Affirm Holdings, Inc. (AFRM) Q4 2026 Earnings Report, Transcript and Summary

Good afternoon. Welcome to the Affirm Holdings Fourth Quarter Fiscal 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, and a replay of the call will be available on our Investor Relations website for a reasonable period of time after the call. I'd now like to turn the call over to Zane Keller, Head of Investor Relations. Thank you. You may begin.

Thank you, operator. Before we begin, I would like to remind everyone listening that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website. Our actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them, except as required by law. In addition, today's call may include non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. 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 IR website. Hosting today's call with me are Max Levchin, Affirm's Founder and Chief Executive Officer; Michael Linford, Affirm's President; and Rob O'Hare, Affirm's Chief Financial Officer. In line with our practice in prior quarters, we will begin with very brief opening remarks from Max before proceeding immediately into your questions. With that, I will turn it over to Max to get us started.

Thank you, Zane. As always, the performance as good as it is. I'll keep the prompt remarks brief. As you may have noticed, fiscal fourth quarter was our most profitable quarter ever, even without the tax allowance release. The company is thriving, and the core business is firing on all cylinders. I'm excited to announce that our veteran execs, Pat Suh and Michael Linford, are promoted to SVP, GM of Global Markets and President, respectively, setting us up for an even tighter execution and allowing me to get even deeper into developing our next generation of products and services. With that, happy to address your questions. Back to Zane.

Okay. Thank you, Max. Now let's get to your questions. Operator, please begin the Q&A session.

[Operator Instructions] Our first question comes from the line of Adam Frisch with Evercore ISI.

Congrats to you, Mike, on a well-deserved promotion. Max, at the Analyst Day, you said you're most excited about things you can't really talk about yet. If precedent holds on the initial guidance and how you ultimately will end the year, growth in fiscal '27 should again be terrific, but with investors focused on the sustainability of high growth rates, when should we expect to see some of these initiatives start to show up in future years? And do you believe that over the long-term, Affirm needs to or should offer consumers multiple financial products and services in addition to what you do today?

Thank you. It's a compound question. I'll go backwards. We already offer multiple products to consumers today. So the answer to, should we do that, we think is yes, otherwise we wouldn't have built all these other things. For the moment, the majority of our products are various expressions of offering credit, but not necessarily at the point of sale. It also comes, obviously, in the form of a card. We have an account. We have a version of our product that works for business purchases. So we've already spread into several other subcategories, including verticals that we address. Actually, there's a bunch of that in my note in as well. So we absolutely expect to continue expanding. In terms of when these things will show up, I think this is probably a question for our CFO and Michael in sort of how we set guidance. But the -- a big part of the expectations from this promotion that Michael got and my own focus is I plan to spend a lot more time working on things that will only show up in fiscal '28, '29, and so on. And so the numbers we're putting to the market today reflect our products that are working and growing and printing profits. Some of the crazier ideas from the future are in the future, and we try very hard not to overpromise and underdeliver.

Okay. I think growth is in good hands with you taking that.

Our next question comes from the line of Harry Bartlett with Rothschild.

I just wanted to touch on something you mentioned in your shareholder letter. Clearly, it is doing very well, but you said that you're really available at 80 of the top 250 e-commerce sites and 10% of e-commerce merchants. You're very well integrated with a lot of the major PSPs now and clearly very well known as a brand. So I guess the question is, what's the impediment for getting these remaining merchants to sign up? And how do you kind of bridge that gap to get there?

We don't think of it as an impediment. I think we have an exceptionally strong revenue team, and Wayne, that who runs it, is an exceptional executive and deserves every accolade. And so I expect his team to continue executing and signing each one of these merchants one by one, sometimes in bulk, but mostly one by one. I think the majority of the time for large merchants, these are long sales cycles that take a lot less convincing than ever before. People understand the value that we provide, and they are excited to see it added to their checkout. But many large enterprises that sell things online have complex and frequently outdated systems. A lot of times, adding a new major point-of-sale system requires them to do some major modifications. Sometimes it pushes them to do whatever work that they were postponing because they weren't planning on adding another one. So these are not things that flip in 1 quarter. But the reason I mentioned the numbers you quoted is because there's just an enormous amount of greenfield. We think our -- if anything, this is a sort of a notion of our sales team has a lot of work to do for probably quite a number of quarters, but no one should be taking a break or should you be thinking we're running out of the Internet or anything.

Our next question comes from the line of Harshita Rawat with Bernstein.

I want to ask about in-store. As Affirm Card continues to scale and now you have the wallet partnerships, how can you scale in-store usage of Affirm where the opportunity is arguably much bigger, as you also alluded. I know there are unique friction points in terms of getting approvals, what happens when you get declined physically get them in store. So I know 30% of your Affirm Card transactions are offline, but it's still very small as a percentage of your overall GMV. So I would love to hear your thoughts on product planning.

I 100% agree. One of the things that the innovation team that I have now more time to run is working on is improving the in-store process. And most things, payments in general, are very rarely about uncovering some low-hanging fruit that was just already in the ground, you need to pick it up. It's primarily about polishing off unhappy paths: poor connectivity. How do you make sure your product works in a large store that's essentially a Faraday cage, you can't get connected to the Internet. How do you integrate with point-of-sale systems that don't know how to read QR codes, don't know how to read barcodes. It's kind of an endless long tail or not endless. There's a meaningful long tail of conditions that make approval or tender delivery or even handling things like card size adjustments in-store just that much harder than online. Online, you hit back on your browser and you correct whatever it is you need to correct. In store, you have to go back to -- the back of the queue to the cash register, which is annoying and people would rather not do that. So the bar for error is much lower, like you have to create a much better consumer experience. So we're excited to work on that. By no means that should imply that we are unexcited about e-commerce. We actually have a lot to do. Obviously, there's still 80% more e-commerce to go. But offline is a giant portion of the market and continues to be. And we have some really interesting ideas on how to make the experience not just uniquely better, but also uniquely Affirm. So maybe the best answer to your question is not quite going to preannounce anything here yet, but we expect to launch a few ideas that are uniquely Affirm specific, which through the lens of sort of product development, you can ask people to do more work to use your product if you're delivering disproportionate value. You can consider sort of Affirm online relative to credit cards. Credit cards are really easy. Just type in a number or you tap it offline and off you go. Affirm has to do a little bit more work to get approval to understand why you might get declined, but the value is there. You get this amazing 0% deal, you get no fees, you get no deferral. And so the work is a little bit more, but the value is tremendous. And so we're going to bring that same ethos of maybe the work is a little bit more, but the value is so much better than what you do with your traditional payment instrument offline. And we'll show something off in the coming quarters.

Our next question comes from the line of Rob Wildhack with Autonomous Research.

I wanted to ask you about the U.K. It sounds like you're pleased with the progress to date. But could you just tell us more about the early receptivity from consumers and from merchants? And then I'm also curious if there's been any competitive response or changes from the incumbents there that you've seen? Any details there would be great. And congrats to Michael and to Pat on the new roles.

Pretty excited about the United Kingdom, seeing solid results. We just held our first executive dinner there a couple of nights ago where we met with some of the larger existing merchants there and got their first round of formal feedback and all that. And by all accounts, it was a love fest. So I think we're doing well in terms of creating new friends and early fans. The consumer uptake, I think we said it before, and it turned out to be true. There's a lot of love to be had when you don't try to make money by sneaking your business model into fine print and hiding things with fees and such, and we don't do any of those things. And sure enough, consumers love it. But retailers actually have a fresh appreciation for that because to date, there hasn't been a player in the market that would build the products the way we do. On the competitive response, and I don't want to be too loud here because I might wake someone up, but we're not seeing much to report on the matter, to be honest. I think for now, at least we're doing great in terms of feeling like our product is a unique play in the market.

Our next question comes from the line of Will Nance with Goldman Sachs.

I wanted to ask just on the growth in interest-bearing this quarter. Obviously, very strong. I know you're calling out the 41% growth in Pay-in-X, but it's also great to see kind of the largest product almost keeping pace with that product. So just curious how you're thinking about overall product mix and then just more of a nuance there. Just wondering if like the shift to the promotional event, if that created any like mix dynamics that we should consider from the fourth to the first quarter?

Yes. Great question. I think it really comes down to mix within sort of the 2 largest centers of gravity within the product portfolio. So on the one hand, we have point of sale. We did actually see sort of an acceleration in 0% share within point-of-sale integrations. And I think some of that is due to the Big Nothing event, but just it's also been a push of ours in terms of what we're selling into merchants. And then really on the direct-to-consumer side, we actually see a much higher proportion of interest-bearing loans within that product set. So we're running sort of north of 80% interest-bearing on our direct-to-consumer products. And I think just with the continued growth and scaling of things like Affirm Card, it's really that, that's driving the sort of mix shift back towards interest-bearing a little bit.

Our next question comes from the line of Dan Dolev with Mizuho Securities.

Exceptionally, as you said, Max, ludicrous quarter. I like that one. I have a question about something you said at the Analyst Day. You said it gets easier to grow as you gain scale, but some of your competitors are not seeing that. So what are you doing right or maybe what are they doing wrong that makes you benefit from that virtue? And congrats again.

Thank you. I can only speak, I guess, to what we're doing right. I think we know exactly who we are. Like we have a very, very specific set of views on why we do what we do, why we prioritize certain things, why we won't do other things and not just what kind of products or what sort of structures we're willing to put in front of our customers and what we're not. But we are a network. Every decision we make at the product level, at the sales level, at the capital markets level, we ask ourselves, does this benefit every part of our network? Does this grow the consumer base? Does it give them a reason to spend more with us? Does it give them a reason to spend more with our customers, the merchants by adding a merchant, are we exposing our consumers to the merchants we want them exposed to and so on. And so we are constantly asking ourselves how can we create a virtuous cycle? How can we aid the virtuous cycle that we've created. If you have a network, eventually, you start seeing network effects. And network effects are very simply, it is expensive to leave because you're going to miss out on a large and growing body and it's dumb not to join because you are missing out on a large and growing body of business. So the larger we get, the more valuable the network becomes, the more activity that happens on the edges of the graph we're building and the more people, the more merchants want to join the graph. I think for most payment systems, if you sort of cast your eye across the last 50 years of -- and I've been building payment systems for almost that long, sadly, the ones that survive and thrive are the ones that are extremely focused on building a network almost at the expense of anything else. And by the way, if you are willing to stay focused and go long, you are rewarded with profitability, with pricing power, with sustainability of the business, sustainable growth. All of that comes in time if you're focused on building a network. And we have been from the very beginning. If you look through my letters, you'll find the word network probably the most commonly repeated now. And that's sort of the secret to the success so far, and we have no intention of changing that. I think a lot of the players in the space decide that the next shiny object is the thing that will create short-term value and whatever happens next happens next. We try to measure things not in quarters, but in years and hopefully decades. So the strategy has worked for us so far. We'll continue doing exactly that.

Great. We agree. Congrats again.

Our next question comes from the line of Jason Kupferberg with Wells Fargo.

So everyone's been asking you guys for a while, are there any signs of consumer stress in the business? Any concerning signals in your data on delinquencies? The answer has consistently been no. We see another strong quarter here. The consumer is really resilient. Is there a case to be made that you guys could actually loosen the credit box a little bit? Or does that feel too risky in light of some of the macro uncertainty out there? And then just a quick one for Rob. Any way you want us to think about modeling GAAP EPS for fiscal '27?

[indiscernible] you answer, and I'll think of something clever?

Sure. I mean I think we've given you a lot of the building blocks of GAAP EPS, Jason. We've given you GAAP operating income. We've also given you an estimate for share count. I think the one piece you're missing is the tax rate, and I'll probably go back to some of the guidance that we gave at the Investor Forum in May. We think on sort of a run rate basis, the GAAP tax rate lands in sort of the mid- to high 20% range. I would just caution though that there can be some volatility in the effective tax rate just based on some of the GAAP versus tax differences and how things like stock-based compensation and some other forms of share remuneration treated. So there's likely to be a bit of volatility, especially as we're continuing to scale profitability. So that's one of the reasons we stopped short of giving an exact guide for EPS. It's just the volatility that we think may play out in the tax rate.

Yes. And on the credit side, sort of a couple of thoughts that are sort of disconnected. We're not so big that you can look at Affirm and read the tea leaves of the overall macroeconomic state of the United States. Our consumer is doing fine. You can see that in the numbers. And we are benefiting tremendously from the ability to say yes and no to every transaction. So we are literally choosing the loans we want to make in real time in very small increments, roughly 100 million times a quarter. So highly differentiable curve, and we decide the shape in the area under. So in the sense of control of our credit outcomes, I said it before, I'll say it again 1,000 times, we are in control of the credit reality. You would see us slow down growth before you would see us have a real credit disturbance. And obviously, these are imprecise sciences. So there are always ups and downs in the DQs. But generally speaking, we manage to a number in the sense that credit target is the input, not the output of the business. The output is the approval rates and things like that. And so with that, we definitely have conversations around what's the overall policy stance. Are we feeling good about the future? Are we feeling less good about the future? Should we tighten, should we loosen? But it's never expressed in terms of some giant lever somewhere that Rob Finnegan grabs on to with both hands and opens up the floodgates of money or closes down. It doesn't work like that at all. There's a constant conversation happening in the credit team asking themselves, are there opportunities for strategically more permissive stance at a class of transactions or a class of consumers at a class of merchants. And those conversations happen all the time on a weekly basis, just like the credit team reports back to the management team on a weekly basis of exactly what the landscape looks like. At any given moment, you could hear them say, you know what, here's what's going on. An interesting standout is this. And this could be anything like we're seeing an early signal in DQ0 or DQ1. So day after the payments are due or 2 days after the payments are due, we're wondering what that is. We're going to monitor it for the next 6 weeks and make a decision. And so all this flavor is to give you a sense of we just really do not think about credit as this binary switch that gets flipped on or off. We never scramble to or away from it in part because we have so much control in part because we have an extremely serious point of view on what these numbers have to be for us to be a responsible and reliable counterparty to our capital markets partners. And so that is the most important relationship in the business on the supply side, and we have to maintain it. And so I am sure somewhere right now -- I hope they're not listening to me rant, but instead of doing their job in credit, but someone in the credit analytics team is putting together a scenario analysis showing how a merchant is getting slightly higher approval then what that does for our GMV and an alternative analysis showing how the merchant is getting a slightly lower approval and what that does for our GMV and consumer satisfaction. And so yes, the work is done constantly. By the end of this call, a decision to loosen and a decision to tighten will be made and it will be executed in due notion by the end of it.

Our next question comes from the line of James Faucette with Morgan Stanley.

I want to touch on the increase in Pay-in-X and kind of the comments that were made in the letter -- shareholder letter about getting some increased participation from merchants there. Just wondering like how you think about being able to expand that program? And then at least more interestingly, perhaps to me is, is that a gateway to improving or expanding up into 0% promotions, et cetera, for those kind of merchants? Is it basically a test/proof point for them?

That's a great question. I'll start this time and Rob can speak to the exact Pay-in-X growth, which is pretty good this quarter. So kind of the most important things to understand is free use of money is valuable to all consumers. So you can sort of ask like what is Affirm for? And one version of the answer is it's for people trying to figure out how to fit a considered purchase, something that actually registers on their personal financial radar into their monthly outflows. So it's affordability, it's access to capital when they need it or access to credit when they need it. The kind of a baseline answer. A more sophisticated answer is there's always alternatives in that space. And so the question then becomes, well, what's the cost of money? What's the cost of it? And obviously, the cost is interest we charge and the best possible deal is, well, what if there was no interest at all? What if someone else paid your interest. And -- that is a really, really important function in part because that makes the product appealing across all credit spectrum. So you could argue that there's a natural point where you say, well, you know what, I have excess of cash. I just don't care. And if you're going to charge me interest, I'm going to pay cash and move on. I'm going to pay with my credit card and pay it off before the end of the month, so there's no interest at all. The second you enter a space of very low interest like demonstrably lower than your credit card APR or 0, which is everyone's favorite price, you end up in a place where even a super prime borrower would benefit from free use of money. And the longer term is the loan, the more obvious the benefit. So every one of these Pay-in-X type products, it's a version of access to money at no cost to the consumer, we're always looking for ways of funding those transactions by the hands of our partners because they are the primary beneficiaries of these transactions. So it extends from merchants to manufacturers, to brands, sometimes to marketing partners to platform partners. So there's plenty of people who are involved in a transaction that have a degree of margin and have a differing level of excitement to see that transaction go through. The most exciting ones are, of course, merchants because they're dealing with things like inventory management, they have discounts, they rather not make, but they do want to see inventory move. But there's also people in manufacturing and the original equipment manufacturers in particular, that have a predictable upgrade cycle that they're trying to stick to. And they will be very excited a year from launch to push their last year's innovations and the new ones can go forth. And so all of that adds up to ample opportunity to create more of these Pay-in-X and pay-over-time transactions with 0. And I particularly like the longer-term ones because that's where underwriting at 0% consumer interest is a really, really hard science. Like this is the kind of thing where if you screw it up a little bit, you'll make a lot of unprofitable transactions. Part of our longevity in the space and our competitive strength has been our ability to precisely price these things, both on the credit side and the profitability side, the capital markets lens. It's very, very hard to do write unless you're very good and very confident in both your underwriting and your control of your underwriting. So that's kind of why these transactions keep showing up. That's why we do things like the Big Nothing. That's why we do a lot of these promotions in various forms of Pay-in-X. That's why you see growth of various Pay-in-X tractions. And you should expect to continue to see more of these. They're all building a giant book of -- this is proof that you, your favorite the manufacturers, the retailers, all the participants should participate in these because even though they tap into your margin a little bit, they drive the kind of buyer that has a lot of choices, and this is their favorite choice.

Yes. And the only thing I would add to that, James, is just I think we really pride ourselves on the breadth of product offerings we can bring to a merchant that can be tailored to the basket of goods that they're selling. And in most cases, the products that we're offering to that merchant's consumers will be dynamic as you go up the basket size spectrum. And so I think what you saw play out this quarter was we had a large merchant that has a relatively low average order value compared to the rest of our network, and they decided to make Pay in 4 an evergreen part of their financing program, and that showed up in a bit of an acceleration in growth for Pay in 4. But we're pretty agnostic ourselves around whether it's a Pay in 4 offering or a 3-month 0% offering. We really want to make sure we put the right offer in front of the consumer that's going to do the right amount of cash flow smoothing for that consumer. And so it really is going to be merchant dependent. And I think our ability to customize those financing programs specific to the merchant is a real differentiator for us in the market.

Our next question comes from the line of Connor Allen with JPMorgan.

I wanted to ask about the services vertical. It looks like volume in that category accelerated quite a bit, almost doubled year-over-year. So could you talk maybe just a little bit about services, what drove that acceleration? And then maybe how sustainable the premium growth is within that category?

Part of it is we signed this really large services platform or 2. And I gave an exceedingly long answer last time, so I promise I'll do a shorter one now. So we signed a couple of very large services platforms. They're doing well and growing. And yet this will inevitably come up at some point in this conversation. We're still very, very early in all of those platforms. The product needs to be adapted to the specific motions of those products and services. And we're pretty excited. Our best integrations are always the ones where we get to co-build with the people we are integrating, and we're knee-deep in building a bunch of really cool new stuff, specifically for the services platform. So no promises how long the 2x the speed is going to keep going, but I don't think we're even out of the first inning of that particular game.

Our next question comes from the line of Bryan Keane with Citi.

Congrats on the promotions, of course. I wanted to ask on Affirm Edge, Max, I think you said that could be a source of upside in the future. Any traction to highlight during the quarter? It looks like we have a couple of pilots now going to happen in the second half of the year. Maybe just how is that product resonating and the potential for it to be a needle mover in fiscal year '28. And then secondly, just Rob, on revenue less transaction costs. I know it always gets a lot of attention. We were talking, I think, 3.25% to 4%. The guidance, obviously, for fiscal year '27 is a little bit above that at 4.16%. Can you just talk about mix and maybe the drivers to be above the midterm guide there?

Sure. I'll take the second one first. Just in terms of the revenue less transaction cost outlook, I mean, really just with the execution that we've seen within the debt capital markets, we just -- we brought on a capital base that gives us a profile and a funding cost that we think should carry on through fiscal '27. And the other big assumptions are things like the mix of how we fund the business, and we expect the mix to stay pretty consistent with what we saw in fiscal '26. Loan product is the other sort of mix component that can drive revenue less transaction cost, take rates. We may start to skew slightly higher to interest-bearing, but it would be a very slight mix shift there. So just given the setup that we have, the other piece, of course, would be consumer credit, and we're not seeing anything in the business today that gives us pause or worry. So I think with sort of those building blocks coming into the year, that's what informed the outlook that we gave, which really is consistent take rates with what we experienced in fiscal '26.

Edge, banks move slowly. That's maybe not a very nice thing to say about our prospective partners, but they're deliberate. They have regulators. They need to make sure that what they launch is not just looks good and looks good to them and was good to us. It also has to look good to Federal Deposit Insurance Corporation and sometimes Office of Currency Controller and so on. So there's a fair number of people that have to okay and bless structures. That said, pretty excited. We're still building out parts of it. So a little bit of it is just like we have to build the rest of the technology. You're building a thing that you're hosting locally for a bank to log in and like fine-tune their financing programs. It's a thing we didn't do before, now we have to. So there's some work to be done in terms of the technical part of it, but majority of the stuff is built. We're very excited about the reception we're getting. I continue saying this sort of in various quarters. I think the second you see one, you should expect to see more like a bunch, but the first one is always going to feel like what if something goes wrong, how do I handle that? And so -- and we're very sensitive to that. And we know how to launch credit products, but it's not the same thing as launching it for others. So we will frankly take as long as it takes for us as long as we need to bring -- to handhold these first launches to market to be able to report excellent results and hopefully get everybody else excited, too.

Our next question comes from the line of Matt O'Neill with Bank of America.

Yes. Appreciate it. Max, I was curious, you laid out a pretty complete map of growth vectors this quarter. I didn't notice leasing or device upgrades on the list. You presumably looked at it given how much of your volume is high-ticket electronics, you push hard into 0% APR. I was hoping maybe you could just walk us through how you think about the economics of a lease versus an installment loan for the same purchase, what an originator might gain from that? And why you conclude it's not a strategy for Affirm either now or ever?

I host a breakout seminar on -- 45 minutes on deep dives in the economics and complexity of the leasing. There's a couple of different things going on in that domain. The notion of kind of a subscription to your device and an automatic upgrade to the latest and greatest on unpredictable cadence, it's actually a really good idea. It's been around for a little while. It certainly pops up in conversations and sort of attempted launches here and there over the last decade. So I don't think -- there's nothing too equival on -- with on that front. On the other side of the equation, ask your favorite financial services, financial institutions analysts, how they feel about lease-to-own and rent-to-own companies. And if it's an unedited context, you might hear some expletives. And so between those 2, there's a lot of complexity in leasing it doesn't usually happen on day 1. It happens on day 365 or whatever it is, 720 something when you find out that the thing you've been for the last couple of years, you don't actually own any of it. And we definitely care very much about the high-end device sales and scheduled upgrades and creating structures that help our retail partners, our manufacturing partners push their merchandise that way. So I think that's a very, very important task and we're certainly quite motivated to participate in that segment. We think there are better ways. We think we can offer something to the market that is a little bit less prone to the -- what the bleep happen here that happens a couple of years from launch of such things. And we'll have more to say on the matter in some reasonably predictable future. For now, I think we're all going to learn with some of the ones that have launched recently and certainly information to be had. But we tend to try to build things from first principles, and that's what we're going to try to do here, too.

Our next question comes from the line of Andrew Bauch with BMO Capital Markets.

I wanted to ask about Affirm Money Account. I feel like it hasn't been discussed in some time. So could you please provide an update there? And then as we think about your list of priorities, are there any interplays to consider with Affirm Card as it pertains to Affirm Money Account? Meaning does Affirm Card serve as an on-ramp to Affirm Money Account similarly to overall active accounts serve as an on-ramp to Affirm Card? And what does that -- what could that ultimately look like?

That's a great question. For one, it's really important for us to have a first-party product that is the most beautiful version possible of a first-party debit card that speaks to a tightly integrated checking/savings account that works really well with the Affirm Card structure because that's literally what Edge is. So any time we go tell a bank, it's going to be amazing to look at these stats, but better have something that's real. So it happens that we have one of our own. I don't talk too much about it, but it's a great product. I happen to think it's the best way to use Affirm Card. Reveal too many reveals here, but it's something that my 0 to 1 team has full ownership of, and we're working quite hard on making it an exceptional product. It's really a great product. If you haven't connected your Affirm Card to your Affirm Money Account, you should definitely try that. But it has been iterated on and is looking better than ever, and it is the experience that Affirm Edge will offer to our bank partners on the issuing side, but there's even more to come. I'll bite my tongue on that one. But ask me again in a quarter.

Our next question comes from Moshe Orenbuch with TD Cowen.

I wanted to follow-up on an earlier question on the Affirm Card. Given that you get much higher spending, I think you mentioned twice as much on the card versus a typical customer. But at the same time, in-store commerce is 3 or 4x and the card is still growing at a rapid pace. Could you talk a little bit about how you think or what the drivers are for its contribution to GMV? Like is it going to be more about the attach rate? Is it going to be more about the spending per card? And anything that you would share with us about things you're doing to kind of enhance both of those metrics?

Good question. I think the honest answer is both. And we care a lot about attach rates. I think we try not to be overly aggressive in pushing it because it is kind of the more sophisticated like you have to work your way to understanding why you want one of these products. So it's not another thing we hammer you with. But then again, we do see 2x the use. So we should obviously be hammering it, perhaps harder. And so anyway, attach rate is important. We're at 19% right now relative to actives. We will, I think, see an increase. That's a reasonably good guess. On the flip side, we love the idea of higher usage per consumer too, and we're working on that. To accomplish that, I think a key goal in managing a successful credit business is you have to remember that your job is to help someone spend money responsibly. Like it's not very difficult to convince someone to borrow money, especially if you're not particularly concerned with how they'll pay you back. And it's a much tougher job to convince them that to spend money with you is a better idea than through another product. So there's some degree of transparence that we need to engineer. We've been pretty successful at it, obviously, given the 2x number, and we're finding more ways to do so. One way to think about it or at least the way I speak to the team about it is we need to make sure that the Affirm Card isn't just the best card in the world. It's also the best way to use Affirm. So as you sort of cast your mind across various Affirm offerings, you should always come back to if I use the card, I will get even better blank. So you should expect us to launch features and products that are cards specific that make it more compelling, which in turn will help attach rates because we're obviously not going to keep it a secret to telling people, if you use the card, you'll get X and Y and Z, use just Affirm, maybe slightly less amazing. And definitely not going to nerve the Affirm at the point-of-sale experience, but we'll keep on finding interesting and exciting ways to reward card. And then there was another leg to the question I talk for too long, I forgot. I think that's probably -- those are definitely the important 2 dimensions. [indiscernible] without the card is still a very profitable product for us. It's not a trade down in terms of profitability. We're not going to make it different in terms of financing programs. You'll still get all the financing programs you get at the point of sale. We never want to be less for our merchant partners, but there are ways of making the card even more compelling. We'll work on that.

Our next question comes from the line of Darrin Peller with Wolfe Research.

Can you just give us a quick update? I mean, obviously, you're outperforming the majority of players in the market, factor in pretty much all of them. But when you think about the competitive landscape, how do you -- I mean, we've seen obviously a number of your peers doubling down on BNPL and some rolling out debit flex cards. So your debit flex card, is there a differentiation you see there? And just more broadly, anything in the market in general you're seeing changing as these competitors start to roll out more and more products also?

I can't say we spend a ton of time obsessing over our competitors. I think we are fairly fixated on ourselves. Selfish as that sound. Selfish as that sounds. I think the product that we have is really compelling. It is different. I still am not aware of any product out there that offer exactly what we do. I think the Visa Flexible Credential that we put together with them is a unique construct and has now been adopted by a couple of players, which is great. I'm excited to see more innovation come through the networks. And that's always a good thing. But the way we built our VFC card is quite unique. It connects to our accounts in a very specific way. And we're -- again, I'm not aware of anyone else who's quite replicated it perfectly. The other thing, like Rob mentioned, and I'll repeat it, one of the unique strengths of ours is we have a large collection of financing programs that we bring to bear for our merchants, but also for our consumers as they decide what fits their bill, their monthly exposure. And I think our card is still highly unique in just how wide the collection of offerings is and literally on every quarter has more and more of these truly unique 0% programs added to it. Like the rewards in the Affirm Card, people often ask us, what is the rewards program? Why is there not a 1% cashback or 2% cashback? And the honest answer is you're getting an extraordinarily more value in every transaction where the merchant is funding your 0s. That's effectively an 8%, 9%, 10%, 15% cash back. And so we wouldn't ever express it that way because that's not how it's understood, but it is the same price except you're paying no interest on it at all for sometimes up to 3 years. And that is definitely not -- has not been replicated by anyone, and I don't expect it to be easily replicable by anyone at all.

Our next question comes from the line of Dan Perlin with RBC Capital Markets.

And congratulations on the quarter and obviously the promotions. I wanted to just touch on quickly the gain on sale revenues, which once again was really the strongest line item for growth. I know you have pretty balanced growth, but this one continues to stand out. But it also looks like it might be normalizing a bit. And so I'm just trying to think about the revenue mix expected around your '27 guide. And that's really just predicated off your road map, the product road map and maybe some international expansion, which it sounds like isn't going to be overly meaningful yet. But any kind of I guess, mix shifts that we need to be mindful of would be helpful.

I think the one thing that I would call out, and this has been true for several years, but it should play out similarly in fiscal '27 as well is just that we will have quarters where -- and Q4 is an example of this. We'll have quarters where when we do a nonconsolidated ABS deal like we did in the fourth quarter, we'll see a bit more gain on sale revenue in those quarters around. So we stopped sort of sharing an exact schedule of nonconsolidated ABS deals for fiscal '27, but I think we did 2 in fiscal '26, and we would expect to have a pretty similar funding plan from that perspective going into fiscal '27.

Our next question comes from the line of John Hecht with Jefferies.

Congrats on the promotions and Max and looking forward to the 2029 product launch. The question I have is...

Are you mocking the fact that it takes me 3 years to do anything good. Which is okay.

I think, Max, you implied that you you're now focused on the way out in the future opportunities. So...

That's mostly could prevent you guys from putting into a spreadsheet.

Sorry, I don't anyway. The question I have is it's just sort of the maturation or seasoning of both your customers and your merchants. At the customer level, are you seeing things like a more rapid path to repeat usage at the merchant level? Or are you seeing more rapid pace to a certain level of penetration? Or are there tools that you guys can use to get there?

We're actually seeing really good results on both. And so a lot of it, it's sort of embarrassing. I'd love to take this great credit for like we discovered electricity and everything is faster now. Like we launched Crate & Barrel a few days ago, and then I saw an e-mail in my inbox telling me, "Hey, [indiscernible], are you Crate & Barrel customer because good news is you're an Affirm customer and Affirm now works is great." Like I think in the past, like 5 years ago, I'm not sure I would have gotten that e-mail. 2 years ago, I would have gotten that e-mail a month after the launch. And a year ago, I would have maybe gotten it in the same week. And now just like all those things are much tighter coordinated. There are machines, not people who are responsible for running through a checklist that happens. So the time from launch to meaningful impact to the first report to the merchant saying, "Horay, we're doing this for you. Let's get excited. Let's do more together." It just is a lot tighter. And so we're doing all those things. We're doing them better. So on the merchant side, we're just constantly improving the post-sales support, if you will. And on the consumer side, the best number I can point you to is transactions per user per year just steadily rises and -- we -- if anything, I raged our product team for not sending me enough e-mail or enough notifications or any form of telling me, hey, did you know that you haven't used Affirm in the last couple of weeks is I would welcome it. I'm not sure everybody else would. But we don't really do a whole lot of, hey, please come back. This sheer number of more surfaces where our logo is visible acts as a great reminder for consumers to say, "Oh yes, that was a great experience. I'll do it again." And cards obviously help, et cetera. But all in, the growth of transactions per user is actually a fairly natural phenomenon. And so we continue to just make sure that merchants sign a lot of merchants, we bring them live. We help them promote us. We co-market things together. We now have a very large user base that we can tell excitedly about brands that we love that we're excited to come into the fold. And that has a predictable effect where people say, yes, I'd love to use Affirm, Crate & Barrel. So I think both those things are happening fairly -- fairly organically. I'm sure we can do more, by the way. So I suspect we'll only accelerate from here.

Our next question comes from the line of Timothy Chiodo with UBS.

I want to talk a little bit about approval rates. I know earlier on the call, we were talking about how for credit loss, it's kind of a given number that you set. You can dial it up, you can dial it down. It's in your control. And the approval rate is sort of related to that at a given level of revenue or unit economics for that loan on the top line. The question that we get often from investors is around your approval rates relative to the other BNPL offerings that are out there. Clearly, they must be much stronger. But when the enterprise sales team goes in to meet with a new prospective merchant, what are they pitching in terms of how much better those approval rates are and how much more GMV they could deliver to that merchant?

I'm allowed to spread a slight amount of FUD, I will do so. We're definitely all compared on the approval rates. And merchants love to ask for guaranteed approval rates. And as a rule, we try very hard not to even talk about those things because that's always a counterweight to our ability to modify a credit policy on the fly as we must. The typical competitive bake-off often enough includes us launching a checkout experience as we would anywhere else and our esteemed competitors launching one where they remove underwriting and fraud prevention and demonstrating extraordinary approval rates only to then have to pull back very hard because you can only make so many bad loans for a while. And we tend to be very focused on our numbers and our losses. And I've said a million times, so I'm not going to dwell too much on it, but it's not enough to have great unit economics. We can obviously approve much deeper and just charge more interest and the profitability would be more or less the same, but anyone who's observing our credit results independent of the profitability would say, wait a second, like these guys are now going much deeper, maybe this isn't going to be as durable in a macroeconomic change reality. And so we tend to be very, very careful about not just the net result, but also the gross losses of the loan content itself. And so we pretty rarely ask ourselves how can we compete with approval rates. We -- all the time, like literally every single quarter ask ourselves, how can we refine our models, which -- if you want to imagine a credit model, it's a sorting function, a very, very sophisticated sorting function, but it looks at a large number of applicants on any given unit time and sorts them into least risky to most risky. And the job of the credit policy is to say, after this level of most risky, I don't want to approve anymore because that's the old risk I'm going to be able to sum it today. And so long as our sorting is as precise as the future reality or as close to future reality as we can possibly get it, that's what we must do. There's not really a shortcut where we say, what if we just approve deeper because the competitors might do so. If anything, we kind of want them to approve deeper than us because they are not as good as we are at sorting risk full stop. And so long as we are given enough time to compare and contrast, very quickly, you start realizing that what looked like a great approval rate on day 1 looks like a rug has been pulled and the approval rates are down and the losses are losses, of course, accumulate from the prior time period. [indiscernible] putting his head down because he's heard enough of this. I'll stop there.

That concludes today's question-and-answer session. I'd like to pass it back over to management for closing remarks.

Great questions. Thank you all for joining the call today. I think we'll be seeing many of you on the conference circuit soon. So see you there. Have a good day. Thanks again.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.