Affirm's Q2 2025: Unraveling Contradictions in 0% Loans, AI Integration, and Funding Costs

These are the key contradictions discussed in Affirm's latest 2025Q2 earnings call, specifically including: 0% Loans Deployment and Pricing Strategy, AI's Role in Headcount and Productivity, Strategy on Credit Environment and Interest Rates, and Funding Costs Expectations:



Revenue and GMV Growth:
- Affirm Holdings, Inc. reported Q2 fiscal 2025 revenue of $3.7 billion, with a 3% to 4% RLTC margin, exceeding analyst expectations due to strong performance across various metrics.
- The growth was driven by increased 0% loans, strategic partnerships, and a strong expansion in the U.S. market.

Increased 0% Loan Offerings:
- Affirm noted a significant increase in 0% loan offerings, which accounted for a noticeable portion of transaction volume in Q2.
- The expansion of 0% loans was due to their effectiveness in driving consumer purchases and merchant promotions, leading to improved conversion rates and increased engagement.

UK Market Launch and Expansion:
- Affirm is set to launch in the UK, with Shopify as its first major enterprise-scale integration, expected to go live soon.
- The entry into the UK market is driven by strong demand for diverse term offerings, particularly for longer-term loans, and the company's ability to provide sophisticated subsidized APRs.

Strategic Funding and Capital Markets:
- Affirm's partnership with Sixth Street is expected to ramp up in the second half of 2025, contributing significantly to growth.
- The partnership reflects the company's ability to scale capital programs responsibly, leveraging favorable market conditions and diversifying funding sources.