01—Abstract
Summary
Summary of the 8-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.
On February 20, 2025, Affirm Holdings disclosed (via Form 8-K) a new Global Customer Installment Program Agreement with Shopify, effective February 14, 2025, which replaces the prior Amended and Restated Customer Installment Program Agreement dated March 18, 2024 (as amended through December 18, 2024).
The agreement governs Affirm's role as the pay-over-time provider for Shop Pay Installments (SPI) in territories where Affirm and Shopify enter into territory program agreements. Territory agreements were concurrently signed for the United States and Canada. Merchants pay Affirm fees generally equal to a percentage of each SPI sale plus a fixed per-sale amount, while Affirm pays Shopify a fee on each SPI sale.
The key commercial terms for investors are the term and exclusivity. The initial term runs three years to June 8, 2028, then renews automatically in one-year increments unless either party gives at least 180 days' notice. Either party may terminate without cause after the first year with 180 days' notice, and either may terminate immediately upon certain early termination events.
Shopify has agreed that Affirm will be its exclusive provider in the Territories for substantially similar financial products for the duration of the agreement. The press release confirms Affirm's exclusivity in the U.S. and extends it to Canada, with planned expansion into the U.K. The filing does not quantify financial impact, such as expected revenue, fee rates, or volume commitments.
Those details are not disclosed, and the full agreement will be filed as an exhibit to the Form 10-Q for the quarter ending March 31, 2025. Because Shopify is a major distribution partner, investors should weigh the expanded international opportunity against the termination rights and the reliance on a single partner for SPI volume.
02—Key points
Key Highlights
- Affirm entered a new Global Customer Installment Program Agreement with Shopify effective February 14, 2025, superseding the prior agreement, which terminated as of that date.
- The initial term runs through June 8, 2028, with automatic one-year renewals unless either party gives at least 180 days' notice of termination.
- Affirm is confirmed as the exclusive pay-over-time provider for Shop Pay Installments in the U.S. and will become exclusive in Canada, with exclusivity lasting for the agreement's term.
- Territory program agreements for the U.S. and Canada were signed concurrently, and the partnership is designed to extend to additional markets, with the U.K. planned.
- Merchants pay Affirm fees generally structured as a percentage of each SPI sale plus a fixed per-sale amount, while Affirm pays Shopify a fee on each SPI transaction.
- Either party may terminate without cause after the first contract year on 180 days' written notice, which introduces a degree of counterparty risk for Affirm's SPI volume.
- Specific financial terms, such as fee rates and expected revenue impact, are not disclosed in this 8-K; the full agreement will be filed with the Q1 2025 Form 10-Q.
03—Questions
Frequently Asked Questions
What changed in Affirm's relationship with Shopify?
Affirm and Shopify signed a new Global Customer Installment Program Agreement effective February 14, 2025. It replaces the prior agreement from March 2024 (as amended through December 2024) and extends Affirm's role as the pay-over-time provider for Shop Pay Installments into Canada and other future territories.
How long does the new Shopify agreement last, and can it be terminated?
The initial term runs three years to June 8, 2028, and renews automatically for one-year periods. Either party can elect not to renew with at least 180 days' notice before the end of a term. Either party may also terminate without cause after the first year on 180 days' notice, and either may terminate immediately upon certain early termination events.
Does Affirm have exclusivity under the agreement?
Yes. Shopify has agreed that Affirm will be its exclusive provider in the Territories for financial products substantially similar to those Affirm currently offers under the agreement. The press release confirms exclusivity in the U.S. and says it extends into Canada.
How does Affirm make money from Shop Pay Installments under this agreement?
Merchants using SPI pay Affirm fees under their Affirm merchant agreements, generally a percentage of each sale plus a fixed amount per sale. Affirm also pays Shopify a fee on each SPI sale processed. The filing does not disclose the specific rates.
What is the financial impact, and where can investors find more detail?
The 8-K does not quantify expected revenue, volumes, or margin impact. The full agreement will be filed as an exhibit to Affirm's Form 10-Q for the quarter ending March 31, 2025, which should provide more detail on economics and terms.
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