What Management Said

Read the full Q4 2025 transcript ↗

For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found in our earnings supplement slide deck, which is available on our Investor Relations website. We actually set a new record in most of our metrics, which is unusual. Fiscal Q2 is a normal peak, but this is Q4, and yet it is the record. I should tell you that our growth is accelerating and we are firing on all pistons.

As Michael loves to say, we take our guidance very seriously and err on the side of being thoughtful and aiming to get ourselves some A+s instead of just straight As. I appreciate the implied dig at how real are these, are these growth users, but I have good news on that front. Generally speaking, there's not a tremendous difference in terms of repeats of users that have been acquired through zeros or not. You know, Max, we've continued to see the capital markets be wide open for consumer lenders.

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. Just quick on the guidance and the comment that the enterprise merchant will transition off in the fiscal second quarter. The assumption in our outlook, Rob, is that that enterprise partner is wound down going into the quarter, so by the end of this quarter, fiscal Q1.

What went well
  • Set a new record in most metrics in fiscal Q4, unusual since Q2 is the normal seasonal peak, with growth accelerating
  • Credit continued to perform well, driven by short-dated loans and 95% of transactions coming from repeat borrowers
  • Monthly 0% APR loans grew north of 90% year-over-year, and merchants funding 0% APR doubled to about 7% of the merchant base
  • Affirm Card reached about $1 billion in volume with a 10% attach rate and 0% card volume tripling; trailing-12-month GMV per cardholder rose to ~$4,700 from ~$3,500
  • Adapt AI deployments drove an average 5% increase in GMV, and funding conditions were the most favorable in years
What went wrong
  • A large enterprise merchant integration is winding down, assumed to contribute zero volume after the end of fiscal Q1
  • 0% APR transactions are somewhat less profitable than interest-bearing loans
  • Student loan repayment resumption and potential consumer softening remain watch items, requiring intensified credit monitoring
  • Abundant funding could tempt lower-quality competitors to over-supply credit, though management said it is not a concern
  • International (U.K.) is very early with weaker brand awareness and entrenched checkout incumbents

Guidance Changes

MetricPeriodCurrent guidance
Revenue less transaction cost (RLTC) take rateFY2026 outlookVery high end of the 3%-4% range
Enterprise merchant volumeFY2026 (after fiscal Q1)Zero volume assumed once integration winds down
0% APR loan mixFY2026Expected to continue taking share within the mix; no specific mix guide

Performance Breakdown

MetricYoYNote
Monthly 0% APR loans north of +90% Growing consumer demand and 0% product taking share within the mix
Merchants funding 0% APR doubled (~2x) Merchants recognizing bottom-of-funnel promotional spend is more efficient than top-of-funnel marketing; ~7% of merchant base now
Affirm Card trailing-12-month GMV per cardholder rose to ~$4,700 from ~$3,500 Card frequency and 0% card volume tripling; more than halfway to the ambitious ~$7,500 target
Repeat borrower share of transactions 95% of transactions Increasingly working with consumers seen before, supporting underwriting and credit quality

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
0% APR / promotional financingExtolled for several quarters as a differentiated, hard-to-replicate productReal zeros with no deferred interest or fees; monthly 0% loans up >90% YoY; merchants funding zeros doubled; management expects penetration to approach ~100% over time—
Affirm CardAmbitious goal of 10 million active cardholders at ~$7,500+ GMV per year; per-cardholder spend ~$3,500 last disclosed~$1B volume, 10% attach, 0% card volume tripled, per-cardholder GMV ~$4,700; offline categories growing; more product boosters coming—
Credit underwriting disciplineLong-standing stance that credit is job number oneExecutive team gets weekly credit updates (3x/week or daily under stress); underwrites every transaction; credit is an output of model settings—
Funding / capital markets—Conditions very favorable; partners with blue-chip asset managers like Sixth Street for the long term; not concerned about irrational competitors—
International expansion—In friends-and-family testing in the U.K. with Shopify; reusable platform; future map 'would look like Europe'; U.K. mix currently more interest-bearing than not—
AI / agentic commerceAdapt AI rollout announced last quarterAdapt AI live with select merchants driving ~5% GMV uplift; sees agentic commerce as a remix of e-commerce that Affirm will be embedded into, not a cannibalization—
Offline commerce / PSP integrations—Offline is the greenfield (~10x e-commerce); Stripe Terminal BNPL and other default-on PSP integrations reduce the integration barrier, leaving mainly a promotional conversation—

Q&A Summary

Consumer stress seemed to improve since last quarter's cautious commentary; what is the outlook and why the optimism?
The U.S. and Canadian consumer continue to perform, originations are strong, and credit continues to perform really well; GMV acceleration reflects consumers using Affirm for more things. Guidance is set thoughtfully, aiming for 'A+' delivery.
Do the many first-time users acquired via 0% APR actually repeat, or do they churn after the promo?
They do repeat, with no big difference in repeat behavior versus non-0% acquired users. Importantly, 0% users convert to interest-bearing loans over time, so 0% is profitable and not a loss leader.
Where do Affirm's users sit on FICO/credit quality, and how exposed are you if consumer data weakens (e.g., student loan resumption)?
Credit performance has been highly consistent and is a deliberate output of model settings; the team monitors it weekly (more often under stress) and declines transactions deemed too risky. Short loan duration and 95% repeat borrowers let them underwrite the consumer as they are today.
With funding capacity up ~55% YoY and utilization down across the industry, does abundant funding risk lower-quality competitors driving credit issues?
Affirm partners with blue-chip, long-term capital partners (e.g., Sixth Street) chosen for discipline, not lowest bid. Conditions are favorable and there is plenty of capital to deploy, so competitor over-supply is not a concern.
What is the strategy for the Affirm Card given ~$1B volume, 10% attach, and tripling 0% volume, and how big can it get?
The card is growing very well and is a heavy investment area with more product boosters coming. The ambitious target is 10 million active cardholders at ~$7,500+ GMV/year; trailing-12-month per-cardholder GMV is ~$4,700, more than halfway there.
Why haven't fintech or legacy peers leaned into 0% APR the way Affirm has?
Underwriting is hard and Affirm is good at it. Real zeros with no deferred interest or fees require merchant subsidies, custom contracts, configurable controls, compliance with fair-lending laws, and real-time credit/capital-markets pricing — a multivariate problem competitors are less equipped to solve.
Does the stable take-rate outlook imply steady product mix, and how does the enterprise merchant affect it?
Management didn't guide to mix specifically, but 0% loans (up >90% YoY) should keep taking share. The focus is on profitable units and a funding/mix plan keeping RLTC in the 3%-4% range, with the guide at the very high end.
What is the status of international expansion, and how will GMV mix differ abroad?
Affirm is in friends-and-family testing in the U.K. with Shopify. The market wants Pay-in-3/4 (typically 0%) but major merchants want longer, largely interest-bearing terms, so U.K. mix is currently more interest-bearing; future geographies 'would look like Europe.'
What is the Adapt AI/Adaptive Checkout 5% GMV increase about?
Adaptive Checkout is the unified, highly configurable checkout engine; Adapt AI automatically tunes the optimal program and terms for each consumer instead of manual per-merchant setup. Rolled out with select merchants, it delivers an average ~5% GMV uplift with more expected.
What exactly happens with the departing enterprise merchant — zero volume or net-of-something?
The outlook assumes the integration goes away at the end of fiscal Q1 with zero volume through the integration thereafter, a deliberately conservative stance on FY2026 volume from that merchant.

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Q4 2025 call
Reported 2025-08-28 · figures from the Affirm Holdings, Inc. Q4 2025 earnings call.

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