Affirm Holdings reported a significant increase in its gross merchandise volume (GMV) and active consumer base, largely driven by holiday shopping trends and the continued adoption of buy now, pay later (BNPL) options. The company experienced strong consumer engagement, particularly in discretionary spending categories such as electronics. Investors responded positively to the latest earnings report, pushing the company’s stock higher in after-hours trading. The growing preference for installment-based payments appears to be influencing consumer purchasing behavior, especially as interest-free offers become more widely available.
Affirm has previously reported steady growth in BNPL adoption, but the latest figures show a more pronounced acceleration. In earlier financial statements, the company highlighted a consistent rise in active users, though at a slower pace. The latest quarter’s GMV surpassing $10 billion marks a notable increase compared to past quarters, reflecting both seasonal demand and the company’s strategic partnerships. Additionally, Affirm’s expansion into new merchant categories suggests a sustained effort to diversify its service offerings beyond traditional retail.
How Is Affirm Performing Financially?
The company’s GMV reached $10.1 billion, marking a 35% increase compared to the previous year. Revenue also saw a sharp rise, climbing 47% to $866 million. Affirm reported that its 0% APR monthly installment GMV expanded by 70%, indicating heightened consumer interest in interest-free payment options. Active users rose by 23% to 21 million, while the average number of transactions per user increased by 22% to 5.3.
CEO Max Levchin expressed confidence in the company’s trajectory, stating that operating income is approaching profitability.
“We are five months away from our chosen target date to turn Affirm operating income positive, but it should be apparent to a casual observer that we are nearly there today — mark it zero.”
The company’s stock surged 12.8% in after-hours trading following the earnings release.
What Role Does the Affirm Card Play in Expansion?
The Affirm Card has been a significant driver of growth, with GMV from the card reaching $845 million, reflecting a 113% year-over-year increase. The number of active cardholders also grew by 136% to 1.7 million. The company emphasized that app-originated 0% APR GMV surged by 260%, signaling strong consumer adoption of the card.
Levchin highlighted the card’s impact on user engagement.
“The card obviously is a great product to increase engagement. … It’s awakened, if you will, dormant consumers that have transacted with us sometime in the past, but haven’t used us in a while.”
This suggests that the card serves as a tool to reactivate previous users while attracting new ones.
Credit performance remained stable, with 30-plus-day delinquencies at 2.5%, aligning with pre-pandemic levels. This marks an improvement from the previous quarter’s 2.8% rate. Wallet integrations have also contributed to transaction growth, with Levchin noting their strategic importance.
“They’re shaping up to be a really meaningful part of the business across the board, and the metrics on these integrated wallets are really strong.”
Affirm’s latest performance highlights a sustained consumer shift toward BNPL services, reinforced by interest-free offers and widespread merchant adoption. The company’s focus on expanding its product portfolio, particularly through the Affirm Card, appears to be driving higher engagement. As competition in the BNPL sector intensifies, Affirm’s ability to maintain stable credit metrics while increasing transaction volume will be critical. Future growth may depend on further merchant partnerships and technological integrations to enhance user convenience and affordability.
