Thank you, operator. Before we begin, I would like to remind everyone listening that today's call may contain forward-looking statements.

These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website. Our actual results may differ materially from any forward-looking statements that we make today.

These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them, except as required by law. In addition, today's call may include non-GAAP financial measures.

These measures should be considered as a supplement to, and not a substitute for, GAAP financial measures. 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 IR website.

Hosting today's call with me uh Hosting today's call with me are Max Levchin, Affirm's Founder and Chief Executive Officer; Michael Linford, Affirm's President; and Rob O'Hare, Affirm's Chief Financial Officer. In line with our practice in prior quarters, we will begin with very brief opening remarks from Max before proceeding immediately into your questions.

With that, I will turn it over to Max to get to get us started.

Thanks, Zane. As always, the performance, as good as it is, I'll keep the impromptu remarks brief.

As you may have noticed, fiscal fourth quarter was our most profitable quarter ever even without the tax allowance release. Company's thriving and the core business is firing on all business pistons.

I'm excited to announce that our veteran execs, Pat Suwimpanich and Michael Linford, have been promoted to SVP, GM of Global Markets and President, respectively, setting us up for an even tighter execution and allowing me to get even deeper into developing our next generation of products and services. With that, happy to address your questions.

Back to you, Zane.

Okay. Thank you, Max.

Uh now let's get to your questions. Operator, please begin the Q&A session.

Hey, guys, and congrats to uh you, Mike, on uh on a well-deserved promotion. Um, Max, at the Analyst Day, you said you're most excited about things you can't really talk about yet.

I- If precedent holds on the initial guidance and how you ultimately will end the year, growth in fiscal '27 should again be uh terrific. With investors focused on the sustainability of high growth rates, when should we expect to see some of these initiatives start to show up in future years, and do you believe that over the long term, Affirm needs to, or should, offer consumers multiple financial products and services in addition to what you do today?

Thanks.

Thank you. Uh, it's a compound question.

I'll I'll I'll go backwards. We already offer multiple products to consumers today.

The the the answer to should we do that, we think it's yes, otherwise we wouldn't have built all these other things. For the moment, the majority of our products are various expressions of offering credit, but not necessarily at the point of sale.

It also comes, obviously, in the form of a card. We have an account.

Um, we have a version of our product that works for business purchases. We're we're already spread into several other subcategories, including verticals that we address.

Actually, there's a bunch of that in my note as well. We we we absolutely expect to continue expanding.

Um, in terms of when these things will show up, I think this is probably a question for our CFO and Michael in terms of how we set guidance. The a big part of the expectations from this promotion that Michael got and my own focus is I plan to spend a lot more time working on things that will only show up in fiscal 2029 and so on.

The numbers we're putting to the market today reflect our products that are working and growing and printing profits. Uh, some of the crazier ideas from the future are in the future, and uh we we try very hard not to overpromise and underdeliver.

Thanks. I think growth is in good hands with you taking that role.

Thanks, guys.

Hi. Thanks for taking the question.

I just wanted to touch on something that you mentioned in your shareholder letter. You clearly doing very well, but you said that you're you're only available at 80 of the top 250 e-commerce sites and and 10% of e-commerce merchants.

Um, you're you're very well integrated with with a lot of the major PSPs now, uh and clearly very well known as a brand. I guess the question is, what's the impediments for for getting these remaining merchants to sign up?

Uh, and how do you kind of bridge that gap together? Uh,

we don't think of it as an impediment. I think we have an exceptionally strong revenue team, and Wayne, that who runs it, is an exceptional executive and deserves every accolade.

Um, and so I I I expect his team to continue executing and signing each one of these merchants one by one, uh sometimes sometimes in bulk, but mostly one by one. Uh, I think the uh majority of the time, for large merchants, these are long sales cycles that take a lot less convincing than ever before.

People understand the value that we provide, and they are excited to see it added to their checkout. Many large enterprises that sell things online have complex and frequently outdated systems.

A lot of times, adding a new major point-of-sale system requires them to do some major modifications. Sometimes, it pushes them to do whatever work that they were postponing because they weren't planning on adding another one.

It These are not things that flip in one quarter. The reason I mention the the the numbers you quoted is because there's just an enormous amount of greenfield.

We We think our if anything, this is a sort of notion of our our sales team has a lot of work to do for probably quite a number of quarters. No one should be taking a break, nor should they be thinking we're running out of the internet or anything.

Hi, good afternoon. Um, I want to ask about in-store.

Um, as Affirm Card continues to scale and now you have the wallet partnerships, how can you scale in-store usage of Affirm, where the opportunity is arguably much bigger, as you also alluded? I know there are u- unique friction points in terms of getting approvals, what happens when you get, did not get denied physically, kind of in-store.

Um, I know 30% of your Affirm Card transactions are offline, uh but it's still very small as a percentage of of your overall GMV. We would love to hear your thoughts on product uh planning in store.

Thanks.

Couldn't agree more.

Uh,

I 100% agree. Um, one of the things that the innovation team that I have now more time to run is working on is improving the in-store process.

Most things payments in general are very rarely about uncovering some low-hanging fruit that was just already on the ground, you need to, pick it up. It's primarily about polishing off unhappy paths, poor connectivity, how do you make sure your product works in a large store that's essentially a Faraday cage, you can't get connected to the internet, how do you integrate with point-of-sale systems that don't know how to read QR codes, only know how to read barcodes?

There's kind of an endless long tail, or not endless, there's a meaningful long tail of conditions that make approval or tender delivery or even handling things like cart size adjustments in store just that much harder than online. Online, you hit back on your browser, and you correct whatever it is that you need to correct.

In store, you have to go back to the back of the queue to uh to the cash register, which is annoying and people would rather not do that. The the the bar for error is much lower.

Like, you have to make create a much better consumer experience. We're excited to work on that.

Um, by no means that should imply that we're we are unexcited about e-commerce. We actually have a lot to do, obviously.

There's still 80% more e-commerce to go. Uh offline is a giant portion of the market and continues to be, and we have some really distinct ideas on how to make the experience not just uniquely better, but also uniquely Affirm.

Maybe maybe the best answer to your question is not quite quite going to preannounce anything here yet, but we expect to launch a few ideas that are uniquely Affirm-specific, which, through the lens of sort of product development, you can ask people to do more work to use your product if you're delivering disproportionate value. You can consider sort of Affirm online relative to credit cards.

Credit cards are really easy. You just type in a number or you tap it offline, and off you go.

Affirm asks you to do a little bit more work to get approved, to understand why you might get declined, but the value is there. You get this amazing 0% deal.

You get no fees. You get no deferral.

The the work is a little bit more, but the value is tremendous. We are going to bring that same ethos of maybe the work is a little bit more, but the value is so much better than what you do with your traditional payment instrument offline, and, we'll we'll show something off in in the coming quarters.

Thank you.

Hi, everyone. Um, I wanted to ask about the UK.

It sounds like you're pleased with the progress to date. Um, but could you just tell us more about the early receptivity from consumers and from merchants?

Then I'm also curious if there's been any um competitive response or changes from the incumbents there that you've seen. Uh, any any details there would be great.

Congrats to Michael and and to Pat on the new roles.

Thank you. Um, pretty excited about the United Kingdom.

Um, seeing solid results. We just held our first executive dinner there a couple of nights ago, where we met with some of the larger existing merchants there and got their first first round of formal feedback and all that.

By all accounts, it was a love fest. I think we're we're doing well in terms of creating new friends and and early fans.

Um, the consumer uptake And I think we said it before, and, it turned out to be true. There's a lot of love to be had when you don't try to make money by sneaking your business model into the fine print and hiding things with fees and such.

We don't do any of those things, and sure enough, consumers love it. Retailers actually have a fresh appreciation for that because, to date, there hasn't been a player in the market that would build the products the way we do.

Uh, on the competitive response, and I don't want to be too loud here, because I might wake someone up, but we're not seeing much to report on the matter, to be honest. I think uh I think for now, at least, we're we're doing great um in terms of feeling like our product is a unique play in the market.

Okay. Thanks a lot.

Hey, thanks for taking the question. Um, wanted to ask just on the the growth in interest-bearing this quarter.

Obviously, very strong. I know you're you're calling out the the 41% growth in Pay-in-X, but it was also great to see kind of the largest product, almost keeping pace uh with that product.

Just curious how you're thinking about overall product mix, and then just more of a of a nuance there. Just wondering if like the shift to the promotional event, if that, created any like mixed dynamics that we should consider from uh the fourth to the first quarter?

Thanks.

Great question. Um, I think it really comes down to mix within sort of the two largest centers of gravity within the product uh portfolio.

On the one hand, we have point of sale. Um, we did actually see sort of an acceleration in 0% share within uh point-of-sale integrations, and I think some of that is due to uh the Big Nothing Event, but just it's also been a push of ours uh in terms of what we're selling into merchants.

Then really on the on the direct-to-consumer side, we actually see a much higher proportion of interest-bearing loans within that product set. We're we're running sort of north of 80% interest-bearing on our direct-to-consumer products.

I think just with the continued growth and scaling of things like Affirm Card, it's really that that's driving um this sort of mix shift back towards interest-bearing a little bit.

Got it. It's very helpful.

Thanks for taking the questions.

Hey, guys, exceptionally uh As you said, Max, ludicrous quarter. I like that one.

I had a question about some I have a question about um something you said at the Analyst Day. You said it gets easier to grow as you gain scale, but some of your competitors are not seeing that.

What are you doing right or maybe what are they doing wrong that makes you benefit from that virtue? Congrats again.

Thank you. Um, I can only speak, I guess, to what we're doing right.

Um, I think we know exactly who we are. Like, we have a very, very specific set of views on why we do what we do, why we prioritize certain things, why we won't do other things.

Not not just what kind of products or what sort of structures we're willing to put in front of our customers and what we're not, but we are a network. Every decision we make at the product level, at the sales level, at the capital markets level, we ask ourselves, does this benefit every part of our network?

Does this grow the consumer base? Does it give them a reason to spend more with us?

Does it give them a reason to spend more with our customers, the merchants? By adding a merchant, are we exposing our consumers to the merchants we want them exposed to, and so on?

We we are constantly asking ourselves, how can we create a virtuous cycle? How can we feed the virtuous cycle that we've created?

If you have a network, eventually, you start seeing network effects. Network effects are, very simply, it is expensive to leave because you're going to miss out on a large and growing body, and it's dumb not to join because you are missing out on a large and growing body of business.

The larger we get, the more valuable the network becomes, the more activity there happens on the edges of the graph we're building, and the more people, the more merchants want to join the graph. I think, for most payment systems, if you sort of cast your eye across the last 50 years of and I've I've been building payment systems for almost that long, sadly, the ones that survive and thrive are the ones that are extremely focused on building a network almost to the expense of anything else.

By the way, if you are willing to stay focused and go long, you are rewarded with profitability, with pricing power, with sustainability of the business, sustainable growth. All of that comes in time if you're focused on building a network.

We have been from the very beginning. If you look through my letters, you'll find the word network probably the most commonly repeated noun, and that that's sort of the the secret to success so far, and we have no intention of changing that.

I think a lot of the players in the space decide that the next shiny object is the thing that will create short-term value, and whatever happens next happens next. We try to measure things not in quarters, but in years and hopefully decades.

With with this strategy has worked for us so far, we'll we'll continue doing exactly that.

Great. Uh, we agree.

Congrats again.

Thank you.

Hey, guys. Thanks for taking the question.

Everyone's been asking you guys for a while are there any signs of consumer stress in the business, any concerning signals in your data on delinquencies? The answer's consistently been no.

We've seen another strong quarter here, the consumer is really resilient. Is there a case to be made that you guys could actually loosen the credit box a little bit or does that feel too risky in light of some of the macro uncertainty out there?

Then just a quick one for Rob, any way you want us to think about modeling GAAP EPS for fiscal '27? Thank you.

Uh,

how about you answer and I'll think of something clever?

Sure, I I mean I think we've we've given you a lot of the building blocks of GAAP EPS, Jason. We've we've given you GAAP operating income, we've also given you uh an estimate for for share count.

I think the one piece you're missing is the tax rate and and I'll I'll probably go back to some of the guidance that we gave um at the Investor Forum in May. We we think on sort of a a run rate basis, the GAAP tax rate lands in sort of the mid to high 20% range.

Um, I would just caution though that there there can be some volatility uh in the effective tax rate just based on some of the GAAP versus tax differences and how things like stock-based compensation and some other forms of share remuneration are treated. There there's likely to be a bit of volatility, especially as we're uh continuing to scale profitability.

Um, I that that's one of the reasons we stop short of giving a an exact guide for EPS is just that the volatility that we we think may play out um in the tax rate.

On the credit side, sort of a couple of thoughts that are sort of disconnected. We're not so big that you can look at Affirm and read the tea leaves of the overall macroeconomic state of the United States.

Our consumer is doing fine. You can see that in the numbers, and we are benefiting tremendously from the ability to say yes and no to every transaction.

We are literally choosing the loans we want to make in real time in very small increments roughly 100 million times a quarter. It's a highly differentiable curve, and we decide the the the shape and the area under.

In in the sense of control of our credit outcomes, said it before, I'll say it again a thousand times, we are in control of the credit reality. You would see us slow down growth before you would see us have a real credit disturbance.

Obviously, these are imprecise sciences, they're always ups and downs in the DQs, but generally speaking, we manage to a number in the sense that credit target is the input, not the output of the business. The output is the approval rates and things like that.

Um, and so with that, we definitely have conversations around, what what's the overall policy stance? Are we feeling good about the future?

Are we feeling less good about the future? Should we tighten?

Should we loosen? It's never expressed in terms of, some giant lever somewhere that Rob Finnegan grabs onto with both hands and opens up the floodgates of money or or closes down.

Doesn't work like that at all. There's a constant conversation happening in the credit team asking themselves are there opportunities for strategically more permissive stance at a class of transactions, for a class of consumers, at a class of merchants?

Those conversations happen all the time on a weekly basis, just like the credit team reports back to the management team on a weekly basis of exactly what the landscape looks like. At any given moment, you could hear them say, "You know what?

Here's what's going on. An interesting standout is this."

This could be anything like, "We're seeing an early signal in DQ0 or DQ1, day after the payments are due or day 2 days after payments are due, we're wondering what that is. We're going to monitor it for the next 6 weeks and make a decision."

We all this all this flavor is to give you a sense that that we just really do not think about credit as this binary switch that gets flipped on or off. We We'd never scramble to or away from it in part because we have so much control, in part because we have an extremely serious point of view on what these numbers have to be for us to be a responsible and reliable counterparty to our capital markets partners.

That is the most important relationship in the business on the supply side, and we have to maintain it. I am sure somewhere right now a I hope they're not listening to me rant, but instead doing their job in credit, but someone in the credit analytics team is putting together a scenario analysis showing how a merchant is getting slightly higher approvals and what that does for our GMV, and an alternative analysis showing how the merchant is getting a slightly lower approvals and what does that does for our GMV and and consumer satisfaction, incidentally.

Yes, the work is done constantly. By the end of this call, a decision to loosen and a decision to tighten will be made, and it'll be executed in due notion by the end of the week.

Said. Thanks, Max.

Thank you.

Thank you very much. I want to touch on the the increase in Pay-in-X and kind of the comments that were made in the in the letter shareholder letter about getting some increased um participation from merchants there.

Just wondering like how you think about being able to expand that program. Then, at least more interestingly perhaps to me is is that a a gateway to improving or expanding um up into 0% promotions, etc., for those kind of merchants?

Is it basically a test/proof point for them? Thanks.

That is a great question. Um, I'll start this time, and Rob can speak to the exact Pay-in-X growth, which is was pretty good this quarter.

Um, the the kind of the most important thing to understand is free use of money is valuable to all consumers. You can sort of ask like what is Affirm for?

One version of the answer is it's for people trying to figure out how to fit a considered purchase, something that's actually registers on their personal financial radar into their monthly outflows. It's affordability, it's access to capital when they need it, or access to credit when they need it.

That's kind of a baseline answer. A more sophisticated big answer is there's always alternatives in that space, and so the question then becomes, well, what what's the cost of money?

What's the cost of this? Obviously, the cost is interest we charge, and the best possible deal is, well, what if there was no interest at all?

What if someone else paid your interest? That is a really, really important function in part because that makes the product appealing across all credit spectra.

You could argue that there's a natural point where you say, "Well, you know what? I have access to cash, I just don't care, and if you're going to charge me interest, I'm going to pay cash and move on, or I'm going to pay with my credit card and pay it off before the end of the month, there's there's no interest at all."

The second you enter a space of very low interest, like demonstrably lower than your credit card APR, or zero, which is everyone's favorite price, you end up in a place where even a super-prime borrower would benefit from free use of money. The longer term is the loan, the more obvious the benefit.

Every one of these Pay-in-X type products is a version of access to money at no cost to the consumer. We're always looking for ways of funding those transactions by the hands of our partners because they are the primary beneficiaries of these transactions.

It extends from merchants to manufacturers, to brands, sometimes to marketing partners, to platform partners. There there's plenty of people who are involved in a transaction that have a degree of margin and have a differing level of excitement to see that transaction go through.

The most excited ones are, of course, merchants because they're dealing with things like inventory management. They have discounts they'd rather not make, but they do want to see inventory move.

Then there's also people in manufacturing and in the original equipment manufacturers in particular that have a predictable upgrade cycle that they're trying to stick to, and they will be very excited a year from launch to uh push their their their last year's innovations so that the new ones can can go forth. All of that adds up to ample opportunity to create more of these Pay-in-X and pay-over-time transactions with zero.

I particularly like the longer-term ones because that's where underwriting at 0% consumer interest is a really, really hard science. Like this is the kind of thing where if you screw it up a little bit, you'll make a lot of unprofitable transactions.

Part of our longevity in the space and our competitive strength has been our ability to precisely price these things both on the credit side and the profitability side just through the capital markets lens. It's very, very hard to do right unless you're very good and very confident in both your underwriting and your control of your underwriting.

That's kind of why these transactions keep showing up. That's why we do things like the Big Nothing.

That's why we do a lot of these promotions in various forms of Pay-in-X. That's why you see growth of various Pay-in-X transactions, and should expect to continue to see more of these.

They're all building a giant book of this is proof that you, your favorite you, the manufacturer, the retailer, the, all the participants, should participate in these because, even though they tap into your margin a little bit, they drive the kind of buyer that has a lot of choices, and this is their favorite choice.

The only thing I would add to that, James, is just I I think we we really pride ourselves on the breadth of product offerings we can bring to a merchant that can be tailored to the basket of goods that they're selling. In in most cases, um the products that we're offering to to that merchant's consumers will be dynamic as you go up the the basket size spectrum.

Um I think what you saw play out this quarter was we had a a large merchant that has a relatively low average order value compared to the rest of our network, and they decided to make uh Pay in 4, an evergreen part of their financing program, and that that showed up in uh a bit of a acceleration in growth for Pay in 4. We're we're pretty agnostic ourselves around whether it's a Pay in 4 offering or a a 3Z, a 3-month 0% offering.

We We really want to make sure we put the right offer in front of the consumer that's going to do um the right amount of cash flow smoothing for that consumer. It really is going to be merchant dependent.

I think our our ability to to customize those financing programs specific to the merchant is a is a real differentiator for us in the market.

Hi, thanks. Uh, I wanted to ask about the services vertical.

Uh, looks like volume in that category accelerated quite a bit, almost doubled year-over-year. Could you talk maybe just a little bit about services, um what drove that acceleration, and then maybe how sustainable the premium growth is within that category?

Thanks, guys. Um, a

part of it is we signed this really large services platform, or two. Um, and uh I feel like I gave an exceedingly long answer last time, I promise I'll do a shorter one now.

We signed a couple of very large services platforms. Uh, they're doing well and growing.

Yet, this will inevitably come up at some point in this conversation. We're still very, very early in all of those platforms.

The product needs to be adapted to the specific motions of those products, sorry, for services. Uh we're pretty excited to do this.

Our best integrations are always the ones where we get to co-build with the people we are integrating, and we're we're knee-deep in building a bunch of really cool new stuff specifically for the services platform. No promises how long the 2x the speed's going to keep going, but uh I I I don't think we're even out of the first inning of that particular game.

Hey, guys. Congrats on the on the promotions, of course.

Wanted to ask on Affirm Edge, um Max, I think you said that could be a source of upside in the future. Uh, any traction to highlight uh during the quarter?

It looks like we have a couple pilots now going to happen in the second half of the year, maybe just how is that product uh resonating and and the potential for it to be a uh needle mover in fiscal year '28? Then, secondly, just, Rob, on revenue less transaction costs, I know it always gets a lot of attention.

We were we were talking, I think, 3 and 1/4 to 4%. Um, the guidance obviously for fiscal year '27 is a little bit above that at 4.16.

Can you just talk about mix and maybe the drivers to be above the midterm guide there? Thanks.

Sure, Bryan, I'll take the second one first. Um, just in terms of the revenue less transaction cost outlook, I mean really just with the execution that we've seen um within the debt capital markets, we just we we brought on a a capital base that that gives us a profile and a funding cost that um we think, should carry on through fiscal '27.

Um the other big assumptions are things like uh the mix of how we fund the business, and we expect um the mix to say to stay pretty consistent with what we saw in fiscal '26. Um, loan product is the other sort of mixed component that can drive revenue less transaction costs take rates.

Um, we may start to skew slightly higher to interest-bearing, but it it would be a very slight mix shift there. Just just given the setup that we have, the other piece, of course, would be um consumer credit, and we're not seeing anything in the business today that that gives us pause or worry.

Um I think with with sort of those building blocks coming into the year, that that's what informed um the outlook that we gave, which really is consistent uh take rates with with what we experienced in fiscal '26.

On Edge, um banks move slowly. That's That's uh maybe not a very nice thing to say about our prospective partners, but uh they're deliberate.

They have regulators. They need to make sure that what they launch is not just looks good and looks good to them and looks good to us, it also has to look good to Federal Deposit Insurance Corporation and uh sometimes Office of uh Currency and Comptroller and so on.

There there there's a fair number of people that have to okay and bless these structures. That said, pretty excited.

We're still building out parts of it, a little bit of it is just like we have to build the rest of technology. We're You You're building a thing that you're hosting locally for a bank to log in and like fine-tune their financing programs, it's a thing we didn't do before, now we have to.

There there's some work to be done in terms of technical part of it, but majority of the stuff is built. We're We're very excited about the reception we're getting.

Um, I continue saying this sort of in various quarters. I think the second you see one, you should expect to see more, like a bunch.

Uh the first one is always going to feel like what if something goes wrong, how do I handle that? We're very sensitive to that, and we know how to launch credit products, but not the same thing as launching it for others.

We will frankly take as long as it takes for us, as long as we need to bring to hand-hold these first launches to market to be able to report excellent results and, hopefully, get everybody else excited too.

Great. Thanks, guys.

Thanks. Uh, appreciate it.

Max, um I was just curious, you laid out a pretty co- complete map of growth vectors uh this quarter and didn't notice leasing or device upgrades uh on the list. You've presumably looked at it, given how much here volume is, high-ticket electronics, you push hard into 0% APR.

Is that something maybe you could just walk us through how you think about the economics of a lease versus an installment loan for the same purchase, what an originator might gain uh from that, and why you conclude why you conclude it's not a strategy for Affirm either, now or ever? Thanks.

I might host a breakout seminar uh on 45 minutes and deep dives in the economics and complexities of leasing. Um, there's a couple of different things going on in in that domain.

The notion of kind of a subscription to your device and an automatic upgrade to the latest and greatest on a predictable cadence, that's actually a really good idea. It's been around for a little while.

It certainly pops up in conversations and sort of attempted launches here and there over the last decade. It I I I don't think there's nothing to quibble on with on that front.

On the other side of the equation, ask your favorite financial services financial institutions analyst how they feel about lease-to-own and rent-to-own companies, and if it if it's a unedited context, you might hear some expletives. Between those two, there there's a lot of complexity in leasing.

It doesn't usually happen on day one. It happens on day 365 or whatever it is, 720-something, when you find out that the thing you've been last couple of years, you don't actually own any of it.

We definitely care very much about the high-end device sales and scheduled upgrades and creating structures that help our retail partners, our manufacturing partners push their merchandise that way. I I think that that's a very, very important task, and we're certainly quite motivated to participate in that segment.

We think there are better ways. We We think we can offer something to the market that is a little bit less prone to the what the bleep happened here that happens a couple of years from from launch of such things.

Uh we'll we'll have more to say in the matter in in some reasonably predictable future. For now, I think we're we're all going to learn with some of the ones that have launched recently, and certainly information to be had.

Uh we tend to try to build things from first principles, and that that's what we're going to try to do here too.

Appreciate the candor. Thanks, Max.

Hey, great quarter, guys. Um, I wanted to ask about Affirm Money accounts.

I feel like it hasn't been discussed in some time, could you please provide an update there? Then, as we think about your your list of priorities, are there any interplays to consider with Affirm Card as it as it pertains to Affirm Money accounts, meaning does Affirm Card serve as an on-ramp to Affirm Money accounts, similarly to overall active accounts serve as an on-ramp to Affirm Card?

What does that what could that ultimately look like?

It's a great question. Um, Well, for one, it's really important for us to have a first-party product that is the most beautiful version possible of a first-party debit card that speaks to a tightly integrated checking/savings account that works really well with the Affirm Card structure because that's literally what Edge is.

Anytime we go tell a bank, it's going to be amazing, look at these stats, we better have something that's real. Happens that we have one of our own.

Don't talk too much about it, but it's a great product. I happen to think it's the best way to use Affirm Card.

Uh, don't want to make reveal too many reveals here, but it's something that uh my zero to one team has full ownership of, and we're we're working quite quite hard on making it an exceptional product. It's already a great product.

If you if you haven't connected your Affirm Card to your Affirm Money account, you should definitely try that. Uh, but it it has been iterated on, and is looking better than ever, and it is the experience that Affirm Edge will offer to our bank partners on on the issuing side, but there's even more to come.

I'll bite my tongue on that one, but uh ask me again in a quarter.

Thank you, Max.

Great, thanks very much. I wanted to uh follow up on an earlier question if uh on the Affirm Card.

Given that, you get much higher spending, I think you mentioned twice as much on the card versus, a typical customer, but at the same time, in-store commerce is 3 or 4x um and the card is still growing at a rapid pace, could you talk a little bit about, how you think, or what the drivers are for uh for its contribution to GMV? Like, is it going to be more about that the attach rate, is it going to be more about the spending per card, and anything that you would, share with us about things you're doing to, to kind of enhance both of those metrics?

Good question. Um, I think the honest answer is both, and we care we care a lot about attach rates.

I think we try not to be overly aggressive in pushing it because it is kind of the more sophisticated, like you have to work your way to understanding why you want one of these products, it's not a another thing we hammer you with. Um, but then again, we do see 2x the use, so, we should obviously be hammering it, perhaps harder.

Uh, and so anyway, attach rate is important. Uh, we're at 19% right now relative to actives.

We will, I think, see it increase. That that that's a reasonably good guess.

Um, on the flip side, we love the idea of higher usage per consumer, too, and we're we're working on that to to to accomplish that. I think a key goal in managing a successful credit business is you have to remember that your job is to help someone spend money responsibly.

Like it's not very difficult to convince someone to borrow money, especially if you're not particularly concerned with how they'll pay you back, and it's a much tougher job to convince them that to spend money with you is a better idea than through another product. There's there's some degree of transference that we need to engineer.

It's been pretty successful at it, obviously, given the 2x number, and we're we're finding more ways to do so. One way of thinking about it, or at least the way I speak to the team about it, is we need to make sure that the Affirm Card isn't just the best card in the world, it's also the best way to use Affirm.

As you sort of cast your mind across various Affirm offerings, you should always come back to, "Well, if I use the card, I will get even better blank." You should expect us to launch features and product that are card-specific that make it more compelling, which, in turn, will help attach rates, because I, obviously, not going to keep it a secret, telling people if you use the card, you'll get X and Y and Z, you use just Affirm, give maybe maybe slightly less um um amazing.

Definitely not not going to nerf the Affirm at the point-of-sale experience, but we'll we'll keep on finding interesting and exciting ways to reward card usage. Um, and then There was another leg to this question.

I've talked for too long, forgot. Uh, I think that that's probably there those are definitely the the the important two dimensions.

For the avoidance of doubt, the card is still a very profitable product for us. It's not a trade-down in terms of profitability.

We're not going to make it different in terms of financing programs. You'll still get all the financing programs you get at the point of sale.

We never want to be less for our merchant partners, but there are ways of making the the card even more compelling, and we'll work on that.

Great. Thanks, Max.

Hey, guys, thanks. Can you just give us a quick update?

Obviously, you're outperforming uh the majority of players in the market, heck, I think pretty much all of them. When you think about the competitive landscape, how do you we've seen obviously a number of your peers doubling down on BNPL and some rolling out debit flex cards.

Your debit flex card, is there a differentiation you see there, and just more broadly, anything in the market in general you're seeing changing as these competitors start to roll out more and more products also? Um,

I can't say we spend a ton of time obsessing over our competitors. I think we are fairly fixated on ourselves, selfish as that sounds or self-centered as it sounds.

Um, I think the product that we have is really compelling. It is different.

I I still am not aware of any product out there that offer exactly what we do. I think the the Visa Flexible Credential that we put together with them is a unique construct and has now been adopted by a couple of players, which is great.

Like, I'm I'm excited to see more innovation come through the networks, and that that that's always a good thing. The way we built our VFC card is quite unique.

It connects to our accounts in a very specific way. Uh we're Again, I'm I'm not aware of anyone else who's quite replicated it perfectly.

The other thing, like Rob mentioned it, and I'll I'll repeat it, one of the unique strengths of ours is we have a large collection of financing programs that we bring to bear for our merchants, but also for our consumers as they decide what fits their bill, their monthly exposure. I think our card is still highly unique in just how wide that collection of offerings is, and literally on every quarter, has more and more of these truly unique 0% programs added to it.

Like the the rewards in the Affirm Card, people often ask us, where's the rewards program? Why why is there not a 1% cashback or 2% cashback?

The honest answer is, you're getting an extraordinarily more value in every transaction where the merchant is funding your zeros. That's effectively an 8, 9, 10, 15% cashback.

We wouldn't ever express it that way because that's, that's not how it's understood, but it is the same price, except you're paying no interest on it at all for sometimes up to 3 years. That is definitely not has not been replicated by anyone, and I don't expect it to be easily replicable by anyone at all.

Programs are compelling. Okay.

That's great. Thanks, guys.

Thanks. Good evening and uh and congratulations on the quarter and and obviously the promotions.

Um, I wanted to just touch on quickly the the gain on sale revenues, which, once again, was really the strongest line item for growth. Um, I know you have pretty balanced growth, but this one continues to stand out, but it also looks like it might be normalizing a bit.

I'm just trying to think about the revenue mix expected around um, your 27 guide, and and that's really just predicated off your roadmap, product roadmap, and and maybe some international expansion, which it sounds like isn't going to be overly meaningful yet. Um any kind of um I guess mix shifts that we need to be mindful of would be would be helpful.

Thank you. I

I think the one thing that that I would call out and and this this has been true for several years, but it it should play out similarly in in fiscal '27 as well, is just that we will have quarters where uh and and Q4 is an example of this, we'll have quarters where, when we do a a non-consolidated ABS deal, like we did in the fourth quarter, you'll see a bit more gain on sale revenue in those quarters around the timing of the deals. Um we've stopped short of sharing uh an exact schedule of non-consolidated ABS deals for fiscal '27, but um I think we did two in fiscal '26, and uh we would expect to have a a pretty similar funding plan uh from that from that perspective going into fiscal '27.

Thank you.

Afternoon, guys. Uh, congrats on the uh promotions.

Max, I'm looking forward to the uh 2029 product launch. Um, the uh question I have is is just Are you

Are you mocking the fact that it takes me 3 years to do anything good? Which is okay, it's true.

No, no, I think I think I think I think, Max, you you implied that you uh you're now focused on the uh way out in the future opportunities, and so uh

That That's mostly to prevent you guys from putting into a spreadsheet. Sorry, I don't

Anyway. Um, the question I have is is just sort of the maturation or seasoning of both your customers and your merchants.

Um, yeah, are at the customer level, are you seeing things like you you more rapid path to um repeat usage? Are at the merchant level, are you seeing more rapid pace to a certain level of penetration?

Um, and or are there tools that you guys can use to get there?

Uh, we're we're actually seeing really good results on both. A lot of it, it's sort of embarrassing.

Like, I'd love to take this great credit for like, we we discovered electricity and everything is, faster now. Like we launched Crate & Barrel a few days ago, and then I saw an email in my inbox telling me, "Hey, hurray, are you a Crate & Barrel customer?

Because good news is you're an Affirm customer, and Affirm now works at Crate." Like, I think in the past, like 5 years ago, I'm not sure I would have gotten that email.

2 years ago, I would have gotten that email a month after the launch, and a year ago, I would have maybe gotten it the same week. Now, just like all those things are much tighter, coordinated.

There are machines, not people, who are responsible for running through a checklist, and it happens. The time from launch to meaningful impact to the first report to the merchant saying, "Hurray, we're doing this for you.

Let's get excited. Let's do more together," it just all is a lot tighter.

We're doing all those things, we're doing them better. On the on the merchant side, we're just constantly improving the post-sales support, if you will.

On the consumer side, the best number I can point you to is transactions per user per year just steadily rises, and we I mean if anything, I rage at our product team for not sending me enough email or enough notifications or in any form of telling me, "Hey, did you know that you haven't used Affirm in the last couple of weeks?" is I would welcome it.

I'm not sure everybody else would. Uh we we don't really do a whole lot of, "Hey, hey, please come back."

Just the sheer number of more surfaces where our logo is visible acts as a great reminder for consumers to say, "Oh, yeah, that was a great experience, I'll do it again." Cards obviously help, etc., but all in, the growth of transactions per user is actually a fairly natural phenomenon.

We continue to just make sure that merchants, we sign a lot of merchants, we bring them live, we help them promote us, we co-market things together. We now have a very large user base that we can tell excitedly about brands that we love that we're, excited to come into the fold, and uh that has a predictable effect where people say, "Oh, yeah, I'd love to use Affirm at Crate & Barrel."

I think both those things are happening um fairly fairly organically. I'm sure we can do more, by the way, I suspect we will only accelerate from here.

Great. Thank you very much.

thank you. I want to talk a little bit about approval rates.

I know earlier on the call we were talking about how for credit loss, it's it's a it's kind of a given number that you set, you can dial it up, you can dial it down, it's in your control. The approval rate is sort of related to that at a given level of revenue or unit economics for that loan on the top line.

The question that we get often from investors is around your approval rates relative to the other BNPL offerings that are out there. Clearly, they must be much stronger.

When the enterprise sales team goes in to meet with a new prospective merchant, what are they pitching in terms of how much better those approval rates are and how much more GMV they could deliver to that to uh that merchant? Thanks.

Um,

if I'm allowed to spread a slight amount of FUD, I will I will do so. Look, we're definitely all compared on approval rates, and merchants love to ask for guaranteed approval rates, and as a rule, we try very hard not to even talk about those things because that's always a counterweight to our ability to modify our credit policy on the fly as as we must.

The typical competitive bake-off often enough includes us launching a check-out experience as we would anywhere else, and our esteemed competitors launching one where they remove underwriting and fraud prevention and demonstrating extraordinary approval rates, only to then have to pull back very hard because you can only make so many bad loans for a while. Uh we tend to be very focused on our numbers and our losses.

Again, look, there I've said it a million times, I'm not going to dwell too much on it, but it's not enough to have great unit economics. Like we can obviously approve much deeper and just charge more interest, and the profitability would be more or less the same, but anyone who's observing our credit results, independent of profitability, would say, "Wait a second, like these guys are now going much deeper.

Maybe this isn't going to be as durable in a macroeconomic change reality." We tend to be very, very careful about not just the net results, but also the gross losses of of the loan content itself.

We pretty rarely ask ourselves, "How can we compete with approval rates?" We all the time, like literally every single quarter, ask ourselves, "How can we refine our models?"

which, if you want to imagine a credit model, it's a sorting function. It's a very, very sophisticated sorting function, but it looks at a large number of applicants on any given unit time, and sorts them into least risky to most risky.

The job of our credit policy is to say, "After this level of most risky, I don't want to approve anymore because that's the all the risk I'm going to be able to stomach today." Long as our sorting is as precise as the future reality, or as close to the future reality as we can possibly get it, that that's what we must do.

There's There's not really a shortcut where we would say, "What if we just approve deeper because the competitors might do so?" If anything, we kind of want them to approve deeper than us because they are not as good as we are at sorting risk, full stop.

Long as we are given enough time to compare and contrast, very quickly, you start realizing that what looked like a great approval rate on day one looks like a the rug has been pulled, and uh the approval rates are down, and uh the losses are losses, of course, accumulate from the prior time periods. Michael is putting his head down because he's heard enough of this.

I'll stop there.

Thank you, Max. That was really helpful answer.

Somehow, I'm feeling verbose today.

Hey, great questions. Thank you all for joining the call today.

Uh, I think we will be seeing many of you on the conference circuit soon. See you there.

Have a good day. Thanks again.