Affirm(US:AFRM)2026-02-05 22:04Financial Performance - Total revenue for the three months ended December 31, 2025, was $1,123,019, representing a 30% increase from $866,381 in the same period of 2024[224] - Operating income for the same period was $117,626, compared to a loss of $4,322 in the prior year, indicating a significant turnaround[224] - Net income for the three months ended December 31, 2025, was $129,586, a 61% increase from $80,360 in the same period of 2024[224] - The total operating expenses for the three months ended December 31, 2025, were $1.01 billion, a 15% increase from $870.7 million in the same period of 2024[260] - Net income for the three months ended December 31, 2025, was $129.6 million, a 61% increase from $80.4 million in the same period in 2024[260] Gross Merchandise Volume (GMV) - The Gross Merchandise Volume (GMV) for the three months ended December 31, 2025, was $13.8 billion, representing a 36% increase from $10.1 billion in the same period in 2024[251] - For the three months ended December 31, 2025, Pay-in-X represented 17% of total GMV facilitated through the platform, up from 15% in the same period of 2024[226] - Interest-bearing loans accounted for 67% of total GMV facilitated through the platform for the three months ended December 31, 2025, down from 72% in the same period of 2024[227] - GMV from 0% APR monthly installment loans was $2.1 billion for the three months ended December 31, 2025, representing a 65% increase from $1.3 billion in the same period in 2024[252] Consumer Metrics - The number of active consumers reached approximately 25.8 million as of December 31, 2025, a 23% increase from 21.0 million in the same period in 2024[254] - Transactions per active consumer increased by 20% to 6.4 for the twelve months ended December 31, 2025, compared to 5.3 for the same period in 2024[259] - Active consumers grew to 25.8 million as of December 31, 2025, up from 21.0 million as of December 31, 2024, with transactions per active consumer increasing from 5.3 to 6.4[265] - The number of consumer transactions increased by 44% for the three months ended December 31, 2025, compared to the same period in 2024[283] Revenue Streams - Merchant network revenue grew by 34% to $328.4 million for the three months ended December 31, 2025, compared to $244.9 million in the same period in 2024[260] - Merchant network revenue increased by $83.5 million, or 34%, and $150.3 million, or 35%, for the three and six months ended December 31, 2025, respectively, compared to the same periods in 2024, driven by a GMV increase of $3.6 billion, or 36%, and $6.8 billion, or 38%[263] - Interest income increased by 21% to $493.6 million for the three months ended December 31, 2025, compared to $409.4 million in the same period in 2024[260] - Interest income increased by $84.3 million, or 21%, and $161.3 million, or 21%, for the three and six months ended December 31, 2025, respectively, correlated with a 22% increase in the average balance of loans held for investment to $8.0 billion[267] - Gain on sales of loans increased by $59.9 million, or 48%, and $115.4 million, or 61%, for the three and six months ended December 31, 2025, respectively, with loan sale volume increasing to $6.0 billion and $10.9 billion[268] - Servicing income increased by $14.1 million, or 49%, and $27.8 million, or 51%, for the three and six months ended December 31, 2025, respectively, due to a 50% increase in the average unpaid principal balance of loans held by third-party investors to $9.1 billion[272] Expenses and Costs - Loss on loan purchase commitment increased by $25.8 million, or 37%, and $43.1 million, or 35%, for the three and six months ended December 31, 2025, respectively, due to a 33% increase in total volume of loans purchased to $10.8 billion and $19.5 billion[274] - Provision for credit losses increased by $61.2 million, or 40%, and $64.1 million, or 20%, for the three and six months ended December 31, 2025, respectively, primarily related to loans held for investment[276] - Funding costs increased by $4.0 million, or 4%, and $9.8 million, or 5%, for the three and six months ended December 31, 2025, respectively, driven by a 22% increase in average total funding debt to $7.2 billion[279] - Processing and servicing expense increased by $42.6 million, or 37%, and $81.3 million, or 39%, for the three and six months ended December 31, 2025, respectively, driven by a 40% increase in payment volume to $3.1 billion and $6.0 billion[281] - Technology and data analytics expense increased by $36.7 million, or 25%, for the three months ended December 31, 2025, compared to the same period in 2024[283] - Sales and marketing expense decreased by $37.3 million, or 27%, during the three months ended December 31, 2025, compared to the same period in 2024[285] - General and administrative expense increased by $1.8 million, or 1%, during the three months ended December 31, 2025, compared to the same period in 2024[287] - Other income, net, decreased by $71.6 million, or 82%, during the three months ended December 31, 2025, compared to the same period in 2024[289] Cash Flow and Financing - Net cash provided by operating activities was $548.3 million for the six months ended December 31, 2025[308] - Net cash used in investing activities was $1.5 billion for the six months ended December 31, 2025, primarily driven by purchases and origination of loans held for investment of $22.5 billion[310] - Net cash provided by financing activities was $1.3 billion for the six months ended December 31, 2025, with cash inflows driven by $18.4 billion in proceeds from the issuance of secured debt[313] - Cash outflows related to principal repayments on secured debt were $17.0 billion for the six months ended December 31, 2025[313] - The company has drawn an aggregate of $1.9 billion on its warehouse credit facilities as of December 31, 2025[296] - The company intends to add necessary funding capacity to support growth objectives as it expands into new geographies[298] Risk and Economic Environment - The macroeconomic environment, including interest rate changes and economic uncertainty, continues to impact consumer demand and loan repayments[238] - Continued volatility in interest rates may adversely impact consumers' spending levels and willingness to pay outstanding amounts owed[327] - 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[329] - The company was exposed to credit risk on $8.8 billion of loans held within its interim condensed consolidated balance sheet as of December 31, 2025[332] - The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $80.1 million as of December 31, 2025[333] - The company has sold $10.2 billion in unpaid principal balance loans subject to risk sharing arrangements as of December 31, 2025, with a maximum exposure to losses of $75.9 million[333] Future Plans - The company submitted applications to establish Affirm Bank on January 23, 2026, which would operate as a wholly owned, Nevada-chartered, FDIC-insured bank subsidiary[244] - The company expects seasonal fluctuations in GMV, with the strongest performance typically occurring during the fiscal second quarter due to holiday spending[237] - The company leverages a diverse capital ecosystem to support resilience across various macroeconomic conditions and economic cycles[239]