[Management View]
Affirm reported record-breaking performance for Q4 2025, with key metrics such as GMV, repeat borrower rates, and funding capacity reaching new highs. Management emphasized the success of its 0% APR product, which attracted 50% of first-time users and demonstrated strong repeat usage patterns. AI-powered Adaptive Checkout (Adapt AI) contributed to a 5% GMV uplift for participating merchants, showcasing Affirm's technological edge. International expansion is underway, with initial testing in the UK in partnership with Shopify.

[Outlook]
Management provided optimistic guidance for fiscal 2026, expecting RLTC take rates to remain at the high end of the 3%-4% range. Affirm plans to deepen its international presence, particularly in Europe, while continuing to scale its Affirm Card and AI-driven initiatives. The company anticipates winding down integration with a significant enterprise merchant by Q2 FY2026, with zero volume expected thereafter.

[Financial Performance]
Affirm achieved a 55% YoY increase in funding capacity and reported annualized GMV for its Affirm Card at $1.2 billion, with a 10% attach rate. The trailing 12-month average GMV per cardholder rose from $3,500 to $4,700. 95% of transactions in Q4 2025 came from repeat borrowers, indicating strong platform engagement. The 0% APR product saw merchant adoption double YoY.

[Q&A Highlights]
Question 1: What is driving Affirm's optimism given the strong quarter and guidance?
Answer: Management highlighted robust consumer demand, strong credit performance, and accelerating GMV growth. Affirm's ability to get paid back on time and its expanding use cases were key contributors to the positive outlook.

Question 2: How do first-time users of 0% APR products behave over time?
Answer: First-time users acquired through 0% APR loans exhibit repeat usage patterns similar to traditional users. Many convert to interest-bearing products, which are more profitable for Affirm, demonstrating the long-term value of 0% APR offerings.

Question 3: How does Affirm manage credit risk amid macroeconomic shifts?
Answer: Affirm closely monitors credit performance, with weekly updates to the executive team. The company underwrites every transaction and declines risky ones, ensuring consistent credit quality even during economic uncertainty.

Question 4: How does Affirm view the competitive funding environment?
Answer: Affirm partners with "blue chip" asset managers for long-term funding relationships, avoiding short-term opportunistic strategies. Management is confident in its disciplined approach to funding and credit quality.

Question 5: What is the strategy for the Affirm Card, and how does 0% APR impact it?
Answer: The Affirm Card is growing rapidly, with plans for further enhancements. The 0% APR feature drives frequency and engagement, contributing to higher GMV per cardholder.

Question 6: Why haven't competitors leaned into 0% APR products as Affirm has?
Answer: Management cited Affirm's superior underwriting capabilities and complex merchant integrations as key differentiators. Competitors may lack the mathematical and operational expertise required to replicate Affirm's success.

Question 7: What is the outlook for international expansion, particularly in the UK?
Answer: Affirm is testing its platform in the UK with Shopify, focusing on longer-term interest-bearing products. Management plans to leverage multinational merchant relationships for further geographic expansion.

Question 8: How does Adaptive Checkout (Adapt AI) work, and what are its benefits?
Answer: Adapt AI optimizes financing offers at checkout using machine learning, leading to higher conversion rates and incremental GMV for merchants. Early results show a 5% GMV increase, with further improvements expected.

Question 9: How does Affirm plan to address offline commerce opportunities?
Answer: Affirm is actively integrating with point-of-sale systems and digital wallets to expand its presence in offline commerce, which represents a significant growth opportunity.

Question 10: What is the impact of rising or falling interest rates on Affirm's business?
Answer: A one-point move in reference rates translates to a 40 bps change in funding costs, with impacts flowing through gradually due to portfolio duration. Management monitors macroeconomic conditions closely.

[Sentiment Analysis]
Analysts expressed enthusiasm for Affirm's record-breaking performance and innovative initiatives, with questions focusing on growth drivers, competitive advantages, and future opportunities. Management maintained a confident and optimistic tone, emphasizing its disciplined approach to credit and funding.

[Quarterly Comparison]
| Metric | Q4 2025 | Q3 2025 | YoY Change (%) |
|----------------------------|-----------------|-----------------|----------------|
| GMV (Gross Merchandise Volume) | Record High | Moderate Growth | Accelerating |
| Repeat Borrower Rate | 95% | 93% | +2% |
| Funding Capacity Growth | +55% YoY | +40% YoY | Improving |
| Affirm Card GMV | $1.2 billion | $1.0 billion | +20% |
| GMV per Cardholder | $4,700 | $3,500 | +34% |

[Risks and Concerns]
1. Macroeconomic shifts, such as rising unemployment or consumer stress, could impact credit performance.
2. The winding down of a significant enterprise merchant relationship may affect holiday season volumes.
3. Increasing competition in the BNPL space could pressure margins and growth rates.
4. Regulatory challenges in international markets may slow expansion efforts.

[Final Takeaway]
Affirm delivered an exceptional quarter, setting new records across key metrics and demonstrating the success of its 0% APR product and AI-driven initiatives. The company's disciplined approach to credit and funding, coupled with its focus on international expansion and offline commerce, positions it well for sustained growth. While macroeconomic and competitive risks remain, Affirm's innovative strategies and strong execution provide a solid foundation for future performance.