Affirm Holdings, Inc.

Good afternoon. Welcome to Affirm Holdings second quarter 2023 earnings conference call. Following the speaker's remarks, we will open up the lines for your questions. As a reminder, this conference call is being recorded and a replay of the call will be available on our investor relations website for a reasonable period of time after the call. I'd now like to turn the call over to Zane Keller, Director, Investor Relations. Thank you. You may begin.

Thank you, operator. Before we begin, I would like to remind everyone listening that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our investor relations website. Actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them except as required by law. In addition, today's call may include non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found on our earnings supplement slide deck, which is available on our investor relations website. Posting today's call with me are Max Levchin, a firm's founder and chief executive officer, and Michael Linford, the firm's chief financial officer. With that, I'd like to turn the call over to Max to begin.

Thank you, Zane. We appreciate everyone taking the time to join us. I hope you've had a chance to review our letter to shareholders, as it contains a great deal of detail. Amidst increased macroeconomic headwinds, our fiscal Q2 had mixed results. Revenue was at the low end of our expected range, and adjusted operating income came in better than expected. On the other hand, gross merchandise volume was short of expectations, as was revenue-less transaction costs, as our mix shifted to more interest-bearing loans and we retained more loans on the balance sheet. We once again reported excellent credit performance as delinquencies fell on a sequential basis. Our continued vigilance and attention to credit outcomes allowed us to meaningfully increase our funding capacity in January. We also acknowledge a tactical error on our part that hurt our results. We began increasing prices for our merchants and consumers later in the year than we should have as this process has taken us longer than we anticipated. This is a lesson we will not soon forget, though it does not change our long-term outlook at all. We have taken appropriate action from implementing pricing initiatives, which are gaining traction, to refocusing our product development effort on margin optimization and core growth, to the most difficult decision of all, reducing the size of our team by 19% today. I believe this is the right decision, as we have hired a larger team that we can sustainably support in today's economic reality, but I am truly sorry to see many of our talented colleagues depart and will be forever grateful for their contributions to our mission. With a smaller, therefore nimbler team, We are focused on achieving profitability on an adjusted operating income basis as we exit fiscal 23 by executing on three key initiatives, accelerating GMV growth while optimizing RLTC, engaging consumers to drive greater frequency and repeat usage, and growing DebitPlus. We continue executing on our strategy to scale our network, make disciplined, high-conviction bets in our most promising opportunities, and capitalize on our massive secular tailwinds. If anybody wants to ask me about the recently proposed rule on leave fees, please go for it. We'll head to Q&A now. Back to you, Zane.