Core Insights - Affirm Holdings Inc. shares increased over 9% following the release of first-quarter fiscal 2026 results that exceeded analyst expectations and raised full-year guidance [1] Financial Performance - The company reported adjusted earnings per share of $0.23, surpassing the consensus forecast of $0.11 by 109% [2] - Revenue grew 34% year over year to $933 million, exceeding expectations of $881.84 million [2] - Gross merchandise volume (GMV) increased by 42% to $10.8 billion, driven by strong performance in the direct-to-consumer segment [2] Segment Performance - Affirm's Card segment showed remarkable growth, with card GMV rising 135% year over year [3] - Active cardholders increased by 500,000 from the previous quarter to reach 2.8 million, while total active consumers grew 24% to 24.1 million, marking the seventh consecutive quarter of accelerating user growth [3] Future Guidance - For the fiscal second quarter, Affirm projected revenue between $1.03 billion and $1.06 billion, with the midpoint slightly below the consensus estimate of $1.06 billion [4] - The company raised its full-year GMV forecast to over $47.5 billion, up from previous guidance of above $46 billion [5] - Affirm maintained its revenue-to-GMV ratio at approximately 8.4%, indicating revenue above $3.99 billion, and reiterated Revenue Less Transaction Costs (RLTC) guidance of $1.9 billion, about 4% of revenue [5] - The adjusted operating margin target was increased to above 27.1% from more than 26.1% [5]

Financial Data and Key Metrics Changes - The company reported exceptionally strong results, setting new records in most metrics for the fourth quarter, which is unusual for this period [6] - The growth is accelerating, with significant improvements in key performance indicators [6] Business Line Data and Key Metrics Changes - The demand for the company's services is reflected in the acceleration of Gross Merchandise Volume (GMV), which reached new records [12][13] - The 0% APR offerings have attracted a substantial number of first-time users, with 50% of new users taking advantage of this promotion [17] Market Data and Key Metrics Changes - The company is experiencing strong momentum in the U.S. and Canada, with positive consumer performance noted [11][12] - The company is in the process of testing its services in the UK, indicating potential for international expansion [69] Company Strategy and Development Direction - The company is focused on enhancing its card offerings and plans to introduce new features to make the card more compelling [43][44] - The strategy includes leveraging 0% APR products to drive consumer engagement and merchant participation, with expectations that nearly all merchants will eventually adopt these offerings [88][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage credit performance despite potential macroeconomic shifts, emphasizing that credit remains a top priority [28][31] - The company is closely monitoring the impact of student loan repayments on consumer behavior and is prepared to adjust underwriting practices as necessary [26][27] Other Important Information - The company has seen a significant increase in the number of merchants funding 0% APR offerings, doubling year over year [88] - The integration with payment service providers (PSPs) is viewed as a critical growth area, particularly for offline transactions [104] Q&A Session Summary Question: How has the operating environment changed since the last report? - Management noted improvements in consumer performance and optimism regarding future growth, particularly in the U.S. and Canada [10][11] Question: What are the repeat rates for first-time users attracted by 0% APR? - First-time users do repeat their usage, and many convert to interest-bearing loans over time, indicating strong customer retention [19][20] Question: How does the company view the current funding environment? - The company is mindful of the health of capital markets and partners with long-term investors, ensuring disciplined lending practices [36][37] Question: What is the strategy for the Affirm card? - The card is growing well, and the company is focused on making it more compelling with new features and increased merchant adoption [43][44] Question: How is the company approaching international expansion? - The company is testing its services in the UK and plans to expand into other European markets, leveraging existing technology and partnerships [69][73]

Financial Data and Key Metrics Changes - The company reported exceptionally strong results, setting new records in most metrics for the quarter, which is unusual for Q4 [6][7] - The growth is accelerating, indicating strong momentum in the U.S. and Canadian markets [15][16] Business Line Data and Key Metrics Changes - The 0% APR offerings have attracted a significant number of new users, with 50% of first-time users opting for this rate [20][21] - Repeat usage rates for users acquired through 0% APR promotions are comparable to traditional users, with many converting to interest-bearing loans over time [25][26] Market Data and Key Metrics Changes - The company has seen a strong performance in the consumer segment, with a focus on maintaining high credit performance despite macroeconomic shifts [31][36] - 95% of transactions in the quarter came from repeat borrowers, indicating a solid customer base [37] Company Strategy and Development Direction - The company is focusing on expanding its international presence, particularly in the UK, with plans to leverage partnerships like Shopify [75][76] - The strategy includes enhancing the Affirm card offerings and increasing the attach rate, which is currently at 10% [46][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage credit performance and maintain strong results despite potential consumer stress from factors like student loan repayments [32][36] - The funding environment remains favorable, with a 55% year-over-year increase in funding capacity, allowing for continued growth [40][41] Other Important Information - The company is actively investing in the Affirm card, which has shown significant growth and is expected to continue expanding [48][50] - The 0% APR product is seen as a competitive advantage, with the company emphasizing its unique underwriting capabilities [55][59] Q&A Session Summary Question: Insights on consumer stress and optimism - Management noted that consumer performance continues to be strong, with positive momentum in the U.S. and Canada [14][15] Question: Repeat rates for first-time users with 0% APR - Management confirmed that users attracted by 0% APR promotions do repeat their usage and often convert to interest-bearing loans [25][26] Question: Concerns about consumer credit quality - Management reassured that credit performance remains a top priority, with consistent monitoring and adjustments as needed [31][36] Question: Impact of funding environment on competition - Management acknowledged the favorable funding conditions but emphasized their focus on maintaining high credit quality and long-term partnerships [40][41] Question: Strategy for the Affirm card and its growth - Management highlighted the card's strong performance and ongoing investments to enhance its appeal and functionality [48][50] Question: International expansion strategy - Management confirmed ongoing testing in the UK and plans for careful expansion into other European markets [75][76]