What Management Said
Read the full Q2 2026 transcript ↗For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found in our earnings supplement slide deck, which is available on our investor relations website. Max, could you talk a little bit about the dynamics of your growth, namely the top five merchants growing 23% and blending down as a concentration? I mostly look at the growth of the business through the lens of things like transactions per user, active consumers, active merchant numbers are really important to us. Generally speaking, of course, we want to have less concentration, more diversity, but we also are frequently driven or drafting behind the growth and promotional initiatives of our partners, big and small.
Obviously, the growth numbers are out there in the sprint, so we are not seeing... So it's a little bit selective, but we feel pretty good about both the demand and the ability and willingness to repay. This one might be for Rob, but I was just hoping we could unpack sort of puts and takes in the RLTC margin, just looking back over the last year or so. It seems like, you know, if we look at the guidance in the remainder of the year, it seems like you're kind of still expecting to be hovering around 4%.
I think that's true in both Q3 and Q4 in the guidance that we've provided. You know, we typically don't guide to specific transaction cost line items or even revenue line items. The last deal we just priced was done with a spread of under 100 basis points. And so we're operating and executing in the capital markets really the best we've seen post the rate movement part of the world.
- GMV grew 36% even while comping the transition of a large retail partner off the Affirm integration
- Affirm Card scaled sharply: GMV up just under 160% YoY, active cardholders up 121%, and 0% deals on the card up 190% YoY
- Latest ABS deal priced at a spread under 100 bps (best since 2021) with a weighted average yield below 4.6%
- Active merchant growth accelerated to 42% (up from the low 20s), driven by wallet partnerships
- Signing up for more FY2026 adjusted operating margin expansion than in the guide 90 days ago, on continued operating leverage
- Consumer is healthy and funding demand is very constructive, with forward-flow/private-credit partners wanting more allocation than Affirm can give
- A large retail partner transitioning off the Affirm integration weighed on the top-five merchant metric and is a growth comp headwind
- Guidance implies GMV growth decelerating to 30% in Q3 and 25% in Q4
- Revenue take rates are softening on a year-over-year basis, driven by the heavier 0% mix
- Loss provisions ticked up a few basis points and the stock was down a couple dollars in after-hours
- Adjusted operating margin expansion is set to be lower in the second half (e.g., Q4) than in Q2
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| GMV growth | Q3 FY2026 | 30% |
| GMV growth | Q4 FY2026 | 25% |
| RLTC take rate | Q3 and Q4 FY2026 | slightly above 4% |
| Adjusted operating margin expansion | FY2026 | more margin expansion than 90 days ago |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| GMV | +36% | broad-based diversification and new merchant adds despite the large retail partner transition |
| Affirm Card GMV | just under +160% | card now material to the business and creating more high-engagement users |
| Active cardholders | +121% | continued rapid card adoption |
| 0% deals on the card | +190% | growth in 0% promotional mix on the card |
| Active merchants | +42% | wallet partnerships adding active merchants to the count |
| Top five merchants | +23% | a different subset of five merchants vs. prior year plus the large partner transition weighing on the metric |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| 0% / no-interest promotions as a moat | — | Simple, asterisk-free 0% offers drive conversion and are unaffected by competitors' aggressive cashback promotions; GMV uplift rises with basket size | — |
| Affirm Card | positioned as top-of-wallet everyday card | usage is bifurcating: a minority use it top-of-wallet while the majority use it for considered purchases; still the biggest growth engine | — |
| International expansion | — | UK scaling with new deals (Wayfair beta, VMO2, Shopify still below peak run rate); growing consistently, though still smaller than the card | — |
| Bank charter (ILC application) | — | Applied primarily for regulatory certainty; timeline is years, not modelable, and not tied to funding costs or new categories | — |
| Funding / ABS / forward flow | — | Capital markets the best since the rate move; spreads under 100 bps and yields below 4.6%; private-credit demand strong and selective vertical-slice allocation unchanged | — |
| Credit health | — | Consumer healthy, NCO curves tightly managed; modest uptick in loss provisions with room to optimize for RLTC | — |
| New verticals and platforms | — | Chosen by consumer pull (auto parts, medical, home improvement); small rent time-shift test, Intuit/QuickBooks B2B2C, Fiserv/FIS bank distribution | — |
| Agentic commerce | — | Still very early but bullish; structurally benefits from no deferred interest/late fees; expects an Affirm button across all forms of commerce over time | — |
| Boost AI / AdaptAI | — | Boost AI is new and lightly adopted, enabling automated A/B testing and merchant-funded promo dollars in an advertising-like model; not broken out in the guide | — |
Q&A Summary
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