Executive Summary

Revenue grew 36% year over year to $783.1M; RLTC rose 53% to $352.6M with RLTC margin at 4.1%. GAAP net income was $2.8M and operating margin improved to -1.1% from -27.9% a year ago .
Versus consensus: Revenue was essentially in line/slightly above $782.96M, while EPS missed ($0.19 actual vs $0.40 consensus). Bolded for emphasis: Revenue: $783.14M vs $782.96M — beat; EPS: $0.195 vs $0.405 — miss* (Values retrieved from S&P Global).
Guidance raised: Q4 FY25 GMV to $9.40–$9.70B (from $9.00–$9.30B), RLTC to $385–$400M (from $375–$390M), and FY25 GMV to $35.70–$36.00B (from $34.74–$35.34B); Operating margin guide for Q4 now +1–3% and FY25 adjusted operating margin nudged higher to 23.0–23.6% .
Key drivers/catalysts: 0% APR monthly installments GMV +44% y/y and highest mix in two years; Affirm Card GMV $807M (+115% y/y) and ~2M active cardholders; March GMV +40% y/y with April trending similarly; average funding cost fell to 7.1% and funding capacity reached $23.3B .

What Went Well and What Went Wrong

What Went Well

0% APR momentum and prime mix: Monthly 0% GMV grew 44% y/y and ~80% of monthly 0% volume came from prime/super‑prime borrowers; management emphasized true zero-interest promotional finance as a brand and conversion lever (“when Affirm says 0%… you will pay no interest”) .
Broad-based GMV strength and acceleration: GMV +36% y/y to $8.6B; top 5 merchants/platform partners +31%; March GMV +40% y/y with April growth roughly in line, driven by D2C (Card) and wallets .
Unit economics and capital: RLTC margin +45 bps to 4.1% on lower transaction costs (provision and funding); average funding cost fell ~50 bps y/y to 7.1%, funding capacity increased to $23.3B supporting >$50B annual GMV, with strong ABS and forward flow execution .

What Went Wrong

EPS miss versus consensus: Primary EPS of ~$0.195 versus ~$0.405 consensus — a notable shortfall despite revenue being slightly ahead* (Values retrieved from S&P Global).
Mix and margin complexities: Revenue/GMV stayed flat y/y at 9.2% as higher loan sales mix and greater 0% APR mix (28% vs 27% y/y) pressured interest yield; management reiterated 0% programs are profitable but lower margin vs interest-bearing loans .
Credit reserve uptick and delinquency nuance: Allowance for credit losses rose to 5.7% (from 5.4% in Q2); 30+ day delinquencies (ex-Peloton/Pay‑in‑X) increased 12 bps y/y though improved 5 bps q/q on tax seasonality .

Financial Results

Summary Financials (Q1 2025 → Q3 2025)

Metric	Q1 2025	Q2 2025	Q3 2025
GMV ($B)	$7.6	$10.1	$8.6
Revenue ($M)	$698.5	$866.4	$783.1
Revenue as % GMV	9.2%	8.5%	9.2%
Transaction Costs as % GMV	5.4%	4.4%	5.0%
RLTC ($M)	$285.1	$419.4	$352.6
RLTC as % GMV	3.8%	4.1%	4.1%
Operating Margin	-19.0%	-0.5%	-1.1%
Adjusted Operating Margin	18.6%	27.4%	22.2%
Net Income ($M)	-$100.2	$80.4	$2.8
Diluted EPS ($)	-$0.31	$0.23	$0.01

Revenue Composition (Q1 2025 → Q3 2025)

Revenue Component ($M)	Q1 2025	Q2 2025	Q3 2025
Merchant Network	$184.34	$244.90	$213.97
Card Network	$47.48	$58.14	$58.57
Total Network	$231.82	$303.04	$272.55
Interest Income	$377.06	$409.37	$402.70
Gain on Loan Sales	$63.61	$125.29	$75.84
Servicing Income	$25.98	$28.69	$32.05
Total Revenue, net	$698.48	$866.38	$783.14

KPIs and Operating Metrics (Q1 2025 → Q3 2025)

KPI	Q1 2025	Q2 2025	Q3 2025
Active Consumers (M)	19.5	21.0	21.9
Transactions per Active Consumer	5.1	5.3	5.6
Active Merchants (k)	323.0	337.2	358.4
Total Platform Portfolio ($B)	$11.8	$14.0	$13.7
ECR ($M)	$581.3	$640.5	$636.8
ECR % of Total Portfolio	4.9%	4.6%	4.6%
Allowance for Credit Losses (Loans HFI)	5.6%	5.4%	5.7%
Average Funding Cost	7.7%	7.2%	7.1%
Affirm Card GMV ($M)	$607	$845	$807
Active Cardholders (M)	~1.4	~1.7	~2.0

Guidance Changes

Metric	Period	Previous Guidance (Q2 Letter)	Current Guidance (Q3 Letter)	Change
GMV ($B)	Q4 FY25	$9.00–$9.30	$9.40–$9.70	Raised
Revenue ($M)	Q4 FY25	$810–$840	$815–$845	Slightly Raised
Transaction Costs ($M)	Q4 FY25	$435–$450	$430–$445	Lowered
RLTC ($M)	Q4 FY25	$375–$390	$385–$400	Raised
Operating Margin (%)	Q4 FY25	Expect GAAP profitability	1%–3%	Clarified to positive range
Adjusted Operating Margin (%)	Q4 FY25	23%–25%	23%–25%	Maintained
Diluted Shares (M)	Q4 FY25	347	344	Lowered
GMV ($B)	FY25	$34.74–$35.34	$35.70–$36.00	Raised
Revenue ($M)	FY25	$3,130–$3,190	$3,163–$3,193	Raised (low end)
Transaction Costs ($M)	FY25	$1,710–$1,740	$1,721–$1,736	Narrowed/slightly lowered high end
RLTC ($M)	FY25	$1,420–$1,450	$1,442–$1,457	Raised
Operating Margin (%)	FY25	N/A	-4.3% to -3.8%	New disclosure
Adjusted Operating Margin (%)	FY25	22.5%–23.5%	23.0%–23.6%	Raised
Diluted Shares (M)	FY25	342	341	Lowered

Earnings Call Themes & Trends

Topic	Q1 FY25 (Prior)	Q2 FY25 (Prior)	Q3 FY25 (Current)	Trend
AI/Technology initiatives	App redesign; card utility; harmonizing 0% offers	GenAI chatbot handled ~20k daily BFCM contacts; ongoing ML in underwriting/fraud	GenAI + ML for automated dispute adjudication; broad internal adoption; careful balance with human empathy	Expanding use cases
0% APR/product mix	Mix slightly declined y/y as interest-bearing accelerated	0% GMV +70%; reinvesting excess RLTC into compelling APR offers	0% monthly GMV +44%; true zero promise; prime-heavy; merchants leaning in	Sustained emphasis
Macro/tariffs/higher-for-longer	Pricing initiatives offset funding costs; target RLTC 3–4%	Comfortable operating if rates higher for longer; capital markets constructive	April growth elevated; guide assumes moderation; recession sensitivity modeled (~50% stress implies ~10pt GMV impact)	Vigilant, prepared
Affirm Card performance	Card GMV >$3k annualized per user; in-store usage rising	Card GMV $845M; attach rising; broadening eligibility	Card GMV $807M; ~2M active cardholders; foreign transaction support; top-of-wallet roadmap	Scaling, feature build-out
Regional/international	UK initial merchants live; Shopify UK testing target	UK launch on schedule; pipeline builds	UK integrations accelerated with Adyen; doubling down on sales	Building distribution
Regulatory/legal/credit reporting	N/A in Q1 letter context	N/A	Expanded BNPL reporting to Experian (Apr 1) and TransUnion (May 1) for all loans; rationale and tech approach discussed	Transparency increasing

Management Commentary

“We are pleased to improve our outlook for the current quarter and the fiscal year… balancing growth and profitability” — Max Levchin, opening remarks .
On promotional finance: “When Affirm says 0% deal, it is, in fact, you will pay no interest… conversion rate on those is better than it’s ever been” — Max Levchin .
On recession preparedness: “We model that in a recession scenario of a ~50% increase in credit stress… would ‘cost’ about 10 percentage points of GMV growth… we have the levers and agility” .
On credit bureau reporting: “Including all loans in a consumer’s credit profile… we spent years testing… invite all competitors to do the same” — Max Levchin .
On competition: “We don’t win on price… we win on conversion and impact… pricing consistent despite competitive environment” — Michael Linford .

Q&A Highlights

Broad-based GMV strength with March +40% y/y; April similar; D2C/Card leading growth .
0% APR economics: profitable but lower margin than interest-bearing; strategic for acquisition and card eligibility .
Funding mix and ABS: recent non-consolidated ABS implies modest uptick in off‑balance sheet funding; forward flow ramping (e.g., Sixth Street) .
Costco online partnership announced; in-store not yet; Shopify renewal extended amortization schedule for warrants but “no economic concessions” .
Bank charter stance: not a funding-cost solution; considered only if needed for product features; continue with strong partner-bank model .

Estimates Context

Metric	Consensus	Actual	Result
Revenue ($M)	782.96*	783.14	Beat*
Primary EPS ($)	0.405*	0.195*	Miss*

*Values retrieved from S&P Global.

Implications: Small revenue beat and EPS miss suggest mix/funding timing and 0% promotional intensity dampened per-share profitability despite strong unit economics. Q4/FY guide raises likely prompt upward revisions to GMV, RLTC, and adjusted margins .

Key Takeaways for Investors

Mix strategy is deliberate: 0% APR monthly installments and Pay-in‑X are lifting conversion/prime mix and Card acquisition, while management maintains RLTC within 3–4% long‑term target despite lower per-loan margins .
Card is becoming a growth engine: $807M GMV (+115% y/y) and ~2M active cardholders; feature velocity (foreign transactions, flexible credential) supports attach and in‑store use expansion .
Capital strength reduces funding cost headwinds: average funding cost down to 7.1%, funding capacity at $23.3B, and strong ABS/forward flow demand support scale toward >$50B annual GMV .
Raised Q4/FY guide is the near-term catalyst: Explicit Q4 positive operating margin (1–3%) and higher GMV/RLTC ranges point to sustained growth with improving profitability, a potential stock narrative positive .
Credit outcomes remain stable with seasonal tailwinds: q/q delinquency improvement (tax season) and positive prepayments; allowance modestly higher but consistent with book mix and approvals .
Regulatory transparency is a medium-term differentiator: Expanded furnishing to Experian and TransUnion should aid consumer credit histories and enable more informed industry underwriting over time .
Network expansion continues: Travel tie-up with UATP (10‑year), UK pipeline (Adyen), wallets, and enterprise renewals (Shopify) broaden distribution and support GMV growth trajectory .

Appendix: Additional Press Releases in Q3 FY25

Strategic global partnership with UATP to bring Affirm to leading travel brands across U.S., U.K., and Canada; travel/ticketing growth tailwinds .
Expanded credit reporting with Experian (all loans from Apr 1) and TransUnion (all loans from May 1), advancing consumer credit-building and responsible lending .
Quarterly results press release confirming the shareholder letter and webcast details .

Affirm Holdings, Inc. (AFRM)·Q3 2025 Earnings Summary