Will Affirm maintain RLTC as % of GMV above 3.5% for all quarters of FY2026?

RLTC at 4.0-4.2% provides 50-70bps buffer above the 3.5% threshold. Management deliberately manages to this metric — they would adjust pricing before allowing it to fall below target range. ABS market conditions are favorable. The 'all quarters' requirement adds some risk from any single quarter shortfall, but the buffer is substantial.

The 3-4% target range means management views 3.5% as mid-range, not a floor. They actively reinvest above 4% into growth. Competitive pressure from Klarna/PayPal could force pricing concessions that compress RLTC. But the 3.5% level has a good margin of safety at current levels. Above 65%.

The deliberate cap at ~4% means management has levers to prevent RLTC from falling too far. They can adjust merchant pricing, loan mix, or credit tightening. The main risk is a simultaneous credit deterioration + ABS spread widening that compresses both sides. At current conditions, well above 65%.

Running at 4.0-4.2% with active management attention. The threshold is below the target range floor. Would take significant adverse conditions to breach. Lean strongly YES.

Growing 0% loan mix is the key risk — merchant-funded deals have different RLTC economics. If 0% mix grows faster than expected, RLTC could compress. But management would adjust before it hits 3.5%. Above 60%.

This is the metric management cares most about. They have demonstrated ability and willingness to manage it actively. 3.5% is well below current levels. Strong lean YES.

Strong buffer, active management. 3.5% is below target floor. Above 65%.

0% loan mix and competitive pressure are risks but management has levers. Above 60%.

Core metric with active management and substantial buffer. Strong lean YES.