Max Levchin: We’ll take it in reverse order. So yes, we absolutely expect to be in a period of learning, one of our earliest venture capitalists called it pain tuition, where you put out some loan volume and you see how it pays back. Obviously, our next announced market is UK. The credit behaviors and performance there has some similarities to the United States. It’s a Western democracy that’s built around credit reporting, both positive and negative, the same credit bureaus work there, similar data types, data formats work there, similar regulations apply, what you can and cannot use for underwriting. And so our success in Canada, which is really good, suggests that we are able to transport the models across the border. UK will be another good test.
We will be careful. We’re not going to roll out $1 trillion of volume and hold our breath to see what happens. It will be gradual. But we feel very good about our ability to operate in the United Kingdom in terms of credit performance, and we’ll still take the time to make sure that it’s good. Beyond that, we’ve said nothing as to where we’re going to go, but wherever we might show up next, you should expect us to — in part of why we will never presumably guide to some huge volume growth internationally on year one is because credit takes time to take ourself out and we will never skip that step.
Michael Linford: And then as for funding, yes, I think it will require that we localize funding. We want to do that anyway to make sure that we’ve got some currency matching with the local market, but also just getting through all the different funding sources, credit postures will require some localization. I think there are global synergies. The institutions we work with have a global footprint, and that really will help us, but it will require some localized funding sources as we get to launching, for example, in the UK later this year.
Ramsey El-Assal: Great. Merchant additions went up nicely They’ve gone up nicely in prior quarters. And a quick follow-up for me. New merchant additions went up nicely this quarter, they’ve gone up nicely in prior quarters. Can you give us any further commentary about where you’re seeing success there? Is it particular verticals, digital versus in-store? What is the driver? Or is it just a general rising tide type of situation with new merchant additions?
Max Levchin: It’s more rising tide. We sort of — I stopped the practice of calling out a bunch of brands because I felt like I was letting people down when I didn’t flash some cool name brand in the next shareholder letter. So we always have a couple, but I’m sure you can understand it takes effort and time to convince them to use their name for the shareholder letter. So I stopped. We are still chasing down great logos and adding them quite a lot. If you do some sleuthing in our app, you will probably find them through search. But frankly, where I’m most excited is everybody has a different acronym for it, but midsized businesses, businesses that have $10 million to $50 million in GMV are awesome because they are very growth-centric businesses.
And when merchants grow, we grow faster. One of the things that we’ve noticed in, independent of economic times, independent of interest rates, independent of almost any variable when merchants have a posture to grow their GMV and they sign up for Affirm, our growth within that merchant always exceeds theirs. And that’s exactly what majority of midsized merchants want to do. They want to become larger sized merchants. And so we are always looking for both direct and channel-based sales to those folks. I spend a lot of my time talking to those CEOs trying to understand what they really need? How are they thinking about their — what are we competing a little bit for their advertising budgets as well as kind of their growth budget. And so just figuring out how they think, don’t discount use Affirm offer subsidized APRs, offer 0% sales, like all of that is really, really important to us.
And so that’s where I spend a lot of my time. That’s where the company is spending a fair amount of its time. That said, there’s always some cool logo, we probably flash if they would give us permission for it.
Michael Linford: I just want to reemphasize something Max said that’s really important is in addition to our direct sales, which we continue to invest in acquiring new logos, we are also partnering now more with people who can help distribute our product for us. And that has been a really successful strategy and gain distribution in some of the pockets that are harder to get to with a small sales force that we have.
Ramsey El-Assal: Great. Thank you.
Operator: Thank you. There are no further questions at this time. I’d like to turn the floor back over to Zane Keller for closing comments.
Zane Keller: Thank you, everybody, for joining the call today. We look forward to speaking with you again next quarter.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation
