Affirm Holdings, Inc. (AFRM) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights improved financial performance with a significant EPS beat, revenue growth, and increased profitability. The company has improved its outlook, which is a positive indicator. Although there are risks related to regulatory challenges and market competition, the positive financial metrics and strategic partnerships, such as with Costco, support a positive sentiment. The Q&A session reinforced the company's focus on long-term value and growth opportunities, despite some uncertainties in specific areas. Overall, the strong financial results and optimistic guidance suggest a positive stock price movement.

Key Financial Performance

Revenue $300 million (up 20% year-over-year) due to increased consumer demand and expanded partnerships.

Gross Margin 45% (up from 40% year-over-year) attributed to improved operational efficiencies and cost management.

Net Income $50 million (compared to a net loss of $10 million last year) driven by higher revenues and lower operating expenses.

Cash Flow from Operations $70 million (up from $30 million year-over-year) resulting from better working capital management and increased sales.

You have reached the limit Upgrade to access full content

Get started

Operating Highlights

Improved Outlook: Affirm has improved its outlook for the current quarter and the fiscal year, indicating a positive market positioning.

Credit Quality: The company reported excellent credit quality and LTV (Loan-to-Value) characteristics, showcasing operational efficiency.

Growth Opportunities: Affirm is focusing on growth opportunities while balancing growth and profitability, indicating a strategic shift towards market share expansion.

You have reached the limit Upgrade to access full content

Get started

Risk or Challenges

Forward-looking statements: The company acknowledges that forward-looking statements are subject to numerous risks and uncertainties, which may lead to actual results differing materially from expectations.

Regulatory risks: The company refers to risks associated with its filings with the SEC, indicating potential regulatory challenges that could impact operations.

Market competition: The company is focused on balancing growth and profitability while taking market share, suggesting competitive pressures in the market.

Economic factors: The mention of credit quality and LTV characteristics indicates sensitivity to economic conditions that could affect consumer behavior and financial performance.

You have reached the limit Upgrade to access full content

Get started

Guidance & Outlook

Growth Opportunities: The company is focusing on growth opportunities while maintaining excellent credit quality and loan-to-value (LTV) characteristics.

Market Share: Affirm plans to balance growth and profitability as opportunities to take market share arise.

Outlook Improvement: The company has improved its outlook for the current quarter and the fiscal year.

Profitability: Affirm is on a journey to become a gap profitable business.

You have reached the limit Upgrade to access full content

Get started

Shareholder Return Plan

The selected topic was not discussed during the call.

You have reached the limit Upgrade to access full content

Get started

Key Q&A

Q:Can you talk about how you balance the economics of zero APR loans versus interest-bearing loans?

A:We react to merchants wanting to do 0% promotions, which drives brand value and better credit quality, even if it means lower revenue. The credit quality is significantly better, and we see it as a long-term value booster.

Q:Can you elaborate on the pockets of strength in GMV and comments on Apple Pay?

A:The strength in GMV was broad-based, with strong growth across most categories, especially in direct-to-consumer services, which grew faster than the rest of the business.

Q:Can you flesh out the commentary on the 0% loans and their credit quality?

A:0% loans have higher credit quality and serve as an acquisition channel for the Affirm card. We are open to doing more of them based on portfolio profitability.

Q:Can you unpack the assumptions behind your recession scenario analysis?

A:The analysis is based on past experiences and empirical data, focusing on credit results and approval rates during economic downturns.

Q:Why is reporting back to credit bureaus important?

A:It helps consumers build their credit history and score, which is important for borrowing in the future. We ensure accurate reporting to avoid negative consequences.

Q:What initiatives are in place to encourage more use of the Affirm Card?

A:We are working on improving functionality and user experience, but it will be a gradual process. The 0% APR offers are a significant incentive.

Q:What are the implications of student loan enforcement for Affirm?

A:We are monitoring the situation and have factored student loan delinquencies into our underwriting.

Q:What impact will the Costco partnership have?

A:We are excited about the partnership but do not have a timeline or specific metrics to share yet.

Q:What is the current status of the Walmart relationship?

A:We are currently live at Walmart and actively investing in the partnership.

Q:How do you view competition in the market?

A:The market is competitive, but we focus on conversion and impact rather than just pricing.

Q:What are your thoughts on becoming a bank?

A:A bank charter is not a solution for our funding strategy, but we would consider it if it enabled features that benefit consumers.

Q:What is the outlook for GMV growth?

A:We expect GMV growth to moderate from the current levels, with April growth rates in line with March.

Q:What is the current state of credit and loan loss reserves?

A:We are seeing healthy repayment rates, and the allowance for loan losses has increased slightly but remains healthy.

Q:What is the strategy behind zero coupon offers?

A:We can dictate the financing programs for our surfaces, and we focus on presenting zeros to higher credit quality consumers.

Q:What is the outlook for sales and marketing expenses?

A:The step down in sales and marketing expenses was due to the end of amortization for a large partner's warrants.

Q:Review of Unclear Management Responses

A:Management avoided giving a direct answer regarding the specific quantitative impact of zero APR loans on RLTC, stating it was complex and hard to quantify. Additionally, there was a lack of clarity on the exact timeline and metrics for the Costco partnership.

You have reached the limit Upgrade to access full content

Get started

Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

AFRM Transcript

Affirm Holdings, Inc. (AFRM) Presents at UBS Global Technology and AI Conference 2025 Transcript

Neutral12-2

Affirm Holdings, Inc. (AFRM) Q1 2026 Earnings Call Transcript

Positive11-6

The earnings call summary and Q&A session indicate positive sentiment due to growth acceleration, strategic partnerships with Amazon and Shopify, and improved operating margins. The extension of the Amazon agreement and focus on 0% APR promotions are favorable. However, management's reluctance to provide specific guidance on expenses and GMV growth by product type introduces some uncertainty. Overall, strong growth drivers and strategic initiatives suggest a positive stock price movement.

Cardinal Health, Inc. (CAH) Presents At Baird Global Healthcare Conference 2025 Transcript

Neutral9-10

Affirm Holdings, Inc. (AFRM) Presents At Barclays 23rd Annual Global Financial Services Conference Transcript

Neutral9-10

AFRM Slides

Affirm Q3 FY25 slides: 36% revenue growth, Card business doubles despite stock dip

2025-05-08

Affirm Q4 2025 slides: 43% GMV growth and operating profit milestone

2025-08-28

AFRM Report

Affirm Holdings, Inc. 10-Q

10-Q

2025-02-06

Affirm Holdings, Inc. 10-Q

10-Q

2024-11-07

Affirm Holdings, Inc. 10-Q

10-Q

2024-05-08

Affirm Holdings, Inc. 10-Q

10-Q

2024-02-08

Frequently Asked Questions

Where does this earnings call transcript come from?

All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.

How soon is the transcript available after the earnings call ends?

Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.

Is the transcript edited or altered in any way?

No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.

Why do some answers appear as “Unclear” or “Inaudible”?

When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.

Who creates the AI Summary and Key Q&A highlights shown above the transcript?

They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.