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    AFRM
    Earnings call· Dec 2025(Q2 FY26)

    Affirm Holdings Q2 FY26 earnings call AFRM

    Feb 5, 2026 Source

    Executive summary

    Affirm Holdings Q2 FY26 — Strong GMV Growth and Diversification

    Affirm delivered excellent Q2 FY26 results, driven by robust GMV growth, significant expansion in active cardholders, and strong ABS market execution. The company continues to diversify its merchant base and product offerings, including the Affirm Card and international expansion. Management remains focused on regulatory stability and leveraging its platform for new partnerships, while acknowledging expected GMV growth deceleration in the coming quarters.

    Highlights

    5

    • GMV grew 36% year-over-year.

    • Active cardholders increased 121% year-over-year.

    • 0% deals on the Card grew 190% year-over-year.

    • ABS deal priced with a spread under 100 basis points and weighted average yield of 4.6%.

    • Active merchant count increased 42% year-over-year.

    Concerns

    3

    • GMV growth is expected to decelerate to 30% in Q3 and 25% in Q4 FY26.

    • Top 5 merchants' growth rate is blending down, impacted by a large merchant partner transition.

    • Loss provisions ticked up a few basis points.

    Guidance & targets

    5
    CategoryTargetConfidence
    RLTC take rates
    slightly above 4%
    medium materiality
    High
    RLTC take rates
    slightly above 4%
    medium materiality
    High
    GMV growth
    30%
    high materiality
    High
    GMV growth
    25%
    high materiality
    High
    FY26 Adjusted Operating Margin
    margin expansion
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Top 5 Merchants
    Growth rate for top 5 merchants, impacted by a large merchant partner transitioning off, leading to a new subset of top 5 merchants.
    GMV growth: 23%
    		—23%——
    Other Category (GMV)
    Represents the long tail of smaller merchants and wallet partnerships, showing significant diversification and high growth.
    GMV contribution: 15% of total
    		—triple digits——

    Operational metrics

    5
    RLTC Take Rate
    just shy of the upper side of the long-term goal
    Q2 FY26

    We managed to a [indiscernible] number. And if you look at the chart of the nice curve, you'll see that these are like super tightly run lines that are just 1 on top of the other.

    Weighted average yield on ABS deal
    4.6%lowest since 2021
    Recent deal

    The last deal we just priced was done with a spread of under 100 basis points. It's really remarkable. We haven't done that since 2021. And the weighted average yield on the deal was low 4.6%.

    Active Users
    25 million
    Q2 FY26

    We have 25 million active users, and we still keep on talking externally but also kind of internally as if we have exactly 1 product that fits them all

    Debit Cards in America
    0.5 billion
    Current

    there's already on the order of 0.5 billion debit cards in America

    GMV uplift from 0% offers
    increases with transaction size
    Q2 FY26

    we broke out just for the big nothing the GMV lift merchants saw by size of basket, which is kind of a really -- we don't really talk about it that much, but you can see there's like a nearly perfect linear curve as the size of the transaction increases the GMV uplift by offering 0% goes up as well.

    Industry KPIs

    2
    MetricValueDetails
    Payments volume gdv36%%
    Cards in force credentials121%%

    Product announcements

    4
    ProductTypeDetails
    Investor Forummilestone
    Bank Charter Applicationmilestone
    Rent Payment Testlaunch
    Boost AIlaunch

    Deals & partnerships

    6
    Shopifypartnership

    Announcement was 'a little while ago,' scaling in the U.K.

    Wayfairpartnership

    Live in the U.K. in beta. Long-time partner in the U.S.

    [indiscernible]partnership

    Described as 'largest or certainly 1 of the first or second largest twice the company -- or selling company in U.K.'

    QuickBooks Payments (Intuit)partnership

    Integrates Affirm into invoices for services provided by small businesses through QuickBooks. Consumers can pay over time.

    Fiservpartnership

    Follows partnership with FIS. Aims to offer Affirm's platform to banks through their core banking software providers, enabling them to offer BNPL capabilities on debit cards.

    FISpartnership

    Fiserv partnership 'follows our partnership with FIS'.

    Risks & headwinds

    3
    GMV growth decelerationQ3 FY26, Q4 FY26

    30% in the third, 25% in the fourth quarter

    Mitigation: No specific call-outs, but implies continued focus on diversification and product expansion. Acknowledged impact from a large retail partner transition.

    Large merchant partner transitionQ2 FY26 and ongoing

    Impacted top 5 merchant growth (23%).

    Mitigation: Diversification of merchant base, growth in 'other' category.

    Loss provisions ticking upQ2 FY26

    ticked up a few basis points

    Mitigation: Management states consumer is healthy and credit is managed 'very, very attentively at all times' to optimize RLTC.

    Q&A highlights

    7

    Inquiring about the dynamics of top 5 merchant growth (23%) versus overall GMV, and if the business is truly widening out given new merchant ads and transactions per active user.

    Management clarified that the 'top 5' merchant list changes, making year-over-year comparisons difficult, especially with a large partner transitioning off. They emphasized overall business growth and diversification.

    “the top 5 that we disclosed for Q2 of FY '26 is actually a different subset of merchants that we're comparing to in fiscal '25 in the same period. So I think all the more reason not to read too much into that stat.”

    asked by Andrew Jeffrey · answered by Robert O'Hare

    2 min read7 chapters

    Detailed Narrative

    01

    Merchant Diversification and Growth

    Affirm is seeing significant growth in its 'other' GMV category, which now represents 15% of total GMV and is growing triple digits. This category comprises a large number of smaller merchants, indicating a broadening of the business beyond its top partners. The company also reported a 42% year-over-year increase in active merchant count, partly driven by wallet partnerships, contributing to overall business diversification.

    02

    Affirm Card Performance

    The Affirm Card continues to be a strong growth engine, with GMV up just under 10% year-over-year, active cardholders increasing 121%, and 0% deals on the Card growing 190% year-over-year. Management highlighted its strategic importance and plans for further development, noting its role in creating more 'die-hard users' and its personal focus for product development.

    03

    International Expansion

    Affirm is actively expanding internationally, particularly in the U.K., with recent deals including Shopify and Wayfair. The company also announced a partnership with a major U.K. retailer. International growth is now consistent and exciting, with plans for expansion into more countries, indicating a significant driver for future growth.

    04

    Regulatory Stability and Bank Charter

    Affirm has applied for an industrial loan company bank charter, viewing it as a long-term investment in regulatory certainty and stability. While the timeline for approval and operation is 'certainly years' and not guaranteed, the move aims to enhance regulatory posture and potentially unlock new products in the future, though it is not expected to impact short-term funding costs.

    05

    Funding Market and ABS Execution

    The ABS market remains highly constructive, with Affirm recently pricing a deal with a spread under 100 basis points and a weighted average yield of 4.6%, levels not seen since 2021. Management noted strong demand from partners, often having to disappoint them on allocation, indicating market confidence in Affirm's ability to control credit outcomes and deliver returns.

    06

    New Vertical Exploration (Rent & Intuit)

    Affirm is testing a very small rent payment product focused on time-shifting payments (e.g., splitting or moving due dates) rather than long-term installment plans, emphasizing its experimental nature. Separately, a partnership with Intuit will integrate Affirm into QuickBooks Payments, enabling consumers to pay for services from small providers over time⏳, unlocking a new facet of transactions.

    07

    Agentic Commerce and AI Initiatives

    Affirm is actively engaged in understanding and preparing for Agentic Commerce, believing its transparent, no-fee product offering will stand out as AI agents learn about financial products. The company also highlighted its 'Boost AI' product, which allows merchants to optimize 0% promotions through automated A/B testing for incremental dollars, acting more like an advertising model.

    AI-generated summary of the company’s earnings call. Not investment advice.