Affirm Holdings, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
AFRM$68.11-2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001628280-26-032294
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-071153
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 173 previous paragraphs and 168 current paragraphs.
81 unchanged; 79 reworded; 8 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
balances at each quarter-end during the fiscal year, including the prior fiscal year-end.
Current report
For the three months ended September 30, 2026, the provision expense for loans held for investment increased by $95.2 million, or 61%. Additionally, the average balance of loans held for investment increased by $2.7 billion, or 38%, for the three months ended September 30, 2026, compared to the same period in 2025. The allowance for credit losses as a percentage of loans held for investment increased from 5.9% as of September 30, 2025 to 6.3% as of September 30, 2026. The increase in the allowance rate year over year is primarily driven by an increase in loans held on our balance sheet as well as a change in the loan mix when compared to September 30, 2025, in line with expected credit performance.
Current report
Sales and marketing expense increased by $8.4 million, or 11%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily driven by a $5.9 million, or 166%, increase in loss on loan origination, and a $5.8 million, or 63%, increase in marketing and promotional expenses, including the cost of co-marketing arrangements, compared to the same period in 2025.
Current report
General and administrative expense decreased by $4.4 million, or 3%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease is primarily driven by a decrease in stock-based compensation expense, partially offset by increases in professional services, customer service expense, and software and subscription expense.
Current report
Other income, net, decreased by $1.4 million, or 7%, for the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily driven by losses from the remeasurement of foreign currency transactions, lower interest income on cash and cash equivalents, and the absence of gains on the extinguishment of convertible debt in the current period, partially offset by gains on our derivative instruments not designated as hedges.
Current report
Income Tax Expense
Current report
Income tax expense for the three months ended September 30, 2026 was $40.9 million, an increase of $38.6 million compared to the same period in 2025. The effective tax rate increased to 20.0% from 2.8%, primarily due to the release of a significant portion of our domestic valuation allowance in fiscal year 2026, which had offset most of the income tax expense on domestic earnings for the three months ended September 30, 2025. For the three months ended September 30, 2026, the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, research and development tax credits, nondeductible stock compensation, valuation allowances in certain foreign jurisdictions, and a net discrete tax benefit primarily related to stock-based compensation.
Current report
Refer to “Convertible Senior Notes” below for the maturities of our convertible senior notes.
Removed paragraphs (13)
Previous report
Our Company is predicated on the principles of simplicity, transparency, and putting people first. By adhering to these principles, we have built enduring, trust-based relationships with consumers and merchants that we believe will set us up for long-term, sustainable success. We believe our innovative approach uniquely positions us to define the future of commerce and payments.
Previous report
ending balances as of March, December, September, and June, as applicable for the quarter-to-date and year-to-
Previous report
date periods.
Previous report
U.S. Income Taxes
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law, which included certain modifications to U.S. tax law. The Company is currently evaluating the future impact of these provisions of the Act on our Consolidated Financial Statements.
Previous report
In addition, our assessment of income taxes is influenced by our recent operating results and expectations regarding future profitability. Recent pretax earnings performance has improved the mix of positive versus negative evidence considered in evaluating the realizability of our deferred tax assets. If these trends continue, we expect that additional positive evidence may be available within our fiscal year ending June 30, 2026 to support the conclusion that a significant portion of the domestic valuation allowance is no longer needed. The timing and amount of any valuation allowance release is subject to change based on multiple factors, including our level of profitability and the extent to which we believe we can sustain it over time. Release of any portion of the valuation allowance would result in the recognition of certain deferred tax assets with a potential corresponding decrease to income tax expense for the period the release is recorded, which would represent a non-cash benefit to net income.
Previous report
(1)Not meaningful (“NM”)
Previous report
The average loan balance of interest bearing loans held for investment increased during the three and nine months ended March 31, 2026, compared to the same periods in 2025. However, the rate of loan growth varied by product type over the same periods, as the average balance of 0% APR loans grew more on a percentage basis than the average balance of interest bearing loans. Therefore, the increase in contractual interest income during the period was further accelerated by an increase in interest income from the amortization of loan discount.
Previous report
The volume-driven increase in gain on sales of loans, for the three and nine months ended March 31, 2026, was further accelerated by a decrease in our repurchase liability to third-party investors of $7.3 million, or 62%, and $11.5 million, or 43%, respectively, compared to the same periods in 2025.
Previous report
Technology and data analytics expense increased by $39.0 million, or 26%, and $109.5 million, or 25%, for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025. The increase is partially driven by amortization of internally-developed software which increased by $15.7 million, or 27%, and
Previous report
Sales and marketing expense decreased by $1.2 million, or 2%, and $105.2 million, or 30% during the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025. During the nine months ended March 31, 2026, the decrease was primarily driven by a $95.6 million, or 39%, decrease in Amazon warrant expense compared to the same period in 2025, primarily due to a portion of the warrants becoming fully vested as of December 2024. Additionally, the decrease was also driven by a $15.4 million, or 65%, decrease in Shopify warrant expense during the nine months ended March 31, 2026, compared to the same period in 2025, primarily due to an amendment made in our partnership agreement, which extended the period of benefit over which we amortize the commercial agreement asset from six to nine years.
Previous report
General and administrative expense increased by $11.0 million, or 8%, and $19.3 million, or 5%, during the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025. The increase is primarily due to growth in payroll and personnel costs, excluding stock-based compensation, and software and subscription expense.
Previous report
Other income, net, increased by $5.2 million, or 38%, for the three months ended March 31, 2026 and decreased by $81.3 million, or 60%, for the nine months ended March 31, 2026, compared to the same periods in 2025. The increase for the three months ended March 31, 2026 was primarily driven by a gain of $1.2 million related to the fair value of our derivative instruments not designated as hedges, compared to a loss of $2.2 million during the same period in 2025. The decrease for the nine months ended March 31, 2026, was primarily driven by a $80.9 million, or 98% reduction in the gain recognized on the early extinguishment of convertible debt, reflecting fewer repurchases compared to the same period in 2025.
Reworded paragraphs (79)
Previous wording
Our point-of-sale solutions allow consumers to pay for purchases in fixed amounts without deferred interest, late fees, or penalties. We empower consumers to pay over time rather than paying for a purchase entirely upfront. This increases consumers’ purchasing power and gives them more control and flexibility. Our platform facilitates both true 0% APR payment options and interest-bearing loans. On the merchant side, we offer commerce enablement, demand generation, and consumer acquisition tools. Our solutions empower merchants to more efficiently promote and sell their products, optimize their consumer acquisition strategies, and drive incremental sales. We also provide valuable product-level data and insights — information that merchants cannot easily get elsewhere — to better inform their strategies. Finally, for consumers, our app unlocks the full suite of Affirm products for a delightful end-to-end consumer experience. Consumers can use our app to apply for installment loans, and upon approval, they can use the Affirm Card digitally online or in-stores to complete a purchase. Additionally, consumers can manage the pre and post purchase split of Affirm Card transactions into a loan, manage payments, open a high-yield savings account, and access a personalized marketplace.
Current wording
Our payment network allows consumers to pay for purchases in fixed amounts without deferred interest, late fees, or penalties. We empower consumers to pay over time rather than paying for a purchase entirely upfront. This increases consumers’ purchasing power and gives them more control and flexibility. Our platform facilitates both true 0% annual percentage rate (“APR”) payment options and interest-bearing loans. Our solutions empower merchants to more efficiently promote and sell their products, optimize their consumer acquisition strategies, and drive incremental sales. We also provide valuable consumer- and product-level data and insights — information that merchants cannot easily get elsewhere — to better inform their strategies. Finally, for consumers, our app unlocks the full suite of Affirm products, enabling consumers to apply for installment loans, and upon approval, use the Affirm Card online or in-store to complete a purchase. Additionally, consumers can manage the pre- and post-purchase split of Affirm Card transactions into a loan, manage payments, open a high-yield savings account, and access a personalized shopping and offers marketplace.
Previous wording
We have three main loan product offerings: Pay-in-X, 0% annual percentage rate (“APR”) monthly installment loans and interest-bearing monthly installment loans. Pay-in-X primarily consists of short-term payment plans with one to four 0% APR installments.
Current wording
We have three main loan product offerings: Pay-in-X, 0% APR monthly installment loans and interest-bearing monthly installment loans. Pay-in-X primarily consists of short-term payment plans with one to four 0% APR installments.
Previous wording
From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction. Merchant fees depend on the individual arrangement between us and each merchant and may vary based on the terms of the product offering; we generally earn larger merchant fees on 0% APR financing products.
Current wording
From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction. Merchant fees depend on the individual arrangement between us and each merchant and may vary based on the loan terms and product offering; we generally earn larger merchant fees on 0% APR financing products.
Previous wording
In order to accelerate our ubiquity, we facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App. Similarly, we also facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.
Current wording
In order to accelerate our ubiquity, we facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App. Similarly, we also facilitate the issuance of virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.
Previous wording
When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model. Once approved for the loan, the consumer then selects their preferred repayment option. A portion of these loans are funded and issued by our originating bank partners, which include Cross River Bank, an FDIC-insured New Jersey state-chartered bank, Celtic Bank, an FDIC-insured Utah state-chartered industrial bank, and Lead Bank, an FDIC-insured Missouri state-chartered bank. These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and other laws. Under this arrangement, we must comply with our originating bank partners' credit policies and underwriting procedures, and our originating bank partners maintain ultimate authority to decide whether to originate a loan or not. When an originating bank partner originates a loan, it funds the loan through its own funding sources and may subsequently offer and sell the loan to us. Pursuant to our agreements with these partners, we are obligated to purchase the loans facilitated through our platform that such partner offers us and our obligation is secured by cash deposits. To date, we have purchased all of the loans facilitated through our platform and originated by our originating bank partners. When we purchase a loan from an originating bank partner, the purchase price is equal to the outstanding principal balance of the loan, plus a fee and any accrued interest. The originating bank partner also retains an interest in the loans purchased by us through a loan performance fee that is payable by us on the aggregate principal amount of a loan that is paid by a consumer. Refer to Note 12. Fair Value of Financial Assets and Liabilities in the notes to the interim condensed consolidated financial statements for more information on the performance fee liability.
Current wording
When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model. Once approved for the loan, the consumer then selects their preferred repayment option. A portion of these loans are funded and issued by our originating bank partners, which include Celtic Bank, an FDIC-insured Utah state-chartered industrial bank, and Lead Bank, an FDIC-insured Missouri state-chartered bank. These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and other laws. Under this arrangement, we must comply with our originating bank partners' credit policies and underwriting procedures, and our originating bank partners maintain ultimate authority to decide whether to originate a loan or not. When an originating bank partner originates a loan, it funds the loan through its own funding sources and may subsequently offer and sell the loan to us. Pursuant to our agreements with these partners, we are obligated to purchase the loans facilitated through our platform that such partner offers us and our obligation is secured by cash deposits. To date, we have purchased all of the loans facilitated through our platform and originated by our originating bank partners. When we purchase a loan from an originating bank partner, the purchase price is equal to the outstanding principal balance of the loan, plus a fee and any accrued interest. The originating bank partner also retains an interest in the loans purchased by us through a loan performance fee that is payable by us on the aggregate principal amount of a loan that is paid by a consumer. Refer to Note 12. Fair Value of Financial Assets and Liabilities in the notes to the interim condensed consolidated financial statements for more information on the performance fee liability.
Previous wording
We are also able to originate loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., and across most states in the U.S. through ourconsolidated subsidiaries. For the three and nine months ended March 31, 2026, we directly originated approximately $2.3 billion, or 20%, and $7.0 billion, or 19%, respectively, of loans compared to approximately $1.5 billion, or 17%, and $4.5 billion, or 17%, for the same periods in 2025.
Current wording
Duringthe three months ended September 30, 2026, we originated loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., Australia, and across most states in the U.S. through ourconsolidated subsidiaries. For the three months ended September 30, 2026, we directly originated approximately $2.7 billion, or 19% of loans compared to approximately $1.9 billion, or 18%, for the same period in 2025.
Previous wording
Our capital efficient funding model is integral to the success of our platform. As we scale the number of transactions on our network and grow GMV, we maintain a variety of funding relationships in order to support our network. Our diversified funding relationships include warehouse facilities, securitization trusts, variable funding notes, forward flow arrangements, and partnerships with banks. Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model. As of March 31, 2026 and June 30, 2025, our equity capital as a percentage of our total platform portfolio, defined as the unpaid principal balance of all loans facilitated through our platform, was 5% and 4%, respectively. The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.
Current wording
Our capital efficient funding model is integral to the success of our platform. As we scale the number of transactions on our network and grow gross merchandise volume (“GMV”), we maintain a variety of funding relationships in order to support our network. Our diversified funding relationships include warehouse facilities, securitization transactions, variable funding notes, forward flow arrangements, and partnerships with banks. Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model. Our total platform portfolio is defined as the unpaid principal balance outstanding of all loans facilitated through our platform as of the balance sheet date, including loans held for investment, loans held for sale, and loans owned by third parties. As of September 30, 2026 and June 30, 2026, our equity capital as a percentage of our total platform portfolio was 5% and 4%, respectively. The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.
Previous wording
Additionally, our operating results are impacted by the percentage of GMV related to transactions occurring through direct merchant point-of-sale integrations relative to GMV processed by our card-issuing partners, which includes transactions on the Affirm Card, our one-time-use virtual debit cards, and with merchants that integrate Affirm services through one of our platform partners or utilize one of our card-issuing partners to process transactions. While commercial and economic terms vary across these offerings, we generally earn a portion of the interchange fees paid by the merchant which are shared with us through our agreement with the card-issuing partner.
Current wording
Additionally, our operating results are impacted by the percentage of GMV related to transactions occurring through direct merchant point-of-sale integrations relative to GMV processed by our card-issuing partners, which includes transactions on the Affirm Card, our virtual debit cards, and with merchants that integrate Affirm services through one of our platform partners or utilize one of our card-issuing partners to process transactions. While commercial and economic terms vary across these offerings, we generally earn a portion of the interchange fees paid by the merchant which are shared with us through our agreement with the card-issuing partner.
Previous wording
The following table presents the composition of the average balance of loans held for investment, less accrued interest receivable, by loan product, for each period presented (in thousands):
Current wording
The following table presents the composition of the average balance of loans held for investment, less accrued interest receivable, by loan product, for each period presented:
Previous wording
(1)The average balance of loans held for investment, less accrued interest receivable, is calculated based on the
Current wording
(1)The average balance of loans held for investment, less accrued interest receivable, is calculated using the ending
Previous wording
Loans held for investment increased by 22% and 17%, respectively, over the nine months ended March 31, 2026 and March 31, 2025. The balance and product mix of loans held for investment in a given period is driven by the volume and composition of loan purchases and originations as well as the volume, composition and timing of loan sales to third party investors and securitizations.
Current wording
Loans held for investment increased by 6% and 3% over the three months ended September 30, 2026 and 2025, respectively. The balance and product mix of loans held for investment in a given period is driven by the volume and composition of loan purchases and originations as well as the volume, composition and timing of loan sales to third party investors and securitizations.
Previous wording
With respect to the three and nine months ended March 31, 2026 and March 31, 2025, loans held for investment increased primarily due to overall GMV growth. The average balance of interest-bearing monthly installment loans increased by 24% and 18%, respectively, for the three and nine months ended March 31, 2026, compared to the same periods in 2025. Over the same periods, the average balance of 0% APR monthly installment loans increased by 41% and 43%, respectively, and the average balance of Pay-in-X loans increased by 52% and 53%, respectively, compared to the same periods in 2025.
Current wording
With respect to the three months ended September 30, 2026 and 2025, the average balance of loans held for investment increased by $2.7 billion, or 38%, primarily due to overall GMV growth of $3.6 billion, or 34%. For the three months ended September 30, 2026, the average balance of interest-bearing monthly installment loans increased by 40% while the average balance of 0% APR monthly installment loans and Pay-in-X loans increased by 30% and 42%, respectively, compared to the same period in 2025.
Previous wording
During the three and nine months ended March 31, 2026 our purchased and originated loan volume was 9.4 billion and 2.3 billion, and 28.9 billion and $7.0 billion, respectively. The purchased volume of loans originated by our bank partners during the periods primarily included a mix of interest bearing and 0% APR monthly installment products whereas the volume of loans originated through one of our subsidiaries during the periods was primarily Pay-in-X. The total volume and composition of loans purchased and originated during the periods is correlated with the volume and composition of GMV.
Current wording
During the three months ended September 30, 2026, we purchased $11.8 billion from our originating bank partners and directly originated $2.7 billion of loans. The purchased volume of loans originated by our bank partners during the periods primarily included a mix of interest bearing and 0% APR monthly installment products whereas the volume of loans originated through one of our subsidiaries during the periods was primarily Pay-in-X. The total volume and composition of loans purchased and originated during the periods is correlated with the volume and composition of GMV.
Previous wording
During the three and nine months ended March 31, 2026, we held substantially all Pay-in-X loans on our balance sheet, while selling a percentage of our interest bearing monthly installment loans and 0% APR monthly installment loans to third party investors, either directly or through off balance sheet securitizations. During both the three and nine months ended March 31, 2026, interest-bearing monthly installment loans and 0% APR monthly installment loans represented 86% and 14%, respectively, of the total $5.0 billion and $15.9 billion unpaid principal balance of loans sold.
Current wording
During the three months ended September 30, 2026, we held substantially all Pay-in-X loans on our balance sheet, while selling a percentage of our interest bearing monthly installment loans and 0% APR monthly installment loans to third party investors, either directly or through off balance sheet securitizations. During the three months ended September 30, 2026, we sold loans with an unpaid principal balance of $6.3 billion comprised of 86% interest-bearing monthly installment loans and 14% 0% APR monthly installment loans.
Previous wording
Refer to Key Operating Metrics for additional information on GMV for the three and nine months ended March 31, 2026, compared to the same periods in 2025.
Current wording
Refer to Key Operating Metrics for additional information on GMV for the three months ended September 30, 2026, compared to the same period in 2025.
Previous wording
We experience seasonal fluctuations in our business as a result of consumer spending patterns, including Affirm Card, which we expect to mimic the seasonality of our general business in the near term. Historically, our GMV has been the strongest during our fiscal second quarter due to increases in retail commerce during the holiday season and our loan delinquencies are at their lowest during our fiscal third and fourth quarter, as consumer savings benefit from tax refunds. Adverse events that occur during our second fiscal quarter could have a disproportionate effect on our financial results for the fiscal year.
Current wording
We experience seasonal fluctuations in our business as a result of consumer spending patterns. Historically, our GMV has tended to be higher during our second and fourth fiscal quarters, due to increases in retail commerce during the holiday season and other promotional activity. Our loan delinquencies tend to be at their lowest during our fiscal third and fourth quarters, as consumer savings benefit from tax refunds. Adverse events that occur during these quarters could have a disproportionate effect on our financial results for the fiscal year.
Previous wording
We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations. Following the Federal Reserve’s decision to begin reducing the federal funds interest rate in September 2024, interest rates have declined; however, uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods. Simultaneously, economic uncertainty and unpredictability, including the prospect of economic recession, persistent inflation, and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact both consumer spending and loan repayments. These challenges have affected, and may continue to affect, our business and results of operations in the following ways:
Current wording
We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations. In September 2026, the Federal Reserve increased the federal funds interest rate, and uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods. Simultaneously, economic uncertainty and unpredictability, including the potential for economic recession, persistent inflation, international conflicts, and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact both consumer spending and loan repayments. These challenges have affected, and may continue to affect, our business and results of operations in the following ways:
Previous wording
•Shifts in consumer demand and loan repayment: We have experienced, and may continue to experience, fluctuations in consumer demand across different merchandise categories as well as an increase in delinquencies due to economic uncertainty, persistent inflationary pressures, elevated interest rates, and other macroeconomic factors. If such conditions deteriorate in future periods, consumer demand and loan repayments may be negatively impacted.
Current wording
•Shifts in consumer demand: We have experienced, and may continue to experience, fluctuations in consumer demand across different merchandise categories as well as an increase in delinquencies due to economic uncertainty, persistent inflationary pressures, elevated interest rates, and other macroeconomic factors. If such conditions deteriorate in future periods, consumer demand and loan repayments may be negatively impacted.
Previous wording
•Managing delinquency rates: We are continuously optimizing our underwriting to manage delinquency rates. While these actions have not adversely affected our GMV growth rates during fiscal 2026, any future credit tightening could adversely impact GMV growth rates.
Current wording
•Managing delinquency rates: We are continuously optimizing our underwriting to manage delinquency rates. While these actions did not adversely affect our GMV growth rates during the three months ended September 30, 2026, any future credit tightening could adversely impact GMV growth rates.
Previous wording
•Borrowing costs: The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs. However, there is continued uncertainty as to whether and to what extent the Federal Reserve may decrease the federal funds rate further in the future.
Current wording
•Borrowing costs: The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs. However, in September 2026, the Federal Reserve increased the federal funds interest rate, and there is continued uncertainty as to whether the federal funds interest rate will remain at current levels, increase, or decrease in future periods.
Previous wording
•Volatile capital markets: Since fiscal 2024, capital markets have shown improvement against recent periods. Strong loan performance has allowed us to add substantial capacity across funding channels.
Current wording
•Volatile capital markets: Since fiscal 2024, capital markets have shown improvement against prior periods, and have allowed us to add substantial capacity across funding channels.
Previous wording
Despite these improvements, uncertainties remain in the macroeconomic environment that may result in fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors or for other reasons. For example, there have been recent public reports of instability at certain private credit funds and other financial institutions. The follow-on effects of this instability are unknown and may impair our ability to access funding sources in the future.
Current wording
Despite these improvements, uncertainties remain in the macroeconomic environment that may result in fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors or for other reasons.
Previous wording
We continue to optimize our underwriting and take other actions to manage consumer loan repayment, increase collections and minimize losses. For example, we offer loan modifications to borrowers experiencing financial difficulty to provide greater flexibility for consumers to repay their obligations, through payment deferrals or loan re-amortizations. A payment deferral extends the next payment due date, and while a consumer may receive more than one deferral, the total deferral period may not exceed three months. A loan re-amortization lowers the monthly payments by extending the term, which may not exceed twenty-four months.
Current wording
We continue to optimize our underwriting and take other actions to manage consumer loan repayment and minimize losses. For example, we offer loan modifications to borrowers experiencing financial difficulty to provide greater flexibility for consumers to repay their obligations, through payment deferrals or loan re-amortizations. A payment deferral extends the next payment due date, and while a consumer may receive more than one deferral, the total deferral period may not exceed three months. A loan re-amortization lowers the monthly payments by extending the term by up to twelve additional months beyond the current remaining term, capped at a total remaining term of twenty-four months.
Previous wording
These loan modification programs also impact our delinquency rates, and such impact can vary over time. The volume of loan modifications during the fiscal quarter ended March 31, 2026 increased to 0.16% up from 0.09% in the same period in 2025. As of March 31, 2026, loans modified within the last twelve months represent 0.28% of the outstanding principal balance of loans held on our balance sheet, compared to 0.21% for the same period in 2025. Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification. An unknown percentage of loans which have been modified and are current as of March 31, 2026 may become delinquent or charge off in the future. We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.
Current wording
These loan modification programs also impact our delinquency rates, and such impact can vary over time. The volume of loan modifications during the fiscal quarter ended September 30, 2026 increased to 0.17% up from 0.12% in the same period in 2025. Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification. We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.
Previous wording
Additionally, state regulatory agencies and state attorneys general have publicly indicated that they plan to increase oversight of financial services companies. Such state authorities may initiate legal proceedings against us under state consumer protection statutes or various federal consumer financial services statutes, subject to the jurisdiction of the CFPB and FTC. These actions may result in financial penalties, which, individually or in aggregate, may adversely impact our operations.
Current wording
Additionally, state regulatory agencies and state attorneys general have publicly indicated that they plan to increase oversight of financial services companies. Such state authorities may initiate legal proceedings against us under state consumer protection statutes or various federal consumer financial services statutes, subject to the jurisdiction of the CFPB and Federal Trade Commission. These actions may result in financial penalties, which, individually or in aggregate, may adversely impact our operations.
Previous wording
We focus on several key operating metrics to measure the performance of our business and help determine our strategic direction. In addition to revenue, net income (loss), and other results under U.S. GAAP, the following tables set forth key operating metrics we use to evaluate our business.
Current wording
We focus on several key operating metrics to measure the performance of our business and help determine our strategic direction. In addition to revenue, net income, and other results under U.S. GAAP, the following tables set forth key operating metrics we use to evaluate our business.
Previous wording
For the three and nine months ended March 31, 2026, GMV was $11.6 billion and $36.1 billion, respectively, which represented an increase of approximately 35% and 37%, respectively, as compared to the same periods in 2025. Overall, the increase in GMV was driven by growth in our direct to consumer products, including Affirm Card, and overall increases in active consumers and average transactions per consumer. In addition, for the three and nine months ended March 31, 2026, GMV from our top five merchants and platform partners collectively grew 26% and 27%, respectively, as compared to the same periods in 2025. The composition of our top five merchants and platform partners is determined based on GMV for each reporting period and, accordingly, the specific merchants and/or platform partners included in the top five may change period-over-period. During the three and nine months ended March 31, 2026, the concentration of GMV derived from our top five partners declined slightly to 42% and 44%, respectively, compared to 45% and 48% for the same periods in 2025 as a result of the continued diversification of GMV across merchants, platform partners and through our direct to consumer products. GMV attributable to Amazon represented 20% and 22% of total GMV for the three and nine months ended March 31, 2026, respectively, compared to 21% and 23% for the same periods in 2025.
Current wording
For the three months ended September 30, 2026, GMV was $14.4 billion which represented an increase of approximately 34% as compared to the same period in 2025. Overall, the increase in GMV was driven by growth in our direct to consumer products, including Affirm Card, and overall increases in active merchants, active consumers and average transactions per consumer. In addition, for the three months ended September 30, 2026, GMV from our top five merchants and platform partners collectively grew 22% as compared to the same period in 2025. The composition of our top five merchants and platform partners is determined based on GMV for each reporting period and, accordingly, the specific merchants and/or platform partners included in the top five may change period-over-period. During the three months ended September 30, 2026, the concentration of GMV derived from our top five partners declined slightly to 40% compared to 44% for the same period in 2025 as a result of the continued diversification of GMV across merchants, platform partners and through our direct to consumer products. GMV attributable to Amazon represented 20% of total GMV for the three months ended September 30, 2026 compared to 21% for the same period in 2025.
Previous wording
During the three and nine months ended March 31, 2026, GMV increased for interest-bearing installment loans, 0% APR monthly installment loans and Pay-in-X, compared to the same periods in 2025; however, the rate of GMV growth varied by product type over the same periods. The variance in growth varied by product is due to seasonality and the timing of certain promotions and campaigns.
Current wording
During the three months ended September 30, 2026, GMV increased for interest-bearing installment loans, 0% APR monthly installment loans and Pay-in-X, compared to the same period in 2025; however, the rate of GMV growth varied by product type over the same periods due to differences in merchant and platform mix and timing of certain promotions and campaigns.
Previous wording
GMV from interest-bearing installment loans grew 33% and 31%, respectively, for the three and nine months ended March 31, 2026, as compared to the same periods in 2025. Interest-bearing installment loans represented 70% and 69% of total GMV, respectively, for the three and nine months ended March 31, 2026.
Current wording
GMV from interest-bearing installment loans was $10.3 billion for the three months ended September 30, 2026, compared to $7.7 billion for the same period in 2025, an increase of $2.6 billion, or 34%. Interest-bearing installment loans represented 71% and 72% of total GMV for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
GMV from Pay-in-X grew 52% and 54%, respectively, for the three and nine months ended March 31, 2026, as compared to the same periods in 2025. Pay-in-X represented 16% of total GMV, for both the three and nine months ended March 31, 2026.
Current wording
GMV from Pay-in-X was $2.1 billion for the three months ended September 30, 2026, compared to $1.6 billion for the same period in 2025, an increase of $0.5 billion, or 33%. Pay-in-X represented 15% of total GMV, for both the three months ended September 30, 2026 and 2025.
Previous wording
GMV from 0% APR monthly installment loans grew 30% and 55%, respectively, for the three and nine months ended March 31, 2026, as compared to the same periods in 2025. 0% APR monthly installment loans represented 13% and 14% of total GMV, respectively, for the three and nine months ended March 31, 2026.
Current wording
GMV from 0% APR monthly installment loans was $1.9 billion for the three months ended September 30, 2026, compared to $1.4 billion for the same period in 2025, an increase of $0.5 billion, or 32%. 0% APR monthly installment loans represented 13% of total GMV for both the three months ended September 30, 2026 and 2025.
Previous wording
As of March 31, 2026, we had approximately 26.8 million active consumers, which represented an increase of 22% compared to approximately 21.9 million active consumers as of March 31, 2025. The increase was primarily due to a high retention rate of existing consumers and the acquisition of new consumers through an expansion in active merchants and platform partnerships.
Current wording
As of September 30, 2026, we had approximately 28.7 million active consumers, which represented an increase of 19% compared to approximately 24.1 million active consumers as of September 30, 2025. The increase was primarily due to a high retention rate of existing consumers, including continued adoption and engagement among Affirm Card users, which represent an increasing percentage of our active consumer population, and the acquisition of new consumers through an expansion in active merchants and platform partnerships.
Previous wording
As of March 31, 2026, we had approximately 6.7 transactions per active consumer, an increase of 20% compared to March 31, 2025. The increase was primarily due to platform growth and a higher frequency of repeat users driven by consumer engagement, including growth of Affirm Card active consumers. As of March 31, 2026 and March 31, 2025, Affirm Card represented approximately 14% and 10%, respectively, of the total number of transactions.
Current wording
As of September 30, 2026, we had approximately 7.3 transactions per active consumer, an increase of 19% compared to September 30, 2025. The increase was primarily due to platform growth and a higher frequency of repeat users driven by consumer engagement, including growth of Affirm Card active consumers. As of September 30, 2026 and September 30, 2025, Affirm Card represented approximately 16% and 11%, respectively, of the total number of transactions from the last twelve months.
Previous wording
The following tables set forth selected interim condensed consolidated statements of operations and comprehensive income (loss) data for each of the periods presented:
Current wording
The following tables set forth selected interim condensed consolidated statements of operations and comprehensive income data for each of the periods presented:
Previous wording
(2)Upon purchase of a loan from our originating bank partners at a price above the fair market value of the loan or upon the origination of a loan with a par value in excess of the fair market value of the loan, a discount is included in the amortized cost basis of the loan. For loans held for investment, this discount is amortized over the life of the loan into interest income. For loans held for sale, when a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans. However, the cumulative value of the loss on loan purchase commitment or loss on origination, the interest income recognized over time from the amortization of discount while retained, and the release of discount into gain on sales of loans, together net to zero over the life of the loan. The following table details activity for the discount, included in loans held for investment, for the periods indicated:
Current wording
(2)Upon purchase of a loan from our originating bank partners at a price above the fair market value of the loan or upon the origination of a loan with a par value in excess of the fair market value of the loan, a discount is included in the amortized cost basis of the loan. For loans held for investment, this discount is amortized over the life of the loan into interest income. For loans held for sale, when a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans. However, the cumulative value of the loss on loan purchase commitment or loss on origination, the interest income recognized over time from the amortization of discount while retained, and the release of discount into gain on sales of loans, together net to zero over the life of the loan. See Note 4. Loans Held for Investment and Allowance for Credit Losses for a table detailing the discount activity for loans held for investment for the periods presented.
Previous wording
(3) Amounts include stock-based compensation as follows:
Current wording
(3)Amounts include stock-based compensation expense. See Note 14. Equity Incentive Plans for the amounts presented within each operating expense line item for the periods presented.
Previous wording
Comparison of the Three and Nine Months Ended March 31, 2026 and 2025
Current wording
Comparison of the Three Months Ended September 30, 2026 and 2025
Previous wording
Merchant network revenue is impacted by both GMV and the mix of loans originated on our platform, including the distribution of loans by product. While we generally earn higher merchant fees on 0% versus interest-bearing loan products, merchant fee rates on each transaction are also impacted by the existence of a commercial agreement and negotiated pricing with each merchant, which may vary depending on loan term, loan size, borrower credit risk, pricing incentives and whether the consumer transacts with the merchant through one of our direct to consumer products, including Affirm Card.
Current wording
Merchant network revenue is impacted by both GMV and the mix of loans originated on our platform, including the distribution of loans by product. While we generally earn higher merchant fees on 0% versus interest-bearing loan products, merchant fee rates on each transaction are also impacted by the existence of a commercial agreement and negotiated pricing with each merchant, which may vary depending on loan term, loan size, borrower credit risk, and pricing incentives. We generally earn lower merchant revenue on our direct to consumer products, including Affirm Card, which are predominantly interest-bearing.
Previous wording
Merchant network revenue increased by $54.1 million, or 25%, and $204.3 million, or 32%, for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025. The increase is primarily attributed to an increase in GMV of $3.0 billion, or 35%, and $9.8 billion, or 37%, for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025. The volume-driven increase in merchant network revenue was offset by an increase in the loss on loan originations by $10.5 million, or 44%, and $46.7 million, or 69%, for the three and nine months ended March 31, 2026, respectively. Additionally, merchant incentives, recorded as a reduction of revenue, increased by $4.3 million and $5.7 million for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025.
Current wording
Merchant network revenue increased by $45.8 million, or 18%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase is primarily attributed to an increase in GMV of $3.6 billion, or 34%, for the three months ended September 30, 2026, compared to the same period in 2025. The volume-driven increase in merchant network revenue was partially offset by an increase in the loss on loan originations by $10.4 million, or 34%, for the three months ended September 30, 2026. Additionally, merchant incentives, recorded as a reduction of revenue, increased by $5.0 million for the three months ended September 30, 2026 compared to the same period in 2025.
Previous wording
Merchant network revenue as a percentage of GMV decreased to 2.3% and 2.4%, respectively, for the three and nine months ended March 31, 2026 from 2.5% for both the three and nine months ended March 31, 2025. The portion of GMV attributed to 0% APR loans, including Pay-in-X, increased by 41% and 55%, respectively, for the three and nine months ending March 31, 2026, compared to the same periods in 2025; however, the impact of a higher percentage of GMV attributed to 0% APR loans was offset by an increase in direct to consumer transactions as a percentage of GMV, led by the growth of Affirm Card.
Current wording
Merchant network revenue as a percentage of GMV decreased to 2.1% for the three months ended September 30, 2026 from 2.3% for the three months ended September 30, 2025, which was primarily driven by an increase in direct to consumer transactions as a percentage of GMV, led by the growth of Affirm Card.
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