Affirm (AFRM) Q4 FY2026 Earnings Call: Record Profitability and FY2027 Outlook

Affirm Holdings (AFRM) described fiscal Q4 2026 as its most profitable quarter to date, excluding the tax allowance release. Management attributed the performance to strength across the core business while emphasizing continued expansion in Affirm Card, interest-bearing products, merchant-funded 0% financing and services.

Key Takeaways

• Management called fiscal Q4 2026 Affirm’s most profitable quarter ever, even excluding the tax allowance release.
• Affirm Card’s attach rate reached 19% of active consumers. Card users generate roughly twice the usage of a typical customer, while about 30% of Affirm Card transactions occur offline.
• More than 80% of direct-to-consumer product volume is interest-bearing, helping shift the overall product mix modestly toward interest-bearing loans.
• Pay-in-X grew 41%, supported by stronger merchant participation and a large merchant making Pay-in-4 an evergreen part of its financing program.
• Services volume nearly doubled year over year after Affirm added several large services platforms. Management said the category remains at an early stage.
• For fiscal 2027, management’s revenue less transaction costs outlook implies a 4.16% take rate, supported by funding execution, a broadly stable funding mix and current consumer credit trends.

Core Financial Data

Business and Operating Performance

Affirm Card and in-store commerce

Affirm Card remains an important driver of consumer engagement. Management said card users generate approximately twice the usage of a typical Affirm customer, with growth expected to come from both higher attach rates and more spending per cardholder.

Offline commerce is a major opportunity, but management identified several operational barriers. These include unreliable store connectivity, legacy point-of-sale systems, limited QR or barcode support and the greater cost of transaction errors at physical checkouts. Affirm is developing in-store features intended to deliver more value than traditional payment methods, with launches expected over the coming quarters.

Management also plans to introduce more card-specific features while preserving the financing programs available through merchants’ online checkout experiences.

Merchant-funded 0% financing and Pay-in-X

Affirm continues to expand Pay-in-4 and longer-duration 0% offers funded by merchants, manufacturers, brands and platform partners. Management views these products as relevant across the credit spectrum because consumers receive financing at no interest cost.

The company emphasized that longer-duration 0% financing requires precise underwriting, pricing and capital-markets execution. Affirm said its ability to customize offers according to a merchant’s basket size and product mix remains a key differentiator.

Merchant expansion and network effects

Management said substantial e-commerce greenfield opportunity remains. Large merchants generally understand Affirm’s value proposition, but integration cycles can be lengthy because many enterprises operate complex or outdated systems.

Affirm continues to frame its business as a network connecting consumers, merchants and capital providers. Management believes adding more merchants increases consumer utility, while a larger consumer base makes the platform more attractive to merchants.

Merchant onboarding and post-launch support have also become faster and more automated. On the consumer side, management said transactions per user per year continue to rise, aided by broader merchant availability and Affirm Card adoption.

Services and international expansion

Services volume nearly doubled year over year, driven partly by the addition of several large services platforms. Affirm is adapting its product to the specific purchasing flows of these partners and described the opportunity as being in its early stages.

In the U.K., management reported positive early feedback from merchants and consumers. The company believes its no-fee, transparent product structure is differentiated and said it had not observed a meaningful competitive response to date.

Affirm Money and Affirm EDGE

Affirm Money is being developed as a tightly integrated checking, savings and debit experience connected to Affirm Card. Management said this first-party product will also serve as the model for the issuing-side experience offered to bank partners through Affirm EDGE.

EDGE remains under development, with most of the technology completed. However, bank decision-making, regulatory reviews and the need to carefully support initial launches are extending implementation timelines. Management expects adoption to accelerate after the first successful deployment but did not provide a firm launch schedule.

Management Guidance

Management said the fiscal 2027 revenue less transaction costs outlook equates to a 4.16% take rate. The forecast assumes funding costs and the funding mix remain broadly consistent with fiscal 2026, alongside only a slight shift toward interest-bearing products.

Affirm completed two nonconsolidated asset-backed securitizations in fiscal 2026. Management expects a broadly similar funding approach in fiscal 2027, which means gain-on-sale revenue may remain concentrated in quarters when these transactions close.

For GAAP earnings modeling, management said the run-rate tax rate should fall in the mid-to-high 20% range. The effective rate may be volatile because of differences between GAAP and tax accounting, including the treatment of stock-based compensation and other share-based remuneration. This uncertainty was one reason the company did not provide exact GAAP EPS guidance.

New product initiatives receiving greater CEO attention are primarily intended to contribute in fiscal 2028, fiscal 2029 and beyond. Management stressed that current financial expectations are based on products already operating, growing and generating profit rather than unannounced projects.

Risks and Areas to Watch

• Consumer credit: Management said current consumers are performing well, but delinquency signals are monitored continuously. Affirm may slow growth before accepting a material deterioration in credit performance.
• Approval rates: The company does not compete by guaranteeing approval levels. Credit-loss targets are treated as an input, with approval rates adjusted to protect loan performance and capital-markets relationships.
• Physical checkout friction: Connectivity, legacy point-of-sale infrastructure and transaction correction processes can limit in-store adoption.
• Enterprise sales cycles: Large merchant integrations can require extensive system modifications and may take multiple quarters.
• EDGE implementation: Bank approvals and regulatory requirements can delay new partner launches.
• Tax-rate volatility: Accounting and tax differences may create fluctuations in GAAP EPS even as profitability scales.

Analyst Q&A Highlights

Credit policy: Affirm makes transaction-level lending decisions in real time, totaling roughly 100 million decisions per quarter. Management said the company continuously tightens or loosens specific consumer, merchant and transaction segments rather than moving a single broad credit lever.

Product mix: The expansion of Affirm Card and other direct-to-consumer products is increasing the interest-bearing mix, while merchant integrations and promotional events continue to support 0% financing.

Competitive differentiation: Management highlighted Affirm’s range of financing programs, transaction-level underwriting and merchant-funded 0% offers. It argued that the value of long-duration 0% financing can materially exceed conventional card rewards.

Future products: CEO Max Levchin plans to devote more time to products and services expected to emerge in fiscal 2028 and later. Potential areas discussed included improved offline experiences, deeper integration between Affirm Card and Affirm Money, and alternatives to conventional device-leasing structures.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good afternoon. Welcome to the Affirm Holdings Fourth Quarter Fiscal 2026 Earnings Call. [Operator Instructions] As a reminder, this conference 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, Head of 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. Our 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 IR website. Hosting today's call with me are Max Levchin, firm's Founder and Chief Executive Officer; Michael Linford, a firm's President; and Rob O'Hare, Affirm's Chief Financial Officer. In line with our practice in prior quarters, we will begin with very brief opening remarks from Max before proceeding immediately into your questions. With that, I will turn it over to Max to get started.

Max Levchin

Thank you again. As always, the performance as good as it is. I'll keep the prompt remarks brief. As you may have noticed, fiscal fourth quarter was our most profitable quarter ever, even without the tax allowance release. Companies thriving in the core business is firing on all business. I'm excited to announce that our veteran execs, Pat and Michael Enfora promoted to SVP GM of Global Markets and President, respectively, setting us up for an even tighter execution and allowing me to get even deeper into developing our next generation of products and services. WIth that, happy to address your questions. Back to you, Zane. .

Zane Keller

Okay. Thank you, Max. Now let's get to your questions. Operator, please begin the Q&A session.

Operator

[Operator Instructions] Our first question comes from the line of Adam Frisch with Evercore ISI. .

Question-and-Answer Session

Adam Frisch

Congrats to you, Mike, on a well-deserved promotion. Max, at the Analyst Day, you said you're most excited about things you can't really talk about yet. If precedent holds on the initial guidance and how you ultimately will end the year, growth in fiscal '27 should again be terrific, but with investors focused on the sustainability of high growth rates, when should we expect to see some of these initiatives start to show up in future years? And do you believe that over the long term, a firm needs to or should offer consumers multiple financial products and services in addition to what you do today?

Max Levchin

Thank you. It's a compound question. I'll go backwards. We already offer multiple products to consumers today. So the answer to, should we do that, we think is yes, otherwise we wouldn't have built all these other things. For the moment, majority of our products are various expressions of offering credit but not necessarily at the point of sale. It also comes obviously in a form a card. We have an account. We have a version of our product that works for business purchases. So we've already spread into several other subcategories, including verticals that we addressed. Actually, there's a bunch of that in my note as well. .

So we absolutely expect to continue expanding. In terms of when these things will show up, I think this is probably a question for our CFO and Michael in sort of how we set guidance. But the -- a big part of the expectations from this promotion that Michael got and my own focus is I plan to spend a lot more time working on things that will only show up in fiscal '28, '29 and so on. And so the numbers we're putting to the market today reflect our products that are working and growing and printing profits. Some of the crazier ideas from the future are in the future, and we try very hard not to overpromise and under deliver.

Adam Frisch

Okay. I think growth is in good hands with you taking that.

Operator

Our next question comes from the line of Harry Bartlett with Rothchild.

Harry Bartlett

I just or to touch on something you mentioned in your shelter, clearly is doing very well, but you said that you're really available 80 the top 250 canaries and 10% of e-commerce merchants. You're very well integrated with a lot of the major PSPs now and clearly very well known as a brand. So I guess the question is, what's the impediment for getting these remaining merchants to sign up? And how do you kind of bridge that gap to get there.

Max Levchin

We don't think of it as an impediment. I think we have an exceptionally strong revenue team and Wayne who runs it is an exceptional executive and deserves every accolades and so I expect his team to continue executing and signing each 1 of these merchants one by one, sometimes in bulk, but mostly one by one. I think the Majority of the time for large merchants, these are long sales cycles that take a lot less convincing than ever before. People understand the value that we provide, and they are excited to see it added to their checkout. But many large enterprises that sell things online have complex and frequently outdated systems, a lot of times adding a new major point-of-sale system requires them to do some major modifications. Sometimes it pushes them to do whatever work that they were postponing because they weren't planning on adding another one.

So these are not things that flip in 1 quarter. But the reason I mentioned the numbers you quoted is because there's just an enormous amount of greenfield. We think our if anything, this is a sort of a notion of -- our sales team has a lot of work to do for probably quite a number of quarters, but no 1 should be taking a break or should you be thinking we're running out of the Internet or anything.

Operator

Our next question comes from the line of Harshita Rawat with Bernstein.

Harshita Rawat

I want to ask about in-store as a form card continues to scale and now you have the wallet partnerships, how can you scale in-store usage of a form where the opportunity is positively much bigger as you also alluded I know there are unique friction points in terms of getting approvals, but happens when you do not get denied physically kind of in-store. I know 30% of your firm card transactions are offline, but it's still very small as a percentage of your overall GMV. So we'd love to hear your thoughts on the product planning.

Max Levchin

Couldn't agree more. I 100% agree One of the things that the innovation team that I have now more time to run is working on is improving the in-store process. And most things payments in general are very rarely about uncovering some low-hanging fruit that was just already in the ground, you need to pick it up. It's primarily about polishing off on Happy Path core connectivity? How do you make sure your product works in a large store that's essentially a Faraday cage you can't get connected to the Internet, how do you integrate with point-of-sale systems that don't know how to read QR code mean hydrate barcodes. It's kind of an endless long tail or not endless there's a meaningful long tail of conditions that make approval or tender delivery or even handling things like card size adjustments in store just that much harder than online.

Online, you hit back on your browser and you correct whatever it is needed, you correct. In store, you have to go back to the back of the queue to the cash register, which is annoying and people would rather not do that. So the bar for error is much lower? Like you have to create a much better consumer experience. So we're excited to work on that. By no means that should imply that we are unexcited about e-commerce. We actually have a lot to do. Obviously, there's still 80% more e-commerce to go, but offline is a giant portion of the market and continues to be. And we have some real interesting ideas on how to make the experience not just uniquely better but also uniquely affirmed. So maybe the best answer to your question is not quite going to preannounce anything here yet, but we expect to launch a few ideas that are uniquely Affirm specific, which through the lens of so product development, you can ask people to do more work to use your product if you're delivering disproportionate value.

You can consider sort of a firm online relative to credit cards. Credit cards are really easy. Just type in a number are you tap it off-line and off you go. A firm asked you did a little bit more work, so you got approval to understand why you might get declined, but the value is there. You get to amazing 0% deal, you get no fees, you get no deferral. And so the work is a little bit more, but the value is tremendous. And so we're going to bring that same ecos, maybe the work is a little bit more, but the value is so much better than what you do with your traditional payment instrument offline. And we'll throw something off in the coming quarters.

Operator

Our next question comes from the line of Rob Wildhack with Autonomous Research.

Robert Wildhack

I wanted to ask you about the U.K. It sounds like you're pleased with the progress to date. But could you just tell us more about the early receptivity from consumers and from merchants -- and then I'm also curious if there's been any competitive response or changes from the incumbents there that you've seen. Any details there would be great. And congrats to Michael and to Pat on the new roles.

Max Levchin

Pretty excited about the United Kingdom, seeing solid results. We just held our first executive dinner there a couple of nights ago where we met with some of the larger existing merchants there and got their first round of formal feedback in Latin all accounts, it was a loss. So I think we're doing well in terms of creating new friends and early fans. The consumer uptake, but I think we said it before and it turned out to be true. There's a lot of love to be had when you don't try to make money by sneaking your business model into the fine print and hiding things with fees and such, and we don't do any of those things and sure enough consumers love it, but retailers actually have a fresh appreciation for that because to date, there hasn't been a player in the market that would build the products the way we do. On the competitive response, and I don't want to be too loud here because I might wake someone up, but we're not seeing much to report on the matter to be honest. I think for now, at least, we're doing great in terms of feeling like our product is a unique play in the market. .

Operator

Our next question comes from the line of Will Nance with Goldman Sachs.

William Nance

I wanted to ask just on the growth in interest-bearing this quarter. obviously very strong. I know you're calling out the 41% growth in Pay and X, but it's also great to see kind of the largest product almost keeping pace with that product. So just curious how you're thinking about overall product mix and then just more of a nuance there. Just wondering if like the shift to the promotional event if that created any like mix dynamics that we should consider from the fourth to the first quarter?

Max Levchin

Yes. Great question. I think it really comes down to mix within sort of the 2 largest centers of gravity within the product portfolio. So on the 1 hand, we have point of sale. We did actually see sort of an acceleration in 0% share within point-of-sale integration, and I think some of that is due to the big nutting event. But just -- it's also been a push of ours in terms of what we're selling into merchants. And then really on the direct-to-consumer side, we actually see a much higher proportion of interest-bearing loans within that product set. So we're running sort of north of 80% interest bearing on our direct-to-consumer products. And I think just with the continued growth and scaling of things like a firm card, it's really that that's driving the sort of mix shift back towards interest-bearing a little bit.

Operator

Our next question comes from the line of Dan Dolev with Mizuho Securities.

Dan Dolev

Exceptionally, as you said, Max, ludicrous quarter, I like that one. I had a question about some -- I have a question about something you said at the Analyst Day. You said it gets easier to grow as you gain scale, but some of your competitors are not seeing that. So what are you doing right or maybe what are they doing wrong that makes you benefit from that virtue? And congrats again.

Max Levchin

Thank you I can only speak, I guess, to what we're doing right. I think we know exactly who we are. Like we have a very, very specific set of views on why we do what we do, why we prioritize certain things, why we won't do other things and not just what kind of products or what sort of structures we're willing to put in front of our customers and what we're not. But we are a network. Every decision we make at the product level, at the sales level, at the capital markets level, we ask ourselves, does this benefit every part of our network? Does this grow the consumer base? Does it give them a reason to spend more with us does it give them a reason to spend more with our customers, the merchants. By adding a merchant, are we exposing our consumers to the merchants, we want them exposed to and so on.

And so we are constantly asking ourselves how can we create a virtuous cycle? How can we eat the virtuous cycle that we've created. Do you have a network eventually, you start seeing network effects. And network effects are very simply, it is expensive to leave because you're going to miss out on a large and growing body and it's dumb not to join because you are missing out on a large and growing body of business. So the larger we get, the more valuable than ever it becomes, the more activity there happens on the edges of the graph we're building and the more people, the more merchants want to join the graph. I think for most payment systems, if you sort of cast dry across the last 50 years of -- I've been building payment systems for almost that long, Sadly, the ones that survive and thrive are the ones that are extremely focused on building a network almost to the expense of anything else.

And by the way, if you are willing to stay focused and go along, you are rewarded with profitability, with pricing power, with sustainability of the business, sustainable growth. All of that comes in time if you're focused on building a network. And we have been from the very beginning, if you look through my letters, you'll find the word network, probably the most commonly repeated noun. And that's sort of the secret to success so far, and we have no intention of changing that I think a lot of the players in the space decide that the next shiny object is the thing that will create short-term value and whatever happens in the next happens next. We try to measure things not in quarters, but in years and hopefully, decades. So the strategy has worked for us so far. We'll continue doing after that.

Operator

Our next question comes from the line of Jason Kupferberg with Wells Fargo. .

Jason Kupferberg

So everyone's been asking you guys for a while, are there any signs of consumer stress in the business? Any concerning signals in your data, delinquencies? We see another strong quarter here. The consumer is really resilient. Is there a case to be made that you guys could actually loosen the credit box a little bit? Or does that feel too risky in light of some of the macro uncertainty out there and then just a quick one for Rob. Any way you want us to think about modeling GAAP EPS for fiscal '27.

Max Levchin

How about you answer, and I'll think of something clever?

Robert O'Hare

Sure. I mean I think we've given you a lot of building blocks of GAAP EPS. Jason, we've given you GAAP operating income, and we've also given you estimate for share count. I think the 1 piece you're missing is the tax rate, and I'll probably go back to some of the guidance that we gave at the Investor Forum in May. We think on sort of a run rate basis, the GAAP tax rate lands in sort of the mid- to high 20% range. I would just caution though that there can be some volatility in the effective tax rate just based on some of the gap versus tax differences and how things like stock-based compensation and some other forms of share remuneration treated. So there's likely to be a bit of volatility, especially as we're continuing to scale profitability. So that's one of the reasons we stopped short of giving an exact guide for EPS. It's just the volatility that we think may play out in the tax rate. .

Max Levchin

Yes. And on the credit side, sort of a couple of thoughts that are sort of disconnected or not so big that you can look at a firm and read the tea leaves of the overall macroeconomic state of the United States. Our consumer is doing fine. You can see that in the numbers. And we are benefiting tremendously from the ability to say yes and no to every transaction. So we are literally choosing the loans we want to make in real time in very small increments. -- roughly 100 million times a quarter. So it's a highly differentiable curve. And we decided the shape and the area under. So in the sense of control of our credit outcomes, I said it before, I'll say it again, 1,000 times, we are in control of the credit reality.

You would see us slow down growth before you would see us have a real credit disturbance. And obviously, these are imprecise science. So there are always ups and downs in the DQs. But generally speaking, we manage to a number in the sense that credit target is the input, not the output of the business. The output is the approval rate something, but -- and so with that, we definitely have conversations around what the overall policy stands. Are we feeling good about the future? Are we feeling less good about the future? Should we tighten, should we loosen? But it's never expressed in terms of some giant lever somewhere that Robin again grabs on to the both hands and opens up the floodgates of money or closes down the work like that at all.

There's a constant conversation happening in the credit team asking themselves, are there opportunities for strategically more permissive stands at a class of transactions for a class of consumers at a class of merchants. And those conditions happen all the time on a weekly basis, just like the credit team reports back to the management team on a weekly basis of exactly what the landscape looks like. At any given moment, you could hear them say, you know what, here's what's going on an interesting standout is this, and this could be anything like we're seeing an early signal in DQ 0 or DQ 1. So day after the payments are due 2 days after the payments or do we're wondering what that is we're going to monitor it for the next 6 weeks and make a decision. And so we told flavor is to give you a sense, we just really do not think about credit at this binary switch that gets flipped on or off.

We never scramble to or away from it. in part because we have so much control in part because we have an extremely serious point of view on what these numbers have to be for us to be a responsible and reliable counterparty to our capital markets partners. And so that is the most important relationship in the business on the supply side, and we have to maintain it. And so I am sure somewhere right now, I hope they're not listening to me rant, but instead of doing their job in credit, but someone in the credit analytics team is putting together scenario analysis showing how a merchant is getting slightly higher approval than what that does for our GMV and an alternative analysis showing how the merchant is getting a slightly lower approval than what that does for our and consumer satisfaction and so yes, the works done constantly by the end of this call, a decision to loosen and a decision to tighten will be made, and it will be executed in denotionby the end of the.

Operator

Our next question comes from the line of James Faucette with Morgan Stanley.

James Faucette

I want to touch on the increase in Pay in X and kind of the comments that were made in the letter -- shareholder letter about getting some increased participation from merchants there. Just wondering like how you think about being able to expand that program? And then at least more interestingly, perhaps to me is, is that a gateway to improving or expanding up into 0% promotions, et cetera, for those kind of merchants? Is it basically a test/proof point for them?

Max Levchin

That's a great question. I'll start this time and Rob can speak to the exact Pay in X growth, which was pretty good this quarter. So kind of the most important thing to understand is free use of money is valuable to all consumers. So you can sort of ask like what is a firm 4? And 1 version of the answer is it's for people trying to figure out how to fit a considered purchase, something that actually registers on their personal financial radar into their monthly outflows. So it's affordability, it's access to capital when they need it or access to credit when they need it. That's kind of baseline answer. A more sophisticated answer is there's always alternatives in that space. And so the question then becomes what's the cost of money? What's the cost of obviously, the cost is interest we charge and the best possible deal is, well, what if there was no interest to what have someone else paid your interest. .

And that is a really, really important function in part because that makes the product appealing across all credit spectrum. So you could argue that there's a natural point where you say, well, you know what, I have excess of cash. I just don't care. And if you're going to charge me interest, I'm going to pay cash to move on or I'm going to pay it my credit card and paid off before the end of the month, so there's no interest at all. The second you enter a space of very low interest demonstrably lower than your credit card APR or 0, which is for everyone's favorite price, you end up in a place where even a super-prime borrower would benefit from pre use of money. And the longer term is the loan, the more obvious the benefit. So every one of these Pay in X type products is a version of access to money at no cost to the consumer. We're always looking for ways of funding those transactions by the hands of our partners because they are the primary beneficiaries of these transactions.

So it extends from merchants to manufacturers, 2 brands, sometimes to marketing partners, to platform partners. There's plenty of people who are involved in a transaction that have a degree of margin and have a different level of excitement to see that transaction go through. The most exciting ones are of course, merchants because they're dealing with things like inventory management, they have discounts they'd rather not make, but they do want to see inventory move. But there's also people in manufacturing and original equipment in factors, in particular, that have a predictable upgrade cycle that they're trying to stick to, and they will be very excited a year from launch to push their last year's innovation so that the new ones can go forward. And so all of that adds up to ample opportunity to create more of these Pay in X and pay over time transactions and I particularly like the longer-term ones because that's where underwriting at 0% consumer interest is a really, really hard science, like this is the kind of thing where if you screwed up a little bit, you'll make a lot of unprofitable transactions. Part of our longevity in the space and our competitive strength has been our ability to precisely price these things, both on the credit side and the profitability side, the capital markets lens. -- it's very, very hard to do right, unless you're very good and very confident in both your underwriting and your control of your underwriting.

So that's kind of why these transactions keep showing up. That's why we do things like the big nothing. That's why we do a lot of these promotions in various forms of Pay in X. That's why you see growth of various paying extractions. And should we expect to continue to see more of these. They're all building a giant book of this is proof that you, your favorite, you the manufacturer, the retailer, all the participants should participate in these because even though they tap into your margin a little bit, they drive the kind of buyer that has a lot of choices and this is their favorite choice.

Robert O'Hare

Yes. And the only thing I would add to that, James, is just I think we really pride ourselves on the breadth of product offerings we can bring to a merchant that can be tailored to the basket of goods that they're selling. And in most cases, the products that we're offering to that merchant's consumers will be dynamic as you go up the basket size spectrum. And so I think what you saw play out this quarter was we had a large merchant that has a relatively low average order value compared to the rest of our network, and they decided to make paying for an evergreen part their financing program, and that showed up in a bit of an acceleration in growth for Pay-in-4, -- but we're pretty agnostic ourselves around whether it's a Pay in 4 offering or a 3-month 0% offering. We really want to make sure we put the right offer in front of the consumer that's going to do the right amount of cash flow smoothing for that consumer. And so it really is going to be merchant dependent. And I think our ability to customize those financing programs specific to the merchant is a real differentiator for us in the market.

Operator

Our next question comes from the line of Connor Allen with JPMorgan.

Connor Allen

I wanted to ask about the services vertical. It looks like volume in that category accelerated quite a bit. almost doubled year-over-year. So can you talk maybe just a little bit about services, what drove that acceleration? And then maybe how sustainable the premium growth is within that category.

Max Levchin

Part of it is we signed this really large services platform or 2 and feel like I give an exceedingly long answer last time, so I promise I'll do a shorter one now. So we signed a couple of very large services platforms they're doing well and growing. And yet, this will inevitably come up at some point in this conversation. We're still very, very early in all of those platforms. The product needs to be adapted to the specific motions of those products or services. And we're pretty excited to our best integrations are always the ones where we get to co-build with the people we are integrating, and we're knee deep in building a bunch of really cool new stuff specifically for the services platform. So no promise is how long the 2x the speed is going to keep going, but I don't think we're even out of the first inning of that particular game.

Operator

Our next question comes from the line of Bryan Keane with Citi.

Bryan Keane

Congrats on the promotions, of course. I wanted to ask on Affirm EDGE, Max, I think you said that could be a source of upside in the future. Any traction to highlight during the quarter? It looks like we have a couple of pilots now going to happen in the second half of the year? Maybe just how is that product resonating and the potential for it to be a needle mover in fiscal year '28? And then secondly, just, Rob, on revenue less transaction costs, I know it always gets a lot of attention. We were talking, I think, 3.5% to 4%. And the guidance obviously for fiscal year '27 a little bit above that at 4.16%. Can you just talk about mix and maybe the drivers to be above the midterm guide there?

Robert O'Hare

Sure. I'll take the second one first. Just in terms of the revenue less transaction cost. Outlook. I mean, really just with the execution that we've seen within the debt capital markets, we just -- we brought on a capital base that gives us a profile and a funding cost that we think should carry on through fiscal '27. And the other big assumptions are things like the mix of how we fund the business and we expect the mix to stay pretty consistent with what we saw in fiscal '26. Loan product is the other sort of mix component that can drive revenue less transaction costs, take rates. We may start to skew slightly higher to interest-bearing, but it would be a very slight mix shift there. So just given the setup that we have, the other piece, of course, would be consumer credit, and we're not seeing anything in the business today that gives us pause or worry. So I think with sort of those building blocks coming into the year, that's what informed the outlook that we gave, which really is consistent take rates with what we experienced in fiscal '26.

Max Levchin

Edge, banks move slowly. That's maybe not a very nice thing to say about our prospective partners. But they're deliberate. They have regulators. They need to make sure that what they launch is not just looks good and looks good to them. And we total has to look good to federal deposit insurance perforation and sometimes Office of currency controller and so on. So there's a fair number of people that have to okay and bless structures. That said, pretty excited. We're still building out parts of it. So a little bit of it is just like we have to build the rest of the technology. You're building a thing that you're hosting locally for a bank to log in and like fine-tune their financing programs. It's a thing we didn't do before now. We have to. So there's some work to be done in terms of technical part of it, but majority of the stuff is built. We're very excited about the reception we're getting. .

I continue saying this sort of in various quarters. I think the second you see one, you should expect to see more like a bunch. But the first one is always going to feel like whether something goes wrong, how do I handle that? And we're very sensitive to that. And we know how to launch credit product, but it's not the same thing as launching it for others. So we will frankly take as long as it takes for us as long as we need to bring to handhold these first launches to market to be able to report excellent results and hopefully get everybody else excited too.

Operator

Our next question comes from the line of Matt O'Neill with Bank of America.

Matthew O'Neill

Yes. Appreciate it. Max, I was curious, you laid out a pretty complete map of growth factors this quarter. I didn't notice leasing or device upgrades on the list. You presumably looked at it given how much your volume is how take electronics, you push hard into 0% APR, I was hoping maybe you could just walk us through how you think about the economics of the lease versus an installment loan for the same purchase what an originator might gain from that? And why you conclude it's not a strategy for a firm either now or ever.

Max Levchin

Host a breakout seminar on 45 minutes on deep dives in the economics and complexity of leasing. There's a couple of different things going on in that domain. So the notion of kind of a subscription to your device, and the automatic upgrade to the latest and greatest unpredictable cadence. It's actually a really good idea. It's been around for a little while. It certainly pops up in conversations and sort of attempted launches here and there over the last decade. So I don't think -- there's nothing too equival with on that front. On the other side of the equation, you ask your favorite financial services financial institutions analysts how they feel about lease-to-own and rental on companies. And if it's a unedited context, you might hear some expletives. And so between those 2, there's a lot of complexity in leasing it doesn't usually happen on day 1. It happens on day 365 or whatever it is 720 something when find out that the thing you've been doing for the last couple of years, you don't actually own any of it. .

And we definitely care very much about the high-end device sales and scheduled upgrades and creating structures that help our retail partners, our manufacturing partners push their merchandise that way. So I think that's a very, very important task and we're certainly quite motivated to participate in that segment. We think there are better ways. We think we can offer something to the market that is little bit less prone to the -- what the bleep happened here that happens a couple of years from launch of such things? And we'll have more to say on the matter in some reasonably predictable future.

For now, I think we're all going to learn with some of the ones that have launched recently and certainly information to be had, but we tend to try to build things from first principles, and that's what we're going to try to do here, too.

Operator

Our next question comes from the line of Andrew Bauch with BMO Capital Markets.

Andrew Bauch

I want to ask about Affirm money accounts. I feel like it hasn't been discussed in some time. So could you please provide an update there? And then as we think about your list of priorities, -- are there any interplays to consider with Affirm card as it pertains to Affirm money accounts? Meaning does Affirm card serve as an on-ramp to Affirm money accounts similarly to overall active accounts served as an on-ramp to Affirm card? And what does that -- what could that ultimately look like?

Max Levchin

That's a great question. For one, it's really important for us to have a first-party product that is the most beautiful version possible of a first-party debit card that speaks to a tightly integrated checking/savings account that works really well with the Affirm card structure because that's literally what edge gets. So anytime we go telebank, it's going to be amazing to look at the stats we better have something that's real. So it happens that we have 1 of our own don't talk too much about it, but I think great product. I happen to think it's the best way to use Affirm card reveal too many reveals here, but it's something that my year-one team has full ownership of, and we're working quite hard on making it an exceptional product. It's already a great product. If you haven't connected your Affirm card to your common account, you should definitely try that, but it has been iterated on and is looking better than ever. And it is the experience that firm edge will offer to our bank partners on the issuing side, but there's even more to come. I'll like my talk on that one, but ask me again in a quarter. .

Operator

Our next question comes from Moshe Orenbuch with TD Cowen.

Moshe Orenbuch

I wanted to follow up on an earlier question on the firm card. Given that you get much higher spending, I think you mentioned twice as much on the card versus a typical customer. But at the same time, in-store commerce is 3 or 4x and the card is still growing at a rapid pace. Could you talk a little bit about how you think -- or what the drivers are for its contribution to GMV? Like is it going to be more about the attach rate? Is it going to be more about the spending per card -- and anything that you would share with us about things you're doing to kind of enhance both of those metrics?

Max Levchin

Good question. I think the honest answer is both. And we are -- we care a lot about attach rates. I think we try not to be overly aggressive in pushing it because it is kind of the more sophisticated that you have to work your way to understanding why you want 1 of these products. So it's not another thing we hammer with. -- then again, we do see 2x the use. So we should obviously be hammering it perhaps harder. And so anyway, attach rate is important. We're at 19% right now relative to actives, will I think, see it increase, that's a reasonably good guess. On the flip side, we love the idea of higher usage per consumer too, and we're working on that.

To accomplish that, I think a key goal in managing a successful credit business you have to remember that your job is to help someone spend money responsibly. Like it's not very difficult to convince someone to borrow money, especially if you're not particularly concerned with how they'll pay you back. it's a much tougher job to convince them that -- to spend money with you is a better idea than through another product.

So there's some degree of transparent that we need to engineer, we're pretty successful at it, obviously, given the 2x number. And we're finding more ways to do so. One we're thinking about it, or at least the way I speak to the team about it is we need to make sure that the Affirm card isn't just the best card in the world, it's also the best way to use Affirm -- so as you sort of cast your mind across various firm offerings, you should always come back to -- if I use the card, I will get even better bank. So you should expect us to launch features and products that are card-specific that make it more compelling which in turn will help attach rates because obviously not going to be a secret to telling people, if you use the card, you'll get X and Y and Z, you use just a firm maybe slightly less Amazing. And definitely not going to nerve the firm at the point-of-sale experience, but we'll keep on finding interesting and exciting ways to reward cards.

And then -- there was another leg to this question. I talked for too long, I forgot. I think that's probably -- those are definitely the important 2 dimensions to be in without the card is still a very profitable product for us. It's not a trade down in terms of profitability. We're not going to make it different in terms of financing programs. You'll still get all financing programs to get at the point of sale. We never want to be less for our merchant partners, but there are ways of making the car even more compelling, and we'll work on that. .

Operator

Our next question comes from the line of Darrin Peller with Wolfe Research.

Darrin Peller

Can you just give us a quick update? I mean, obviously, you're outperforming the majority of players in the market, in fact, I think pretty much all of them. But when you think about the competitive landscape -- how do you -- I mean, we've seen obviously a number of your peers doubling down on BNPL and some rolling out debit Flex cards. So your debit Flex card, is there a differentiation you see there? And just more broadly, -- anything in the market in general, you're seeing changing as these competitors start to roll out more and more products also?

Max Levchin

I can't say we spend a ton of time obsessing over our competitors. I think we are fairly fixated on our selfish as that sounds great for us. I think the product that we have is really compelling. It is different. I still am not aware of any product out there that offer exactly what we do. I think the beta flexible credential that we put together with them is a unique construct and has now been adopted by a couple of players, which is great, but I'm excited to see more innovation come through the networks. And that's always a good thing. But the way we built our BFC Card is quite unique. It connects to our accounts in a very specific way. And we're again, I'm not aware of anyone else who's quite replicated. -- perfectly. The other thing, like Rob mentioned it and I'll repeat it, 1 of the unique strengths of ours is we have a large collection of financing programs that we bring to bear for our merchants but also for our consumers as they decide what fits their bill, their monthly exposure. .

And I think our card is still highly unique in just how wide that collection of offerings is and every quarter has more and more of these truly unique 0% programs added to it. Like the rewards in the Affirm card, people often ask us, where is the rewards program? Why is there not a 1% cash back or 2% cash back and the honest answer is you're getting an extraordinarily more value in every transaction where the merchant is funding your zeros. That's effectively in 8%, 9%, 10%, 15% cash back. And so we wouldn't ever express it that way because that's not how it's understood, but it is the same pace except you're paying no interest on it at all for some time up to 3 years. And that is definitely not -- has not been replicated by anyone and I don't expect it to be easily replicable by anyone at all.

Operator

Our next question comes from the line of Dan Perlin with RBC Capital Markets.

Daniel Perlin

And congratulations on the quarter and obviously promotions. I wanted to just touch on quickly the gain on sale revenues, which once again was really the strongest line item for growth. I know you have a pretty balanced growth, but this one continues to stand out, but it also looks like it might be normalizing a bit. And so I'm just trying to think about the revenue mix expected around our '27 guide. And -- and that's really just predicated off your road map, the product road map and maybe some international expansion, which it sounds like isn't going to be overly meaningful yet. But any kind of, I guess, mix shifts that we need to be mindful of would be helpful. .

Max Levchin

I think the 1 thing that I would call out, and this has been true for several years, but it should play out similarly in fiscal '27 as well is just that we will have quarters where -- and Q4 is an example of this. We'll have quarters where when we do a nonconsolidated ABS we executed in the fourth quarter, still see or gain on sale revenue in those quarters around. So we stopped sort of sharing an exact schedule of nonconsolidated ABS deals for fiscal '27. But I think we did 2 in fiscal '26 and we would expect to have a pretty similar funding plan from that perspective going into fiscal '27.

Operator

Our next question comes from the line of John Hecht with Jefferies.

John Hecht

Congrats on the promotions and Max and looking forward to the 2029 product launch. The question I have is...

Max Levchin

Are you mocking effect that it gives me 3 years to do anything good.

John Hecht

Which is okay I think, Max, you implied that you you're now focused on the way out in the future opportunities.

Max Levchin

Putting into your spreadsheet. .

John Hecht

Sorry, I don't anyway. The question I have is just sort of the maturation or seasoning of both your customers and your merchants -- at the customer level, are you seeing things like a more rapid path to repeat usage are at the merchant level? Or are you seeing more rapid pace to a certain level of penetration? Or are there tools that you guys can use to get there?

Max Levchin

We're actually seeing really good results on both. And so a lot of it, it's sort of embarrassing. I'd love to take this great credit for like we discovered electricity, and everything is faster now. Like we launched Crate&Barrel a few days ago and that I saw an e-mail in my inbox telling me, "Hey, Herrera Barrel customer because good news is you're in a firm customer and a firm that works with great like I think in the past, like 5 years ago, I'm not sure I would have gotten an e-mail 2 years ago, about many mall a month after the launch. And a year ago, I would have maybe gotten in the same week. And now just like all those things are much tighter coordinated, there are machines, not people who are responsible for running through a checklist that had happened. So the time from launch to meaningful impact to the first report to the merchant saying, Here, we're doing this for you, let's get excited. Let's do more together. It just is a lot tighter. And so we're doing all those things, we're doing even better. .

So on the merchant side, we're just constantly improving the post-sales support, if you will. And on the consumer side, the best number I can point you to is transactions per user per year just steadily rises. And we -- if anything, I rated our product team for not sending me off e-mail or enough notifications or any form of telling me, did you know that you haven't used Affirm in the last couple of weeks is I would welcome it. I'm not sure everybody else would, but we don't really do a whole lot of, hey, please come back. the sheer number of more surfaces where our logo is visible as a great reminder for consumers to say, "Oh, that was a great experience good again." And cards obviously help et cetera. But all in the growth of transactions per user is actually a fairly natural phenomenon. And so we continue to just make sure that merchants sign a lot of merchants. We bring them live. We help them promote us. We co-market things together.

We now have a very large user base that we can tell excitedly about brands that we love that we are excited to come into the fold, and that has a predictable effect where people say, "Oh, yes, I'd love to ease a firm great and barrel. So I think both of those things are happening fairly organically and I'm sure we can do more, by the way. So I suspect we'll only sorry.

Operator

Our next question comes from the line of Jim Timothy Chiodo with UBS.

Timothy Chiodo

I want to talk a little bit about approval rates. I know earlier on the call, we were talking about how for credit loss it's kind of a given number that you set, you can dial it up. You can dial it down. It's in your control. And the approval rate is sort of related to that at a given level of revenue or unit economics for that loan on the top line? The question that we get often from investors is around your approval rates relative to the other BNPL offerings that are out there. Clearly, they must be much stronger. But when the enterprise sales team goes into with a new prospective merchant, -- what are they pitching in terms of how much better those approval rates are and how much more GMV they could deliver to that merchant.

Max Levchin

I'm allowed to spread a slide amount of fund. I will do so. we definitely all compared on approval rates, and merchants love to ask for guaranteed approval rates. And as a rule, we try very hard not to even talk about those things because that's always a counterweight to our ability to modify our credit policy on the fly as we must. The typical competitive bake-off often enough includes us launching a checkout experience as we would anywhere else, and our esteemed competitors launching 1 where they remove underwriting and fraud prevention and demonstrating extraordinary approval rates only to then have to pull back very hard because you can only make so many bad loads for a while. And we tend to be very focused on our numbers and our losses.

And again, I said a million times, so I'm not going to dwell too much on it, but it's not enough to have great unit economics. We can obviously approve much deeper and just charge more interest and the profitability would be more or less the same, but anyone who's observing our credit results independent of the profitability we say, wait a second, like these guys are now going much deeper, maybe this isn't going to be as durable in a macroeconomic change out. And so we tend to be very, very careful about not just the net result but also the gross losses of the loan content itself. And so we pretty rarely ask ourselves how can we compete with approval rates. We -- all the time, like literally every single quarter ask ourselves how can we refine our models which if you want to imagine a credit model, it's a sorting function.

It's a very, very sophisticated sorting function, but it looks at a large number of applicants on any given unit time and sort them into lease risky to most risky. And the job of a crater policy is to say after this level of most risky, I don't want to approve any more because that's the old risk I'm going to be able to somato. And so long as our sorting is as precise as the future reality as close to future reality as we can possibly get it. That's what we must do. There's not really a shortcut where we'd say, what if we just approved deeper because the competitors might do so. If anything, we kind of want them to approve deeper than us because they are not as good as we are at sorting risk, full stop. And so long as we are giving enough time to compare and contrast, very quickly, you start realizing that what looks like a great approval rate on day 1 looks like rig has been pulled and the approval rates are down and the losses are of course, accumulated from the prior time periods. -- is putting his head down because he's heard off of this. I'll stop there.

Operator

That concludes today's question-and-answer session. I'd like to pass it back over to management for closing remarks.

Max Levchin

Great questions. Thank you all for joining the call today. I think we will be seeing many of you on the conference circuit soon. So see you there. Have a good day. Thanks again.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.