Affirm (AFRM) 2027财年第一季度业绩电话会: GMV增长34%及全年保底30%

Affirm Holdings, Inc. (NASDAQ: AFRM) 公布其 2027 财年第一季度 GMV 增长 34%，并将全财年增长率下限上调至至少 30%。管理层表示，进入第二季度后增长势头进一步增强，同时信贷管理、资金成本以及新分销渠道的投资依然是核心议题。

核心要点

• 2027 财年第一季度 GMV 增长 34%，管理层将全财年增长率下限定为至少 30%。
• 管理层表示，2027 财年第二季度初业务增速处于 30% 高段区间，但强调全财年目标是保底增长率，而非预测区间或上限。
• 第一季度扣除交易成本后的收入（RLTC）变现率达到 4.3%。
• 资金成本环比上升 27 个基点，但同比下降至表内贷款规模的 6%。表内资金中超过 70% 为固定利率。
• 管理层表示，Affirm 全新的基于 Transformer 的核保架构有望在不增加坏账损失的情况下，将审批通过率提高约 2 至 3 个百分点。
• 除范围更广的“其他”业务板块外，“服务”（Services）是已披露业务中增长最快的类别。

核心财务数据

业务与运营表现

DTC 分销渠道与 Affirm Card

Affirm 表示，与通过深度整合的商户合作关系获得的商户折扣费率相比，DTC（直面消费者）交易产生的刷卡手续费收入通常较低。然而，DTC 业务中有息贷款占比更高，使得 Affirm 获得的平均综合收益高于公司整体业务水平。

管理层将 Affirm Card 既视为一款消费者端产品，也视为加深商户合作整合的切入点。卡交易规模能向商户展示已有的市场需求，从而推动直接对接及商户出资补贴的分期方案洽谈。

Affirm Card 约 30% 的交易依然发生在线下门店。刷卡消费前预先规划分期仍是主要使用场景，但消费者亦可在消费后将符合条件的借记交易转换为分期还款计划。

Affirm 计划增加针对银行卡的专项融资方案和优惠。管理层表示，部分优化功能预计在财报电话会后不久上线，但并未对具体产品进行详细的事先剧透。

核保与信贷管理

Affirm 基于 Transformer 的核保架构旨在识别细微的还款和行为模式，而无需完全依赖人工构建的特征。管理层表示，在区分优质与劣质信贷风险方面，该新方案的表现约为备选传统模型的两倍。

公司预计，该模型能在不带来额外坏账损失的情况下，带动审批通过率提升约 2 至 3 个百分点。目前采用相同架构的其他模型也正在研发中。

9 月份 Affirm 开展了局部审批和贷款发放测试并将相关贷款留存于表内，导致拨备费用增加。管理层表示，这些测试对公司生态网络具有增益作用并推动了新用户增长，但相应的拨备计提推高了当季的拨备费用。

管理层强调，Affirm 的加权平均贷款久期依然较短。Max Levchin 表示，潜在的过度风险敞口通常能在不到 90 天内化解，而 Michael Linford 则将信贷表现描述为通过公司核保模型做出的主动选择。

服务类业务与大额分期融资

除范围更广的“其他”板块外，“服务”是已披露类别中增长最强劲的领域。Affirm 表示，其合作伙伴关系正在扩大对线下服务和家居装修融资的覆盖，不过管理层指出，在一个新垂直领域实现产品与市场的契合可能需要数个季度。

对于暖通空调（HVAC）系统等大额消费类别，商户可能愿意承担更高的商户折扣费率，因为分期融资能显著提振转化率。这些交易通常贷款久期更长，在增加总收入机会的同时，也会产生额外的资金成本。

数字钱包与支付效率

Affirm 表示，与 Apple Pay 和 Google Pay 的整合促进了用户的复用频次，在偏好数字钱包的消费者群体中尤为明显。管理层将上线电子钱包接入视为其战略的一部分，旨在让用户能够通过自己偏好的购物渠道使用 Affirm。

该公司还在将部分首付款的支付渠道从借记卡网络转向 ACH。此举可降低刷卡手续费支出，但 ACH 会带来结算延迟和资金风险。Affirm 计划通过针对特定支付方式的风险模型来管理这一风险敞口。

国际化扩张与 Affirm Edge

管理层提及在英国市场的早期进展，并将部分新用户增长归功于海外扩张。同时，管理层预计与某重要合作伙伴挂钩业绩的合作计划相关的认股权证费用将会上升，其中包括来自新市场获取的用户。

Affirm Edge 的首批试点预计将于下一个自然年上半年展开。该产品旨在通过借记卡发卡行和银行输出 Affirm 的信贷能力。管理层提醒称，落地进度将取决于平台合作伙伴和金融机构的推进节奏。

AI Agent 商业与品牌出资促销

Affirm 预计 AI 导购 Agent 将根据借贷成本、月还款可负担性、分期期限及产品透明度来优化支付选择。管理层认为，随着 Agent 商业的发展，Affirm 针对单笔交易进行实时定价以及提供商户补贴的 0% 费率分期的能力，有望巩固其市场地位。

该公司正在为品牌赞助的促销活动构建程序化基础设施。其系统旨在将品牌的营销预算与具体 SKU 级别的分期优惠对接，同时通过系统自动管理营销活动的时间节点与预算。管理层表示，Affirm App 内已有约 100 万个 SKU 获得了品牌赞助的资金支持，并计划进一步扩大规模。

管理层指引

Affirm 将 2027 财年 GMV 增长下限定为至少 30%。管理层并未发现任何会导致增速从第一季度录得的 34% 出现放缓的具体因素，并表示第二季度初的增速明显高于第一季度水平。

针对 2027 财年第二季度，管理层指出，GAAP 营业利润率可能会受到与某大型合作伙伴计划相关的认股权证费用的影响。随着该合作伙伴通过引入新项目用户获得认股权证，该项费用将随之增加。假日零售的季节性因素以及新拓展市场中新用户比例的上升，也可能对费用结构产生影响。

针对第二季度及全财年的资金成本假设，综合考虑了公司的固定利率资金结构以及近期资产支持证券活动，包括循环结构以及期限延长至三年期和五年期的交易。

风险与关注事项

• 拨备费用增加反映了 9 月份留存于表内的核保测试贷款。这些贷款后续的信贷表现仍与未来的坏账损失趋势密切相关。
• 资金成本环比上升 27 个基点，但管理层表示，投资者不应将此增幅理解为基准利率上升的直接传导。
• ACH 支付能够降低处理成本，但会带来结算延迟和账户资金不足的风险。
• AI Agent 商业仍处于早期阶段，可能会引发非预期购买、退货、欺诈以及责任认定归属等问题。
• 网络安全漏洞正在快速演变。管理层表示，Affirm 正在持续监控漏洞披露、部署补丁，并持续对数据和系统防护进行投入。
• Affirm Edge 的推广普及可能较为渐进，因为银行、平台服务商及其他合作伙伴通常具有较长的系统实施周期。

分析师问答亮点

Affirm 能否维持 30% 以上的增长？管理层指出，Affirm 在整体商业零售中的渗透率仍较低，且正在向更多市场、新垂直行业和新兴产品拓展。公司承诺 2027 财年增长底线至少为 30%，但同时指出这并非对某一具体长期增速的保证。

为何资金成本出现环比上升？管理层归因于季度资产负债表结构及季节性因素。管理层强调，表内资金中超过 70% 为固定利率，且资金成本同比已下降至贷款规模的 6%。

更强大的核保能力能否在不削弱信贷质量的前提下推动增长？Affirm 表示，其基于 Transformer 的模型有望在不增加额外坏账损失的情况下，将借款人审批通过率提高约 2 至 3 个百分点。管理层还强调了其贷款组合久期较短，以及来自资产支持证券和远期资金流投资者的持续需求。

AI Agent 导购购物将对 Affirm 产生何种影响？管理层预计 AI Agent 将对总借款成本、月还款额和分期期限进行对比。Affirm 认为商户出资补贴的 0% 费率方案以及交易级定价可能成为重要工具，但也提醒称目前其应用仍处于早期阶段。

大额服务类业务的经济效益如何？商户可能愿意承担更高的折扣费率以促进转化，而更长的贷款久期可以增加 Affirm 的单笔交易总收入。不过，长久期贷款带来的更高资金成本会部分抵消这些效益。

电话会全文实录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good afternoon. Welcome to the Affirm Holdings, Inc. First Quarter Fiscal 2027 Earnings 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, 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.

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, Affirm's Founder and Chief Executive Officer; Michael Linford Affirm's President; and Rob O'Hare, Affirm's, Chief Financial Officer. In line with our practice in prior quarters, we will begin with brief opening remarks from Max before proceeding immediately into your questions. With that, I will turn the call over to Max to begin.

Max Levchin

Thank you, Zane. We had a blue tsunami on Tuesday and a red wedding today. We are not hanging up a white flag. So thank you for tuning into our call. Hopefully, we'll provide some for your minds and some Mert for humor. So let's get to your questions. Over to you, Zane. .

Zane Keller

Okay. Thank you, operator. Let's go ahead and begin the Q&A session.

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Your first question comes from Rob Wildhack with Autonomous Research.

Max Levchin

Hi, operator, let's try moving on to the next person in the queue. I think we're having a little bit of technical difficulties here. Operator, are you there? .

Michael Linford

We know that everyone else can hear us. So we'll curate it ourselves. .

Everyone. I know we're having some technical issues here. So just give us a minute while the operator sorts it out. Apologies for the delay.

Operator

Ladies and gentlemen, apologies, we are experiencing technical difficulties. Please standby we will begin momentarily. We apologize for the technical issue. We do have a question coming from the line of Adam Frisch with Evercore ISI, you may proceed with your question.

分析师问答

Adam Frisch

Going to start off with a wise ask comment like did I miss anything, but I think we're -- so I want to talk about growth for a second, and that's the crux of my question. I actually have 2. And this follow me along here. If you took your business as it is today and didn't discount any new growth opportunities or initiatives that you're working on, things like Edge and international and all the stuff necks that you're doing with your crew. How long do you think you could grow the existing business in the mid-30s range?

And then the follow-up, and then I have 1 more on Agentic. If you take all the new and emerging initiatives and put them back into the algorithm how much longer do you think you can maintain growth in the -- somewhere in the mid-30s or higher or something like that?

Michael Linford

I think you're asking me to make a forward-looking statement. .

Max Levchin

I'm telling the team all day every day that we are not to grow less net we handle. It doesn't necessarily mean that we're guaranteed to do it just because I will excel -- but I think a key part of my job is finding a way to grow at 30-plus percent as far as I'm concerned for a very long time.

We are less than 4% of e-cars. We are a spec on the overall commerce and just in the U.S., we're live in 4 markets. We're going to be live in a few more. So it's not really a reason why this can't continue for a very long time, like it's ours to scrap. So -- and there's a lot of really interesting things we're working on that are not in the picture. So I think we have lots of outs in the game.

There's a reason why we keep on owning the number of quarters. We've been growing by 30-plus percent consecutively. Just trying to make a point. And obviously, Adam, we've tried to reflect that in the full year guide. We've set a floor for growth. That floor now starts with a 3 as well.

We're signing up for at least 30% growth this year. So we're doing what we can. We've seen really good momentum in the business even in the first month of Q2, the business is growing at a high 30s rate today today. So yes, I think there's a lot to be bullish about from a growth perspective.

Adam Frisch

Okay. Awesome. And then if I could just squeeze in 1 more on Agentic. There's lots of speculation out there that certain forms of buy now pay later and are "better" for consumers because they're, in essence, getting free money and agents will favor that, and therefore, there could be a shift in ad dollars over time to buy now pay later platforms. Do you agree with this thesis? And is that 1 of the longer-term drivers that you're spending time on? .

Max Levchin

We're definitely spending a lot of time in Agentic. So that's certainly accurate. We are in really productive conversations with the folks, maybe more than that with others. So directionally very important, we care a lot about it. The 0% better than not 0% is a slightly simplistic way of cutting it.

If you are looking at someone who is likely on this call, the answer is unequivocal, yes, because you're getting free money, especially in the world of slightly rising interest rates. If you are a salaried employee and are managing your cash flow month-to-month, you hear a lot more about a monthly affordability metric versus a true interest number you're looking at. And so there are plenty of consumers that we serve at lower income levels, we're partly great risk by the way we'll gladly pay you back and do so time and time again, but they really care about longer terms.

And at some point, they come uneconomical and longer terms. And they are completely okay with that, and of course, retailers are excited to subsidize to compel them to transact anyway, but they may not care about a 0% loan as much as they care about less than $100 a month.

If it becomes a 5% APR incentive 25% APR, they're excited, but even at 25% APR, it fits into their monthly budget. I think the thing about this is agents are reliably going to pick the right instrument for that consumer. For a lot of people, it will be 0 is better than not for a lot of people is going to be the longest term possible. It's great and there's plenty of -- so as general Agentic shopping will optimize for the most rational transaction pricing.

We're the only game in town, broadly speaking, that knows how to price every transaction at an individual level in real time every time. So we think we're going to benefit significantly in the world of Agentic.

Operator

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

Robert Wildhack

First, a quick 1 for Rob. Just on funding costs. The letter called out that they're up 27 basis points quarter-over-quarter. I think the old rule of thumb had been 40 bps for every 100 bps in broader rates, but you're already at 27 here. So can you just talk about the drivers there? And then your ability to offset higher funding costs elsewhere in the P&L since it didn't really have much of an impact on margin.

Max Levchin

Yes. I mean there's seasonality, right, in terms of how the balance sheet is composed from quarter-to-quarter. So I guess I would point towards the year-on-year declines in funding cost as a percentage of loans on the balance sheet. So we're pretty proud of that fact that were down at 6%. I think that's a really, really healthy level for the business and that's frankly showing up and helping us drive to the 4.3% our LTC take rate that we posted in Q1.

So I think funding costs, they continue to be something that we feel like we have really good line of sight into. We did call out in the letter that of the on-balance sheet funding more than 70% of that funding was fixed rate in nature. So I wouldn't read too much into the sequential uptick in terms of that being a pure flow-through of rising benchmark rates.

I don't think that's the right read here. So we've done a lot to, frankly, make sure that we take advantage of what has been a really compelling ABS environment for us. We've been in the market with several deals. And the good news about the ABS market is those deals are on the revolving side, on the on-balance sheet side, those are fixed rate deals in nature. And we've even gone out to 3 and now 5-year deals recently here in the market.

So I think the combination of all of that is that we feel like we have a really good line of sight into funding costs, and that's being reflected in all the guidance that we said obviously, both for Q2 and probably more importantly for the full year.

Robert Wildhack

Great. And then maybe 1 for Max. In the letter, you talked about the the transformer-based architecture underwriting model. And I think I can understand what that's doing, but I would just love to hear you talk more about how that works and what you think a new model like this might unlock in terms of accuracy, lower loss rates, faster growth, et cetera.

Max Levchin

So there's actually an excellent if you search a firm technical blog, I think that's the headline. like 2,000 or say on the exact architecture design almost exactly. We took care to remove some trade secret experiment. But it's a pretty disclosure document describing both the process of building this thing of how it really works.

So if you want to deal real details, they're all there. The extremely shortened version is -- there's a bunch of information both in external data sources and our own that encodes really subtle powers or that represents really subtle patterns in particular in repayment, but also just other metric -- and when you're designing features like a thing that you actually used to predict of the model up until recently, the only way is to have really spark humans and they sit around and they're like, so if we look at the patterns of when this person may have been paid.

We don't really know exactly like so you do a lot of hypothesizing and then you say, we think we see pattern. And we're going to try to encode it in. And then you put it through a bunch of things, including things like, well, would this possibly correlate to predividend basis, is it too close to something that could correlate to race or where you live. And so you do a lot of manual work, and that's eventually of the mall that predicts risk can be back to us, et cetera.

And so we built this really cool transformer model that learns -- figures out how to learn these angle patterns without any human involvement at all and that produces essentially future candidates and then trains on that full entirely in a single pipeline. And so you're picking up information value that may be just to sub for a human to detect to begin with, but more importantly, just doing it a lot faster.

And again, I'm oversimplifying it by AI people they're rolling their eyes and going out to the guys than it is. But I promise you we have much, much better people who actually design this thing. And the net result is improves our approvals, roughly twice better than the next candidate in a traditional. We have a family is a model that we've been trading for 15 years now almost. Every time we launch a new model, we initially compare it in its ability to separate good risk from bad versus the prior candidate.

And so when we look at the traditional model in this new architecture compared to the performance of the future candidate and this new idea, the new idea performed twice a well, it doesn't mean we're proving to us many people at all. It means we're proving probably to to 3 points more people, but those are people who are -- we are able to lend essentially with no incremental loss whatsoever.

And that is an enormous booster what -- how do we get to this 3% growth? Why don't we build new features new product. The other way find better risk without taking incremental loss or incremental delinquencies and that's exactly what this model does with the whole pipeline of more models in that family coming out pretty excited about them.

Yes. And strong read the block post -- it has a better job than I can .

Operator

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

Timothy Chiodo

I'm hoping we could talk a little bit about some of the progress being made with the adjacent verticals. The TAM that you gave at the Investor Day, it's multiples of e-commerce, and you've had now a lot of progress with Intuit service tide and many others. And I was hoping we could just touch on that for a little bit.

Max Levchin

You can see in the supplement that by far the outperforming growth segments of the ones that we break out other than nondescriptive other segments, the best 1 is services, and that's exactly what the brand just -- and so that's going really well. It's still so for relief like that is a major -- every time we launch a new vertical, it takes us a bunch of quarters to figure out the perfect product market fit -- you have to do it carefully. You can't just show up with a fleet or money for me sign and see what happens, but that's 1 way 2 years possible, and we don't do that.

So we're still learning, but we're very excited about the progress. We're seeing really good uptake it unlocks things like improvement, which we were never really a clear and unlock access to off-line services, which isn't really is a hard thing to access unless you have these plotting partnerships, which we now do. So doing really well there.

We are always looking for more. I want not to preannounce, but this is not the last new segment we're going to go into in a big way.

Operator

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

John Hecht

Really big progress, ongoing progress with more direct-to-consumer activity. But it also looked like there -- the merchant revenues relative to GMV were lower as a percent. Is there some tie-in there, does the merchant discount rates vary from DTC versus directly at the merchant? .

Robert O'Hare

The short answer, John -- this is Rob. The short answer is yes, it does. Most of our D2C program runs on either a physical card or a virtual card. And so in most cases, we're collecting interchange and that interchange is going to be a function of the merchant where the transaction occurs and in some cases, the industry for the transaction as well.

So on average, the interchange that we collect is probably lower than the average merchant discount rate that we would have through an integrated merchant. And so there is a little bit of downward pressure on that network revenue line. The good news is our direct-to-consumer business is very interest-bearing heavy, firm card, for example, has historically run north of interest-bearing loans. And so the all-in compensation to a firm is on average much higher than the business at large. But is that mix of merchant revenue or network revenue in this case, that is going to be a bit lower.

But we think that, that product still works really, really well for us, and we're really proud of the growth and the profitability that it's thrown off.

Max Levchin

I'll add a little bit to just because I think it's important to kind of see the long-term version of this as well. As we integrate with more and more merchants, we're able to do what we tell call you the virtual financing programs where the financing programs we offer to consumers at the point of sale which sometimes is 0% financing sometimes longer terms, but inevitably subsidized by the merchant or the brand they're selling is also available to consumers on the car.

So we can always think of the car and really all of our direct-to-consumer products has a little bit of a trailblazing device. We go to a merchant. I mean it -- this is a very, very interest story. I personally and our sales team goes to retailers we said, "Hey, we have already driven a couple of hundred million dollars of volume for you using Affirm card." But this is just half the story. We can do amazing things for you, we can double your volume if you start participating in the deals that we have and all the other tools that we've built like Busa, et cetera, that allow you to optimize your basically marketing dollars. And the way to do that is a direct integration.

As soon as the direct integration happens, -- you will see those Zerickson deals show not just the point of sale, but also on the card, and we're investing in the car even more making exclusive core deals happen, you'll see a bunch of that in the quarter that we're in now. So -- to date, what Rob described is exactly how we dose over time, each merchant where card gets a lot of use, we'll get a call from 1 of us saying, "Hey, you really should integrate directly, you will get the other half for our product that's amazing." We're more than successful in doing ourselves. .

John Hecht

Absolutely. That all makes total sense. And then just -- I'm wondering what you learned so far in terms of the card usage? Like how much of it is -- I guess, the in-store component of usage, does that change the transaction type how are people making payment decisions? Are they paying in for? Are they migrating it to a loan more commonly? Maybe just any insight on what you're observing at the transaction level with the card product. .

Max Levchin

Sure. The fraction of in-store transactions, I think, remain pretty stable around 30%. The frequency is a lot higher, but so will know that. It remains quite high. The pre plan, so you create a payment plan before you swipe or tap. It's still the dominant use case. So consumers are using us with a card similar to the way to use a sales, but there's definitely a non-0 element of post-transactional with splitting where you first transact with a card using it on the debit card, which is what it is underneath and then choosing to turn it into -- which we support as well. So it's a little bit more, let's call it, diverse usage pattern, but fundamentally, it's access to a firm product that Affirm programs with be perfect.

Operator

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

Bryan Keane

I just wanted to ask, Rob, a little bit about provision expenses as a percentage of GMV went up, delinquencies went up a touch. I know that's probably not a big deal. I think you guys made some comments on it. in the shareholder letter, but I just wanted to ask about that. And then on the GAAP operating margin in second quarter guide was a little below street I guess it was similar to the guidance first quarter. Just thinking about the pluses and minuses in GAAP margins as we go to second quarter from first. .

Robert O'Hare

Yes. Sure. I'll take them in order. I think in terms of the provision dollars in the quarter, we were in a position where we did choose to run some experiments within the approvals and the origination, and we made the decision to keep those loans on balance sheet and the experiment itself was pretty localized to the month of September.

So those loans are on the balance sheet, they're showing up in the allowance because they're experimental, I think they're more than properly accounted for in terms of allowance. So that did have the impact of driving a little bit more provision expense, a little bit more allowance in the quarter. But when we look at the profitability and the revenue less transaction cost take rate that we were able to drive in Q1 of 4.3%.

We felt like that was the right thing for us to do, and it was overall accretive to the network and help drive on the new user front, particularly. So -- we feel good about that decision, and that -- the byproduct of that was a little bit more provision expense in the quarter. But again, that felt very comfortable just given the profitability we were seeing in the first couple of months of the quarter.

And then on the GAAP operating income on the guide relative to external expectations, I mean, obviously, I think on our side, some of the GAAP-only expenses that would be the drivers between adjusted operating income and GAAP operating income. I think as I've looked at some of the external models, I think maybe there's a little bit of under modeling around the warrant expense in particular, -- as most folks know, we have a program with a large partner where there's a performance component, and that partner earns warrants through new to program users.

We're seeing actually a nice trajectory of growth in new users through that program, partly driven by some international expansion that's happened. So I think that's an area where our internal forecast is maybe a bit heavier on expense the external estimates. I think ultimately, that's a really good thing for the business. We really are excited about getting this toehold in the U.K., and I hope that it's the beginning of several successful international markets. So again, I think that's the 1 area I would point to that maybe -- the Street has under modeled for us in terms of expense. I think that's driving most of the delta in the GAAP operating income margin .

Bryan Keane

Is there any seasonality in that in first and second quarter just based on different trends in volumes. .

Robert O'Hare

I think the seasonality probably looks a bit like retail. And then there is also this maybe added complexity where in a new market, we see a higher rate of new users than we would in a more mature program or a mature market. So I think it's a combination of those 2 things. But yes, there's definitely some holiday period seasonality. .

Operator

Your next question comes from Harshita Rawat with Bernstein.

Harshita Rawat

I have 2 questions. So one, I think in the letter you referenced kind of bank account for down payments instead of debit cards, I guess my question is, what are the challenges to getting more borrowers to do that? I guess -- and also, like, I think, help us kind of quantify some of the kind of savings. I know obviously, you say on interchange with debit cards, but there's also some costs associated with bad counts. And then second, maybe talk about digital wallets. You referenced that in the letter, you're live with Apple Pay, Google Pay. What have been the learnings so far from the rollout as well .

Max Levchin

Yes, I mentioned the new payments with DCH. A little bit in the same context as the AI gateway. There's a lot to save still inside our system. We're fairly well optimized in terms of managing operating expenses. But at our scale, fire engines going by. Hopefully, you cannot hear us. .

So anyway, the -- and I guess what would you think about -- the we can analyze the savings the approach anyway. -- every time you switch from a real-time network to a non-real-time network, you are introducing an element of risk. We are very good at risk management. At a certain scale, we have enough data where you can essentially self-insure using debit card networks to take down payments, you buy -- you get a little bit of an insurance of good funds, but you're paying interchange by switching to each, you are introducing a delay. You don't necessarily know you're getting to fund that all time, but if you ever really going to do any mall or you're able to build a specialty model for that particular form of payment, you are saving money and effectively just putting it towards giving consumers better deals, save on OpEx.

So that's kind of the general trust and I mentioned one, but there's many such initiatives going on. And they're always going on. This 1 was just a particularly dear to my heart cause is a long time making. And

then on the wallet side of things No, we are -- we were trying not to talk in retail about any 1 particular product. So I'll keep it general -- it's been -- it's generally speaking, it's been very accretive. We find that folks that prefer digital wallets really stick to them. So having a direct integration is a great unlock for repeat usage.

We definitely get some new users through the integrations as well, but the most compelling kind of benefit for those deals is always just being there when the consumer is. If you look at some of our merchant partnerships, you'll find our digital wallets right next to us. And if any door you go through, you will find a firm available, and some folks love going to our flows. Others like to do that inside well provider, and we see as an important part of our business to be a place.

And so that's the kind of the most important thing. And that strategy was something we said we were some time since we embrace channel conflict sort of short hand for this. And we've embraced it for a while and it pay dividends. We're seeing those users come back through those doors over and over again and to become accustomed to finding Affirm exactly for the preferred shop.

Operator

Your next question comes from the line of Will Mats with Goldman Sachs.

Unknown Analyst

I was going to dovetail off that last 1 there, at least the answer. It was great to see the DTC and wallet driving around half of the volume this quarter. And when we think about ways to kind of drive that even higher over time, obviously, you have things that you can do that I would kind of put in the network effect category, adding more merchants, more nodes to the network, and places where you can use a firm and that just driving good things for the overall business. If we think about it more from an issuing perspective, what are some of the things that you're contemplating just to enhance the overall experience of the firm user and just drive kind of more repeat usage, more habituation, I thought the example that you just gave on the wallet partnerships was great. Anything you could talk about just on kind of user experience and kind of things on the road map there? .

Max Levchin

Never preannounce the road map, it takes longer than you think. I'll bite, but I'll try to keep it not really disclose. So there's a lot of work being put in right now into the card. Like we really think it's the best way to use it for or it should be the best way to Affirm. We think it already is there's so much more we think like the card should be uniquely best most protective, least difficult, it should be the thing that you prefer.

And the reason I'm so excited on that is because it fits naturally into both normal waste point-of-sale integration to the menin processes parts also fits natively into older digital wallet. And so we're very, very focused on that product, just continuously adding benefits to that.

So there's a lot of work being done. You'll see some of it actually launching literally in days, not weeks. So you'll see the answer and answer to this question in it. Media future, there are the card specific financing programs coming. There's a card-specific firm offers that are going to start appearing that will make the firm had the preferred way kind of just through the pure financial benefits to the consumers -- all sub there, but I think that's kind of the -- that's the trust -- some of this is, by the way, what we internally call the mainline development. And then there's even more coming a little bit later from a DT1 team where we're really thinking in the sort of the next generation of the car .

Operator

Your next question comes from the line of Andrew Jeffrey with William Blair. .

Andrew Jeffrey

Max, you always speak so eloquently about credit and your ability to I think you talked about the we take risk come in the latter is great. But the credit and the ability to manage risk and increase approval rates across the credit spectrum. I wonder if a little bit of tonight's reaction to another really good quarter is just Michael explained the delinquencies in this quarter. But just a reaction to the higher provision and concerns that in a more uncertain economy, credit becomes a problem or credit weighs on our LTC. And I wonder if there's just this perception fundamentally about a firm's ability to compound GMV at 30-plus percent while maintaining the excellent credit outcomes we've seen. .

Max Levchin

I'll start with I think Michael is the 1 who's going to give you the real eloquent answer, but I'm going to steal a line from him before we get anywhere. So I'll tell you a story. In May of 2020, -- we were not a 0-trade company. We did not have a lot of cash, and we had no idea with this coveting we're going to be all about. The status checks hasn't arrived yet, and Michael and I were staring at our book and asking the question, if the world goes SaaS with hell of a hand basket, no 1 can pay their build, what are we going to do?

And he gave a very pity line that remains true to this day full 6.5 years later. This was in May, whatever happens by August, it won't matter because the entirety of the book at risk will have been paid off. We lend very, very short weighted average term. You can -- I'll leave it to Michael to repeat. I think actually, Rob is the 1 who explained that a lot of the delinquency changes are entirely seasonal, the year-over-year changes irrelevant.

The provision uptake has to do with some -- we think it's very intelligent implementation. But it's only entirely in our control -- but the bigger point if you don't lead any of the eloquence that I bring to my storytelling around modeling and risk management, just note that the average term is still very, very short. We get to deal with whatever overexposure we might take on today is less than 90 days.

So that should give a lot of people's -- I did great comfort in our ability to recover from whatever mistakes we might make. That said, like 1/3 of the company is involved in some form or another of managing credit. Credit is job #0. Used to be my call sign in every 1 of the letter that feel like I hired retreating myself, but it hasn't changed the way we run the business. So if that's the reason the market misunderstands this, let us stop at understand. .

Michael Linford

And then just 2 things to add. First is the credit outcomes that we are getting now and have gotten over the past 6 years of our public life have been in line with what we wanted to have. Our credit outcomes are a choice point that we make in our business where we want them to be. Everything we do is intentional with respect to credit. And we can do that because we're looking at hundreds of millions of decisions every quarter when we're making underwriting decisions.

And you can tune those models to the appropriate amount of losses you'd like to have based upon that just incredible volume of decisions that you're making in the quarter. The second is -- the capital markets have spoken very loudly on this topic, whether it's the ABS markets who both understand, appreciate and have the first risk in those kind of our loans, but also the forward flow market, really sophisticated world-class blue-chip loan buyers who understand the credit losses in our business exceptionally well.

Continue to be extremely interested in exposure to our assets. These folks are, honestly, some of the smartest credit investors in the world, and they are still extremely excited to participate in our assets. Maybe I feel that we are in market right now on price today was over 4x described despite doing it in 1 of probably the worst 1 of the worst macroeconomic -- certainly in the equity Capital Markets Days we've had since COVID. to be able to price a deal like that without volatility. You can't do that without that market giving you too big sums up on your late controls model.

Andrew Jeffrey

Okay. I appreciate that very much. Sorry about misrecognizing you, Rob, .

Max Levchin

If you've been tuning in for a while, you know how we feel about cresting how much we care. It sometimes frustrates us, that's not everybody has gotten the message yet, but we'll just keep compounding at 30% and keeping that use in the right range and at some point, we'll be on parts. .

Operator

Your next question comes from the line of Nate Svennson with Deutsche Bank. .

Christopher Svensson

Max, 1 for you. I was hoping you could talk a little bit about the time you're spending now with the ZT1 team, clearly sounds like it's positive for your mental health. But I guess, in terms of what your role in that team opens up for a firm as a whole, now that you're able to refocus your time a bit and I think in 1 of the prior questions, you said you're not going to preannounce road map, so I won't ask that. But I think more of a flavor on how you're spending your time with that team, what you're working on would be helpful. .

Max Levchin

Sure. And I know some of them are listening to my donors. There are continuing delight of my daily grind here. So I guess, some sense for what we're actually worth. I'll give you a -- this is maybe a true look behind the curtain. So the that I set with DC-1 roughly trying to remind us live here for every quarter or so. .

The 2 orphan projects that have either a risk-adjusted or probability-adjusted path to $1 billion in revenue in a span of 5 years from launch or to move the needle to the tune of 15% to 20% on an existing line of business. that is already $1 billion. In other words, we either want to take a bet on an existing thing that we believe a firm proper is misprioritizing and we have both the audacity and the capacity to try to move the needle there or just frequently back more frequently, we actually want to go into kind of the very big approach where we build something, and we have no if it's going to work or not, but we're going to try. And if we see a heartbeat, we go all in and build it until it gets to the point where we handed off to the main development team and then they pick it up. So 1 practical thing -- this is not a big reveal because we talked about this product report.

So every once in a while when many sees our brand on to production. This is the idea that if you are a multi-SKU general merchandise, you're probably selling a lot of things that you are not marketing up more than 10%, maybe 15%. And so when a firm comes in and says, "Hey, you ought to do a 0% sales they don't think it's a great idea. Black Friday is coming up 0% drives the volume, let's do this. if you are a vertically integrated seller, like, of course, sounds like a great idea, here is my 6.5% to 9.5% MPR plus give lots of people access to so our general merchandiser and you're reselling a branded product on some of estate, your market is basically the app that we're making of you for the MDR.

The 0% is not going to happen unless you're just try to have any color. However, the original equipment or the original item manufacturer retains a lot of margin, many of them are motivated to put their marketing dollars to work. In fact, they were have existing relationships with the retailer -- and so helping the retailer and the brand tie all those funds, which are typically fund, there's a lot more margin to go around, which usually gets spent in sort of silly promotions like driving -- as you know there's a 20% sale at retailer X on brand Y.

It's an extremely, extremely amphisticated way of doing it. A much better way is, did you know that this particular skew -- he's done a 0% loan, at the exactly retail price. There's no discounting, but this retailer has this brand at 0% available right now. So -- all of this sounds kind of obvious. It's branded that nobody has done it. The reason that was done it is because it's really hard to scale. This actually happens in retail today.

We didn't invent the genre. If you talk to any major player, any general merchandisers, they'll tell you, we do this all the time, it called vendor promotion, vendor-funded promotion. So you go to the vendor and say, "Hey, you have a couple of hundred thousand dollars. I want to put you into my circular, it's going to go out to people. And works okay, but it's run off of spreadsheets and people have to make phone calls and it's quite a lot of manual labor to the 1 or 2 year, and it's generally seeing applicable to every item or deep brand and it's very, very undifferentiated.

We've been building a system that allows for all of this to be managed basically entirely electronically, where you can really have a large number of SKUs at any given time with these brand sponsored promotions -- this requires things like budget management because somebody wants to run these programs forever.

They need to be launched and run down at exactly the right time. They have to hit at the same time as a marketing promotions that happen typically within the general merchandisers, retail media networks, all of them now have their own arm, so the test to echo through that and reach the consumers that way. So flowing all of that together and making sure it's still very profitable for the retailer. It's just an incredible amount of work.

That's what we've been building at DT1. If you want to see what that looks like, if you actually play with a firm app, you will find that we scaled BSP out very significant. I'm not going to drop any names on this call, it would be a good calender hunt, but there's about 1 million different SKUs in the Affirm app that our brand sponsor funded. So -- that's very real. No. It's not any of his forecast is count heavily everything I say here, but I'm personally very excited with this will do for Christmas sales. And Hopefully, we'll scale it out to hundreds of millions of SKUs before too long.

Hopefully half of this may this is like -- so if you want a flavor would you like to work with me, these rands occur in DT1 on either regular basis. .

Operator

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

Jason Kupferberg

All right. Great. I wanted to just come back on GMV growth for a minute. The 34% in Q1, obviously, real strong, we're doing at least 30 according to the new guide for the full year. So on the surface, that implies some deceleration during the balance of the year. I know your compares get a little easier because you're got past the Walmart headwind, et cetera. So I mean, any factors that would actually drive a slowdown off of these Q1 levels? Or is this just the typical conservatism that we've come to know and love .

Robert O'Hare

Yes. I mean, obviously, we've given a floor for growth for the full year at about 30%. So it's not a range. There's no ceiling to growth. We're doing everything we can to grow the business responsibly. We're seeing growth rates early in Q2 and certainly in September as well that were much north of what we posted in Q1. So no reason to -- nothing to point to specifically in terms of a deceleration in the business. We just wanted to set a responsible floor for growth for the full year. And that's what we did with F27 guide. .

Jason Kupferberg

Understood. I also saw in the shareholder letter you've got the first firm edge pilots are going live in the first half of the next calendar year. Talk a little bit more about how many banks that will be with? What's the general size of these institutions? And any other color because, obviously, based on what you talked about at the Investor Day, it seems that could be pretty exciting over a multiyear period. .

Michael Linford

I'll take this one. This is Michael. We're really excited about Edge. It's a chance for us to distribute what we know is a better way for consumers to access credit to a really very wide audience partnering with the issuers of debit cards across banks of all sizes -- is also really early. We've been part of work, working to develop the product.

We like we're really close to being wrapped up with some of the development work. And then we will need to figure out the right set of partners to get live weight, -- nothing to announce here today, but I think patience is a code word here. We have a set of partners, both the platform partners as well as the end customers here who don't move exceptionally fast. And we have to be really mindful of just the pace at which they can move, and we have to pace ourselves to them and they're going to govern that. So it's going to take a little bit of time, don't have a lot of partners, but are and continue to remain very excited about the products.

Operator

Your next question comes from Dan Dolev with Mizuho Securities. .

Dan Dolev

Thanks for squeezing me in. I appreciate it. I want to ask the question about Agentic commerce in a different way, Max, like -- maybe just help us understand, and this is what everyone has been trying to figure out. So if a merchant cares about a genetic conversion, shouldn't they subsidize more firm 0% loans or any other affirmed loans -- or does it not make a difference? Like what's the key hook here for the merchants in an agent world? .

Max Levchin

Yes, they should. And part of why we've been so hard at work on things like BSD is to create programmatic APIs. So initially, humans with calendars and tools, but soon enough agents on their own and deploy dollars to compel a buying agent from their side to say yes. Agents are going to be shopping on your behalf. They'll certainly be looking for improved deals on your behalf.

Affirm is really the only scaled player with capable of managing longer-term zeros that are differentiated, that are driven by SKUs that are driven by target targeting. And we should expect at some point this is very, very early. I just heard Dara talk about how there have been very few Agentic rights booked on Uber. So it's all very, very early days. But it is coming. It's exciting. I'm sure all of you have tried all the various agents and some of them are really, really compelling now. Each 1 of these will be programmed to finding the best financial transaction.

That is going to be a combination of cost, which is going to matter and 0% is going to be the best cost because there's no cost to borrow. It's also going to matter that they are fully disclosive that the price hasn't changed, if you were somehow day late that it doesn't compound so you can estimate a dollar. So all the things that we've talked about is really, really important. -- a percentage of our consumers picks us, because of those features.

Some thing is because we're there, and they don't necessarily grasp the full kind of value that they're getting by choosing a firm of old agents will grasp exactly the value they're getting. We do offer the best credit product there is like that's actually true. And so as agents find us it will help merchants sell more. Merchants can help. Merchants sell more by funding more promotions. And so I expect 0% volume to go up a lot. In the genetic, I expect agents to care about the ever-changing catalog of 0% loans or 3% deals inside the firm ecosystem. I think that's a really important service that we're going to provide to every genetic shopper tool out there.

So there's a lot of lot to like about where this is headed. But I guess, like I would just caution anyone to create a spreadsheet that shows [indiscernible].

Operator

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

Daniel Perlin

So I just wanted to follow up a little bit on that actually. But from the context of like cybersecurity investment cycles, it's definitely becoming a little bit more of a topic this quarter. And especially in a world that you just described Max around increasing genic opportunities. So the question is, -- how are you guys thinking about where you are in that cycle? And are you able to throttle up in or down given potential risks associated with that. And then the other part of the question is, is there any risk to you guys in terms of ownership of liability to the event that you start to see more Agentic fraud as a result of pointing in your direction. I don't know the answer. So I'm just trying to just kind of figure out what kind of, I guess, position that .

Max Levchin

It's a great question. So on the cybersecurity side of things, obviously, we're taking super seriously. This is not -- and by the way, so shoot everyone, if you just -- like there's a mean unground. I wake up, there's another vulnerability. That is the life of our security team and every security team -- the job right now? And so I think we're all constantly watching out for use closures. We're trying to keep up with all the patches, trying to make sure that we're keeping our data safer users data safe, et cetera.

So -- and this will be a -- I'm generally being quite bullish by way we're definitely not in security, but it is a little bit of my past life. So I have strong opinions. I think the vendors are getting access to better models quicker than attackers. And so we will go through an unpleasant period of patching and fixing game, learning how to write better software. But in some fairly short period of time, we're going to be better software builders with AI and generally speaking, better protected.

So I -- we're in a little bit of a shooting more right now with the bugs that are being discovered every day, but it will end, hopefully, relatively quickly, and then we're all going to be better for it. So not not unconcerned, not even a little bit. In fact, I text our security team and all kinds of hours saying, have you guys seen the disclosure yet, like what are we doing to make sure we're not affected.

So that's that's been lined right now, but we're technically very, very strong and we're definitely benefiting from the excellence of our engineering and anticlines. On the fraud and liability side, that is a fantastic question. Generally speaking, you can't expect Agentic commerce to be more than a little bit messy in the early days. Your agent will hallucinate, you must have said, yes, and here's an 85-inch screen for your tiny 1 veteran apartment and you don't care what you going to do it that we bought it and it's yours.

And you love to return but the headaches and the as will be there. So as all of that gets bigger -- and by the way, they are improving very quickly. The region is going to learn, the models that how your agent is going to learn very including some in. So all of that is also going to resolve itself in a reasonably short term, but the messiness of consumer interaction with the Agentic purchase, unwanted purchases, not as described.

And then as Craig very happily pointed out a Agentic fraud is going to be a thing. See speaking, if there's risk to manage. We like that world better than the world where there is. We are very good at it. We're very good at capturing the right data. We're very good at rapidly scaling model building and training things that allow us to mitigate price and ultimately manage risk. And so I don't want to say I'm excited for this new challenges are common ways. But to some extent, every time there is a servant in the force of payments, whether in a form of risk or rates or fraud or credit or new modalities, new channels, we tend to win because the solutions are inevitably engineering and AI and base, and we have a very strong advantage in the rest of the intra that space.

Operator

Your next question comes from the line of Matt O'Neil with Bank of America.

Matthew O'Neill

Here with a minute ago. Well, maybe Matt did cherry pick a word from the shareholder letter, it would be fatuous as me to double down on some many of the questions that have already been asked and answered. So maybe for closing or Mark, is there anything that none of us managed to ask that you would have liked to have been asked or you'd like to conclude with? .

Max Levchin

I applaud your attentive thread of my references. That's one, there are several more. No 1 ever asks how many there are many in this one. Some of them are very deep cut. So that's a work antigen if you want to take your mind off the market. I think I think most of you really understand the business pretty well, and we're always happy to engage in these calls because it gives a chance to brag a little bit on the questions I've got that are about as far as fire over the years. .

I don't know Michael and Rob, you guys have something that should have been asked. I feel like this is the last few quarters, if you want to back analyst community, we've done it really well. Like we look forward to these conversations. We like the questions. We feel appropriately challenged and we don't roll our eyes at any of them.

Operator

And our last question comes from James Faucette with Morgan Stanley.

James Faucette

I wanted to ask on some of the larger ticket sizes and transaction opportunities. thinking about what you could be doing with ServiceNow or service ties excuse me and others. How should we think about how that may impact MDRs, et cetera? It seems like 0 percentage you were talking about MAX could be really attractive part of the sales toolkit for those kinds of service providers. But I think 1 of the things that we grapple with is like what kind of impact would we have on MDRs and the overall economics of transactions compared to what you're doing today? .

Max Levchin

Our large ticket items, large-ticket build service and included is our brand butter. There's no 1 else in the industry that's figured out how to do that. at scale in a differentiated manner. So we're always excited for more of that volume. You're totally right. There's a really healthy demand. I remember when I answer the largest transaction we have written was $7,000. And that was like, "Oh my God, I can't believe I said that out loud and that is not even close to our largest transaction."

So we are carefully increasing our aperture for risk or only the deserving borrower only typically quite high credit quality. But there's definitely room there. It's actually hard for me to immediately reason about MDR changes because there's 2 opposing forces. The merchant is if you're selling an system, so maybe up as I go, but typically, HVAC is like $20,000, $29,000 range, that's a typical sort of replacement for a single-family home. A merchant trying to move that merchandise is more than excited to pay a substantial MDR to make the answer as compelling as possible. You don't want me to come back and shop at get. You just want me to buy this thing.

So MDRs are naturally to get from merchants because they understand that they're only going to sell a dozen per quarter. 1 of them not being sold makes a huge difference to their bottom line. So specialty shops that all these things are particularly drawn to provision. So all of that is really, really good for -- on the flip side, the buyer, given the size of the transaction is actually typically very low risk.

And so from our point of view, to extract a reasonable margin of safety on the loan, the requirements are meaningfully lower. So you kind of have 2 directional pressure in each direction. And I don't know if I can instantly handicap whether I mean the net result is higher or lower. Feels like it goes a little bit higher, but maybe not quite as high as a 4-year, 0% loan with compel or something like that. .

Robert O'Hare

Yes. And I think for a larger ticket transaction, James, this is Rob. We would also go longer on duration. And so in terms of the overall total revenue quantum that we would get from the transaction because it is going to be a longer duration loan, it's probably on the higher end of the spectrum for us as well. Just just given there's going to be more funding costs associated with that loan on our side. .

Operator

This now concludes our question-and-answer session. I would like to turn the floor back over to Zane Keller for closing comments. .

Zane Keller

Well, thank you, everyone, for joining today. Apologies again for the technical difficulties at the beginning of the call. And thank you for your time, and we'll talk to many of you again shortly. See then. Talk to you.

Operator

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day.