AFRM — Affirm Holdings, Inc.

Affirm Holdings Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Affirm reported strong financial results with a GMV (Gross Merchandise Volume) growth of 36% year-over-year.
• Active merchants increased by 42%, attributed to partnerships with wallet services.
• The company maintained an ROTC (Return on Transaction Capital) margin slightly below 4%, with expectations to hover around this level for the second half of the fiscal year.
• The Affirm card saw significant growth, with GMV up 160% and active cardholders increasing by 121%.

2. Strategic Updates and Business Highlights:

• Affirm announced plans for an investor forum on May 12, 2026, to discuss commercial initiatives and medium-term financial frameworks.
• The company is exploring new verticals, including home improvement and medical, driven by consumer demand.
• Affirm is actively pursuing a bank charter to enhance regulatory certainty, although the timeline for approval is expected to be several years.
• The introduction of Boost AI aims to optimize merchant promotions through automated A/B testing.

3. Forward Guidance and Outlook:

• Affirm anticipates a slowdown in GMV growth to 30% in Q3 and 25% in Q4, primarily due to comping against a large retail partner transition.
• The company expects adjusted operating margins to remain strong, with continued operating leverage and revenue growth.
• Affirm is optimistic about the performance of its card and international expansion, particularly in the UK.

4. Bad News, Challenges, or Points of Concern:

• The transition of a large retail partner off the Affirm platform has created headwinds, impacting GMV concentration metrics.
• There are concerns regarding the competitive landscape, with other players becoming more aggressive in the BNPL space, although Affirm has not seen a significant impact on its pricing or market position.
• Regulatory scrutiny remains a concern, particularly around potential caps on BNPL rates, although no specific caps have been discussed.

5. Notable Q&A Insights:

• Max Levchin emphasized that the consumer base remains healthy, with borrowers showing willingness to repay loans.
• The company is focused on diversifying its merchant base and reducing reliance on top partners.
• Affirm's pricing strategy for 0% offers is being evaluated, with discussions ongoing about how to ensure they are compensated fairly for the value delivered to merchants.
• The company is exploring the integration of its payment options into new platforms, including potential partnerships with banks and payment service providers.

Overall, Affirm demonstrated robust growth and strategic initiatives while navigating challenges related to competitive pressures and regulatory environments.