker 1: Yeah. I mean, maybe just kind of touching on that. I mean, I guess as a product, do you think that arguably 0% kind of open you up to a wider customer base? I'm thinking maybe, you know, the higher income user who may not typically use interest-bearing or maybe if we think about international markets where maybe there's less kind of propensity to use credit products. You know, do you think that has a wider product market fit? Yeah. yeah I mean, maybe just kind of touching on that. i mean maybe just kind of touching on that I mean, I guess as a product, do you think that arguably 0% kind of open you up to a wider customer base? i mean i guess as a product do you think that arguably 0% kind of open you up to a wider customer base I'm thinking maybe, you know, the higher income user who may not typically use interest-bearing or maybe if we think about international markets where maybe there's less kind of propensity to use credit products. i'm thinking maybe you know the higher income user who may not typically use interest-bearing or maybe if we think about international markets where maybe there's less kind of propensity to use credit products You know, do you think that has a wider product market fit? you know do you think that has a wider product market fit

Speaker 2: Yeah, again, I think it's a really important ingredient, you know. I think given where we were coming from in terms of our interest-bearing mix in the program when we started to lean a bit more into 0%, I think it felt like adding more 0% made sense for the network overall. It's really hard for us to pick, you know, one single loan product and say, "That's the best one for any given market," just because we really do aim to support such a wide breadth of transactions and average order values. Yeah, again, I think it's a really important ingredient, you know. yeah again i think it's a really important ingredient you know I think given where we were coming from in terms of our interest-bearing mix in the program when we started to lean a bit more into 0%, I think it felt like adding more 0% made sense for the network overall. i think given where we were coming from in terms of our interest-bearing mix in the program when we started to lean a bit more into 0% i think it felt like adding more 0% made sense for the network overall It's really hard for us to pick, you know, one single loan product and say, "That's the best one for any given market," just because we really do aim to support such a wide breadth of transactions and average order values. it's really hard for us to pick you know one single loan product and say "that's the best one for any given market," just because we really do aim to support such a wide breadth of transactions and average order values I think in the context of the merchants that we work with today and the merchants we hope to work with in the future, you know, really having that flexibility around being able to support transactions across the spectrum and also flexibility around, frankly, how we construct the financing programs at a given merchant. You know, some of our largest merchants are very cost of acceptance focused and driving an interest-bearing program allows us to monetize the consumer side of the equation and craft a program that allows us to get that prominence at the point of sale with a large merchant and make it cost-effective and help them reach both their cost and their conversion targets in their business. I think in the context of the merchants that we work with today and the merchants we hope to work with in the future, you know, really having that flexibility around being able to support transactions across the spectrum and also flexibility around, frankly, how we construct the financing programs at a given merchant. i think in the context of the merchants that we work with today and the merchants we hope to work with in the future you know really having that flexibility around being able to support transactions across the spectrum and also flexibility around frankly how we construct the financing programs at a given merchant You know, some of our largest merchants are very cost of acceptance focused and driving an interest-bearing program allows us to monetize the consumer side of the equation and craft a program that allows us to get that prominence at the point of sale with a large merchant and make it cost-effective and help them reach both their cost and their conversion targets in their business. you know some of our largest merchants are very cost of acceptance focused and driving an interest-bearing program allows us to monetize the consumer side of the equation and craft a program that allows us to get that prominence at the point of sale with a large merchant and make it cost-effective and help them reach both their cost and their conversion targets in their business We really try to craft programs that work for our consumers and work for our merchants, and it's really not. We're not ever focused on one single product as the end all be all. Again, I think it's always sort of a multivariate calculus here to make sure we have the right program that works across a wide range of transactions. We really try to craft programs that work for our consumers and work for our merchants, and it's really not. we really try to craft programs that work for our consumers and work for our merchants and it's really not We're not ever focused on one single product as the end all be all. we're not ever focused on one single product as the end all be all Again, I think it's always sort of a multivariate calculus here to make sure we have the right program that works across a wide range of transactions. again i think it's always sort of a multivariate calculus here to make sure we have the right program that works across a wide range of transactions

Speaker 1: Sure. Maybe let's move on to kind of margins. I think one of the areas that people have been talking about quite a lot is the kind of mix shift to 0% and the kind of potentially dilutive effect that has on net take rates and obviously there's a lot of offsets in there. I guess if you're thinking about the business and the mix going forward, how do you balance some of those lower net take rate products versus growth? Sure. sure Maybe let's move on to kind of margins. maybe let's move on to kind of margins I think one of the areas that people have been talking about quite a lot is the kind of mix shift to 0% and the kind of potentially dilutive effect that has on net take rates and obviously there's a lot of offsets in there. i think one of the areas that people have been talking about quite a lot is the kind of mix shift to 0% and the kind of potentially dilutive effect that has on net take rates and obviously there's a lot of offsets in there I guess if you're thinking about the business and the mix going forward, how do you balance some of those lower net take rate products versus growth? i guess if you're thinking about the business and the mix going forward how do you balance some of those lower net take rate products versus growth

Speaker 2: Again, I think we've got a long-term range that we've established of wanting to be in the 3%-4% Revenue Less Transaction Cost as a percentage of GMV. That's a mouthful. You know, for the last several quarters, we've been operating sort of at or above the high end of that range, you know, pretty close to 4% for most of the recent quarters. 0% to your framing, right? 0% can be a way to forego some income. We're not getting interest income in those transactions from the consumer. It's a way for us to mix into you know, a slightly dilutive loan product. We do think it's an important part of having a full product offering to a range of consumers. Again, I think we've got a long-term range that we've established of wanting to be in the 3%-4% Revenue Less Transaction Cost as a percentage of GMV. again i think we've got a long-term range that we've established of wanting to be in the 3%-4% revenue less transaction cost as a percentage of gmv That's a mouthful. that's a mouthful You know, for the last several quarters, we've been operating sort of at or above the high end of that range, you know, pretty close to 4% for most of the recent quarters. 0% to your framing, right? 0% can be a way to forego some income. you know for the last several quarters we've been operating sort of at or above the high end of that range you know pretty close to 4% for most of the recent quarters 0% to your framing right 0% can be a way to forego some income We're not getting interest income in those transactions from the consumer. we're not getting interest income in those transactions from the consumer It's a way for us to mix into you know, a slightly dilutive loan product. it's a way for us to mix into you know a slightly dilutive loan product We do think it's an important part of having a full product offering to a range of consumers. we do think it's an important part of having a full product offering to a range of consumers You know, as I said previously, we think it's a really important ingredient to the overall business. You know, when I look at the business from a financial perspective, again, we're printing unit economics that are at or above the high end of our long-term range of 4%. Then, you know, as you go down the P&L as well, we've driven really nice operating leverage in the business over the last several years as well. I think the business, you know, the business is performing very well from a financial perspective. For us, it's really making sure that we, you know, drive strong units and drive operating leverage, of course, but also that we maximize the opportunity that we think we have as a market leader in the U.S. You know, as I said previously, we think it's a really important ingredient to the overall business. you know as i said previously we think it's a really important ingredient to the overall business You know, when I look at the business from a financial perspective, again, we're printing unit economics that are at or above the high end of our long-term range of 4%. you know when i look at the business from a financial perspective again we're printing unit economics that are at or above the high end of our long-term range of 4% Then, you know, as you go down the P&L as well, we've driven really nice operating leverage in the business over the last several years as well. then you know as you go down the p&l as well we've driven really nice operating leverage in the business over the last several years as well I think the business, you know, the business is performing very well from a financial perspective. i think the business you know the business is performing very well from a financial perspective For us, it's really making sure that we, you know, drive strong units and drive operating leverage, of course, but also that we maximize the opportunity that we think we have as a market leader in the U.S. for us it's really making sure that we you know drive strong units and drive operating leverage of course but also that we maximize the opportunity that we think we have as a market leader in the u.s Making sure that we continue to reach as many merchants and as many consumers as possible, you know, just given everything that we're able to bring to bear in various financing offers. Making sure that we continue to reach as many merchants and as many consumers as possible, you know, just given everything that we're able to bring to bear in various financing offers. making sure that we continue to reach as many merchants and as many consumers as possible you know just given everything that we're able to bring to bear in various financing offers

Speaker 1: Sure. One of the things you talked about previously is within the card, you know, the very strong weighting of the card towards interest-bearing products. Sure. sure One of the things you talked about previously is within the card, you know, the very strong weighting of the card towards interest-bearing products. one of the things you talked about previously is within the card you know the very strong weighting of the card towards interest-bearing products

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Which helps to kind of, I guess, offset some of the lower MDRs. I guess when we look to the latest quarter, the card seems becoming a really strong vehicle for distributing 0%. Maybe you could just give some color there and how this kind of plays into your thinking and, I guess, the overall economics. Which helps to kind of, I guess, offset some of the lower MDRs. which helps to kind of i guess offset some of the lower mdrs I guess when we look to the latest quarter, the card seems becoming a really strong vehicle for distributing 0%. i guess when we look to the latest quarter the card seems becoming a really strong vehicle for distributing 0% Maybe you could just give some color there and how this kind of plays into your thinking and, I guess, the overall economics. maybe you could just give some color there and how this kind of plays into your thinking and i guess the overall economics

Speaker 2: Yeah. I mean, card is obviously one of the fastest, if not the fastest-growing part of our business. To your point, the mix of interest-bearing loans within card has historically, you know, always been above our overall company mix of interest-bearing. Really product mix is probably the single biggest driver of product economics or product profitability and card benefits from a very high interest-bearing mix and that was still true in the December quarter as well. As much as we are leaning a bit more into 0%, I think we also have card with really strong growth rates sort of bringing that interest-bearing mix back a bit too. You know, the interchange that we collect on card transactions is very healthy. Yeah. yeah I mean, card is obviously one of the fastest, if not the fastest-growing part of our business. i mean card is obviously one of the fastest if not the fastest-growing part of our business To your point, the mix of interest-bearing loans within card has historically, you know, always been above our overall company mix of interest-bearing. to your point the mix of interest-bearing loans within card has historically you know always been above our overall company mix of interest-bearing Really product mix is probably the single biggest driver of product economics or product profitability and card benefits from a very high interest-bearing mix and that was still true in the December quarter as well. really product mix is probably the single biggest driver of product economics or product profitability and card benefits from a very high interest-bearing mix and that was still true in the december quarter as well As much as we are leaning a bit more into 0%, I think we also have card with really strong growth rates sort of bringing that interest-bearing mix back a bit too. as much as we are leaning a bit more into 0% i think we also have card with really strong growth rates sort of bringing that interest-bearing mix back a bit too You know, the interchange that we collect on card transactions is very healthy. you know the interchange that we collect on card transactions is very healthy On an all-in basis, I mean, card is arguably our most profitable product, depending on how you define products at Affirm. That collection, those loans. The other thing that's important to remember, because it is almost exclusively a repeat use product, getting through that first transaction with a new consumer tends to be the riskiest from a, you know, from an empirical basis. Because we're benefiting from positively selected and repeat borrowers that we've already underwritten once, that does help take some of the credit losses out of the product as well. That combination of a really high interest-bearing mix and then a pretty favorable credit setup, those two things contribute to a really, really nice profitability in the card. On an all-in basis, I mean, card is arguably our most profitable product, depending on how you define products at Affirm. on an all-in basis i mean card is arguably our most profitable product depending on how you define products at affirm That collection, those loans. that collection those loans The other thing that's important to remember, because it is almost exclusively a repeat use product, getting through that first transaction with a new consumer tends to be the riskiest from a, you know, from an empirical basis. the other thing that's important to remember because it is almost exclusively a repeat use product getting through that first transaction with a new consumer tends to be the riskiest from a you know from an empirical basis Because we're benefiting from positively selected and repeat borrowers that we've already underwritten once, that does help take some of the credit losses out of the product as well. because we're benefiting from positively selected and repeat borrowers that we've already underwritten once that does help take some of the credit losses out of the product as well That combination of a really high interest-bearing mix and then a pretty favorable credit setup, those two things contribute to a really, really nice profitability in the card. that combination of a really high interest-bearing mix and then a pretty favorable credit setup those two things contribute to a really really nice profitability in the card

Speaker 1: Sure. Yeah. I guess just on the subject of pricing, we've had a question here from Amanda, and she says, "What's Affirm's long-term strategy to maintain competitive advantage and continue growing market share? Sure. sure Yeah. yeah I guess just on the subject of pricing, we've had a question here from Amanda, and she says, "What's Affirm's long-term strategy to maintain competitive advantage and continue growing market share? i guess just on the subject of pricing we've had a question here from amanda and she says "what's affirm's long-term strategy to maintain competitive advantage and continue growing market share

Speaker 2: You know, I think for us, I think that one of the things that is unique about Affirm, particularly in the U.S., is the breadth of loan products that we offer. Most of our competitors are very highly concentrated within Pay in 4 transactions. There's a lot to like about Pay in 4 transactions. If you just look at how the product works, you really are dependent on a relatively high merchant discount rate. You know, the merchant is driving the lion's share of the revenue in those transactions. I think it can be difficult to penetrate some of the more cost of acceptance-focused large retailers in the U.S. if Pay in 4 is your only product offering. You know, I think for us, I think that one of the things that is unique about Affirm, particularly in the U.S., is the breadth of loan products that we offer. you know i think for us i think that one of the things that is unique about affirm particularly in the u.s is the breadth of loan products that we offer Most of our competitors are very highly concentrated within Pay in 4 transactions. most of our competitors are very highly concentrated within pay in 4 transactions There's a lot to like about Pay in 4 transactions. there's a lot to like about pay in 4 transactions If you just look at how the product works, you really are dependent on a relatively high merchant discount rate. if you just look at how the product works you really are dependent on a relatively high merchant discount rate You know, the merchant is driving the lion's share of the revenue in those transactions. you know the merchant is driving the lion's share of the revenue in those transactions I think it can be difficult to penetrate some of the more cost of acceptance-focused large retailers in the U.S. if Pay in 4 is your only product offering. i think it can be difficult to penetrate some of the more cost of acceptance-focused large retailers in the u.s if pay in 4 is your only product offering I think what's been really advantageous to Affirm is our ability to craft financing programs that meet the merchant's cost of acceptance needs, but are also, you know, nicely profitable for us and also convert well and put offers in front of consumers that resonate with those consumers as well. I think that, you know, sort of that triangle of conversion, cost of acceptance for the merchant, and profitability for us, I think we've been able to win across all three of those considerations. We do it by crafting a program that has maybe some 0% volume to drive conversion for the merchant. I think what's been really advantageous to Affirm is our ability to craft financing programs that meet the merchant's cost of acceptance needs, but are also, you know, nicely profitable for us and also convert well and put offers in front of consumers that resonate with those consumers as well. i think what's been really advantageous to affirm is our ability to craft financing programs that meet the merchant's cost of acceptance needs but are also you know nicely profitable for us and also convert well and put offers in front of consumers that resonate with those consumers as well I think that, you know, sort of that triangle of conversion, cost of acceptance for the merchant, and profitability for us, I think we've been able to win across all three of those considerations. i think that you know sort of that triangle of conversion cost of acceptance for the merchant and profitability for us i think we've been able to win across all three of those considerations We do it by crafting a program that has maybe some 0% volume to drive conversion for the merchant. we do it by crafting a program that has maybe some 0% volume to drive conversion for the merchant Also, we can build an all interest-bearing program if we need to, that'll still convert, you know, plenty well for the merchant, and help them lower their cost of acceptance. Again, similar to the 0% question, we can sort of build a program that optimizes for the merchant's needs, and we have a lot of confidence that we'll figure out ways to make that program, you know, drive growth for the merchant and can drive increased levels of conversion over time too through optimizations. Also, we can build an all interest-bearing program if we need to, that'll still convert, you know, plenty well for the merchant, and help them lower their cost of acceptance. also we can build an all interest-bearing program if we need to that'll still convert you know plenty well for the merchant and help them lower their cost of acceptance Again, similar to the 0% question, we can sort of build a program that optimizes for the merchant's needs, and we have a lot of confidence that we'll figure out ways to make that program, you know, drive growth for the merchant and can drive increased levels of conversion over time too through optimizations. again similar to the 0% question we can sort of build a program that optimizes for the merchant's needs and we have a lot of confidence that we'll figure out ways to make that program you know drive growth for the merchant and can drive increased levels of conversion over time too through optimizations

Speaker 1: Yeah. That's great. I mean, I guess just on the subject of kind of competition and some of the areas where, you know, you have innovated, I guess, on product, be interested to talk about, you know, AdaptAI and BoostAI, the sort of uptake you're seeing from merchants and I guess how important those tools have been in terms of when you're, you know, having conversations with new merchants. Yeah. yeah That's great. that's great I mean, I guess just on the subject of kind of competition and some of the areas where, you know, you have innovated, I guess, on product, be interested to talk about, you know, AdaptAI and BoostAI, the sort of uptake you're seeing from merchants and I guess how important those tools have been in terms of when you're, you know, having conversations with new merchants. i mean i guess just on the subject of kind of competition and some of the areas where you know you have innovated i guess on product be interested to talk about you know adaptai and boostai the sort of uptake you're seeing from merchants and i guess how important those tools have been in terms of when you're you know having conversations with new merchants

Speaker 2: Yeah. You know, AdaptAI is sort of on our direct-to-consumer side of the house and those optimizations are live and running and, you know, we control those surfaces and the AdaptAI really helps us optimize the set of offers that we present to a consumer for any given transaction, and making sure that we're driving as much conversion and as much take-up is the term we use, take-up by the consumer. Those are live today and helpful. On the BoostAI side, I think we're still relatively early in that market opportunity. Really what BoostAI is doing is it's taking a pretty static financing program that was hard-coded into our historical merchant agreements, and we're partnering with merchants to find ways to dynamically optimize the offer set. Yeah. yeah You know, AdaptAI is sort of on our direct-to-consumer side of the house and those optimizations are live and running and, you know, we control those surfaces and the AdaptAI really helps us optimize the set of offers that we present to a consumer for any given transaction, and making sure that we're driving as much conversion and as much take-up is the term we use, take-up by the consumer. you know adaptai is sort of on our direct-to-consumer side of the house and those optimizations are live and running and you know we control those surfaces and the adaptai really helps us optimize the set of offers that we present to a consumer for any given transaction and making sure that we're driving as much conversion and as much take-up is the term we use take-up by the consumer Those are live today and helpful. those are live today and helpful On the BoostAI side, I think we're still relatively early in that market opportunity. on the boostai side i think we're still relatively early in that market opportunity Really what BoostAI is doing is it's taking a pretty static financing program that was hard-coded into our historical merchant agreements, and we're partnering with merchants to find ways to dynamically optimize the offer set. really what boostai is doing is it's taking a pretty static financing program that was hard-coded into our historical merchant agreements and we're partnering with merchants to find ways to dynamically optimize the offer set Maybe moving away from a static 3 months, 6 months, and 12-month set of offers that the merchant might be presenting on their sites to finding the right set of offers across a range of AOVs. It's sort of a dynamic calculus to make sure that we drive as much conversion for the merchant, as much GMV as possible, and also making sure that, you know, we drive strong unit economics throughout those optimizations on the Affirm side too. It does take, you know, a lot of trust with the merchant and just it does require repapering our contracts. We're in the early innings of getting that rolled out. Maybe moving away from a static 3 months, 6 months, and 12-month set of offers that the merchant might be presenting on their sites to finding the right set of offers across a range of AOVs. maybe moving away from a static 3 months 6 months and 12-month set of offers that the merchant might be presenting on their sites to finding the right set of offers across a range of aovs It's sort of a dynamic calculus to make sure that we drive as much conversion for the merchant, as much GMV as possible, and also making sure that, you know, we drive strong unit economics throughout those optimizations on the Affirm side too. it's sort of a dynamic calculus to make sure that we drive as much conversion for the merchant as much gmv as possible and also making sure that you know we drive strong unit economics throughout those optimizations on the affirm side too It does take, you know, a lot of trust with the merchant and just it does require repapering our contracts. it does take you know a lot of trust with the merchant and just it does require repapering our contracts We're in the early innings of getting that rolled out. we're in the early innings of getting that rolled out It's something that's really exciting because what we've seen in the early data is its GMV lift for the merchants, it's higher take-up for our consumers, which means we're putting a, you know, a better offer in front of them. It's, you know, we're benefiting from the increased GMV, but it's also better unit economics for us as well. It really is a win-win-win across merchants, consumers, and Affirm. We're confident that we're on the right track. It just, there is a lot of blocking and tackling with merchants to just get through some of these amendments that we need to get this fully rolled out. It's something that's really exciting because what we've seen in the early data is its GMV lift for the merchants, it's higher take-up for our consumers, which means we're putting a, you know, a better offer in front of them. it's something that's really exciting because what we've seen in the early data is its gmv lift for the merchants it's higher take-up for our consumers which means we're putting a you know a better offer in front of them It's, you know, we're benefiting from the increased GMV, but it's also better unit economics for us as well. it's you know we're benefiting from the increased gmv but it's also better unit economics for us as well It really is a win-win-win across merchants, consumers, and Affirm. it really is a win-win-win across merchants consumers and affirm We're confident that we're on the right track. we're confident that we're on the right track It just, there is a lot of blocking and tackling with merchants to just get through some of these amendments that we need to get this fully rolled out. it just there is a lot of blocking and tackling with merchants to just get through some of these amendments that we need to get this fully rolled out

Speaker 1: Sure. Let's move on to talk about some of the longer-term trends. Agentic commerce, I know it's received a lot of attention. I know we're still kind of in the foothills of that. You know, quite recently, we heard that OpenAI was kind of retreating from its instant checkout within ChatGPT after only five months. It seems like we're kind of shifting back to a world where transactions may be completed in websites or in apps, rather than this kind of new model that people are expecting. I guess, did that news surprise you? You know, how does that change how you're thinking about the agentic commerce opportunity? Sure. sure Let's move on to talk about some of the longer-term trends. let's move on to talk about some of the longer-term trends Agentic commerce, I know it's received a lot of attention. agentic commerce i know it's received a lot of attention I know we're still kind of in the foothills of that. i know we're still kind of in the foothills of that You know, quite recently, we heard that OpenAI was kind of retreating from its instant checkout within ChatGPT after only five months. you know quite recently we heard that openai was kind of retreating from its instant checkout within chatgpt after only five months It seems like we're kind of shifting back to a world where transactions may be completed in websites or in apps, rather than this kind of new model that people are expecting. it seems like we're kind of shifting back to a world where transactions may be completed in websites or in apps rather than this kind of new model that people are expecting I guess, did that news surprise you? i guess did that news surprise you You know, how does that change how you're thinking about the agentic commerce opportunity? you know how does that change how you're thinking about the agentic commerce opportunity

Speaker 2: I don't think it changes anything on our side. We fully expect to have a seat at the table if consumer demand moves to agentic to facilitate transactions. I think looking at the size of our consumer base in the U.S., right? Affirm is clearly a financing option that consumers want and that consumers need. We would expect to be a player in any sort of updated protocol that does roll out or, you know, there may be multiple protocols for a while here as well. You know, I think if you look at what we've been able to do in terms of e-commerce, you know, we use the term internally, we embrace channel conflict. We've been able to partner directly with merchants. I don't think it changes anything on our side. i don't think it changes anything on our side We fully expect to have a seat at the table if consumer demand moves to agentic to facilitate transactions. we fully expect to have a seat at the table if consumer demand moves to agentic to facilitate transactions I think looking at the size of our consumer base in the U.S., right? i think looking at the size of our consumer base in the u.s right Affirm is clearly a financing option that consumers want and that consumers need. affirm is clearly a financing option that consumers want and that consumers need We would expect to be a player in any sort of updated protocol that does roll out or, you know, there may be multiple protocols for a while here as well. we would expect to be a player in any sort of updated protocol that does roll out or you know there may be multiple protocols for a while here as well You know, I think if you look at what we've been able to do in terms of e-commerce, you know, we use the term internally, we embrace channel conflict. you know i think if you look at what we've been able to do in terms of e-commerce you know we use the term internally we embrace channel conflict We've been able to partner directly with merchants. we've been able to partner directly with merchants We also have large partnerships like Shopify, where we're able to leverage you know existing platforms, merchant base and distribution to accelerate our growth. We fully expect to be, you know, we've done similar things with Apple Wallet, you know, the Apple Pay Later program as well. You know, we would expect to be anywhere that consumers are shopping, and if that moves into an agentic world, then we would fully expect to be a part of those transactions as well. Again, I think that's something that our merchants are gonna want, and I think it's also something that consumers will want. We also have large partnerships like Shopify, where we're able to leverage you know existing platforms, merchant base and distribution to accelerate our growth. we also have large partnerships like shopify where we're able to leverage you know existing platforms merchant base and distribution to accelerate our growth We fully expect to be, you know, we've done similar things with Apple Wallet, you know, the Apple Pay Later program as well. we fully expect to be you know we've done similar things with apple wallet you know the apple pay later program as well You know, we would expect to be anywhere that consumers are shopping, and if that moves into an agentic world, then we would fully expect to be a part of those transactions as well. you know we would expect to be anywhere that consumers are shopping and if that moves into an agentic world then we would fully expect to be a part of those transactions as well Again, I think that's something that our merchants are gonna want, and I think it's also something that consumers will want. again i think that's something that our merchants are gonna want and i think it's also something that consumers will want

Speaker 1: Sure. Well, nice Shopify reference. That was a segue onto my next question. We think about international. You know, you launched in the U.K. in 2024. You started ramping throughout last year. I mean, where are you with your ramp with Shop Pay Installments in the U.K.? And I guess, you know, what needs to be done in terms of going to that automatically switched on for new merchants? Sure. sure Well, nice Shopify reference. well nice shopify reference That was a segue onto my next question. that was a segue onto my next question We think about international. we think about international You know, you launched in the U.K. in 2024. you know you launched in the u.k in 2024 You started ramping throughout last year. you started ramping throughout last year I mean, where are you with your ramp with Shop Pay Installments in the U.K.? i mean where are you with your ramp with shop pay installments in the u.k And I guess, you know, what needs to be done in terms of going to that automatically switched on for new merchants? and i guess you know what needs to be done in terms of going to that automatically switched on for new merchants

Speaker 2: Yeah. You know, I think we're working towards that end goal of being auto on for merchants within the Shopify platform in the U.K. I think we're at a pretty similar point in the program life cycle. You know, we went through this same phase that we're in now in the U.S. before we had the bigger launch. Right now it's just about making sure we understand how conversion works within the program and making sure that you know, the program is as optimized as it can be before we get ready for this sort of step function change in scale that would come with a broad auto on release within Shopify. I think we're right on schedule in terms of that progress. Yeah. yeah You know, I think we're working towards that end goal of being auto on for merchants within the Shopify platform in the U.K. you know i think we're working towards that end goal of being auto on for merchants within the shopify platform in the u.k I think we're at a pretty similar point in the program life cycle. i think we're at a pretty similar point in the program life cycle You know, we went through this same phase that we're in now in the U.S. before we had the bigger launch. you know we went through this same phase that we're in now in the u.s before we had the bigger launch Right now it's just about making sure we understand how conversion works within the program and making sure that you know, the program is as optimized as it can be before we get ready for this sort of step function change in scale that would come with a broad auto on release within Shopify. right now it's just about making sure we understand how conversion works within the program and making sure that you know the program is as optimized as it can be before we get ready for this sort of step function change in scale that would come with a broad auto on release within shopify I think we're right on schedule in terms of that progress. i think we're right on schedule in terms of that progress Having gone through the U.S. rollout, you know, I think this is a really important stage to make sure that we're ready for the volume that can come through a platform like Shopify. Having gone through the U.S. rollout, you know, I think this is a really important stage to make sure that we're ready for the volume that can come through a platform like Shopify. having gone through the u.s rollout you know i think this is a really important stage to make sure that we're ready for the volume that can come through a platform like shopify

Speaker 1: Sure. I guess maybe we think about your next leg of growth beyond the U.K. I mean, I guess to what extent can you more rapidly, you know, roll out Shop Pay across your merchants in continental Europe? I know you've talked about Australia and I guess some of the steps that need to go in place there. Sure. sure I guess maybe we think about your next leg of growth beyond the U.K. i guess maybe we think about your next leg of growth beyond the u.k I mean, I guess to what extent can you more rapidly, you know, roll out Shop Pay across your merchants in continental Europe? i mean i guess to what extent can you more rapidly you know roll out shop pay across your merchants in continental europe I know you've talked about Australia and I guess some of the steps that need to go in place there. i know you've talked about australia and i guess some of the steps that need to go in place there

Speaker 2: Yeah, I mean, obviously outside of our existing markets, which today are the U.S., Canada, and the U.K., I mean, there we will need new and different licenses to operate outside of our existing three geos. You know, that's something that we'll need to prioritize and bring in-house before we're ready to launch a new program. Yeah, we fully, you know, we don't think that we're done expanding with Shopify after the U.K. We're excited to get the U.K. right. To your point earlier, you know, there's still some work to be done to get that fully launched. We'll start to talk about new markets when they're a little bit closer to being live. Yeah, I mean, obviously outside of our existing markets, which today are the U.S., Canada, and the U.K., I mean, there we will need new and different licenses to operate outside of our existing three geos. yeah i mean obviously outside of our existing markets which today are the u.s canada and the u.k i mean there we will need new and different licenses to operate outside of our existing three geos You know, that's something that we'll need to prioritize and bring in-house before we're ready to launch a new program. you know that's something that we'll need to prioritize and bring in-house before we're ready to launch a new program Yeah, we fully, you know, we don't think that we're done expanding with Shopify after the U.K. yeah we fully you know we don't think that we're done expanding with shopify after the u.k We're excited to get the U.K. right. we're excited to get the u.k right To your point earlier, you know, there's still some work to be done to get that fully launched. to your point earlier you know there's still some work to be done to get that fully launched We'll start to talk about new markets when they're a little bit closer to being live. we'll start to talk about new markets when they're a little bit closer to being live

Speaker 1: Sure. Let's go on to another deal that you've announced recently, QuickBooks. I mean, it looks like a very interesting partnership. It's $175 billion online payment volumes. Maybe you could just talk a bit about this opportunity and your expectations, I guess, in terms of adoption. Sure. sure Let's go on to another deal that you've announced recently, QuickBooks. let's go on to another deal that you've announced recently quickbooks I mean, it looks like a very interesting partnership. i mean it looks like a very interesting partnership It's $175 billion online payment volumes. it's $175 billion online payment volumes Maybe you could just talk a bit about this opportunity and your expectations, I guess, in terms of adoption. maybe you could just talk a bit about this opportunity and your expectations i guess in terms of adoption

Speaker 2: Yeah. I mean, it's a really exciting partnership. The first phase of the program will be bringing Affirm financing programs to business to consumer invoices through the QuickBooks platform. We wanna make it as frictionless as possible for consumers to pay those invoices with our set of financing offers. You know, I think when we look at some of the KPIs within the program that's existed historically, it's a large enough average order value that I think a lot of the strengths that Affirm has around underwriting every transaction and also being able to go longer on terms to smooth the consumer's cash flow. Yeah. yeah I mean, it's a really exciting partnership. i mean it's a really exciting partnership The first phase of the program will be bringing Affirm financing programs to business to consumer invoices through the QuickBooks platform. the first phase of the program will be bringing affirm financing programs to business to consumer invoices through the quickbooks platform We wanna make it as frictionless as possible for consumers to pay those invoices with our set of financing offers. we wanna make it as frictionless as possible for consumers to pay those invoices with our set of financing offers You know, I think when we look at some of the KPIs within the program that's existed historically, it's a large enough average order value that I think a lot of the strengths that Affirm has around underwriting every transaction and also being able to go longer on terms to smooth the consumer's cash flow. you know i think when we look at some of the kpis within the program that's existed historically it's a large enough average order value that i think a lot of the strengths that affirm has around underwriting every transaction and also being able to go longer on terms to smooth the consumer's cash flow I think it's a really nice setup for us in terms of the sweet spot of the invoicing program that exists and what we're able to do on the Affirm side. It's really early. You know, we are live with an increasing number of merchants today, and we're hoping to continue to scale that, you know, over the course of this month. Lots to like so far, but it's so early that, you know, with our existing base of business, it won't be material this year. It's a program that we're really excited about. I think it. You know, more than anything, it's a great expansion into the services vertical, which is, I think historically an area where BNPL has been under-penetrated. I think it's a really nice setup for us in terms of the sweet spot of the invoicing program that exists and what we're able to do on the Affirm side. i think it's a really nice setup for us in terms of the sweet spot of the invoicing program that exists and what we're able to do on the affirm side It's really early. it's really early You know, we are live with an increasing number of merchants today, and we're hoping to continue to scale that, you know, over the course of this month. you know we are live with an increasing number of merchants today and we're hoping to continue to scale that you know over the course of this month Lots to like so far, but it's so early that, you know, with our existing base of business, it won't be material this year. lots to like so far but it's so early that you know with our existing base of business it won't be material this year It's a program that we're really excited about. it's a program that we're really excited about I think it. i think it You know, more than anything, it's a great expansion into the services vertical, which is, I think historically an area where BNPL has been under-penetrated. you know more than anything it's a great expansion into the services vertical which is i think historically an area where bnpl has been under-penetrated I think Affirm's been under-penetrated as well. We have a lot of confidence that what Affirm does should work really, really well in that end market. We're excited to partner with, you know, a market leader like Intuit to broaden our reach. I think Affirm's been under-penetrated as well. i think affirm's been under-penetrated as well We have a lot of confidence that what Affirm does should work really, really well in that end market. we have a lot of confidence that what affirm does should work really really well in that end market We're excited to partner with, you know, a market leader like Intuit to broaden our reach. we're excited to partner with you know a market leader like intuit to broaden our reach

Speaker 1: Very clear. Maybe we talk about the bank license next. You know, obviously there's a funding benefit here, but maybe you could just talk about some of the other benefits that you expect to see from a kind of cost and a product velocity perspective. Very clear. very clear Maybe we talk about the bank license next. maybe we talk about the bank license next You know, obviously there's a funding benefit here, but maybe you could just talk about some of the other benefits that you expect to see from a kind of cost and a product velocity perspective. you know obviously there's a funding benefit here but maybe you could just talk about some of the other benefits that you expect to see from a kind of cost and a product velocity perspective

Speaker 2: Yeah. Yeah. You know, I think one of the things that we're the most excited about is just being able to have Affirm participate in more of the value chain within our product offerings. You know, if you envision a world where we do have a banking subsidiary, you know, that subsidiary could be an originator of loans, which just allows us to be that much closer to the consumer and a bigger portion of the product flow generally. You know, there's enough growth in our business, and I think the true sort of ramp of the bank and the scaling of the bank will play out over a handful of years, assuming we are granted the license. Yeah. yeah Yeah. yeah You know, I think one of the things that we're the most excited about is just being able to have Affirm participate in more of the value chain within our product offerings. you know i think one of the things that we're the most excited about is just being able to have affirm participate in more of the value chain within our product offerings You know, if you envision a world where we do have a banking subsidiary, you know, that subsidiary could be an originator of loans, which just allows us to be that much closer to the consumer and a bigger portion of the product flow generally. you know if you envision a world where we do have a banking subsidiary you know that subsidiary could be an originator of loans which just allows us to be that much closer to the consumer and a bigger portion of the product flow generally You know, there's enough growth in our business, and I think the true sort of ramp of the bank and the scaling of the bank will play out over a handful of years, assuming we are granted the license. you know there's enough growth in our business and i think the true sort of ramp of the bank and the scaling of the bank will play out over a handful of years assuming we are granted the license We're really not thinking about turning off any of our existing banking partners, and we would expect that with all the growth and scale that's on the come at Affirm, that the bank subsidiary would just be, you know, a part of that growth and a participant in that growth alongside our existing partners. You know, originating loans is one area. Issuing cards can be another area where we utilize bank partners, and I think over time, we may be able to bring more of that flow in-house or at least have some redundancy through the Affirm bank for those workflows. We're really not thinking about turning off any of our existing banking partners, and we would expect that with all the growth and scale that's on the come at Affirm, that the bank subsidiary would just be, you know, a part of that growth and a participant in that growth alongside our existing partners. we're really not thinking about turning off any of our existing banking partners and we would expect that with all the growth and scale that's on the come at affirm that the bank subsidiary would just be you know a part of that growth and a participant in that growth alongside our existing partners You know, originating loans is one area. you know originating loans is one area Issuing cards can be another area where we utilize bank partners, and I think over time, we may be able to bring more of that flow in-house or at least have some redundancy through the Affirm bank for those workflows. issuing cards can be another area where we utilize bank partners and i think over time we may be able to bring more of that flow in-house or at least have some redundancy through the affirm bank for those workflows Those are some of the early things, but we are several years out from, you know, again, having a bank that's scaled, and we also wanna leave a little bit of surface area to cover at our investor forum in May, for the bank topic. Those are some of the early things, but we are several years out from, you know, again, having a bank that's scaled, and we also wanna leave a little bit of surface area to cover at our investor forum in May, for the bank topic. those are some of the early things but we are several years out from you know again having a bank that's scaled and we also wanna leave a little bit of surface area to cover at our investor forum in may for the bank topic

Speaker 1: Sure. Maybe we ask one question, but feel free to defer. I mean, I guess, you know, we talked about kind of costs and the benefits there, but where do you see opportunities from a revenue standpoint? I guess longer term, is the vision to position Affirm as a kind of provider of installment credit in any situation where, you know, customer is underserved or penalized by large banks beyond BNPL? I guess along those lines, we've got a question from Karen, who's asked, "Will we ever see Affirm finance vehicles or homes? Sure. sure Maybe we ask one question, but feel free to defer. maybe we ask one question but feel free to defer I mean, I guess, you know, we talked about kind of costs and the benefits there, but where do you see opportunities from a revenue standpoint? i mean i guess you know we talked about kind of costs and the benefits there but where do you see opportunities from a revenue standpoint I guess longer term, is the vision to position Affirm as a kind of provider of installment credit in any situation where, you know, customer is underserved or penalized by large banks beyond BNPL? i guess longer term is the vision to position affirm as a kind of provider of installment credit in any situation where you know customer is underserved or penalized by large banks beyond bnpl I guess along those lines, we've got a question from Karen, who's asked, "Will we ever see Affirm finance vehicles or homes? i guess along those lines we've got a question from karen who's asked "will we ever see affirm finance vehicles or homes

Speaker 2: I mean, right now there's a pretty bright line around secured lending. We don't wanna repossess goods from our consumers. I think autos and homes is a no today. Forever's a long time, so that may change, but today I think that's a pretty clear no for us. I think the other piece of the question I'm gonna defer to May. I mean, right now there's a pretty bright line around secured lending. i mean right now there's a pretty bright line around secured lending We don't wanna repossess goods from our consumers. we don't wanna repossess goods from our consumers I think autos and homes is a no today. i think autos and homes is a no today Forever's a long time, so that may change, but today I think that's a pretty clear no for us. forever's a long time so that may change but today i think that's a pretty clear no for us I think the other piece of the question I'm gonna defer to May. i think the other piece of the question i'm gonna defer to may

Speaker 1: Okay, fine. Great. Well, let's move on to talk about the FIS and the Fiserv deals. You know, it seems like the opportunity here in terms of the overall TAM could be huge. So I guess the question really is, you know, how well you can penetrate that TAM. So maybe you can give some insight into how you go about distribution. I guess any early feedback you've had from the conversations with banks and perhaps, you know, the differences in how we should think about FIS and Fiserv. Okay, fine. okay fine Great. great Well, let's move on to talk about the FIS and the Fiserv deals. well let's move on to talk about the fis and the fiserv deals You know, it seems like the opportunity here in terms of the overall TAM could be huge. you know it seems like the opportunity here in terms of the overall tam could be huge So I guess the question really is, you know, how well you can penetrate that TAM. so i guess the question really is you know how well you can penetrate that tam So maybe you can give some insight into how you go about distribution. so maybe you can give some insight into how you go about distribution I guess any early feedback you've had from the conversations with banks and perhaps, you know, the differences in how we should think about FIS and Fiserv. i guess any early feedback you've had from the conversations with banks and perhaps you know the differences in how we should think about fis and fiserv

Speaker 2: Well, I mean, I think generally, we're utilizing the same approach and would have the same vision across both platforms. There can be some differences just in terms of the average size of bank that the various platforms work with. Really, like, in a nutshell, the idea and the pitch to banks is, there's several, you know, small to medium-sized banks that have meaningful debit programs and large customer bases. We can see in our data, and the bank can probably see in theirs, that they're going elsewhere for financing, right? They're utilizing credit cards, whether it's Capital One or Citi or whomever to consummate their considered purchases. Well, I mean, I think generally, we're utilizing the same approach and would have the same vision across both platforms. well i mean i think generally we're utilizing the same approach and would have the same vision across both platforms There can be some differences just in terms of the average size of bank that the various platforms work with. there can be some differences just in terms of the average size of bank that the various platforms work with Really, like, in a nutshell, the idea and the pitch to banks is, there's several, you know, small to medium-sized banks that have meaningful debit programs and large customer bases. really like in a nutshell the idea and the pitch to banks is there's several you know small to medium-sized banks that have meaningful debit programs and large customer bases We can see in our data, and the bank can probably see in theirs, that they're going elsewhere for financing, right? we can see in our data and the bank can probably see in theirs that they're going elsewhere for financing right They're utilizing credit cards, whether it's Capital One or Citi or whomever to consummate their considered purchases. they're utilizing credit cards whether it's capital one or citi or whomever to consummate their considered purchases With the Affirm Card functionality, we can bring that to the bank's existing debit programs and allow them to participate in those swipes a lot more than they are today. Also, you know, again, to sort of maintain or probably grow their share of wallet with their existing consumers. I think right now, you know, we're in the very, very early stages of having conversations with banks. I think the conversations are resonating with banks, but it's a lot of work for us to do to build this functionality into the various banking cores. We're excited to continue to have the conversations on the sales side to hopefully land some early pilot bank partners here. With the Affirm Card functionality, we can bring that to the bank's existing debit programs and allow them to participate in those swipes a lot more than they are today. with the affirm card functionality we can bring that to the bank's existing debit programs and allow them to participate in those swipes a lot more than they are today Also, you know, again, to sort of maintain or probably grow their share of wallet with their existing consumers. also you know again to sort of maintain or probably grow their share of wallet with their existing consumers I think right now, you know, we're in the very, very early stages of having conversations with banks. i think right now you know we're in the very very early stages of having conversations with banks I think the conversations are resonating with banks, but it's a lot of work for us to do to build this functionality into the various banking cores. i think the conversations are resonating with banks but it's a lot of work for us to do to build this functionality into the various banking cores We're excited to continue to have the conversations on the sales side to hopefully land some early pilot bank partners here. we're excited to continue to have the conversations on the sales side to hopefully land some early pilot bank partners here

Speaker 1: Great. I think we've had a question here from Ajmal on a kind of capital, I guess maybe slightly longer term, but I guess how do you think about, you know, implementing share repurchase programs or dividends, you know, I guess from a distribution perspective once you reach that point? Great. great I think we've had a question here from Ajmal on a kind of capital, I guess maybe slightly longer term, but I guess how do you think about, you know, implementing share repurchase programs or dividends, you know, I guess from a distribution perspective once you reach that point? i think we've had a question here from ajmal on a kind of capital i guess maybe slightly longer term but i guess how do you think about you know implementing share repurchase programs or dividends you know i guess from a distribution perspective once you reach that point

Speaker 2: Yeah. I mean, I think today we do have an existing buyback program for our convertible bonds, and so, that's been the place historically where we've returned capital to shareholders, but just by de-leveraging and being opportunistic about how and when we buy back our convert. I think with that program and the relatively near term maturity for our 2026 convertible bonds, I think that's where you're gonna see us continue to lean in in terms of capital allocation. In the longer run, you know, again, I think we're still relatively early in being a profitable company. We're really proud of the cash flow generation that we're seeing in the business today. Yeah. yeah I mean, I think today we do have an existing buyback program for our convertible bonds, and so, that's been the place historically where we've returned capital to shareholders, but just by de-leveraging and being opportunistic about how and when we buy back our convert. i mean i think today we do have an existing buyback program for our convertible bonds and so that's been the place historically where we've returned capital to shareholders but just by de-leveraging and being opportunistic about how and when we buy back our convert I think with that program and the relatively near term maturity for our 2026 convertible bonds, I think that's where you're gonna see us continue to lean in in terms of capital allocation. i think with that program and the relatively near term maturity for our 2026 convertible bonds i think that's where you're gonna see us continue to lean in in terms of capital allocation In the longer run, you know, again, I think we're still relatively early in being a profitable company. in the longer run you know again i think we're still relatively early in being a profitable company We're really proud of the cash flow generation that we're seeing in the business today. we're really proud of the cash flow generation that we're seeing in the business today I think over time, we'll start to give more time and thought to capital allocation just as we see the business continue to mature. Yeah, again, right now, I think the convert is what's sort of front and center for us. I think over time, we'll start to give more time and thought to capital allocation just as we see the business continue to mature. i think over time we'll start to give more time and thought to capital allocation just as we see the business continue to mature Yeah, again, right now, I think the convert is what's sort of front and center for us. yeah again right now i think the convert is what's sort of front and center for us

Speaker 1: Sure. I guess kind of on the same topic, I mean, how do you think about new acquisitions? I guess Felix asked here, you know. Sure. sure I guess kind of on the same topic, I mean, how do you think about new acquisitions? i guess kind of on the same topic i mean how do you think about new acquisitions I guess Felix asked here, you know. i guess felix asked here you know

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Would you think it is a way to accelerate your expansion? Would you think it is a way to accelerate your expansion? would you think it is a way to accelerate your expansion

Speaker 2: I think so. I mean, I think we have a corporate development team that is very active in terms of working through inbound opportunities that we receive, but also, you know, prospecting within various sort of product expansion areas, new markets. I think it's a really nice complement. I think M&A can be a really nice complement to our existing product and engineering capabilities. You know, again, there's always a sort of could we go faster if we bought something? I think that's often a question we ask internally, and I think that'll be our program going forward as well. I think so. i think so I mean, I think we have a corporate development team that is very active in terms of working through inbound opportunities that we receive, but also, you know, prospecting within various sort of product expansion areas, new markets. i mean i think we have a corporate development team that is very active in terms of working through inbound opportunities that we receive but also you know prospecting within various sort of product expansion areas new markets I think it's a really nice complement. i think it's a really nice complement I think M&A can be a really nice complement to our existing product and engineering capabilities. i think m&a can be a really nice complement to our existing product and engineering capabilities You know, again, there's always a sort of could we go faster if we bought something? you know again there's always a sort of could we go faster if we bought something I think that's often a question we ask internally, and I think that'll be our program going forward as well. i think that's often a question we ask internally and i think that'll be our program going forward as well

Speaker 1: Sure. Well, Rob, that's been great. I think we've just about run out of time, but you know, thanks very much for your time today. Yeah, look, if anyone has any questions, please follow up with Zane or Maggie from Affirm's IR team. Sure. sure Well, Rob, that's been great. well rob that's been great I think we've just about run out of time, but you know, thanks very much for your time today. i think we've just about run out of time but you know thanks very much for your time today Yeah, look, if anyone has any questions, please follow up with Zane or Maggie from Affirm's IR team. yeah look if anyone has any questions please follow up with zane or maggie from affirm's ir team

Speaker 2: Awesome. Thanks, Harry. Really appreciate all the questions. Awesome. awesome Thanks, Harry. thanks harry Really appreciate all the questions. really appreciate all the questions

Speaker 1: Thanks. Thanks. thanks