What did Affirm agree to with Amazon, and when does it take effect?

Affirm entered into a Second Amended and Restated Installment Financing Services Agreement with Amazon.com Services and Amazon Payments on November 6, 2025. It takes effect February 1, 2026, replacing the 2021 agreement, and runs through January 2031 with automatic one-year renewals unless either party gives notice. Affirm will keep offering installment loans on Amazon.com and through Amazon Pay on certain third-party retailer channels.

Why does the warrant amendment matter for shareholders?

Amazon holds a warrant for up to 15 million Class A shares. The amendment keeps the $100.00 exercise price for shares tied to new users acquired before February 1, 2026, and sets a $63.06 price for shares tied to users acquired afterward. The lower price increases potential dilution from future vesting, though the exact economic impact depends on user acquisition levels that have not been disclosed.

Is Affirm's credit performance deteriorating?

Management said credit outcomes remained steady and within target. 30+ day delinquencies excluding Peloton and Pay in X loans were down 4 basis points year over year, though they rose 45 basis points sequentially, which management attributed to seasonality consistent with prior years. Recent monthly installment cohorts are tracking toward about 3.5% ultimate net charge-offs, in line with historical loan cohorts.

How much of the profit improvement came from one-time items?

A meaningful part of the GAAP improvement reflects lower enterprise warrant expense. Sales and marketing expense fell $67 million, mainly because a $72 million reduction in enterprise warrant expense as certain tranches finished amortizing. Excluding warrant expense, sales and marketing still rose about 24%. Investors should weigh the ongoing operating improvement, which is driven by RLTC growth, separately from these non-cash accounting effects.

What is the outlook for fiscal 2026?

Affirm expects fiscal 2026 GMV above $47.5 billion, revenue around 8.4% of GMV, RLTC near 4% of GMV, GAAP operating margin above 7.5%, and adjusted operating margin above 27.1%. For fiscal Q2 2026, the company guided to GMV of $13.0 to $13.3 billion, revenue of $1,030 to $1,060 million, and an operating margin of 6.5% to 8.5%.

AFRM 8-K: Earnings & Results, Material Agreements & More

01—Abstract

Summary

Summary of the 8-K filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.

Affirm Holdings reported strong fiscal first-quarter 2026 results (quarter ended September 30, 2025), with GMV up 42% to $10.8 billion^a, total revenue up 34% to $933 million, and net income of $80.7 million versus a $100.2 million loss a year earlier.

Revenue Less Transaction Costs (RLTC) rose 60% to $455 million^b, or 4.2% of GMV, above the company's 3-4% long-term target range, and Adjusted Operating Income more than doubled to $264 million (28% margin). Operating income turned positive at $64 million, helped by a $72 million decline in enterprise warrant expense. Management reported that 30+ day delinquencies were stable year over year and that recent monthly installment cohorts are tracking toward roughly 3.5% ultimate net charge-offs, consistent with history.

Funding capacity grew to $26.6 billion^c, and the company's net cash position was $1.1 billion. The filing's most material item is the extension of the Amazon installment financing relationship. Affirm and Amazon entered into a Second Amended and Restated Installment Financing Services Agreement, effective February 1, 2026, running five years through January 2031 with automatic one-year renewals.

Affirm also amended Amazon's warrant for up to 15 million Class A shares: warrant shares vesting from new users acquired before February 1, 2026 keep a $100.00^d exercise price, while those vesting afterward carry a lower $63.06 price. Investors should note that the full agreement terms are not yet public and will be filed with the 10-Q for the quarter ending December 31, 2025. Guidance for fiscal 2026 calls for GMV of more than $47.5 billion, revenue of roughly 8.4% of GMV, RLTC of about 4% of GMV, and GAAP operating margin of more than 7.5%.

Management expects enterprise warrant expense to fall at least 30% in fiscal 2026 versus fiscal 2025, which would continue to lift reported GAAP profitability. Because the company's results depend heavily on a few large partners, the Amazon renewal and warrant economics are central to the thesis.

02—Key points

Key Highlights

GMV grew 42% year over year to $10.8 billion, with 0% APR monthly installment GMV up 74% and Affirm Card GMV up 135% to $1.4 billion.
Total revenue rose 34% to $933 million, but revenue as a percentage of GMV declined 52 basis points to 8.7%, reflecting mix shift toward direct-to-consumer and 0% APR products.
RLTC grew 60% to $455 million (4.2% of GMV), exceeding the company's 3-4% long-term target, helped by lower provision for credit losses and funding costs.
GAAP operating income of $64 million (6.8% margin) compared with a $133 million loss a year earlier; net income of $80.7 million versus a $100.2 million loss.
Amazon agreement extended five years through January 2031, with a second warrant amendment setting a $63.06 exercise price for new-user vesting after February 1, 2026.
Fiscal 2026 outlook: GMV above $47.5 billion, revenue around 8.4% of GMV, GAAP operating margin above 7.5%, and enterprise warrant expense down at least 30%.
Funding capacity rose to $26.6 billion, net cash was $1.1 billion, and the company repurchased or was authorized to repurchase up to $200 million of 2026 convertible notes.

03—Questions

Frequently Asked Questions

What did Affirm agree to with Amazon, and when does it take effect?
Affirm entered into a Second Amended and Restated Installment Financing Services Agreement with Amazon.com Services and Amazon Payments on November 6, 2025. It takes effect February 1, 2026, replacing the 2021 agreement, and runs through January 2031 with automatic one-year renewals unless either party gives notice. Affirm will keep offering installment loans on Amazon.com and through Amazon Pay on certain third-party retailer channels.
Why does the warrant amendment matter for shareholders?
Amazon holds a warrant for up to 15 million Class A shares. The amendment keeps the $100.00 exercise price for shares tied to new users acquired before February 1, 2026, and sets a $63.06 price for shares tied to users acquired afterward. The lower price increases potential dilution from future vesting, though the exact economic impact depends on user acquisition levels that have not been disclosed.
Is Affirm's credit performance deteriorating?
Management said credit outcomes remained steady and within target. 30+ day delinquencies excluding Peloton and Pay in X loans were down 4 basis points year over year, though they rose 45 basis points sequentially, which management attributed to seasonality consistent with prior years. Recent monthly installment cohorts are tracking toward about 3.5% ultimate net charge-offs, in line with historical loan cohorts.
How much of the profit improvement came from one-time items?
A meaningful part of the GAAP improvement reflects lower enterprise warrant expense. Sales and marketing expense fell $67 million, mainly because a $72 million reduction in enterprise warrant expense as certain tranches finished amortizing. Excluding warrant expense, sales and marketing still rose about 24%. Investors should weigh the ongoing operating improvement, which is driven by RLTC growth, separately from these non-cash accounting effects.
What is the outlook for fiscal 2026?
Affirm expects fiscal 2026 GMV above $47.5 billion, revenue around 8.4% of GMV, RLTC near 4% of GMV, GAAP operating margin above 7.5%, and adjusted operating margin above 27.1%. For fiscal Q2 2026, the company guided to GMV of $13.0 to $13.3 billion, revenue of $1,030 to $1,060 million, and an operating margin of 6.5% to 8.5%.

04—Continue

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