Affirm (NASDAQ:AFRM) reported strong momentum over the past year, highlighting both growth and profitability gains, according to comments from CFO Rob O’Hare during a recent investor discussion. O’Hare said the company grew gross merchandise volume (GMV) about 39% over the last 12 months and posted “30% adjusted operating income” in its most recent quarter, describing the performance as success across “both growth and profitability.”
Recent performance and merchant wins
Discussing the company’s fiscal second quarter results released in February, O’Hare pointed to a “great quarter financially,” emphasizing that the company was “really proud of the growth” and “really proud of the profitability.” He also cited a five-year renewal signed with Amazon—Affirm’s largest merchant partner—during the quarter.
He added that Affirm’s loan product breadth is a differentiator, with about two-thirds of volume in monthly interest-bearing loans. That mix, he said, gives Affirm flexibility in structuring merchant programs around objectives like cost of acceptance and conversion. O’Hare also said average order values on Affirm programs can be “multiples” of what merchants see outside the Affirm offering.
Affirm Card traction and offline use
A central theme was the company’s direct-to-consumer push, particularly Affirm Card. O’Hare called it the “most noteworthy” product in the company’s direct-to-consumer set, saying Affirm Card represented about 16% of GMV in the most recent quarter and that about 14% of users utilized the card.
O’Hare said Affirm Card has filled a distribution gap because consumers can use it “anywhere that accepts Visa,” including merchants that have not integrated Affirm at checkout. He also pointed to strength in offline usage, saying in-store usage is “about an order of magnitude higher on Card than it is in the rest of the business.”
He said user adoption and GMV tied to Card each more than doubled year-over-year, and he declined to put a cap on potential penetration, noting the “unit level economics are really, really strong,” which allows the company to invest in user acquisition for the product.
Guidance approach, RLTC range, and credit trends
On guidance, O’Hare said the company revisits its outlook quarterly to reflect funding conditions and repayment data, using the forward rate curve at the time guidance is set. He characterized credit trends as “pretty stable,” with “nothing noteworthy to call out in terms of underlying assumptions.”
O’Hare also said the company may revisit its long-term target range for revenue less transaction costs (RLTC) as a percentage of GMV, which had historically been described as 3%–4%. He noted that the range was set around the IPO period when the business mix was heavier in 0% monthly installment loans, and when the company wanted to “leave space” for newer partnerships to scale and for products like Pay in 4 to become a larger part of the business.
Pay in 4 represented “about a sixth” of volume in the most recent quarter, and O’Hare said it is “hard for me to imagine a situation where we go all the way to 3 in the short run here.” He said management would likely revisit the range at an investor forum in May.
On consumer health, O’Hare said 96% of transactions in a given quarter come from repeat borrowers. He emphasized that the company manages credit using “first payment delinquencies” as a leading indicator—typically around 30 days after origination—and said repayment outcomes are “absolutely in line with our expectations” and have been “very consistent.” He also said the company is “not seeing any sort of pullback in terms of demand,” adding that average order values have reached “a bit of an asymptote” and spending patterns have been consistent.
0% APR programs and profitability
O’Hare addressed growth in 0% APR offerings, saying the programs have been compelling for both merchants and consumers and are funded by merchants. He said the company’s 0% programs are profitable and attract higher-credit borrowers, complementing the broader mix in which the “lion’s share” remains interest-bearing loans.
He said 0% loans increase consumer acceptance rates when presented alongside interest-bearing options, which can drive more GMV for Affirm and improve conversion for merchants. He also said merchants have seen value in paying more in merchant discount rate to support 0% financing because it can help accelerate growth and drive higher conversion.
International expansion, bank application, and distribution partnerships
On international growth, O’Hare said the company is in “very, very early innings” in the U.K. and is continuing optimization work with Shopify before making the product more widely available and a default part of Shop Pay, similar to the company’s approach in the U.S. He said Affirm is also scaling with Shopify in Canada. Beyond Shopify, he highlighted merchant wins in the U.K., including Virgin Media O2 and Wayfair, describing a mix of new merchants and U.S. merchants expanding with Affirm geographically.
O’Hare also discussed Affirm’s bank subsidiary application submitted in January. He said that, in the long run, a bank could be a “mild positive,” but emphasized the company is early in the process and expects a decision could take about a year, with a measured ramp if approved. He said the main benefit would be diversification of loan origination and potentially some diversification in virtual card issuance, while not materially changing relationships with existing partner banks. In response to a question about funding mix, O’Hare said deposits would be the “net new” channel and estimated that roughly 10% of funding could come from deposits toward the tail end of a three-year period after a bank launch, though he characterized that as an early estimate.
Separately, O’Hare described partnerships with Fiserv and FIS aimed at bringing Affirm Card functionality to debit cards at banks. He said the goal is to leverage those companies’ bank networks to expand distribution and allow banks to keep financed purchases within their own ecosystems via a seamless customer experience.
In audience Q&A, O’Hare said the company has not prioritized stablecoins because most volume is still domestic within each country and cross-border activity on the platform has not been significant. He also said proposed BNPL legislation in New York did not appear to be a headwind based on his initial reading, noting Affirm does not rely on consumer fees. On a rent-related pilot with Tillful, O’Hare said Affirm is testing the concept with a focus on short-dated terms of less than 30 days to avoid “stacked loans” of monthly rent obligations, while still aiming to help consumers smooth cash flows.
About Affirm (NASDAQ:AFRM)
Affirm Holdings, Inc is a financial technology company that provides point-of-sale consumer lending and payments solutions for online and in-store purchases. Its core product is a buy-now-pay-later (BNPL) platform that enables consumers to split purchases into fixed, transparent installment loans with no hidden fees. Affirm offers a range of financing options through merchant integrations, a consumer-facing mobile app and virtual card capabilities, and tools for merchants to offer alternative payment methods at checkout.
