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're really proud of our ability to execute in the ABS market and in the capital markets more broadly. What we produce is something very special and very unique, and it's highly valued in the debt capital market. Can you just put a finer point in terms of why your full year 2026 guide is unchanged for that metric?
I think most broadly, we're really focused on 4% being an upper bound for revenue-less transaction cost take rates. There will be puts and takes within given quarters, just given different capital markets transactions and other sort of idiosyncratic things that can happen in a given quarter. Really, that goal is to make sure that we're maximizing growth and profitability. I would not call our underwriting practices a natural selection, just for the record.
Given we are growing at 40% year-over-year, a couple of basis points is not a thing that I lose sleep over. And maybe since you did mention that you're testing cash flow underwriting, what kind of impact that could have on your ability to approve transactions and see growth in volume per card? Cash flow underwriting is really helpful for younger consumers and just folks who are kind of overlooked by the rest of the ecosystem. The growth of Card is regulated by a couple of factors, our willingness to market it.
| Metric | Period | Current guidance |
|---|---|---|
| Operating margin (adjusted) | FY2026 | more than 7.5% |
| RLTC as % of GMV | FY2026 | 4% target |
| RLTC as % of GMV | Q2 FY2026 | near 4% |
| GMV | Q2 FY2026 | $13 billion-$13.3 billion |
| RLTC dollars | FY2026 | taken up in updated outlook |
| Metric | YoY | Note |
|---|---|---|
| Overall growth | 40% | Broad-based network growth across merchants, consumers and the Affirm Card |
| RLTC as % of GMV | +48 bps to 4.2% | Better provision performance and favorable funding/product mix |
| Fashion and beauty GMV | 30% | Growth in lower-AOV discretionary categories like apparel and beauty |
| Transaction count per customer | up meaningfully | Higher purchase frequency and rising share of consumer spend, led by the Affirm Card |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| 0% APR loans / promotions | Fastest-growing loan product for several quarters | Ran the multi-day '0% Days' promotion, merchant-funded; leaning in heavily and plan to repeat it bigger | — |
| Affirm Card | Goal of 10 million active cards and $7,500 annual discretionary spend per card | Just under 1/3 of the way to the card count and roughly 1/3-1/2 of the way on spend; testing cash-flow underwriting to reach younger/thin-file consumers | — |
| PSP / platform partnerships | — | Signed Worldpay for Platform; PSPs speed integration and reach, with bespoke economics, and support international expansion (e.g., Shopify) | — |
| Capital markets / funding | — | Constructive ABS market with flight to quality; priced a strong deal and expanded Blue Chip CLO buyer relationships | — |
| Credit / underwriting in new verticals | — | Robust model-building process lets Affirm enter services (ServiceTitan, auto repair, elective medical) confidently; consumer credit healthy including among government employees | — |