Affirm (AFRM) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Market outlook and growth trends

• GMV growth deceleration in the second half is due to lapping high prior-year growth and the end of a major Walmart partnership, with normalization expected going forward.

• Recent quarters showed acceleration in year-over-year growth even without the Walmart volume, indicating underlying strength.

• 0% promotions, especially at the start of October, drove aggregate volume increases without pulling forward demand.

• BNPL penetration in the US is around 8%-9% of e-commerce, with international markets showing potential for further growth.

• The addressable market is seen as a replacement for revolving credit, targeting $1.1-$1.2 trillion in US revolving debt.

Product strategy and consumer engagement

• Merchant-funded 0% promotions are dollar accretive, boosting both consumer retention and merchant conversion.

• 0% offers attract higher quality consumers, improve retention, and are unit economic positive even at lower margins.

• Promotions like "zero days" are net accretive, driving incremental purchases rather than just shifting timing.

• Product enhancements focus on tailoring card and wallet experiences to different consumer segments and income levels.

• Offline BNPL penetration is below 1%, representing a significant growth opportunity as wallet and card integrations expand.

Underwriting, risk management, and funding

• Underwriting is a key differentiator, enabling longer duration and higher ticket size loans compared to competitors.

• Constant reinvestment in underwriting and modeling is necessary to adapt to evolving consumer and merchant needs.

• Recent ABS deal in January achieved the tightest spread to date, with strong demand and robust capital partner relationships.

• Forward flow agreements provide a cushion for growth, with stable, high-quality funding sources like CPPIB and Prudential.

• Regular engagement with capital partners ensures adaptability and benefits from a flight to quality in funding markets.