Core Insights - Affirm Holdings reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and showing a significant improvement from a loss of $0.31 per share a year ago, resulting in an earnings surprise of +109.09% [1] - The company achieved revenues of $933.34 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.46% and reflecting a year-over-year increase from $698.48 million [2] - Affirm Holdings has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $1.04 billion, while the estimate for the current fiscal year is $0.86 on revenues of $3.99 billion [7] - The stock's immediate price movement will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Industry Context - The Internet - Software industry, to which Affirm Holdings belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Group 1 - The discussion included a positive sentiment towards the performance of Affirm, indicating a favorable quarterly result [1] - Philip, a company in the mid-stream refining space, was mentioned as a potential investment opportunity worth considering [1]

[music] Welcome back to fast money earnings alert on a firm shares of the buy now pay later uh company spiking 11% after hours the company delivering earnings and revenues that exceeded Wall Street estimates the conference call is underway CNBC's Mackenzie Sagalas got the latest Mac. >> Hey Mel so firm shares are rallying after hours as transaction volume jumped 42% in the quarter. CEO Max Lechin opened the earnings call though by pointing to their new 5-year deal with Amazon as a major win.Indeed, a key mo ...

Core Insights - A firm’s shares surged 11% after hours due to earnings and revenues surpassing Wall Street estimates [1] - The company reported a 42% increase in transaction volume for the quarter, indicating strong business performance [1][2] - A significant highlight was the new 5-year partnership with Amazon, which CEO Max Lechin emphasized as a major achievement [1] Financial Performance - Earnings more than doubled expectations, showcasing a strong revenue beat [3] - Transaction volume reached a new high despite limited seasonal lift, reflecting robust demand [3] - Card volume increased by 135% year-over-year, indicating effective growth strategies [3] User Engagement - Active users have now reached 2.8 million, demonstrating an expanding customer base [3] - The demand for 0% loans has become the fastest-growing product for the company, suggesting a shift in consumer preferences [2]

Financial Data and Key Metrics Changes - The company reported a strong quarter with significant growth, maintaining a revenue-less transaction cost (RLTC) target of 4% for fiscal 2026, indicating a focus on maximizing growth and profitability [22][101] - The operating margin guidance has been raised to over 7.5%, up from the previous guidance of more than 6%, attributed to growth rather than cost-cutting measures [70][72] Business Line Data and Key Metrics Changes - The company highlighted that approximately half of the GMV growth came from direct point-of-sale merchant integrations, with a third from direct-to-consumer channels, indicating a balanced growth strategy [51] - The 0% APR loans have been a significant growth driver, with expectations for continued strong performance in this product category [75][61] Market Data and Key Metrics Changes - The company has seen healthy consumer spending trends, particularly in sectors like sporting goods and outdoor products, with 30-day delinquency rates remaining stable [26][27] - The company is expanding its partnerships with payment service providers (PSPs) to enhance integration speed and market reach, which is crucial for growth in various markets [15][33] Company Strategy and Development Direction - The company has extended its agreement with Amazon for an additional five years, reflecting a long-term commitment to serving customers and enhancing its market position [5][46] - The focus on cash flow underwriting is aimed at capturing younger consumers and those overlooked by traditional credit systems, which is expected to drive growth in the Affirm Card segment [38][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall health of the consumer base, noting that even during economic uncertainties, repayment rates have remained stable [28][29] - The company is committed to maintaining a strong focus on direct-to-consumer products and enhancing consumer engagement through promotional events and new features [52][60] Other Important Information - The company is actively monitoring macroeconomic trends and adjusting its strategies accordingly to ensure resilience in its operations [29][92] - The management emphasized the importance of building honest financial products that improve lives, indicating a long-term vision for product development [80] Q&A Session Summary Question: Thoughts on funding market execution amidst challenges - Management highlighted their strong execution in the ABS market and capital markets, attributing it to the unique value of their products and strong investor relationships [10][11] Question: Insights on PSP relationships and strategy - Management discussed the importance of PSPs for integration speed and market access, emphasizing their role in expanding merchant partnerships [14][15] Question: Trends in RLTC and future guidance - Management maintained a focus on 4% as an upper bound for RLTC, indicating a long-term strategy to maximize growth and profitability [21][23] Question: Consumer spending environment and delinquency trends - Management confirmed that consumer spending remains healthy, with stable delinquency rates, indicating effective underwriting practices [26][27] Question: Economics of PSPs versus direct integrations - Management noted that PSP agreements are typically bespoke and vary significantly, impacting their international expansion strategy [32][33] Question: Factors driving Affirm Card member growth - Management indicated that cash flow underwriting is beneficial for younger consumers, which is expected to drive growth in card usage [37][40] Question: Insights on Amazon agreement extension - Management expressed satisfaction with the long-term commitment to Amazon, focusing on delivering value to consumers [46][47] Question: Operating margins and expense expectations - Management attributed improved operating margins to growth rather than cost-cutting, with a focus on revenue growth driving operating income [71][72] Question: Competitive environment and capital market conditions - Management noted that the capital markets remain constructive for their assets, with a focus on maintaining strong investor relationships [104][106]

Financial Data and Key Metrics Changes - The company reported a strong quarter with significant growth, maintaining a revenue-less transaction cost target of 4% for fiscal 2026 [23][24] - The operating margin guidance for the fiscal year has been increased to over 7.5%, up from the previous guidance of over 6% [73][75] Business Line Data and Key Metrics Changes - The growth in GMV (Gross Merchandise Volume) was driven by direct point-of-sale merchant integrations and direct-to-consumer channels, with half of the growth coming from the former and one-third from the latter [52][78] - The 0% APR loans have been highlighted as the fastest-growing loan product, indicating a strong consumer preference for this offering [78] Market Data and Key Metrics Changes - The company has successfully extended its partnership with Amazon for an additional five years, indicating strong market positioning and consumer trust [5][47] - The company is experiencing healthy consumer spending trends, particularly in sectors like sporting goods and outdoor products [27][29] Company Strategy and Development Direction - The company is focusing on expanding its relationships with payment service providers (PSPs) to enhance integration speed and market reach [16][34] - There is a strategic emphasis on cash flow underwriting to better serve younger consumers and those with limited credit histories, which is expected to drive growth [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the consumer market, noting that delinquencies remain low even among less affluent consumers [29][30] - The company is committed to maintaining a long-term focus on growth and profitability, with a target range of 3-4% for revenue-less transaction costs in the future [23][103] Other Important Information - The company is actively exploring new verticals, such as services and elective medical, with a robust process for adapting underwriting models to new data [92][94] - The recent promotional event, referred to as "Zero Days," was successful in driving consumer engagement and merchant participation [60][101] Q&A Session Summary Question: Thoughts on the funding market and execution - Management highlighted their strong execution in the ABS market and the importance of asset performance in driving investor appetite [10][11] Question: PSP strategy and future expectations - Management emphasized the importance of PSP relationships for integration speed and market access, with ongoing efforts to expand these partnerships [15][16] Question: Trends in consumer spending and delinquency rates - Management noted that consumer spending remains healthy, with low delinquency rates observed even among government employees during economic challenges [27][29] Question: Insights on the Amazon partnership - The extension of the Amazon agreement was seen as a significant long-term commitment, reflecting mutual satisfaction with the service provided [47][48] Question: Operating margins and expense expectations - Management attributed the increase in operating margins to growth rather than cost-cutting, with a focus on revenue growth driving operating leverage [75][76] Question: Competitive environment and market positioning - Management indicated that the competitive landscape remains dynamic, with a focus on product quality and execution as key differentiators [106][108]

Financial Data and Key Metrics Changes - The company reported a strong quarter with significant growth, maintaining a revenue-less transaction cost (RLTC) of 4.2% [22][105] - The updated fiscal year 2026 outlook indicates an increase in operating margins to more than 7.5%, up from the previous guidance of over 6% [73][74] Business Line Data and Key Metrics Changes - The company highlighted that approximately half of the GMV growth came from direct point-of-sale merchant integrations, while one-third came from direct-to-consumer channels [52] - The 0% APR loans are identified as the fastest-growing loan product, with expectations for continued growth in this area [78] Market Data and Key Metrics Changes - The company noted a healthy spending environment for consumers, particularly in sectors like sporting goods and outdoor products [27] - Delinquency trends remain low, indicating strong consumer repayment behavior [29] Company Strategy and Development Direction - The company extended its agreement with Amazon for an additional five years, indicating a commitment to long-term partnerships [4][47] - The strategy includes expanding relationships with payment service providers (PSPs) to enhance integration speed and market reach [15][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute in the ABS market despite broader market challenges, attributing success to strong asset performance and investor relationships [10][112] - The company is focused on maintaining a long-term perspective, with a target RLTC range of 3% to 4% for sustainable growth [23][107] Other Important Information - The company is actively exploring new verticals, including services and automotive repair, with a robust process for adapting underwriting models [96][97] - The recent promotional event, referred to as "Zero Days," was successful in driving consumer engagement and merchant awareness [61][104] Q&A Session Summary Question: Thoughts on funding market execution amidst challenges - Management highlighted their strong execution in the ABS market and the unique value of their products, which are well-received by investors [10] Question: Insights on PSP relationships and strategy - Management emphasized the importance of PSPs for integration speed and expanding market access, noting ongoing efforts to enhance these relationships [15][34] Question: Trends in consumer spending and delinquency rates - Management confirmed that consumer spending remains healthy, with low delinquency rates indicating effective underwriting practices [27][29] Question: Update on operating margins and expense expectations - Management attributed the increase in operating margins to growth rather than cost-cutting, with a focus on revenue growth driving operating leverage [74] Question: Competitive environment and capital market conditions - Management noted a constructive capital market environment for their assets, with a focus on maintaining strong relationships with investors [112]

Core Insights - The payments company reported a profit of $80.7 million, exceeding analysts' expectations [1] - The profit increase is attributed to higher merchant integration and a growing direct-to-consumer business [1] Financial Performance - The reported profit of $80.7 million indicates a strong financial performance for the company [1] - The results reflect a positive trend in the company's operational efficiency and market positioning [1] Business Drivers - Increased merchant integration has played a significant role in driving profitability [1] - The direct-to-consumer business segment has also contributed to the overall growth in profits [1]

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Financial Performance - Total revenue for the three months ended September 30, 2025, was $933,337,000, representing a 34% increase from $698,479,000 in the same period of 2024[218] - Operating income improved to $63,661,000 compared to a loss of $132,623,000 in the prior year, marking a 148% increase[218] - Net income for the quarter was $80,694,000, a significant recovery from a net loss of $100,222,000 in the same quarter of 2024, reflecting an 181% improvement[218] - For the three months ended September 30, 2025, GMV was $10.8 billion, representing a 42% increase compared to $7.6 billion in the same period in 2024[241] - Merchant network revenue increased by $66.8 million, or 36%, for the three months ended September 30, 2025, compared to the same period in 2024[254] - Interest income rose by $77.1 million, or 20%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by a 19% increase in the average balance of loans held for investment[258] - Gain on sales of loans increased by $55.4 million, or 87%, for the three months ended September 30, 2025, compared to the same period in 2024, with loan sales volume rising to $4.9 billion[259] - Servicing income increased by $13.7 million, or 53%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a 57% increase in the average unpaid principal balance of off-balance sheet loans[262] - Loss on loan purchase commitment increased by $17.3 million, or 32%, for the three months ended September 30, 2025, compared to the same period in 2024, due to a 36% increase in total volume of loans purchased[264] Consumer Metrics - Active consumers reached approximately 24.1 million as of September 30, 2025, up 24% from approximately 19.5 million as of September 30, 2024[246] - Transactions per active consumer increased to 6.1 for the three months ended September 30, 2025, up 20% from 5.1 for the same period in 2024[250] Loan and Funding Information - Approximately $1.9 billion in loans were directly originated by the company, representing 18% of total GMV for the quarter[225] - For the three months ended September 30, 2025, Pay-in-X represented 15% of total GMV, while 0% APR installment loans accounted for 13%[220] - GMV from 0% APR monthly installment loans was $1.4 billion, representing a 74% increase from $826 million for the same period in 2024[244] - The company has drawn an aggregate of $1.2 billion on its warehouse credit facilities as of September 30, 2025, with a total borrowing capacity of $5.2 billion[286] - The company intends to add necessary funding capacity to support growth objectives as it expands into new geographies[288] - The company has a revolving credit facility with an aggregate commitment amount of $330.0 million, maturing on June 26, 2027, with no borrowings outstanding as of September 30, 2025[293] - The convertible senior notes have an aggregate principal balance of $1.1 billion, with the 2026 Notes maturing on November 15, 2026, and the 2029 Notes maturing on December 15, 2029[294] Cash Flow and Investments - Net cash provided by operating activities was $374.6 million for the three months ended September 30, 2025, compared to $196.9 million for the same period in 2024, reflecting a significant increase[296][298] - Net cash used in investing activities was $139.6 million for the three months ended September 30, 2025, with cash outflows primarily driven by purchases and origination of loans held for investment totaling $9.8 billion[300] - Net cash provided by financing activities was $110.1 million for the three months ended September 30, 2025, driven by $9.1 billion in proceeds from the issuance of secured debt[302] Risk Management - The company continues to monitor macroeconomic conditions, including elevated interest rates and consumer demand fluctuations, which may impact future performance[233] - The company maintains an interest rate risk management program, estimating that a hypothetical 100 basis point upward shock to interest rates would have a less than $70.0 million adverse impact on cash flows over the next 12 months[319] - The company is exposed to credit risk on $7.2 billion of loans held within its balance sheet as of September 30, 2025, with approximately 11% of loan receivables related to customers in California[322] - The company is exposed to credit risk due to nonperformance by financial institutions holding cash and cash equivalents[324] - The company manages credit risk by diversifying counterparties and adhering to guidelines regarding credit ratings and investment maturities[324] - A failure of multiple financing sources to fulfill funding obligations could materially adversely affect the company's financial condition and cash flows[324] Regulatory and Compliance - Regulatory oversight from the Consumer Financial Protection Bureau (CFPB) remains a factor, with ongoing requests for reports concerning the company's business conduct and activities[237] Expenses - Processing and servicing expenses increased by $38.7 million, or 41%, for the three months ended September 30, 2025, driven by a $2.9 billion, or 41%, increase in payment volume[269][270] - Technology and data analytics expenses increased by $33.8 million, or 25%, for the three months ended September 30, 2025, with a 43% rise in amortization of internally-developed software[273] - Sales and marketing expenses decreased by $66.7 million, or 46%, primarily due to a $66.3 million, or 62%, decrease in Amazon warrant expense[275] - General and administrative expenses increased by $6.5 million, or 5%, due to higher professional services costs, including consulting and legal fees[277] - Other income, net, decreased by $14.9 million, or 44%, primarily due to an $18.1 million, or 92%, reduction in gains from early extinguishment of convertible debt[280]