#1Affirm Financial Model Information Session June 2023 affirm#2Agenda We will hold Q&A breaks after the RLTC section and conclusion AFFIRM | 2023 01 RLTC walkthrough 02 03 Operating expense walkthrough Conclusion affirm 2#3Cautionary note about forward-looking statements This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. All statements other than statements of historical fact are forward-looking statements, including statements regarding: the Company's strategy and future operations; the development, innovation, introduction and performance of, and demand for, the Company's products; the Company's future growth, investments, network expansion, product mix, brand awareness, financial position, gross market value, revenue, transaction costs, operating income, provision for credit losses, and cash flows; and general economic trends and trends in the Company's industry and markets. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and assumptions include factors relating to: The Company's need to attract additional merchants, partners and consumers and retain and grow its relationships with existing merchants, partners and consumers; the highly competitive and evolving nature of its industry; its need to maintain a consistently high level of consumer satisfaction and trust in its brand; the concentration of a large percentage of its revenue and GMV with a small number of merchant partners and commerce platforms; its ability to sustain its revenue growth rate or the growth rate of its related key operating metrics; its ability to successfully maintain its relationship with Celtic Bank as an originating bank partner and engage additional originating bank partners; its ability to AFFIRM | 2023 maintain, renew or replace its existing funding arrangements and build and grow new funding relationships; the impact of any of its existing funding sources becoming unwilling or unable to provide funding to it on terms acceptable to it, or at all; its ability to effectively underwrite loans facilitated through its platform and accurately price credit risk; the performance of loans facilitated through its platform; the impact of increases in market interest rates and negotiated interest rate spreads on its business; the terms of its securitizations, warehouse credit facilities and forward flow agreements; the impact on its business of general economic conditions, including the impact of inflation, increasing recessionary concerns, instability of financial institutions, the financial performance of its merchants, and fluctuations in the U.S. consumer credit market; its ability to achieve or sustain profitability in the future, including in the manner and timeframe it has previously communicated; its ability to grow effectively through acquisitions or other strategic investments or alliances; seasonal or other fluctuations in its revenue and GMV as a result of consumer spending patterns; pending and future litigation, regulatory actions and/or compliance issues; developments in its regulatory environment; the impact of the reduction in its workforce announced in February 2023, including its ability to realize certain cost savings anticipated as a result of the reduction and its ability to continue to attract and retain highly skilled employees; and other risks that are described in its most recent Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q for the quarters ended December 31, 2022 and March 31, 2023, and in its other filings with the U.S. Securities and Exchange Commission. These forward-looking statements reflect the Company's views with respect to future events as of the date hereof and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. The forward-looking statements are made as of the date hereof, and the Company assumes no obligation and does not intend to update these forward-looking statements. affirm 3#4Use of Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we present the following non-GAAP financial measures, including revenue less transaction costs, revenue less transaction costs as a percentage of GMV, adjusted operating loss and adjusted operating margin. We also present certain operating expenses on a non-GAAP basis, as well as those non-GAAP operating expenses as a percentage of GAAP total revenue. Reconciliations of each non-GAAP financial measure with the most directly comparable GAAP financial measure can be found in our earnings supplement slide deck, which is available on our Investor Relations website. Our management uses these non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our operating results and the effectiveness of our business strategy, and in evaluating our financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, and our use of these non-GAAP financial measures has limitations as an analytical tool. Accordingly, you should not consider these non-GAAP financial measures in isolation or as substitutes for analysis of our financial results as reported under GAAP, and these non-GAAP measures should be considered along with other operating and financial performance measures presented in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business. AFFIRM I 2023 affirm 4#5AFFIRM I 2023 01 Revenue less transaction costs (RLTC) walkthrough affirm 5#6Suggested approaches to model RLTC Bottom up approach Top down approach AFFIRMI 2023 Forecast GMV by product Forecast total GMV Estimate on vs. off balance sheet GMV Forecast revenue and transaction cost line items Forecast RLTC as a % of GMV RLTC forecast affirm 6#7Gross merchandise volume in $ million by product type $2,257 3FQ'21 $2,484 4FQ'21 AFFIRMI 2023 $2,713 $4,458 1FQ'22 Pay in 4 18% Growth $3,916 $4,396 $4,389 2FQ'22 3FQ'22 0% APR monthly $5,658 24% Ex-Peloton Growth $4,639 3FQ'23 Product mix drivers Changes in merchant mix ● Ability to add new products at existing merchants Increasing adoption of Adaptive Checkout vs. Pay in 4 only ● Structural GMV drivers ● U.S. e-commerce spend ● Increasing BNPL penetration ● Expanding share of cart ● Capturing daily and in-store spend International expansion 4FQ'22 1FQ'23 2FQ'23 Interest bearing Note: GMV defined as the total dollar amount of all transactions on the Affirm platform during the period, net of refunds. Beginning in Fiscal Q1 2023, Affirm modified the definition of its low Average Order Value product from Split Pay to Pay in 4. Pay in 4 includes volume from loan transactions with 0% APR and 6-8 week term lengths but now excludes volume from monthly installment loans with 0% APR and 3 month term lengths. Metrics are unaudited. Temporary GMV drivers ● Seasonality: 2FQ benefits from holiday shopping ● Shifts in consumer spend between staples vs. discretionary purchases affirm 7#8On vs. off-balance sheet GMV in $ million loans sold and GMV less loans sold $2,257 34% 3FQ'21 AFFIRMI 2023 $2,484 48% $2,713 41% $4,458 56% $3,916 51% 4FQ'21 1FQ'22 2FQ'22 3FQ'22 GMV less loans sold $4,396 34% $4,389 46% $5,658 Loans sold 37% 4FQ'22 1FQ'23 2FQ'23 $4,639 37% 3FQ'23 Drivers ● Funding market conditions ● GMV growth relative to funding capacity additions Note: GMV reflects gross merchandise volume net of refunds and includes volume from Pay Now or down payments on loans; loans are net of down payments and exclude Pay Now volume. Loans sold includes outstanding principal balance at the time of loan sale. Metrics are unaudited. affirm 8#9AFFIRMI 2023 Revenue affirm 9#10How we monetize GMV Revenue sources in $ million and total revenue as a % of GMV AFFIRMI 2023 $231 10.2% $262 Metrics are unaudited. 10.5% 3FQ'21 4FQ'21 % of GMV $269 9.9% $361 8.1% $355 Network revenue 9.1% $364 8.3% 1FQ'22 2FQ'22 3FQ'22 4FQ'22 Interest income Gain on sales of loans $362 8.2% $400 7.1% 7% Growth $381 8.2% 1FQ'23 2FQ'23 3FQ'23 Servicing income affirm 10#11Network revenue in $ millions and as a % of GMV $112 5.0% $108 AFFIRMI 2023 4.3% $112 4.1% 3FQ'21 4FQ'21 1FQ'22 $154 3.4% $144 Metrics are unaudited. 3.7% 2FQ'22 3FQ'22 Network Revenue $150 3.4% $140 3.2% $163 2.9% $148 3.2% 4FQ'22 1FQ'23 2FQ'23 3FQ'23 As % of GMV ● Total GMV ● Drivers GMV mix between Pay in 4, 0% APR, interest-bearing product, and Pay Now affirm 11#12Illustrative merchant fee rates MDR has been stable on a like-for-like product basis 12.5% 10.0% 7.5% 5.0% 2.5% 3FQ'21 AFFIRM I 2023 4FQ'21 Core 0% Long 1FQ'22 2FQ'22 - Core 0% Short 3FQ'22 Core IB 4FQ'22 - Pay in 4 1FQ'23 2FQ'23 Non-Integrated Virtual Card 3FQ'23 ● ● ● Drivers Product mix - the most important driver of overall MDR Loan duration within 0% APR Merchant mix Core 0% Long includes loans with term lengths greater than 12 months and 0% APR; Core 0% Short includes loans with term lengths at least three months long but less than or equal to 12 months and 0% APR; Core IB includes loans with interest from Affirm integrated merchants; Pay in 4 (formerly known as Split Pay) includes loans with 0% APR and 6-8 week term lengths; Non-Integrated Virtual Card includes loans made by Affirm at non-integrated merchants using Affirm's virtual card technology, excludes loans made in Canada via Affirm or legacy Paybright business and excludes Returnly and Debit+ Card transactions. Metrics are unaudited. affirm 12#13Interest income in $ million and as a % of average loans held for investment $95 19% $104 AFFIRMI 2023 20% 14% $117 22% 15% $138 24% 14% $135 Metrics are unaudited. 22% 3FQ'22 12% 3FQ'21 4FQ'21 1FQ'22 2FQ'22 Consumer interest as % of avg LHFI (annlz'd) Amortization of discount 14% $138 22% 15% $137 21% 15% $155 20% 15% $178 Consumer & other interest income 19% 15% 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Total interest as % of avg LHFI (annlz'd) Drivers ● Average balance of loans held for investment (LHFI) ● LHFI mix between interest-bearing and 0% APR, including Pay in 4 Pricing initiatives affirm 13#14Gain on sales of loans in $ millions and as a % of loans sold $16 2.2% $43 AFFIRMI 2023 3.5% $31 2.8% $58 2.3% $52 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 Gain on sales of loans Metrics are unaudited. 2.6% $55 3.7% $64 3.1% $60 2.9% $33 1.9% 4FQ'22 1FQ'23 2FQ'23 3FQ'23 As % of loans sold ● ● Drivers Loans sold during quarter Funding market conditions Benchmark interest rates and credit spreads Average APR on loans sold ● Credit quality of loans sold affirm 14#15Servicing income in $ million and as a % of average off balance sheet platform portfolio $8 1.8% 3FQ'21 $7 AFFIRMI 2023 1.3% $9 1.4% $11 Servicing income 1.4% $23 Metrics are unaudited. 2.3% $22 2.0% $21 1.8% 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 As % of avg. off B/S platform portfolio, anniz'd $21 1.8% $21 1.9% 3FQ'23 Drivers ● Average balance of platform portfolio held off balance sheet affirm 15#16AFFIRMI 2023 Transaction Costs affirm 16#17Transaction cost overview in $ million and total transaction costs as a % of GMV AFFIRMI 2023 $97 4.3% 3FQ'21 As % of GMV Metrics are unaudited. $114 4.6% $157 5.8% 4FQ'21 1FQ'22 Loss on LPC $177 4.0% $172 4.4% 2FQ'22 3FQ'22 Funding costs $180 4.1% $179 4.1% $255 4.5% 4FQ'22 1FQ'23 2FQ'23 Processing & servicing $214 4.6% 3FQ'23 Credit provision affirm 17#18$182 Allowance December 2022 QUARTERLY CHANGE IN ALLOWANCE $61 AFFIRM | 2023 Provision for Losses Beginning of Period Allowance (+) Provision for Loan Losses (-) Charge-offs, Net End of Period Allowance Loans Held for Investment Allowance % of Loans Held for Investment Loan Loss Allowance Waterfall Dollars in millions; metrics are unaudited. $(67) Charge-offs, Net Jun 30, 2022 159 68 (72) $155 $2,504 6.2% $176 Allowance March 2023 QUARTER ENDING Sep 30, 2022 155 62 (64) $153 $2,682 5.7% $159 Allowance March 2022 Dec 31, 2022 153 103 (74) $182 $3,656 5.0% LAST 12 MONTHS CHANGE IN ALLOWANCE $294 Provision for Losses March 31, 2023 182 61 (67) $176 $3,776 4.7% $(278) Charge-offs, Net $176 $3,776 4.7% Allowance March 2023 12 MONTHS ENDING March 31, 2023 159 294 (278) $176 affirm 18#19Provision for credit losses in $ million and as a % of GMV less loans sold during the quarter -0.1% ($1) 3FQ'21 $25 AFFIRMI 2023 2.0% $64 3.9% $53 2.7% 4FQ'21 1FQ'22 2FQ'22 Provision for Credit Losses Metrics are unaudited. $66 3.5% $73 2.5% $64 2.7% $107 3.0% $66 2.3% 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Provision as % GMV less loans sold Drivers ● Allowance for loans held at end of period Product and merchant mix ● Credit posture, reflected in ITACS mix ● Actual credit outcomes affirm 19#20Processing and servicing expense in $ million and as a % of GMV $21 0.9% $22 AFFIRMI 2023 0.9% 3FQ'21 4FQ'21 $25 0.9% $42 0.9% $43 Metrics are unaudited. 1.1% $47 1.1% $54 1.2% $67 As % of GMV 1.2% $65 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Processing and Servicing Expense 1.4% Drivers ● Total GMV and platform portfolio size ● Mix of GMV originated at a large enterprise partner with a revenue-share agreement Repayment mix and servicing optimizations affirm 20#21Funding costs in $ million and as a % of funding debt & securitization notes $15 3.2% 3FQ'21 $16 AFFIRMI 2023 3.2% $17 3.4% 4FQ'21 1FQ'22 Funding Costs $18 3.3% $16 Metrics are unaudited. 2.8% $19 3.3% $25 4.2% $44 6.1% $51 6.3% 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 As % of avg. funding debt + securitization notes, annlz'd Drivers ● Average balance of funding debt plus securitization notes ● Average funding cost (benchmark rate + credit spreads) Loans held for investment affirm 21#22Loss on loan purchase commitment in $ millions and as a % of GMV from 0% APR products excluding Pay in 4 $62 6.4% 3FQ'21 $51 AFFIRMI 2023 5.4% $52 4.5% $65 3.3% $47 Metrics are unaudited. 5.6% $40 5.7% $36 4.4% $38 7.1% 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Loss on Loan Purchase Commitment $31 As % of Core 0% APR GMV 4.4% Drivers ● 0% and Low APR loans held on balance sheet originated by partner banks Duration of 0% APR loans originated by partner banks affirm 22#23AFFIRM | 2023 Top Down Approach RLTC as a % of GMV affirm 23#24Recent drivers of RLTC as a % of GMV Business Impact Driver Affirm / BNPL Industry Specific Dynamics Pricing initiatives Product mix Merchant mix shift. Product efficiency improvements Macroeconomic Factors Consumer spending trends Funding costs Holiday seasonality Consumer credit environment AFFIRM I 2023 ● ● Higher APRS increase consumer interest and gain on sale Higher merchant fees increase network revenue Our loan products have differing profitability profiles, with interest bearing loans typically being the most profitable loan product Enterprise partners and lower order values increase frequency and network size, but potentially at lower RLTC as a % of GMV Increase in platform fees due to success of certain partnerships Underwriting optimizations reduce credit provisions, driving up margin Higher benchmark interest rates and credit spreads increase the cost to fund on-balance sheet loans and reduce gain on sale Rapid sequential GMV growth drives up 2FQ provision expense which is dilutive to RLTC as a % of GMV within quarter Impacts loan loss provisions and gain on sale FY'23 RLTC impact Note: "FY'23 RLTC impact" refers to RLTC impact as measured through the first three quarters of FY'23 Tailwind Tailwind Discretionary purchases tend to have higher AOVS, which generally have a higher RLTC Headwind as a % of GMV Headwind Tailwind Headwind Headwind Headwind affirm 24#25RLTC summary in $ million and as a % of GMV $134 5.9% $148 AFFIRMI 2023 5.9% $112 4.1% $184 4.1% 3FQ'21 4FQ'21 1FQ'22 2FQ'22 Metrics are unaudited. RLTC $182 4.7% $184 4.2% 3FQ'22 4FQ'22 As % of GMV $182 4.2% $144 2.5% $167 3.6% 1FQ'23 2FQ'23 3FQ'23 ● Final RLTC considerations ● Macroeconomic factors have been a significant headwind to RLTC as a % of GMV in FY'23 Affirm-specific factors have had a neutral impact to RLTC as a % of GMV in FY'23 ● Pricing initiatives will take several quarters to achieve maximum benefit RLTC as a % of GMV is highly seasonal with 2FQ seasonally softest Note: References to impact on RLTC as a % of GMV in FY'23 relate to RLTC impact as measured through the first three quarters of FY'23 affirm 25#26AFFIRM | 2023 RLTC Q&A affirm 26#27AFFIRM I 2023 02 Operating expense walkthrough affirm 27#28Non-GAAP operating expenses $ million $49 21% $44 17% Technology & Data Analytics $51 AFFIRMI 2023 $65 $67 19% 18% 19% $80 22% $84 23% $88 22% $78 20% 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Tech and data - As of revenue $30 13% Sales and Marketing $40 $41 $49 15% 15% 14% $29 8% $39 11% $25 7% $31 8% $16 4% 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Sales and marketing - As % of revenue $51 $50 22% 19% General and Administrative $66 24% $79 22% $84 24% $95 Non-GAAP operating expenses exclude (a) depreciation and amortization; (b) stock-based compensation included in GAAP operating loss; (c) expenses related to warrants and share-based payments granted to enterprise partners; and (d) certain other costs. Metrics are unaudited. $93 26% 26% $88 $81 22% 21% 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 G&A As % of revenue affirm 28#29Share-based payment expense $ million AFFIRMI 2023 $196 $127 $110 $176 $217 $230 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 Metrics are unaudited. Amounts above are included in Operating Expenses. $248 $269 Amazon enterprise warrants Amazon commercial agreement CEO value creation award Employee stock-based compensation $220 1FQ'23 2FQ'23 3FQ'23 Shopify commercial agreement affirm 29#30Share-based payment accounting $ 000 unless otherwise indicated Balance as of December 31, 2022 Issuance of common stock upon exercise of stock options Vesting of restricted stock units Vesting of warrants for common stock Stock-based compensation Tax withnolding on stock-based compensation Foreign currency translation adjustments Unrealized gain on securities available for sale Unrealized loss on cash flow hedges Net loss Balance as of March 31, 2023 AFFIRMI 2023 Metrics are unaudited. Total Stockholders' Equity $ $ 2,510,148 716 93,922 125,902 (18,169) 31 4,520 (257) (205,677) 2,511,136 Considerations GAAP share-based expenses are added back to stockholders' equity at the end of each fiscal period The main impact of share-based expenses is dilution Since 3FQ'21, our shareholder equity has been stable at ~$2.5 billion despite substantial net losses affirm 30#31Enterprise warrant and commercial agreement expenses $ million unless otherwise indicated $17 $17 $17 AFFIRMI 2023 $88 $119 $120 Enterprise warrants $128 3FQ'21 4FQ'21 1FQ'22 2FQ'22 3FQ'22 4FQ'22 1FQ'23 2FQ'23 3FQ'23 Metrics are unaudited. $148 $113 Commercial agreements Item 3FQ'23 expense Commercial agreement $19 Enterprise warrants $94 million Driver Fixed expense Performance based We expect total enterprise warrant and commercial agreement expense to decline substantially by 2FH'25 affirm 31#32Employee stock-based compensation $ million unless otherwise indicated $180 3FQ'21 AFFIRMI 2023 $111 4FQ'21 $93 $89 1FQ'22 2FQ'22 CEO value creation award Metrics are unaudited. $98 $111 3FQ'22 4FQ'22 $120 $122 1FQ'23 2FQ'23 Employee stock-based compensation $107 3FQ'23 Considerations We establish SBC based upon an annual dilution target, not GAAP expense Additional CEO Value Creation Award stock options will be earned only if the 90 trading day VWAP of Affirm Class A shares exceeds $132 affirm 32#33AFFIRM I 2023 03 Conclusion affirm 33#34Final considerations when Modeling our business Focus on forecasting RLTC Consider using both bottom up and top down approaches Consider both the Affirm-specific and macroeconomic factors affecting RLTC as a % of GMV AFFIRM I 2023 Non-GAAP operating expenses We have demonstrated good non-GAAP sales and marketing and G&A expense leverage Non-GAAP tech and data analytics expense has scaled with GMV and customer growth Share-based payments We target a certain amount of annual share-based dilution Vesting of CEO value creation award options is subject to high share price thresholds We expect enterprise warrant and commercial asset expense to decline substantially by FYE'25 affirm 34#35Thank you and Q&A Questions? [email protected] affirm 35