Affirm(AFRM 1.40%) reported fourth quarter fiscal 2025 results on August 28, 2025, with record performance in core metrics and accelerating growth, with GMV, funding capacity, and 0% APR adoption all reaching new highs. Management highlighted a robust credit profile (95% of transactions from repeat borrowers), strong capital markets access (funding capacity up 55% year over year), and the rapid scaling of next-gen products like the Affirm Card and Adapt AI. This summary distills unique, investment-relevant developments and their implications for Affirm's ability to compound value over the long term.
Adapt AI deployment delivers quantifiable lift to GMV
Affirm has rolled out Adapt AI, an artificial intelligence-driven module for its Adaptive Checkout suite, to automate and optimize the consumer financing offer mix in real time, resulting in a reported average 5% increase in gross merchandise volume (GMV) at participating merchants. This capability enhances the efficacy of Affirm's platform beyond traditional manual adjustments, and differentiates the firm's value proposition when negotiating merchant relationships and driving conversion across millions of transactions.
"Let us figure out the best set of programs for any given consumer as they're staring at a cart or a product on your site or in your store, and we will take care of the rest. We will convert them to a buyer from a shopper, at the best possible terms for them that is compelling to them. Not everybody wants a zero percent deal. Many people actually really care about the monthly cash flow impact, and they're far less APR sensitive or total interest sensitive. Many people are extremely headline APR sensitive. And you can sort of slice and dice it from there. Tuning that manually works beautifully. Tuning that automatically is an extraordinary improvement. And the 5% is great early result. We expect more, and we'll certainly brag about it as we get there. But adapt.ai is AI powered configuration of adaptive checkout."
AI-driven optimization is increasing GMV for merchants.
Affirm Card adoption accelerates as cross-channel frequency rises
The Affirm Card surpassed $1.2 billion in volume with a 10% attach rate, while its average trailing 12-month spend per cardholder climbed to $4,700 versus $3,500 in the previous disclosure. Management noted that 0% APR volume on the card tripled, and the product’s usage is expanding into new offline categories, signaling progress toward Affirm’s goal of 10 million active cardholders with $7,500-plus annual spend.
"The current trailing twelve months of the cardholder is about $4,700. So think the last time we dropped this number, it was along the lines of 3,500. This is across all Affirm services. So this is card and all the other places where you might go with CART. Dominates. That's been, obviously, So we're not quite at the 7,500, but we're more than halfway there. And so like, there are many things that are coming together to make sure the card is the best expression. Of the firm. So just as far as I think I wanna go right now, we're kinda long winded on this one. But there's a lot to do, and there's some unexpected things that are coming soon."
The Affirm Card is seeing accelerating engagement and expanding offline utility, positioning the company for long-term cross-channel payment share gains.
Affirm demonstrates durable credit quality and disciplined funding strategy
Quarterly results showed 95% of transactions came from repeat users, with underwriting applied to every transaction and close monitoring of credit cohorts in response to macroeconomic uncertainties, such as the U.S. student loan repayment resumption. Funding capacity rose 55% year over year, while management stressed selection of blue-chip, long-term capital partners and maintenance of a 3%-4% revenue less transaction costs (RLTC) range.
"The numbers you see are there exactly because we want them to be there. Set a many times before. Credit performance is an output of our settings of the models that we run. You know, not not sure to belabor the obvious, but we underwrite every single transaction, and there's reserve the right to decline transactions we feel are too risky for the end borrower and for Affirm, and we do. And if there's ever a deviation from our normally, extraordinarily high net promoter scores because not everybody enjoys hearing, hey. You shouldn't borrow. You're overextended. But we won't change our point of view on their ability to borrow and our willingness to lend if they are in fact overextended, be it with a firm or overall in their credit utilization."
Affirm’s platform-driven credit discipline and intentional funding partner selection underpin resilience through changing economic cycles and reduce risk of adverse selection or funding-driven expansion by weaker competitors.
Looking Ahead
Management’s guidance for fiscal 2026 assumes the wind-down of a major enterprise merchant integration by the end of the fiscal first quarter 2026, with zero associated volume included thereafter. Affirm expects continued mix shift toward monthly 0% loans, which were up over 90% year over year, and forecasts RLTC take rate at the very high end of the 3%-4% range (non-GAAP). Internationally, Affirm is live in the U.K. with friends-and-family pilots partnered with Shopify, and plans to expand to additional European markets using a technology- and data-reusable playbook; no specific quantitative guidance was provided on international contribution timing or magnitude.
