Earnings Call Insights: Affirm Holdings, Inc. (AFRM) Q4 2025
Management View
- CEO Max Roth Levchin stated, “we actually set a new record in most of our metrics, which is unusual. Fiscal Q2 is a normal peak but this is Q4 and yes, it is the record. So that’s really cool. I should tell you that our growth is accelerating and we are firing on all pistons.” Levchin highlighted the team’s tenure and affirmed his confidence in the company’s trajectory.
- Levchin underscored the ongoing expansion of Affirm Card, noting, “the current trailing 12 months of the cardholder is about $4,700. So I think the last time we dropped this number, it was along the lines of $3,500. This is across all Affirm services, so this is card and in all the other places where you might go, but card dominates that spend obviously. So we’re not quite at the $7,500 but we’re more than halfway there.”
- On new market initiatives, Levchin shared that Affirm is “in friends-and-family testing in the U.K. with our Shopify friends. It’s very exciting so that’s obviously an enormous potential of that is not lost on anyone.”
- COO Michael Linford commented on capital partnerships, “we partner with who we think is the blue chips of these asset managers. And that can come in the form of large strategic partnerships with world-class investors like Sixth Street or very good insurance asset managers up and down our stack.”
- CFO Robert W. O’Hare added, “given the short duration of the loans that we’re originating, the most important thing for us is that we have a full picture of the borrower’s wherewithal to repay the loan at the time of origination. And then the asset is so short-dated and we’re increasingly working with consumers that we’ve seen before. 95% of our transactions came from repeat borrowers this quarter.”
Outlook
- Affirm leadership maintained a positive outlook on both growth and profitability, with Levchin stating, “from the consumer point of view… we think that it continues to perform. It’s really maybe a commentary on how strong the momentum is in the U.S., and to at least a similar degree, Canadian consumer and soon, we’ll find out what that looks like for U.K. one.”
- The company anticipates continued acceleration in GMV and further expansion of the 0% APR program, with Levchin noting, “monthly 0% loans were growing north of 90% year-on-year. So we would expect that, that loan product in particular, continues to take a bit of share within our mix.”
- The international rollout, particularly in the U.K. with Shopify, is positioned as a near-term growth lever. Levchin indicated, “as we scale Shopify, that is absolutely subject to change just based on what this will do relative to what’s available.”
Financial Results
- Levchin described Q4 as a record-setting quarter for most metrics.
- O’Hare reported that “95% of our transactions came from repeat borrowers this quarter,” highlighting strong customer engagement and low risk for new originations.
- Affirm Card volume reached $1.2 billion with a 10% attach rate, and the trailing 12-month cardholder spend increased to $4,700 across Affirm services.
- Monthly 0% APR loans grew more than 90% year-on-year, and the number of merchants funding the offering doubled to 7% of the merchant base.
Q&A
- Dan Dolev, Mizuho: Asked about improved optimism versus last quarter and drivers for the uptick. Levchin responded that demand for service and credit performance remain strong, and originations are accelerating.
- Daniel Rock Perlin, RBC: Queried repeat rates for first-time 0% APR users. Levchin replied, “there’s not a tremendous difference in terms of repeat of users that have been acquired through 0s or not. But… do 0% users flip over to interest bearing? And they do.”
- Adam Frisch, Evercore ISI: Questioned consumer risk and FICO distribution amid potential headwinds. Levchin explained the company is “not concerned” due to real-time underwriting and ongoing credit monitoring, emphasizing that “credit is job #1.”
- Will Nance, Goldman Sachs: Asked about risk from alternative lenders with increased funding. Linford stressed Affirm’s strategy of choosing “blue chips of these asset managers” and maintaining long-term discipline.
- Multiple analysts, including Adib Choudhury (William Blair), pressed on international and U.K. growth. Levchin confirmed the U.K. launch is underway, with early testing and plans to leverage Shopify for rapid scaling.
- Rob Wildhack, Autonomous Research: Inquired about the 0% APR strategy. Levchin attributed Affirm’s success to underwriting strength and the ability to structure merchant-subsidized offers profitably.
Sentiment Analysis
- Analysts were generally positive, frequently using phrases like “crushing it” and “great results,” but their questions often probed sustainability of current trends, competitive risks, and consumer health.
- Management displayed high confidence, using phrases such as “we are firing on all pistons,” and providing detailed, assertive responses. Levchin often emphasized control over credit risk and growth levers.
- The tone remained highly confident in both prepared remarks and Q&A, with management maintaining more optimism this quarter compared to last, when there was more caution around macro risks.
Quarter-over-Quarter Comparison
- Q4 featured more assertive claims of record results and accelerating growth, compared to Q3’s more cautious optimism and focus on judicious growth.
- Guidance language shifted to emphasize rapid expansion, especially in 0% APR products and international markets.
- The focus of analyst questions evolved from managing risk and competition (previous quarter) to probing Affirm’s ability to sustain growth and capitalize on new markets and partnerships.
- Management’s confidence in credit quality and underwriting remains strong, but this quarter, the emphasis shifted to growth acceleration and the scaling of the Affirm Card.
- The share of repeat borrowers and engagement with new products (especially the card) were more frequently highlighted.
Risks and Concerns
- Management noted ongoing monitoring of macroeconomic shifts, including student loan repayments and consumer credit health.
- Affirm continues to prioritize credit risk management, with Levchin reaffirming, “credit is job #1.” The team is prepared to adjust underwriting standards as needed.
- Analyst concerns centered on competitive pressures from alternative lenders, risk in funding markets, and the sustainability of high growth in 0% APR and card products.
- The upcoming transition of a major enterprise merchant was addressed, with the outlook assuming “the integration goes away at the end of this quarter” and volume from that partner to be conservatively modeled.
Final Takeaway
Affirm Holdings delivered a record-setting quarter, highlighted by accelerating growth in GMV, substantial increases in Affirm Card usage, and the rapid expansion of its 0% APR product. Management emphasized the strength of its underwriting, the durability of consumer demand, and the company’s readiness to capitalize on international opportunities, particularly in the U.K. with Shopify. Repeat usage remains high, and new product initiatives, including AI-driven checkout optimization, signal a focus on both innovation and disciplined risk management as Affirm moves into its next phase of growth.