Dan Perlin — Analyst, RBC Capital Markets
Awesome. Yeah, that's fantastic. Thank you. Have a good one.
Adam Frisch — SMD, Evercore ISI
Hey guys, good afternoon. It seems like you guys are just, as Max said, I'll quote you, you guys are crushing it. The only thing I could see kind of derailing the story is what's going on with the consumer. If you expect things like the resumption of college loans and so forth, maybe the data around consumers gets a little dicier in the next couple of months into the end of the year. Could you just remind us where you are in your spectrum of the folks that use your platform, where they are on the FICO scores relatively, like how many of your transactions are with consumers that are near prime, prime, or super prime? When the data inevitably comes out where the consumer might be getting a little shakier, we have someone to fall back on in terms of the quality of the folks engaging with Affirm.
Thank you.
Max Levchin — Founder and CEO, Affirm Holdings Inc
I don't know if it's going to come out any sooner than right now. It's all in our supplements, I think. Generally speaking, student loan repayment resumption is something that we've all been aware of for quite some time and have definitely taken measures to make sure we are not overextending that borrower and also monitoring how that is going for them. The reason or the fact that we don't give or didn't give an enormous amount of attention to the credit performance in this particular letter isn't because we forgot. It's because it's been highly consistent and can perform really well. It also doesn't mean we've taken our eyes off. The sort of the thing that we kept on repeating for years and years is that credit is job number one. It still is.
The team still gets, the Executive Team still gets a full credit performance update every single Monday. Anytime the disturbance is in force, we move that from once a week to 3x a week and, you know, daily if that's what warrants it. We are very, very mindful of credit performance. We are not even a little bit asleep at the switch. The numbers you see are there exactly because we want them to be there. We said it many times before. Credit performance is an output of our settings of the models that we run. Not sure to belabor the obvious, but we underwrite every single transaction and reserve the rights to decline transactions we feel are too risky for the end borrower and for Affirm. We do.
If there's ever a deviation from our normally extraordinarily high net promoter scores, because not everybody enjoys hearing, "Hey, you shouldn't borrow, you're overextended," we won't change our point of view on their ability to borrow and our willingness to lend if they are in fact overextended, be it with Affirm or overall in their credit utilization. No, I'm not concerned about that. Obviously, macroeconomic shifts are a thing that happens to everybody at the same time. That's not a thing we control, but we can control our results and have controlled the results for years and years as the macroeconomic environment moved up and down sometimes pretty suddenly. I feel very good about our performance, feel good more importantly in our ability to control that performance so long as we keep our eyes on the credit numbers, and we certainly do.
Rob O'Hare — CFO, Affirm Holdings Inc
I would just add that I think given the short duration of the loans that we're originating, the most important thing for us is that we have a full picture of the borrower's wherewithal to repay the loan at the time of origination. The asset is so short-dated and we're increasingly working with consumers that we've seen before. 95% of our transactions came from repeat borrowers this quarter. That setup really allows us to focus on underwriting the consumer here today where they are and making sure that we're instrumented to catch changes in the future. We don't really stare at those problems in advance. I think we're really focused on making sure that the cohorts that we originate today pay us back. If we need to adjust the underwriting, you know, to be more inclusive or less inclusive in the future, we'll do that in normal course.
Will Nance — VP, Goldman Sachs
Hey guys, thanks for taking the questions. Nice results today as always. I wanted to ask a question just on the funding environment. You know, Max, we've continued to see the capital markets be wide open for consumer lenders. I think your funding capacity was up roughly 55% year-over-year. Utilization is way down. We've also seen that in pretty much every other lender in this space, with the rise of kind of alternative credit coming into this space. How do you think about the incentives that this creates in the market and the risk of credit issues that result from more of an oversupply of funding from some of the lower quality competitors in the space or people who are kind of flush with funding and have kind of incentives to make a lot of loans because of that? Thanks.
Rob O'Hare — CFO, Affirm Holdings Inc
I can start and Max can add. I don't know that I can really speak to the people in the broader ecosystem. I know that we are really mindful of the health of the capital markets when we think about picking our partners. It's as important that we pick capital partners who we think are going to be our partners for the long term and not just worrying about who's the lowest bid today. As a result, we partner with what we think is the blue chips of these asset managers. That can come in the form of large strategic partnerships with world-class investors like Sixth Street or very good insurance asset managers up and down our stack. That's not an accident. We think really long and hard about picking the partners who we think are going to be committed and long-term with us.
Therefore, we don't move too quickly either. We don't pivot out of a strategy. We think in the better part of decade increments. We're not so concerned with what those partners do because they're obviously thinking about the problem in the right way. I will say the conditions are very favorable as you pointed out, and that's to our benefit. We're really mindful of that, and I think that's part of the reason why the execution is so good right now.
Moshe Orenbuch — MD, TD Cowen
Thanks. Thanks very much for taking my question. I was hoping we could talk a little bit about the Affirm Card. You gave some statistics, you know, talking about it being a billion to a volume, a 10% attach rate, and also that the 0% volume on the card kind of tripled. Can you talk a little bit about, you know, the current strategy with respect to the card, how you think it's going to, you know, impact Affirm's customers and volume going forward, and maybe is there any special significance to the 0% in that product?
Max Levchin — Founder and CEO, Affirm Holdings Inc
I'm trying to parse all the really cool threads to pull on here. Obviously, the card's growing really well. The meaning of the update, for the avoidance of doubt, was it's kicking ass and taking names, and we're very proud of it. We got a lot more to go before we think it might change. 10% attach rate is just a number. We'll celebrate more when it increases. The strategy with the card, I learned the hard way that I'm not going to front run what's next for it, but it is an extremely active area of investment for us. We have more coming, more things coming. Some really, we think, incrementally powerful boosters to this particular rocket are on the way. We're pretty excited about what's to come there.
I will not pronounce them now, but you know, I'm still spending a lot of my time figuring out how to make the card even more compelling. You can see a little bit about the offline category growth in the update, I think, and that sort of speaks to the fact that we are learning how to offer it in the right way to the consumer so that they remember to take it with them to places where they haven't used it, e.g., a gas station, which is just not a thing you can integrate, you know, online. In terms of zeros on the card, it's actually, more than anything, an amazing surprise and delight and frequency driver. If you remember last call, we said that the really ambitious version of the card gets us to 10 million card.
The ambitious version of the card future is 10 million card holders active and something along the lines of $7,500+ GMV per year. The current trailing 12 months of the card holder is about $4,700. I think the last time we dropped this number, it was along the lines of $3,500. This is across all Affirm services. This is card and all the other places where you might go, but card dominates that spend obviously. We're not quite at the $7,500, but we're more than halfway there. There are many things that are coming together to make sure the card is the best expression of Affirm. That's as far as I think I want to go right now. I'm already kind of long-winded on this one, but there's a lot to do and there's some cool unexpected things that are coming soon.
Moshe Orenbuch — MD, TD Cowen
Thank you for that.
Rob Wildhack — Analyst, Autonomous Research
Very helpful. Thank you.
Kyle Peterson — Equity Research, Needham & Company
Great. Good afternoon, guys. Nice results. Thanks for taking the questions. I want to touch on the outlook and the take rate. It looks like it's going to be kind of fairly stable with at least the run rated 4Q level. Does that imply that the mix, the product mix that we saw in the fourth quarter should be fairly steady, or are there any other take rate impacts that we should be mindful of, like, for example, with the enterprise partner or anything that might influence some of these numbers as well?
Max Levchin — Founder and CEO, Affirm Holdings Inc
Yeah, we stopped short of guiding to mix specifically, but as you saw this quarter, monthly 0% APR loans were growing north of 90% year on year. We would expect that that loan product in particular continues to take a bit of share within our mix. Otherwise, I think the most important thing for us is that the units we're creating are profitable and that we have a funding plan and a mix plan that allows us to sort of stay in that 3%-4% RLTC range. With the guide, we're expecting to be at the very, very high end of that range from a revenue less transaction cost take rate perspective.
Kyle Peterson — Equity Research, Needham & Company
Okay, that's really helpful. I guess just a follow-up, following up on Will's question around funding. I want to ask, are you guys seeing, just given that the funding environment is the best it's been in quite some time, have you guys seen any uptick in competition or irrational players that might be kind of spoiling the water? If so, how are you guys kind of dealing with that and continuing to grow while maintaining really solid credit?
Rob O'Hare — CFO, Affirm Holdings Inc
Yeah, for us, the quality of the credit isn't really a decision. It's something we constrain the business with, and then we operate from that point. That's not lost on our capital partners. I think the reason why what I consider to be the best credit investors in the world want to partner with Affirm and do is because of that commitment we've made to operate the business in a certain way. We've done that not just when things are really good. We've done that back through all of the turmoil that you've seen over the past half decade. Our best investors see that. They recognize that, and they're attracted to it. We think about these things as long-term partnerships. I think some of the behavior or concerns that you're alluding to would exist in people who are looking for just kind of more tradie type relationships, 1x.
That's just not how we operate our business. It's kind of far away from us. When you think about choosing your partners, and we have the luxury of a choice given our performance, think about the partners we choose to do business with. Our team is really selective around partners who we know are going to be thoughtful and not get over their skis and chase anything away from them. When I talk to partners and they share that they either were pursuing an opportunity and didn't get it because they weren't willing to pay up, both of us are happy in those moments because I know that my partner is being disciplined and that discipline will benefit us in the long run. I think there's just so much capital to go to work right now that it doesn't really give me any concern.
Kyle Peterson — Equity Research, Needham & Company
Great. Good to hear. Thank you, guys. Nice results.
Adib Choudhury — Equity Research, William Blair
Hi, this is Adib Chattery on for Andrew. Thanks for taking our questions. We wanted to ask on the international strategy in the U.K., but also in other geos you might be looking at and kind of the opportunity for Affirm to bring its underwriting product to the rest of the world. Secondly, how the mix of GMV might look differently internationally versus Affirm's core domestic business.
Max Levchin — Founder and CEO, Affirm Holdings Inc
It's a great question. I'm happy to report that we are in friends and family testing in the U.K. with our Shopify friends. It's very exciting. That's obviously an enormous potential that is not lost on anyone. We have merchants that we've taken live there and are excited to bring on a few more of our own. Shopify is just an incredible partner in our growth, and we think we have it for them as well. That's coming quite soon. The mix is a little hard to tell in the following sense. We know that the market has tremendous appetite for Pay in 3 and Pay in 4, which are traditionally 0% because that's what the majority of the competition does the totality of their business in.
We also know that all the major merchants we've spoken with or signed have said, "What we really need from you guys is longer terms. We want six months, 12 months," which obviously to a large degree will be interest bearing. As of right now, I think the mix that we have in the U.K. is, excuse me, more interest bearing than not. As we scale Shopify, that is absolutely subject to change just based on what this will do relative to what's available. It's a little too early to make claims. We are absolutely going to be as mindful and as attentive to credit in the U.K. as we have been in the U.S. and Canada. That's not an optional thing. We're not going to play it fast and loose whatsoever.
We feel very good about our ability to get the data we need to underwrite and also just to achieve the scale we need to make sure that the levers of control are useful. In terms of other geographies, I think we've been pretty transparent that we're not going to show you a map, but if we drew one, it would look like Europe.
Adib Choudhury — Equity Research, William Blair
Got it. If I could ask a quick follow-up, could we just get a high-level update on the Apple Pay partnership and if there's anything kind of incremental to share there? Thanks so much.
Max Levchin — Founder and CEO, Affirm Holdings Inc
We, as is our custom, do not talk about, still speaking to individual partners, but in particular, we do not talk about all our partnerships in any detail.
Adib Choudhury — Equity Research, William Blair
Thanks.
John Hecht — MD, Jefferies
Afternoon, guys. Good quarter. I'm looking at a globe and I can't find anything that looks like Europe other than Europe. Thank you for that.
Max Levchin — Founder and CEO, Affirm Holdings Inc
See, New Zealand kind of looks like Japan. Sorry.
John Hecht — MD, Jefferies
Yeah. Question on, I guess, customer engagement, you know, higher frequency of engagements. As a customer seasons on the platform, do the dynamics or characteristics of their typical transaction change as they kind of mature?
Max Levchin — Founder and CEO, Affirm Holdings Inc
That is a really good question. I don't know if I have a really thoughtful answer for you right now. The theory behind the card and things like Affirm Anywhere and all the other products we've built to gain frequency was largely that we are already understood to be a considered purchase helper. If you're buying a bicycle or a mattress, that's sort of a once every N years type purchase, you obviously should use Affirm because you will probably find a great brand-sponsored zero or subsidized APR, all that. As we added more products, they were always meant to take the AOV down at the average. We would be useful in more situations, more frequent situations. That's generally speaking been the case.
I think if you track our average ticket, you can sort of see a gentle downtrend, even as the frequency increased faster than the downtrend for sure, as we sort of grabbed onto more purchases, just some with more frequent ones. That's sort of the best I got off the cuff. I am sure we can publish something off cycle explaining what really happens, but needless to say, we're very happy with the increased frequency. We're not super fussy about AOVs. We don't think it's our job to make you buy two mattresses. We're answering demand that you naturally have versus telling you in any sort of promotional way, "Buy a mattress, buy another one." That means whatever natural average ticket, average spend the user has on any unit time, that's what we should have. We're still ahead of the averages.
If you look at things like debit cards, which is kind of our primary, debit card and credit cards, which are our primary replacement goods or services, you will see that we're still ahead of them, but we're coming closer and closer. We won't rest until we are a proper replacement for credit cards, of course. At that point, our AOV should be roughly the match to them.
John Hecht — MD, Jefferies
Okay, that's very helpful. You guys provided the general framework to think about the impact of rising rates. The futures curve or the forward curve looks like there's a high probability of lower rates. Can you guys give us a framework to think about the impact of lower rates on the business?
Max Levchin — Founder and CEO, Affirm Holdings Inc
Yeah, great question, John. It should be generally the same rough mechanics that we outlined during the rising rate environment where a one-point move in reference rates should translate to about a 40 bps change in our funding costs. That should be true whether rates are going up or down. The other part of the framework that we shared previously, just for everyone, is that it will take time for those mechanics to play out because a portion of our funding is variable in nature, but the majority of our funding actually is not truly variable and will adjust with a time lag. It may take a year or two or even longer for those rate changes to fully show up in our funding costs and in our platform portfolio base.
There is nothing in our agreements with merchants or otherwise that would lead us to believe that we wouldn't see the same impact of a declining rate environment as a rising rate environment if you're looking purely at funding costs. I think the question that we make sure we ask internally is if rates are declining, why is that happening, right? There could be offsetting impacts elsewhere in the business. If rates were to decline because unemployment was rising or there was stress on the consumer, obviously that could lead to costs elsewhere in our base.
John Hecht — MD, Jefferies
Okay, thank you very much.
Matthew Coad — Equity Research Director, Truist Securities
Hey guys, thanks for taking the question here. Wanted to go back to the 0% topic, but wanted to address it from the merchant side. You talked about the number of merchants funding this offering doubling year-over-year. I believe that's up to 7% of your total merchant base now that's funding the 0% APRs. Curious, as we look forward, what you think that penetration rate can get to.
Max Levchin — Founder and CEO, Affirm Holdings Inc
It should round up to almost 100. There are, and I'm prone to some hyperbole with numbers, and Rob is laughing at me, but here's what I really mean by this. Merchants are broadly divided into a handful of categories, but one way to do it is to think of the margin they spend on marketing. My contention is that marketing budget is at least as well spent at the bottom of the funnel as it is at the top. If you're broadcasting a story of why somebody should come shop with you, you're frequently doing it in terms of going out of business sale, hopefully not, but more like, you know, 20% sale or a Christmas sale. The sort of sales-driven, sale-driven consumer acquisition is a little bit of a hand grenade approach to trying to make sales.
At the very bottom of the funnel or at the product exploration level of the funnel, you can be much more precise. With our technology such as Adapt AI, where we offer consumers the exact, or our estimation of exact financing offer that would compel them to buy, it is just much cheaper for the merchant. They would spend a lower percentage of their marketing budget if they thought of it this way at the bottom of the funnel. The adoption curve of these tools, the 0% APR contract, is entirely a function of these merchants realizing that the marketing money they're spending is better spent on such promotions at the bottom of the funnel versus the blanket coverage at the top of the funnel.
Every year, we're just doing slightly better, making sure this is convincing, everything from showing them results and/or working with them to test this, publishing white papers, educating our salespeople, helping them educate their internal accounting people, etc. At the limit, I think every single merchant will benefit from these programs. There are merchants whose margins are quite low naturally, and they spend very little of the overall GMV marketing themselves, maybe because they're already at scale, maybe because they just have an alternative distribution model. That will be the last holdout. Generally speaking, this is a more efficient way of driving sales. It is apparent to a large enough body of GMV producers that it will eventually trickle down to the rest of the bunch. That's my conviction, and I'm standing by it. Every year we have more and more zeros to show for it.
It will keep happening until morale improves.
Matthew Coad — Equity Research Director, Truist Securities
No, thanks, Max.
Max Levchin — Founder and CEO, Affirm Holdings Inc
Anything to add, Rob?
Matthew Coad — Equity Research Director, Truist Securities
Oh, if I could just sneak in a follow-up, Max, you had addressed this in the shareholder letter. You touched a lot on AI. I was hoping you could just talk about it on the call here too, just kind of like how you're thinking about the future for agentic commerce and Affirm's role in it.
Max Levchin — Founder and CEO, Affirm Holdings Inc
It's in a letter. I try to boil it down to be relatively pithy. You're tempting me to give the longer form that Michael successfully talked me out of putting in. The letter speaks to it pretty well. We think that agentic commerce is going to be extremely successful for some categories of transactions. It may not be super successful for all of them. Many transactions require final human approval just because they have to do with taste. Kind of the unstated weakness of today's state of AI is it's fundamentally taste-free. It doesn't know what's beautiful. It certainly doesn't know what's beautiful to you. A lot of purchases are made with taste as the front and center of the why. The need to finance beautiful things or things that you require isn't going away.
Inherently, we will be in those transactions just like we have been able to find our way into all the other ones. The thing that's compelling for us about agentic commerce in particular is it's fundamentally a rehashing or remixing of e-commerce as it exists before AI. You can imagine, the conversation about universal carts has been around forever and no one's ever really built the universal cart of any kind of scale. Universal shopping cart is very much what's going to happen inside these chatbots if you are to close these transactions from multiple brands, multiple stores, multiple warehouses in the same chat session. This idea of remixing e-commerce is what I think successful, certainly successful first act, maybe all the acts of agentic commerce looks like. We are built to be mixed into all environments.
You see us pop up in places like ShopPay installments, which is a really deep integration. We are a component of someone else's wallet. You see us inside Chrome autofill, which is a completely different integration, but not actually very different from our point of view because our services work in that environment. Very different environment, very similar integration, almost identical consumer experience as far as Affirm is concerned. You will see versions of this in agentic commerce as that rolls out as well. We're pretty excited about it. I mean, I'm generally a techno optimist, so you should be careful what you sort of believe with my sort of rose-colored glasses on. I don't think it's going to cannibalize commerce at a fundamental level. I think it's actually going to increase volume for a lot of merchants.
We will find that some things are still going to be purchased the old way and other things are just going to become naturally more obvious inside of an assisted or assistance-driven transactions. We're going to be here for all of it.
Matthew Coad — Equity Research Director, Truist Securities
Really helpful. Thank you.
James Faucette — MD, Morgan Stanley
Hey, good afternoon everybody. I wanted to ask on the PSP integration, pretty interesting announcement of BNPL with Stripe Terminal. I think there's potential for that to, or similar type announcements to be made with other payment service providers. I'd be curious if there's any framing you would provide in terms of how important you think the PSP channel will be for your business, particularly when we think about the business overall excluding Amazon and Shopify as a way to add additional merchants. How do you intend to lean into that channel, et cetera?
Max Levchin — Founder and CEO, Affirm Holdings Inc
Good question. Generally speaking, offline is still kind of the greenfield of buy now, pay later. The fraction of online to offline is still whatever it is these days, 10 to 1, 8 to 1. There is a lot more there than inside e-commerce. Yet buy now, pay later is a minute fraction of that world because the integrations are just difficult. Discovery is hard. Placement of you should think of this in more affordable terms, sort of messaging prompting at the product level, is difficult. It is important. It is important insofar as when we go to talk to a merchant that has a large offline presence, talking to them about let's promote something together and let's integrate something together are two conversations.
Being able to say, actually, we don't have to worry about the latter, it's already built into your point of sale processor, let's just talk about the promotional details and how we're going to advertise the opportunity to finance things without fees, frictionlessly, without gimmicks, makes the conversation easier because now you are talking about that marketing budget and discussing it with just one part of the retailer versus a whole separate IT environment that says, sure, we'd love to do it, but our roadmap is busy until 2030. In that sense, it's a huge boost. It's an enabling technology, not a now that we have it, every offline partner is just going to fall into our lap. The work isn't eliminated, but it's meaningfully reduced.
James Faucette — MD, Morgan Stanley
Got it. That's really helpful. Just a quick clarification on 0%. I certainly understand and think that the push there and the benefits you get are pretty clear. I'm wondering, in terms of the shorter duration of 0% that you called out and how that evolved during the course of the June quarter, is that a seasonal thing? Is that just an expansion of availability, a change in the type of customers that are eligible and opting for 0%? Just trying to get a little bit of color of how to think about that component on a go-forward basis. Thanks.
Rob O'Hare — CFO, Affirm Holdings Inc
Yeah, thanks for the question, James. I think the answer really was in the question. It was really a mix of both. We do have seasonality in our business generally, but certainly seasonality within our 0% programs, and that showed up a bit as well, especially when you're comparing maybe across Q3 and Q4. Also, when we introduce zeros to a new merchant, one of the ways that we can do that is by making the shortest term that's presented in the financing program a 0% offer. That has the natural output of shortening term lengths for that merchant's program as well. It really is a range of things that were at play in this quarter.
I think it speaks to the flexibility and just our ability to customize across multiple surfaces, term length, and APR to make sure that we're putting the best program together for our merchants and for consumers.
James Faucette — MD, Morgan Stanley
Great. Thanks so much, guys. Have a good day.
Reginald Smith — Executive Director, Equity Research, JPMorgan
Good evening, guys. Thanks for taking the question. This Friday, I wanted to follow up on the question that James just asked, but take it in a slightly different direction. I'm thinking about PSPs, you know, primarily online, so e-commerce, not named Shopify. Is there a way to kind of frame, or how do you guys think about your penetration within that channel and I guess the maturity of that channel? If you were to look at the volumes in that segment, are they growing faster than the line average, slower? Help, you know, kind of frame that channel for us to the extent that you can. Whether or not you guys often have default on status or how that works.
My last question, just or rather follow up to that is just quickly on that merchant that's leaving in the end of the first fiscal quarter, is the thinking that you're still, your logo will still be available on the website, or has that changed? Thank you.
Max Levchin — Founder and CEO, Affirm Holdings Inc
I'll start and let Rob finish just because I think you're asking about assumptions in the guide. On the PSP side of things, we're pretty early there. Obviously, default on is a really important, really powerful thing. We have multiple partnerships of this matter with PSPs not named Shopify, and we're working pretty hard on expanding the list and being default on. I don't have the growth rates off the top of my head, so I don't want to perjure myself here, but I think they are accretive to the growth rate of the business, not detracting. I will let Zane or Rob look this up, and if I'm wrong, I'm sure they'll correct me soon enough. I'm pretty sure I'm right on this one. It's a really important channel. It's pretty early.
If you just follow our announcements, you'll see that these are significantly more recent than, for example, the Shopify announcement. Just from the pure scale and time to penetrate, these are later comers, and there's more to be had there. All of that, we think, accretes to the future growth. The merchant sets are a little bit different sometimes. Obviously, Shopify has an extremely broad appeal, but given they have some degree of this as the canonical Shopify merchant, the same is true for every other platform or aggregator or payment processor, etc., etc. Each one gives us access to something that we probably haven't seen before to at least some degree. I think that's all I want to say on PSPs.
Rob O'Hare — CFO, Affirm Holdings Inc
Yeah, in terms of the question around the merchant, I think the easiest way to talk about the relationship is just to outline what's in our outlook. What we've assumed in the outlook is that the integration goes away at the end of this quarter. It's unclear exactly what the mechanics will be of how the relationship plays out, but that's what we've assumed. We think we've taken a pretty conservative stance in terms of volume in fiscal 2026 coming from this merchant.
Reginald Smith — Executive Director, Equity Research, JPMorgan
Got it. When you say go away, does that mean zero volume from that merchant, or is that net will go away? What does that mean exactly?
Rob O'Hare — CFO, Affirm Holdings Inc
What we've assumed in the outlook is that through the integration, there would be zero volume after.
Reginald Smith — Executive Director, Equity Research, JPMorgan
Got it. Got it. Okay. Thank you.
Harry Bartlett — VP, Equity Research, Rothschild & Co Redburn
Hey guys, yeah, thanks for taking the question. I just wanted to touch on international again. I'm just thinking about ShopPay. We talked about going to the UK, but in terms of how quickly you can roll that out into other geographies, is it now a case of you have a playbook and then you'll be able to kind of move a bit faster if you're looking to move in other areas of Europe? Also, I guess just outside of Shop, do you have any difference in your approach to how you're going to expand internationally? I'm just coming from this from the point of, you know, brand awareness maybe isn't quite as strong as it is in the U.S., and there are some incumbent players at checkout. I just wonder if you have a different approach here on maybe the sales and marketing or quickly more awareness. Thank you.
Max Levchin — Founder and CEO, Affirm Holdings Inc
I'll try to touch on all these things as quickly as I can since there's a lot here. The short answer to your first question is yes and no concurrently. In terms of the platform build and a lot of the technology, it is certainly built to be reusable. We're not going to, you know, launch U.K. and go off and build another completely different system to be live in Italy or favorite European country. That's all reusable and designed to be reusable, etc. We're also not too concerned about spinning up technological or data center presence in AWS. They exist in every market. The things that are different about every market are access to data, some of the peculiarities of local regulation, and then also local licensing is really important.
Some things you can infer pretty easily about how one might approach not having to do double and triple work on licensing or following regulatory regimes. You can be assured that we're doing all those things as intelligently as we can. There's some work involved, even if you are as intelligent as you can possibly be with all those things. That part, I think we're in really good shape. We don't expect to go off the radar for too, too long. We'll have more to say about it in the coming quarters. Things like Apple Markets are not a concern, just for the ones of doubt. In terms of sales and marketing, we've said it before, so this shouldn't be news to anybody, but we have a nice list of multinational partners. There are partners that are with us in the U.S.
or Canada or U.K. who are multinational and are, generally speaking, very pleased with our performance. We think we have a very good shot at talking those folks into being useful to them in more than one market. We've been successful at it between the U.S. and Canada, certainly. I see no reason why, with the appropriate level of attention and good hygiene, we couldn't do this again. That's the expansion plans for these lighthouse brands. We don't anticipate a dramatic investment in our brand in the U.S. or U.K. or beyond, mostly because we market very successfully with our partners. The majority of the marketing spend in our financials reflects the go-to-market efforts we share with our merchant partners where we come together in all sorts of interesting promotional ways. We'll do that. We have some pretty exciting plans for that in our latest market.
I don't want to spoil any surprises just yet, but that's certainly coming. It will not break our bank by any stretch. It's all fully priced into the guide.
Harry Bartlett — VP, Equity Research, Rothschild & Co Redburn
That's great. Thank you.