Core Insights - Affirm is positioned for profitability after years of investments impacting its bottom line, with gross merchandise volume (GMV) increasing by 43% year-over-year to $10.4 billion and revenue rising by 33% to $876 million, marking the company's first operating profits [1] Financial Performance - The Affirm card contributed significantly to growth, with GMV increasing by 132% to $1.2 billion and active cardholders rising by 97% to 2.3 million [2] - For the upcoming fiscal year, Affirm anticipates approximately 25% growth in GMV [2] Strategic Expansion - The company plans to expand internationally following successful launches in the UK and Canada, with a focus on enhancing the Affirm card's use cases [3] - New features and experiences for the Affirm card are in development to ensure its usability in various markets, as demonstrated by recent successful transactions in Norway [3] Market Sentiment - Affirm's stock has increased by 44% year-to-date, with a majority of sell-side analysts (36 out of 44) rating the stock as a Strong Buy or Buy [4] - Analysts express confidence in Affirm's growth trajectory, citing core growth, new channels gaining scale, and accelerating profitability, while acknowledging potential volatility due to consumer spending trends [5]

Group 1 - The Chief Capital Officer of Affirm, Brooke Major-Reid, has been with the company for over 4 years and oversees capital markets execution, treasury, operational and cash management, bank partnerships, funding origination partnerships, card issuing, and analytics and risk management functions [1] - Affirm has experienced significant growth during the tenure of the Chief Capital Officer, indicating a positive trajectory for the company [1]

Question-and-Answer SessionSo just to start out, maybe for those less familiar with you, do you want to just provide a brief introduction on yourselves and your responsibilities at Affirm?Brooke Major-ReidChief Capital Officer Sure. Good morning, everyone. It's great to be here. Thanks for hosting us, Allison. My name is Brooke Major-Reid. As Allison said, I'm Chief Capital Officer. I've been at Affirm just over 4 years. Capital at Affirm covers capital markets execution, all the things we do to fund the bu ...

Summary of Affirm's FY Conference Call - September 10, 2025 Company Overview - **Company**: Affirm (NasdaqGS:AFRM) - **Industry**: Buy Now Pay Later (BNPL) Key Highlights 1. **Fiscal Q2 2025 Performance**: - Affirm reported a **43% year-over-year growth in GMV** (Gross Merchandise Volume) driven by strong demand for **0% APR loans** [4][5] - Achieved **operating income profitability** for the first time on a GAAP basis, marking a significant milestone [5] - **RLTC** (Revenue Less Transaction Costs) increased by **37% year-over-year** [5] - Adjusted operating income margin reached **27%, up four percentage points year-over-year** [5] 2. **Affirm Card Growth**: - GMV from the Affirm Card more than **doubled year-over-year**, with a **132% increase** [6] - The number of cardholders grew by **93%**, achieving a **10% attach rate** [6] - The card segment now constitutes over **10% of total GMV** [6] 3. **Market Trends**: - The BNPL industry is experiencing significant growth, outpacing e-commerce growth [6] - BNPL is becoming mainstream, with consumers and merchants increasingly expecting BNPL options at checkout [6][7] 4. **Offline Market Opportunity**: - Currently, offline transactions account for less than **3% of total GMV**, while the offline market is **six times larger than online** [8] - Affirm sees substantial growth potential in capturing offline market share [8] 5. **FY26 Guidance**: - Affirm expects GMV growth of **36% to 37%** for the first fiscal quarter and a minimum of **25.5%** for FY26 [9][10] - The company anticipates continued GAAP profitability [10] 6. **Consumer Health and Delinquency Rates**: - Overall consumer health remains strong, with **30+ day delinquencies down** year-over-year [13][14] - Charge-off rates for monthly installment products are approximately **3.5%**, and for Pay in 4 loans, around **60 basis points** [14] 7. **Funding Environment**: - The funding environment is described as **constructive**, with strong demand for Affirm's loans [16][18] - Affirm maintains a diversified funding strategy, utilizing both on-balance sheet and off-balance sheet funding [21][23] 8. **International Expansion**: - Affirm has launched in the UK and is exploring further expansion into markets like Australia, Netherlands, France, and Germany [12][58] - The company plans to leverage existing partnerships, such as with Shopify, to facilitate international growth [60] 9. **Competitive Differentiation**: - Affirm emphasizes long-term partnerships with funding sources, differentiating itself from competitors who may focus on short-term transactions [61][62] - The company prides itself on superior underwriting capabilities and a comprehensive product offering [63][64] 10. **Adaptive Checkout**: - Affirm's Adaptive Checkout allows for customized offers for each transaction, enhancing consumer experience and improving conversion rates [45][48] Additional Insights - Affirm's strategy includes a focus on data accumulation to improve underwriting and offer personalization [48] - The company is committed to maintaining strong credit outcomes, which are essential for sustaining funding relationships [19][65] - Affirm's approach to funding is characterized by a focus on sustainable growth and efficient capital access [65][66]

Group 1 - Klarna Group priced its initial public offering (IPO) at $40 per share, raising $1.37 billion and achieving an initial valuation of $15.1 billion [1] - Klarna's IPO involved the sale of 34.3 million shares, exceeding the targeted range of $35-$37 [1] - Klarna positions itself as a digital bank rather than solely a "buy now, pay later" service, primarily operating in Europe, contrasting with Affirm Holdings, which focuses on the U.S. market [2] Group 2 - Affirm Holdings has seen its stock rally by 45% in 2025, indicating strong market performance [2] - Affirm Holdings received an upgrade in its IBD SmartSelect Composite Rating from 94 to 96, reflecting improved performance metrics [3][4]

Core Insights - Affirm has successfully scaled into a profitable U.S. consumer platform, achieving over 30% growth [1] - There is an increasing engagement rate from both merchants and consumers, indicated by higher transaction frequency and more merchant-sponsored offers [1] - The company has reached GAAP profitability, marking a significant milestone in its financial performance [1] Company Outlook - The future trajectory of Affirm is a key point of interest, with questions surrounding its end state and potential growth opportunities [1]

Core Insights - Affirm has successfully scaled into a profitable U.S. consumer platform, achieving over 30% growth [1] - There is increasing engagement from both merchants and consumers, indicated by higher transaction frequency and more merchant-sponsored offers [1] - The company has reached GAAP profitability, marking a significant milestone in its financial performance [1] Company Outlook - The future trajectory of Affirm is a key point of discussion, with questions surrounding its long-term vision and potential end state [1]

Summary of Affirm Conference Call Company Overview - **Company**: Affirm (NasdaqGS:AFRM) - **Industry**: Fintech, specifically focusing on Buy Now, Pay Later (BNPL) services Key Points and Arguments Growth and Market Position - Affirm has achieved over 30% growth and is now GAAP-profitable, indicating strong engagement from both merchants and consumers [4][6] - The company currently captures mid-single digits of the U.S. e-commerce market, suggesting significant room for growth against traditional credit cards [5] - Affirm aims to expand its user base, geographic reach, and improve its offerings, focusing on personalized offers for consumers [5][6] Competitive Landscape - The BNPL market is highly competitive, with Affirm choosing to compete on the quality of experience and offers rather than exclusivity [18] - There are two potential scenarios for the evolution of BNPL: one where providers become significant players in payments, and another where they are treated like private label credit cards [7][9] - Affirm believes the former scenario is more likely due to the power of consumer utility and the shift towards co-branded cards [9][10] Merchant Engagement and 0% Offers - The increase in merchant-funded 0% installment offers has been a significant trend, with Affirm emphasizing the long-term development of this offering [20][21] - Affirm has built a discipline around optimizing these offers, demonstrating their effectiveness to merchants [21][23] - The company has seen over 90% growth in 0% offers, indicating strong merchant engagement and a shift in how merchants view promotional strategies [26][30] Credit Reporting and Consumer Impact - Affirm is actively working with credit bureaus to report consumer repayment behavior, which is expected to enhance consumer credit scores and availability [31][32] - The company emphasizes the importance of reflecting good repayment behavior in credit scores, advocating for industry-wide participation in reporting [33][34] International Expansion - Affirm is expanding into Europe, starting with the UK, while maintaining its core value proposition of no fees and no revolving debt [47][48] - The company aims to adapt its offerings to local markets while keeping its fundamental principles intact [48] Future Directions and Technology - Affirm is not currently pursuing a neobank model but is focused on expanding its BNPL services and card offerings [36][40] - The partnership with FIS is expected to enhance distribution and consumer engagement, with future announcements anticipated regarding bank adoption of this technology [59][60] Consumer Experience and App Utilization - The Affirm app is evolving to serve as a central hub for managing transactions, with increased user engagement and transaction frequency [57][58] - The app is positioned to provide users with access to 0% offers and other promotional deals, enhancing the overall consumer experience [58] Additional Important Insights - Affirm's approach to underwriting and risk management is seen as a competitive advantage, allowing for better customer selection and retention [27][28] - The company is optimistic about the future of agented commerce and its potential to create new channels for growth [51][54] - Affirm's commitment to transparency and consumer trust is highlighted as a key differentiator in the BNPL space [6][34]

Core Insights - Three software stocks, Affirm Holdings Inc. (AFRM), AvePoint Inc. (AVPT), and Docebo Inc. (DCBO), are identified as being in the bottom 10% of value percentile rankings, indicating a potential misalignment between their valuations and underlying fundamentals, suggesting they may be poised for correction [1][2][7]. Company Summaries - **Affirm Holdings Inc. (AFRM)**: The company's value percentile dropped significantly from 23.03 to 4.14, a decline of 18.89 percentage points. Despite a year-to-date stock gain of 37.39% and a 124.99% increase over the past year, its valuation appears increasingly difficult to justify without improvements in fundamentals [9]. - **AvePoint Inc. (AVPT)**: This company saw a slight decrease in its value percentile from 10.10 to 5.95, a drop of 4.15 percentage points. The stock is down 0.30% year-to-date but has increased by 40.78% over the year. It maintains a stronger long-term price trend but shows weakness in the short and medium terms [9]. - **Docebo Inc. (DCBO)**: The value percentile for Docebo fell from 10.09 to 6.29, a decrease of 3.8 percentage points. The stock has declined 29.81% year-to-date and 22.05% over the year. It has a moderate growth ranking with a strong price trend in the short and medium terms but a weak long-term trend [9]. Value Percentile Explanation - The value percentile is a comparative ranking metric that ranges from 0 to 100, indicating how a stock's valuation compares to its peers based on financial ratios such as price-to-earnings (P/E) and price-to-book (P/B) [6].

Group 1 - Affirm is a rapidly growing Fintech platform in the buy now, pay later market [1] - The company has made significant progress in the last fiscal year, particularly in growing key platform metrics such as gross merchandise volume [1]