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. I know a lot of ink is being spilled elsewhere about what's going on in the capital markets. To, you know, a key part of the reason why you see funding costs down on the order of 125 basis points year-on-year. It's just really a reflection of the capital markets demand for our asset and our team's ability to execute despite quite a bit of economic volatility and headlines out there.

I noticed that, growth in the Pay-in-X has, you know, is your fastest-growing segment now. This is very tempting to turn this into a 15-minute answer in the finer points of software development, which I am personally invested and involved in. If you look at our revenue per employee, it is already hanging out in, like, NVIDIA territory. If you look at the revenue per employee, you'll see that we're just highly efficient.

I think we would expect to do more of the same in fiscal 2027, but I'll stop short of giving any sort of outlook or guidance for 2027 today. There could be a small drag on revenue less transaction costs as we enter these new markets. Is there anything that's working differently or stronger than it has been in the past as far as card customer acquisition goes? I think to the first part, there's a long list of things we have done and continue to do to just increase adoption.

What went well
  • Another record fiscal Q3 that management called "one for the record books"
  • Active merchant count rose 44%, accelerating beyond a strong Q2
  • Funding costs down ~125 bps year-on-year with deep, oversubscribed ABS deals and tightening spreads
  • Stable delinquencies and no deterioration in the Affirm consumer they underwrite
  • Affirm Card scaled to 4.4 million cardholders (+700K in the quarter), their fastest-growing and most profitable product
  • Transactions per active still growing above 20%, driven by network effects
What went wrong
  • Allowance rate rose quarter-over-quarter on Q3 seasonality plus elevated tax-season prepayments leaving delinquencies on a lower loan base
  • Difficult prior-year comp from sunsetting a top-three merchant in Q1 that steps up into Q4, a few points of growth headwind
  • 0% APR / Pay-in-X mix carries slightly lower RLTC margin as it grows
  • Agentic AI developer-tool costs now show in the P&L (low single-digit millions per quarter) and continue into Q4
  • Entering new international markets could be a small drag on revenue-less-transaction-costs during the underwriting ramp

Guidance Changes

MetricPeriodCurrent guidance
GMV / revenue growth rateFiscal Q4 2026Incrementally more positive in the updated guide; Q4 growth not expected to be a ceiling into fiscal 2027
International / new-market contributionFiscal 2026Not material; deep dive deferred to the Investor Forum
Agentic AI developer-tool spendFiscal Q4 2026Low single-digit millions per quarter, continuing; not a material P&L impact

Performance Breakdown

MetricYoYNote
Active merchant count +44% Growth from large platform partners such as Shopify and PSPs plus the new Intuit program
Funding costs -125 bps Lower benchmark rates combined with spreads tightening on strong capital-markets demand for the asset
Transactions per active >+20% Network effects from more merchants signed and more consumers converting to higher-frequency Affirm Card use

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Affirm Card~900,000 card adds in the prior quarter700,000 adds this quarter to 4.4M cardholders (~17% attach, ~20% of actives); highest credit quality, most profitable and fastest-growing product, now in billions of GMV—
Funding / capital markets—Market exceptionally constructive; three deals year-to-date (two revolving, one static priced), heavy oversubscription, forward-flow demand led by Sixth Street JV, pension funds and insurers rather than liquid retail vehicles—
0% APR / Pay-in-X—Fastest-growing segment; one large program moved to an evergreen 0% Pay-in-4 offer and Shopify volume keeps growing; all largest programs now use 0%—
Agentic AI / engineering productivity—Roughly doubled agentic code requests; accretive to the bottom line, low single-digit millions per quarter cost, and explicitly no AI-related layoffs—
Underwriting & credit moat—Framed as the least-understood advantage; sophisticated AI underwriting keeps RLTC above long-term targets while competitors stumble—
International expansion & bank application—Investment underway but not material in FY26; bank charter conversation with regulators ongoing with nothing to share, product roadmap separate—

Q&A Summary

Any changes or slowdowns in credit, and is the private-credit unease affecting your funding side?
No deterioration in the Affirm consumers they underwrite and no disturbance in funding; the funding market remains exceptionally constructive with deep demand, tightening spreads, oversubscribed deals and forward-flow partners wanting larger allocations.
What's driving the ABS market for you, and what are spreads and demand doing?
Three deals year-to-date (two revolving, one static just priced) all saw incredible depth, oversubscription and sustained spread tightening, a key reason funding costs are down ~125 bps year-on-year alongside lower benchmark rates.
Why is Pay-in-X now your fastest-growing segment and will it continue into Q4?
Yes it should continue; one very large program moved to an evergreen 0% Pay-in-4 offer, and the Shopify program keeps growing nicely as the main source of Pay-in-4/Pay-in-X volume.
Active merchant count grew 44%; where is the biggest opportunity to add merchants and how penetrated is BNPL presentment?
The biggest accelerants remain large platform partners like Shopify and PSPs; presentment is still very early innings, with the brand-new Intuit program a huge, barely-scratched merchant universe.
Why was the allowance up quarter-over-quarter?
Partly Q3 seasonality as volumes step down from the holiday quarter to a lower base, and partly elevated tax-season prepayments, a positive credit signal that shrinks the loan balance and leaves delinquencies on a smaller base, lifting the allowance rate.
Competitors are cutting staff because of AI, what's Affirm's stance?
No AI-related layoffs; Affirm already runs lean with very high revenue per employee, and the AI tools are accelerating shipping (a recent hackathon delivered dozens of shippable features) so they need all their people.
What's behind the continued Affirm Card adds and are you seeing scale benefits at 4.4M?
Growth is natural, not juiced, kept as a repeat product within the existing base at roughly 20% of actives; now in the billions of GMV, the card is no longer a small product and gets more engineering and risk resources, so expect more features.
Can the 0% APR mix keep rising and can that RLTC margin gap versus the rest of the book close?
Over time yes as more merchants learn 0% deals drive more predictable sales; 0% loans carry slightly lower RLTC but also lower credit costs, and all their largest programs already use 0%.
Is GMV growth sustainable and is the competitive landscape changing?
Nothing unusual or unsustainable in the quarter; still tiny relative to U.S. e-commerce so taking share isn't hard yet, and their durable edge is 15 years of underwriting, capital-markets trust, no late fees and brand recognition that rivals underestimate.
What are the drivers of transactions per active growing above 20%?
A network-effect flywheel: converting more consumers to higher-frequency cardholders, plus signing new merchants that increase brand visibility and sign-ups, together accelerating usage per user.

More on Affirm Holdings, Inc.

Reported 2026-05-07 · figures from the Affirm Holdings, Inc. Q3 2026 earnings call.

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