Affirm Holdings (NASDAQ: AFRM) is a fast-growing leader in the buy now, pay later (BNPL) sector, offering consumers flexible installment payments for purchases. The company's stock has been volatile this year, rising 137% from its April lows to close around $73 per share yesterday following an 11.8% jump. This gain followed one of Affirm's regular fireside chats hosted by CFO Rob O'Hare to address investor questions. The comments reassured investors about the underlying health of Affirm's business during a ...

A top manager at the company tried to assuage concerns that the customer base might rein in its spending.On Tuesday, many investors chose to buy Affirm Holdings (AFRM +11.77%) stock. The buy-now, pay later (BNPL) specialist saw a nearly 12% increase in its share price following comments from one of the company's top managers, as well as an analyst price target upgrade. A bullish discussionThe comments were made by Affirm CFO Rob O'Hare in a fireside chat presented by the company. In his presentation, O'Hare ...

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [18] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [23] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [24] - GMV increased by 58.7% year-over-year, marking the company's first $1 billion quarter [19] - The take rate rose by 60 basis points year-over-year to 11.2% [19] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [10] - By the end of Q3 2025, subscribers increased to 568,000 as the company pivoted back to focus on subscription products [12] Market Data and Key Metrics Changes - Consumer metrics measured by mods rose almost 50% year-over-year [4] - Monthly active users grew by 38% year-over-year, while revenue-generating users rose by 120% year-over-year [42] Company Strategy and Development Direction - The company is focusing on enhancing its product experience and deepening consumer engagement through new features like the Earn tab [5][18] - There is a strategic shift back to subscription products, with on-demand services being used as a fallback option [12] - The company is exploring a banking charter to enhance efficiency and flexibility in its operations [16] Management's Comments on Operating Environment and Future Outlook - Management believes the BNPL industry is still in its early days, with significant growth potential ahead [3] - The company has not seen any deterioration in consumer activity despite recent headlines affecting the lending sector [21] - The outlook for 2026 includes adjusted EPS guidance of $4.35, reflecting a 29% growth over 2025 [25] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects during the quarter [23] - The CFO, Karen Hartje, is retiring, but will assist in the transition for the next 12 months [17] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter due to insufficient conversion rates into subscriptions [27][28] Question: Take rate trends and credit losses - The take rate is targeted at 60% gross margin, and the 3.1% credit loss rate aligns with expectations, with a potential drop as on-demand is de-emphasized [30][31] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has significant growth potential, viewing it as a safer alternative to credit cards for consumers [38][40] Question: Underlying drivers of 2026 EPS guidance - The guidance reflects continued growth in subscriptions and a focus on maintaining gross margin dollars at a faster pace than operational expenses [49] Question: Changes in competition - Management has not observed significant changes in pricing or strategy from competitors, aside from Klarna launching a subscription product [52]

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [18] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [23] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [24] - GMV increased by 58.7% year-over-year, marking the company's first $1 billion quarter [19] - The take rate rose by 60 basis points year-over-year to 11.2% [19] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [10] - By the end of Q3 2025, subscribers increased to 568,000 as the company pivoted back to subscription products [12] Market Data and Key Metrics Changes - Consumer metrics measured by monthly active users grew by 38% year-over-year, while revenue-generating users rose by 120% year-over-year [42] - Monthly sessions climbed by 78% year-over-year, indicating increased engagement [42] Company Strategy and Development Direction - The company is focusing on enhancing its subscription model while using on-demand as a supplementary tool for specific consumer segments [12][28] - There is a strong emphasis on responsible lending practices, positioning the BNPL product as a budgeting tool rather than a means to overspend [4][40] - The company is exploring additional products and features, including AI-driven tools to enhance customer service and engagement [7][8] Management's Comments on Operating Environment and Future Outlook - Management believes the BNPL industry is still in its early stages, with significant growth potential ahead [3] - The company is maintaining a disciplined approach to costs while focusing on sustainable growth and profitability [24][25] - Despite some concerns in the consumer credit market, the company has not observed any deterioration in consumer activity [21] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects, including an antitrust suit and capital markets exploration [14][15] - The company is exploring a banking charter to enhance operational efficiency without becoming a bank holding company [16] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter due to insufficient conversion rates into subscriptions [27][28] Question: Take rate trends and credit losses - The take rate is expected to maintain a target of 60% gross margin, while the 3.1% credit loss rate aligns with expectations [30][31] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has many years of growth ahead, as consumers increasingly prefer it over traditional credit cards [38][40] Question: Underlying drivers of 2026 EPS guidance - The guidance reflects continued growth in subscriptions and a focus on maintaining gross margin dollars at a faster pace than operational expenses [48][50] Question: Changes in competition - Management has not observed significant changes in pricing or strategy from competitors, although some are launching similar subscription products [52] Question: Marketing posture for subscriptions - The current marketing strategy emphasizes direct offers for subscriptions rather than on-demand products, aiming to improve lifetime value [58][64]

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [17] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [22] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [23] - GMV (Gross Merchandise Volume) increased by 58.7% year-over-year, marking the first $1 billion quarter for the company [17] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [9] - By the end of Q3 2025, subscribers rose to 568,000 as the company pivoted back to focus on subscription products [11] Market Data and Key Metrics Changes - The take rate, defined as total revenue as a percentage of GMV, rose by 60 basis points year-over-year to 11.2% [18] - The provision for credit losses as a percentage of GMV increased by 70 basis points year-over-year to 3.1% [19] Company Strategy and Development Direction - The company is focusing on enhancing its subscription model while using on-demand as a supplementary tool for specific consumer segments [11][10] - There is a strong emphasis on responsible lending practices, positioning the BNPL product as a budgeting tool rather than a means to overspend [4][33] - The company is exploring new product features, including AI-driven tools to enhance customer service and engagement [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the BNPL industry, citing its early-stage development and consumer preference over traditional credit cards [3][31] - The company reaffirmed its guidance for top-line growth and adjusted net income, with modest adjustments to GAAP net income due to a discrete tax benefit [24] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects, including an antitrust suit and capital markets exploration [12][13] - Total cash grew by $14.7 million in the quarter to $134.7 million, demonstrating the strength of the balance sheet [23] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter based on conversion data, indicating that on-demand is better suited for enterprise merchants rather than direct-to-consumer [25][26] Question: Take rate trends and credit losses - The take rate is targeted at maintaining a 60% gross margin, and the 3.1% credit loss rate aligns with expectations, with guidance indicating a range of 2.5%-2.75% for the year [27][29] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has significant growth potential, viewing it as a safer alternative to credit cards and emphasizing responsible spending [31][33] Question: Drivers of 2026 EPS guidance - The company anticipates continued growth in subscriptions and is focused on maintaining cost discipline while monitoring economic conditions [37][39] Question: Changes in marketing strategy for subscriptions - The marketing approach has shifted to prioritize subscription offerings directly to consumers, contrasting with previous strategies that emphasized on-demand products [40][42]

Financial Data and Key Metrics Changes - Non-GAAP diluted EPS for the third quarter was $0.90, exceeding the outlook range of $0.70 to $0.75 per share, marking the third consecutive earnings beat this year [7][28] - Consolidated revenue for Q3 was $595.1 million, reflecting a slight decline compared to $606.1 million in the same period last year [27][28] - Consolidated adjusted EBITDA was $67 million, or 11.3% of revenue, compared to $63.5 million, or 10.5% of revenue in Q3 of 2024 [27][28] Business Line Data and Key Metrics Changes - Progressive Leasing GMV was $410.9 million, representing a year-over-year decline of 10%, but underlying performance showed mid-single-digit growth when adjusting for the Big Lots bankruptcy and tightening of lease approvals [23][24] - Revenue for Progressive Leasing was down approximately 4.5% at $556.6 million compared to $582.6 million in the prior year [24] - Four Technologies delivered triple-digit revenue growth for the eighth consecutive quarter, with a year-to-date adjusted EBITDA of $11.1 million, representing a 23% margin on revenue [18][19] Market Data and Key Metrics Changes - E-commerce GMV accounted for 23% of total Progressive Leasing GMV in Q3 2025, up from 20.9% in Q2 and 16.6% in Q3 2024 [13] - The overall demand environment remains soft across many durable goods categories, which is expected to continue into Q4 [21] Company Strategy and Development Direction - The company is focused on improving capital efficiency and profitability through the sale of the VIVE Financial Credit Card Receivables Portfolio, which strengthens the balance sheet and allows for better capital allocation [11][29] - Strategic priorities include investing in growth, exploring M&A opportunities, and returning excess cash to shareholders through share repurchases and dividends [12][29] Management's Comments on Operating Environment and Future Outlook - Management noted persistent consumer challenges due to inflationary pressures and financial stress among lower-income households, impacting discretionary spending [8][21] - The company anticipates that GMV pressures will continue into Q4, with expectations for improvement in Q1 2026 as the toughest year-over-year comparisons will roll off [36][52] Other Important Information - The company ended Q3 with $292.6 million in cash and $600 million of gross debt, resulting in a net leverage ratio of 1.1 times [29][30] - The sale of the VIVE portfolio is expected to provide approximately $150 million, enhancing liquidity and creating flexibility for future investments [29][30] Q&A Session Summary Question: Update on consumer pulse amid economic pressures - Management acknowledged elevated delinquencies but noted improvements in write-offs due to prior tightening actions, indicating a cautious but stable portfolio [34][35] Question: GMV outlook for the rest of the year - Management indicated that Q3 was a tough comp and that pressures would likely persist into Q4, with expectations for improvement in Q1 2026 [36][37] Question: Discussion on trade down effects - Management noted that while there has been tightening in the market, they have not observed significant trade down effects impacting their customer base [45][46] Question: Insights on Four Technologies and customer acquisition - Management highlighted that Four Technologies has seen organic growth driven by referrals and user-generated content, indicating strong customer engagement [85]

Financial Data and Key Metrics Changes - Non-GAAP diluted EPS for Q3 was $0.90, exceeding the outlook range of $0.70-$0.75, marking a 17% increase year-over-year [6][28] - Consolidated revenue for Q3 was $595.1 million, reflecting a slight decline from $606.1 million in the same period last year [10][26] - Consolidated adjusted EBITDA was $67 million, or 11.3% of revenue, compared to $63.5 million, or 10.5% of revenue in Q3 of 2024 [27] Business Line Data and Key Metrics Changes - Progressive Leasing GMV was $410.9 million, representing a year-over-year decline of 10%, but underlying performance showed mid-single-digit growth when adjusting for the Big Lots bankruptcy and tightening of lease approvals [23][24] - Revenue for Progressive Leasing was down approximately 4.5% at $556.6 million compared to $582.6 million in the prior year [24] - Four Technologies delivered triple-digit revenue growth for the eighth consecutive quarter, with year-to-date adjusted EBITDA of $11.1 million, representing a 23% margin on revenue [18][19] Market Data and Key Metrics Changes - E-commerce GMV accounted for 23% of total Progressive Leasing GMV in Q3 2025, up from 20.9% in Q2 and 16.6% in Q3 2024 [13] - Write-offs for Progressive Leasing were 7.4%, showing improvement both sequentially and year-over-year, reflecting effective risk management [9][25] Company Strategy and Development Direction - The company is focused on improving capital efficiency and profitability through the sale of the Vive Financial credit card receivables portfolio to Atlanticus Holdings Corporation [11][12] - Strategic pillars include growing direct-to-consumer performance, enhancing technology for customer experience, and expanding the multi-product ecosystem [12][16][18] - The company aims to deepen partner engagement and drive sustainable, profitable revenue through its multi-product ecosystem [21] Management's Comments on Operating Environment and Future Outlook - Management noted persistent consumer challenges due to inflation and financial stress among lower-income households, impacting discretionary spending [8] - The company anticipates continued softness in demand for durable goods in Q4 but remains focused on portfolio health and disciplined spending [20][21] - The revised outlook for 2025 reflects consolidated revenues in the range of $2.41 billion to $2.435 billion, adjusted EBITDA of $258 million to $265 million, and non-GAAP EPS of $3.35 to $3.45 [30][31] Other Important Information - The company ended Q3 with $292.6 million in cash and $600 million of gross debt, resulting in a net leverage ratio of 1.1x [29] - The company did not repurchase shares during the quarter due to ongoing discussions regarding the Vive portfolio [22][28] Q&A Session Summary Question: Update on consumer pulse amid current challenges - Management acknowledged elevated delinquencies but noted improvements in write-offs due to prior tightening actions, indicating a cautious but stable portfolio [35][36] Question: GMV outlook for the rest of the year - Management indicated that Q3 was a tough comp and that pressures would continue into Q4, with expectations for improvement in Q1 2026 [37][38] Question: Discussion on trade down effects - Management noted no significant trade down observed in the credit stacks, but acknowledged the potential for tightening in the future [48][49] Question: Insights on Four Technologies and customer acquisition - Management highlighted that Four's growth has been driven by organic referrals and word-of-mouth, with plans to enhance cross-selling opportunities [78][79]

Financial Data and Key Metrics Changes - Non-GAAP diluted EPS for Q3 was $0.90, exceeding the outlook range of $0.70 to $0.75, marking the third consecutive earnings beat this year [5][20] - Consolidated revenue for Q3 was $595.1 million, reflecting a slight decline from $606.1 million in the same period last year [23][28] - Consolidated adjusted EBITDA was $67 million, or 11.3% of revenue, compared to $63.5 million, or 10.5% of revenue in Q3 of 2024 [23][24] Business Line Data and Key Metrics Changes - Progressive Leasing GMV for Q3 was $410.9 million, representing a year-over-year decline of 10%, but underlying performance showed mid-single-digit growth when adjusting for the Big Lots bankruptcy and tightening of lease approvals [20][21] - Revenue for Progressive Leasing was down approximately 4.5% at $556.6 million compared to $582.6 million in the prior year, impacted by GMV headwinds [21][22] - Write-offs for Progressive Leasing were at 7.4%, showing improvement both sequentially and year-over-year, reflecting effective risk management [21][22] Market Data and Key Metrics Changes - E-commerce GMV accounted for 23% of total Progressive Leasing GMV in Q3 2025, up from 20.9% in Q2 and 16.6% in Q3 2024, indicating growth in online channels [11] - Four Technologies delivered triple-digit revenue growth for the eighth consecutive quarter, with over 80% of GMV coming from active subscribers [15][16] Company Strategy and Development Direction - The company is focused on improving capital efficiency and profitability through the sale of the VIVE Financial Credit Card Receivables Portfolio, which is expected to enhance overall profitability and allow for better capital allocation [9][10] - Strategic pillars include growing direct-to-consumer performance, enhancing technology for customer experience, and expanding the multi-product ecosystem [11][14][15] - The company aims to deepen engagement with existing retail partners and expand its footprint across national and regional segments [12] Management's Comments on Operating Environment and Future Outlook - Management noted persistent consumer challenges due to inflation and financial stress among lower-income households, impacting discretionary spending [6][17] - The outlook for Q4 anticipates continued headwinds from the Big Lots bankruptcy and a soft demand environment, with expectations for improvement in 2026 as macro conditions stabilize [34][45] - The company remains committed to disciplined capital allocation, focusing on growth initiatives, strategic M&A, and returning excess capital to shareholders [26][53] Other Important Information - The company ended Q3 with $292.6 million in cash and $600 million of gross debt, resulting in a net leverage ratio of 1.1 times [26][27] - The sale of the VIVE portfolio is expected to provide approximately $150 million in proceeds, enhancing liquidity and financial flexibility [26][27] Q&A Session Summary Question: Update on consumer pulse amid economic pressures - Management acknowledged elevated delinquencies but noted improved write-offs due to prior tightening actions, indicating a cautious but stable portfolio [31][32] Question: GMV outlook for the rest of the year - Management indicated that Q3 was a tough comp and expected similar headwinds into Q4, with hopes for improvement in 2026 [34][35] Question: Capital allocation strategy post-VIVE sale - Management emphasized a focus on growth initiatives and strategic M&A, with share repurchases considered only after these priorities [52][53] Question: Insights on Four Technologies and customer acquisition - Management highlighted strong organic growth driven by referrals and word-of-mouth, with plans to enhance cross-selling opportunities between Four Technologies and leasing [64][75]

Zip Co Ltd (ZIP) - Zip Co Ltd's share price has increased by 61.6% since the beginning of 2025 [1] - Zip is a fintech company established in 2013, providing a buy-now-pay-later (BNPL) service that is favored by retail consumers [1] - The platform allows customers to make immediate purchases and repay in several interest-free installments [1] - Zip generates revenue through transaction fees from businesses and late fees from customers who miss payments [2] - The current price-to-sales ratio for Zip is 7.12x, higher than its 5-year average of 5.81x, indicating that shares are trading above historical averages [5] - Revenue for Zip has been growing over the last three years, which is a positive indicator despite the higher price-to-sales ratio [5] Scentre Group (SCG) - Scentre Group specializes in shopping centre real estate, operating under the Westfield brand in Australia and New Zealand [3] - The group manages a portfolio of 42 centres valued at over $34 billion, with an occupancy rate exceeding 99% and attracting over half a billion visitors annually [3] - SCG has a trailing dividend yield of approximately 4.18%, compared to its 5-year average of 4.78%, indicating a slight decrease in yield [6]

Zip Co Ltd (ZIP) - Zip Co's share price has increased by 46.5% since the beginning of 2025, indicating strong market performance [1] - The company specializes in buy-now-pay-later (BNPL) services, providing flexible payment options for retail consumers [2] - Zip has partnered with over 79,300 retailers and serves more than 6 million customers globally [2] - Revenue has grown at a rate of 75.7% per year since 2021, reaching $868 million in FY24, while net profit improved from -$678 million to $6 million [6] - The return on equity (ROE) for Zip is reported at 1.8% [6] Scentre Group (SCG) - Scentre Group operates shopping centres under the Westfield brand in Australia and New Zealand, managing a portfolio valued at over $34 billion [3] - The group has an occupancy rate exceeding 99% and attracts more than half a billion visitors annually [3] - In CY23, Scentre Group reported a debt/equity ratio of 87.3%, indicating more equity than debt [7] - The average dividend yield since 2020 has been 4.8% per year, while the ROE for SCG in CY23 was reported at 1.0% [8]