Affirm Holding’s fiscal first quarter results showed resilient consumer spending across a variety of channels and enthusiasm for the company’s debit card offering.
Supplementals from the company showed that gross merchandise volume (GMV) was up 28% to $5.6 billion.
Active customers surged 15% to 16.9 million, while transactions per average consumers gained 25% to 4.1.
The company spotlighted its direct-to-consumer GMV, which touched roughly $1.5 billion. Affirm Card GMV came in at $224 million, and management noted that as many as 75,000 consumers a month have been signing up for the debit card. The card gives consumers the option to pay for purchases over time or all at once. More than 400,000 cards were active at the end of September.
Active merchants at the end of the most recent period were more than 266,000, up from 245,000 last year.
During the conference call with analysts, CEO Max Levchin said the fiscal first quarter “drove positive credit outcomes, which matters to us the most, and added some funding capacity. Our plans now include continuing to invest in risk management technology and product development” which would include bringing the card more fully into omnichannel — and thus brick-and-mortar — environments.
In terms of category spend, Affirm noted in its materials that most category volumes were higher.
General merchandise spending, by way of example, surged 41% year on year, travel and ticketing spending grew by 56%.
Sporting goods and outdoor-related spending was down 19%.
The 30+ day delinquencies excluding Pay in 4 loans increased on a sequential basis compared to the final quarter of the last fiscal year, which management said was expected and consistent with seasonal credit trends; delinquencies were down 0.3% year over year.
“Demand for the product remains strong,” Levchin said on the call. “We are still declining quite a number of applicants because we are trying to remain as thoughtful and productive in our credit outcomes.”
Shop Pay Installments GMV accelerated for the third quarter in a row, management said on the call, and Levchin stated that “even a 1% or 2% increase in end-to-end conversion just creates millions or tens of millions of dollars of incremental GMV.”
Asked on the call about Affirm Card usage, Levchin said that consumer choice are roughly split between paying across installment options and paying in full. He noted, too, that “We will build all of our product roadmaps on this idea of you should have this card.”
B2B offers another avenue to growth, said Levchin, who added that a newly introduced product is geared towards sole proprietorships, addressing a pain point where the “efficiency of the lending market to that user is really, really poor.”
Student loan repayments, Levchin said on the call, had given seasonality to results that “are largely behind us.” The typical Affirm client, he said, remains fully employed, and there has not been much change in the ability of those consumers to pay their bills.
Looking ahead, management has forecast current quarter GMV of between $6.7 billion to $6.9 billion. Investors sent the shares 10% higher in after-hours trading.
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