Affirm Holdings, Inc. (NASDAQ:AFRM) Q3 2023 Earnings Call Transcript May 9, 2023

Affirm Holdings, Inc. beats earnings expectations. Reported EPS is $-0.69, expectations were $-0.92.

Operator: Good afternoon. Welcome to Affirm Holdings Third Quarter 2023 Earnings Conference Call. Following the speakers’ remarks, we will open the lines for your questions. As a reminder, this conference call 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, Director, Investor Relations. Thank you. You may begin.

Zane Keller: 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. 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 Investor Relations website. Hosting today’s call with me are Max Levchin, Affirm’s Founder and Chief Executive Officer; and Michael Linford, Affirm’s Chief Financial Officer. In line with our practice with prior quarters, we will begin with brief opening remarks from Max before proceeding immediately into questions and answers. On that note, I will turn the call over to Max to begin.

Max Levchin: Thank you, Zane. Thanks everyone for joining, and I hope you had a chance to read our quarterly letter as it packs lots of great information, but I will offer a very quick summary for you. We had an excellent quarter, beat across all of the important metrics we track, while continuing to maintain excellent credit results. On the execution side of things, I’m really proud of how the team performed this quarter. We shipped well over 100 projects from pricing to new credit model to dozens of user interface improvements. In isolation, each of these wins is probably relatively small, but they compounded to huge gains. One major project this quarter was our continued effort in rolling out Debit+. We delivered Debit+ into the main Affirm app, and while it’s still quite early, we continue seeing strong signal to consumer demand.

Debit+ user transaction frequency after 90 days from activation is about 7x that of a regular Affirm user. I’m truly excited about this product and what the team has planned for it and we intend to give you a significantly more fulsome update on Debit+ in the quarters to come. Seems that there is a once in a century event that happens every week lately, rattling capital markets, but we continue to deliver great returns for our capital market partners and it was rewarded by an incremental addition to our funding capacity in the quarter, as well as in April after we closed. So, in short, we had a great quarter, we compounded many small wins into big gains. We’re very excited about Debit+ and the overall outlook for Affirm as a company. Back to you, Zane.

Zane Keller: Great. Thank you, Max. With that, we will now begin our question-and-answer session. Operator, please open the line for our first question.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Moshe Orenbuch with Credit Suisse. Please proceed.

Operator: Our next question comes from the line of Bryan Keane with Deutsche Bank. Please proceed.

Operator: Our next question comes from the line of Ramsey El-Assal with Barclays. Please proceed.

Operator: Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed.

Operator: Jason, you’re back in.

Operator: I think we can hear you now. Try asking again.

Operator: Yes.

Operator: Our next question comes from the line of Andrew Jeffrey with Truist Securities. Please proceed.

Operator: Our next question comes from the line of Eugene Simuni with MoffettNathanson. Please proceed.

Operator: Our next question comes from the line of Rayna Kumar with UBS. Please proceed.

Operator: Our next question comes from the line of Dan Dolev with Mizuho. Please proceed.

Operator: Our next question comes from the line of James Faucette with Morgan Stanley. Please proceed.

Operator: [Operator Instructions] And our next question comes from the line of Rob Wildhack with Autonomous Research. Please proceed.

Operator: Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the call back to Zane Keller.

Zane Keller: Well, thank you, everybody, for joining the call today, and we look forward to speaking with you again next quarter.

Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.