Affirm Holdings Reports Strong Fiscal First Quarter

Affirm Holdings has released its fiscal first quarter results, highlighting an increase in consumer spending and a positive response to its debit card offering. The company saw its gross merchandise volume (GMV) rise by 28% to $5.6 billion. This growth was supported by a 15% surge in active customers, now totaling 16.9 million, and a significant 25% increase in transactions per average consumer, reaching 4.1.

Debit Card Offering Gains Traction

The Affirm Card, which allows consumers to pay for purchases over time or in full, has shown particularly strong performance with $224 million in GMV. The card is attracting approximately 75,000 new sign-ups each month, with over 400,000 active cards reported by the end of September.

Expansion of Merchant Partnerships

Active merchants partnering with Affirm have also increased to more than 266,000, up from 245,000 in the previous year. This expansion indicates a growing acceptance and integration of Affirm’s services within the retail sector.

CEO Comments on Growth and Strategy

During a conference call, CEO Max Levchin expressed the company’s focus on credit outcomes and plans to continue investing in risk management and product development. A key strategic move includes the integration of the Affirm Card into omnichannel environments, enhancing its accessibility to brick-and-mortar stores.

Consumer Spending on the Rise Across Categories

Affirm’s performance has been robust across various spending categories. General merchandise spending saw a 41% increase, while travel and ticketing grew by 56%. However, there was a 19% decline in sporting goods and outdoor-related spending.

Credit and Delinquency Trends

The company observed an expected sequential increase in 30+ day delinquencies, excluding Pay in 4 loans, aligning with seasonal credit trends. However, there was a 0.3% year-over-year decrease in delinquencies. Levchin reaffirmed the strong demand for Affirm’s products, despite a cautious approach to credit outcomes.

Growth in Shop Pay Installments and B2B Opportunities

Shop Pay Installments GMV has accelerated for the third consecutive quarter. Affirm is also exploring growth through B2B offerings, with a new product targeting sole proprietorships to address lending market inefficiencies.

Outlook and Market Response

Looking ahead, Affirm expects a GMV between $6.7 billion to $6.9 billion for the current quarter. Following the announcement of these results, Affirm’s shares rose by 10% in after-hours trading, signaling investor confidence in the company’s trajectory.