Affirm signals 4% RLTC upper bound and extends Amazon partnership through 2031 while expanding 0% offerings

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

MANAGEMENT VIEW

* Max Levchin, Founder, CEO & Chairman, opened by stating, "As always, the better the quarter, the fewer the opening remarks, and this one was really great." He announced, "Earlier this week, we extended our U.S. agreement with Amazon for an additional 5 years through January 2031. We look forward to serving these customers going forward."
* Michael Linford, Chief Operating Officer, highlighted Affirm's execution in funding markets, noting, "We are expanding relationships with blue-chip forward flow buyers, increasing their exposure to Affirm while continuing to scale our ABS program. ... What we produce is something very special and very unique and it's highly valued in the debt capital markets."
* Levchin emphasized the importance of payment service provider (PSP) partnerships, explaining, "PSP is a really important channel for us... as a path to get on to more doors or into more merchants and sometimes even platforms within platforms, those -- that's what PSP relationships are so good at, and that's exactly what we try to accomplish there."
* Robert O'Hare, Chief Financial Officer, addressed revenue less transaction cost (RLTC) take rate: "We're really focused on 4% being an upper bound for revenue less transaction cost take rates... There will be puts and takes within given quarters... But I think long term, we think 3% to 4% is the right range."

OUTLOOK

* O'Hare stated, "We're really focused on 4% being an upper bound for revenue less transaction cost take rates." He clarified, "That goal is to make sure that we're maximizing growth and profitability. And so that's why 4%, we think, is the right target for this year."
* Regarding operating margins, O'Hare said, "The full year guide is now more than 7.5%. Last quarter, you guided the full year is more than 6%. So that's coming up... It's really not a function of any sort of cost cutting or anything else in the OpEx space. It's really a function of growth."
* Guidance for GMV in Q2 is in the range of $13 billion to $13.3 billion.

FINANCIAL RESULTS

* O'Hare discussed RLTC trends, indicating a figure of 4.2% for the quarter and reiterated, "We're maintaining our 4% target for fiscal '26."
* O'Hare confirmed operating leverage is "a function of growth," with incremental revenue less transaction cost dollars flowing to operating income.
* Management noted the addition of 0.5 million Affirm card members during the quarter.
* O'Hare stated, "0% monthly installment loans continues to be our fastest-growing loan product."

Q&A

* Dan Dolev, Mizuho: Asked about Affirm's ability to execute in funding markets. Linford responded, "We are expanding relationships with blue-chip forward flow buyers, increasing their exposure to Affirm while continuing to scale our ABS program."
* Christopher Svensson, Deutsche Bank: Inquired about PSP strategy. Levchin described PSP as "a really important channel for us" and detailed its role in expanding Affirm's reach.
* Kathy Chen, Wells Fargo: Asked about RLTC trends and guidance. O'Hare replied, "We're really focused on 4% being an upper bound... Long term, we think 3% to 4% is the right range."
* Daniel Perlin, RBC: Asked about consumer health and delinquency trends. Levchin stated, "Our consumer is borrowing, paying us back, shopping fairly healthily... we do not see any loss of repayment."
* Harry Bartlett, Rothschild & Co: Asked about PSP economics and international expansion. O'Hare explained, "These end up being typically bespoke negotiations... Shopify in a lot of ways, has been a huge distribution partner for us."
* Moshe Orenbuch, TD Cowen: Asked about drivers for Affirm card penetration and cash flow underwriting. Levchin stated, "Cash flow underwriting is really helpful for younger consumers... We think it's going to help us grow."
* Rob Wildhack, Autonomous Research: Asked about the Amazon agreement extension. Linford responded, "We're going to be able to continue to work with them over the next 5 years."

SENTIMENT ANALYSIS

* Analysts expressed a positive tone, with repeated compliments such as "great quarter as always" and "great results." Questions focused on clarification and expansion, not skepticism.
* Management's tone was confident and upbeat, with Levchin noting "this one was really great" and O'Hare emphasizing, "we're maximizing growth and profitability."
* Compared to the previous quarter, management’s confidence remains strong, with continued focus on growth and execution, and analysts remain supportive.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter highlighted the Amazon partnership extension through 2031, a significant strategic update not present previously.
* RLTC guidance remained steady at 4%, with O'Hare reiterating its role as an upper bound.
* Operating margin guidance increased to more than 7.5% from more than 6% in the prior quarter.
* Focus on PSP partnerships and international expansion remains, with more details on recent signings and integration strategies.
* Card growth and 0% loan product momentum continue as key themes in both quarters.
* Management tone is consistently confident, while analysts continue to focus on growth, profitability, and product strategy.

RISKS AND CONCERNS

* O'Hare pointed out potential volatility in RLTC due to "different capital markets transactions and other sort of idiosyncratic things that can happen in a given quarter."
* Levchin emphasized monitoring macro trends, stating, "We're looking all the time, but maybe a little bit more carefully right now."
* Management noted deliberate pacing in card growth to maintain credit quality, with Levchin highlighting, "We've maintained slightly higher credit quality in the card on average."

FINAL TAKEAWAY

Affirm management highlighted an extension of the Amazon partnership through 2031 and reaffirmed a 4% upper bound on RLTC for the year. The company is seeing robust growth in its card and 0% monthly installment loan products while focusing on profitable expansion through PSP partnerships and international channels. Operating margin guidance has improved, reflecting strong growth-driven leverage. Management maintains confidence in credit quality, funding execution, and ongoing product innovation, positioning Affirm for continued expansion in both existing and new markets.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/afrm/earnings/transcripts]

MORE ON AFFIRM

* Affirm Holdings, Inc. (AFRM) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4839827-affirm-holdings-inc-afrm-q1-2026-earnings-call-transcript]
* Affirm Holdings, Inc. 2026 Q1 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4839713-affirm-holdings-inc-2026-q1-results-earnings-call-presentation]
* Affirm: Competitive Threats And Credit Risk Are Not Adequately Priced, Sell [https://seekingalpha.com/article/4829535-affirm-stock-competitive-threats-and-credit-risk-are-not-adequately-priced-sell]
* Affirm stock gains on GMV guidance lift, Q1 earnings, revenue beats [https://seekingalpha.com/news/4517796-affirm-stock-gains-on-gmv-guidance-lift-q1-earnings-revenue-beats]
* Affirm FQ1 2026 Earnings Preview [https://seekingalpha.com/news/4515884-affirm-fq1-2026-earnings-preview]