Earnings call: 2024 Affirm Holdings continues strong growth amid rate hikes

Earnings call: Affirm Holdings continues strong growth amid rate hikes


Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM) reported another excellent quarter, demonstrating robust growth and resilience in Gross Merchandise Value (GMV) despite a backdrop of rising interest rates. The company’s pricing initiatives have supported volume growth and the Affirm Card has seen increased adoption, indicating potential to capture a larger share of consumer spending.

Affirm’s CEO Max Levchin emphasized the company’s focus on long-term growth rather than short-term fluctuations, and its ability to operate comfortably amidst minor rate changes set by the Federal Reserve.


Key Takeaways

  • Affirm reported strong GMV growth, driven by effective pricing initiatives and resilience to interest rate hikes.
  • The Affirm Card is gaining traction with users, with a notable increase in adoption and pay now transactions.
  • The company’s business is not highly sensitive to minor rate movements, according to CEO Max Levchin.
  • Seasonality explains the slight sequential decline in Affirm Card volume.
  • Affirm is investing in AI and intelligent chatbots to improve customer service and efficiency.
  • The company is expanding its reach, targeting mid-sized business merchants and preparing for an international launch in the UK.

Company Outlook

  • Affirm is confident in the potential growth of the Affirm Card, projecting it to become a multi-billion-dollar business.
  • The company is focused on expanding its brand recognition in the retail industry.
  • International expansion is on the horizon, with a launch in the UK expected later this year.

Bearish Highlights

  • The average order value (AOV) has been trending downward, reflecting a shift towards smaller and more frequent purchases.

Bullish Highlights

  • Affirm is seeing a steady increase in pay now usage, indicating that more users are finding value in the card for everyday transactions.
  • Growth within mid-sized merchant additions is outpacing the company’s own growth, showcasing the success of direct and channel-based sales strategies.


  • There was a slight sequential decline in Affirm Card volume, attributed mainly to seasonality.

Q&A Highlights

  • Levchin discussed the importance of not being highly sensitive to rate changes and the seasonal nature of the card’s growth trajectory.
  • The CEO highlighted the role of AI in customer service and the potential for job displacement, while emphasizing the continued need for human expertise.
  • The AOV is seen as a less critical metric, with the downward trend viewed positively as it indicates usage for everyday purchases.
  • International expansion will involve a learning period to understand credit performance in new markets, with localized funding sources being a necessity.

As Affirm Holdings Inc. continues to navigate the dynamic financial landscape, the company remains focused on long-term growth strategies and leveraging its technology to enhance customer experience. With plans to expand internationally and a growing adoption of the Affirm Card, the company is positioning itself to capitalize on the evolving consumer spending habits and the increasing demand for flexible payment solutions.

InvestingPro Insights

Affirm Holdings Inc. (ticker: AFRM) has demonstrated the ability to grow its Gross Merchandise Value (GMV) and expand its product adoption with the Affirm Card, as highlighted in the recent earnings report. In line with these developments, let’s take a look at some real-time data and InvestingPro Tips that shed further light on the company’s financial health and stock performance.

InvestingPro Data indicates a market capitalization of $10.11 billion, underscoring the company’s significant presence in the financial technology space. Despite the company’s growth, the P/E ratio stands at -13.35, reflecting the market’s anticipation of future earnings rather than current profitability. Moreover, the revenue growth over the last twelve months as of Q2 2024 is a robust 29.35%, highlighting the company’s strong top-line expansion.

An InvestingPro Tip notes that Affirm’s stock price has experienced a significant drop over the last three months, with a 28.0% decline. This could be attributed to the broader market volatility and investor concerns about profitability, as analysts do not anticipate the company will be profitable this year. Yet, it is important to note that the company’s liquid assets exceed its short-term obligations, providing a cushion for operational flexibility.

For readers looking to delve deeper into Affirm’s financials and stock performance, additional InvestingPro Tips are available, providing a comprehensive analysis of the company’s prospects. There are 9 more tips listed on InvestingPro, which can be accessed at https://www.investing.com/pro/AFRM. For those interested in a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to get an additional 10% off, enhancing your investment research capabilities with premium insights.

As Affirm continues to push forward with its strategic initiatives, these InvestingPro Insights can help investors stay informed and make more educated decisions regarding the company’s stock and future potential.

Full transcript – Affirm Holdings Inc (AFRM) Q3 2024:

Operator: Good morning and welcome to the Affirm Holdings Third Quarter Fiscal 2024 Earnings Call. Following the speakers’ remarks, we will open the line for your questions. As a reminder, this conference is being recorded and a replay of the call will be available on our Investor Relations website for a reasonable period of time after the call. I’d now like to turn the call over to Zane Keller, Director, Investor Relations. Thank you. You may begin.

Zane Keller: Thank you, operator. Before we begin, I would like to remind everyone listening that today’s call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website. Actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of today and the company does not assume any obligation or intent to update them except as required by law. In addition, today’s call may include non-GAAP financial measures.

These measures should be considered as a supplement to and not a substitute for GAAP financial measures. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found in our earnings supplement slide deck, which is available on our Investor Relations website. Hosting today’s call with me are Max Levchin, Affirm’s Founder and Chief Executive Officer; and Michael Linford, Affirm’s Chief Financial Officer. In line with our practice in prior quarters, we will begin with brief opening remarks from Max before proceeding immediately into Q&A. On that note, I will turn the call over to Max to begin.

Max Levchin: Thank you, Zane. Thank you for joining us today and taking interest in our journey and our mission. As you can tell, we’re trying something new, a pre-market open earnings call, live from New York and our awesome remote work be damned, very well-attended office in Manhattan. We’re excited to see some of you in-person later this week. But for now, as you can tell, we had another excellent quarter. It’s all in our note. So let’s jump straight into Q&A. Back to you, Zane.

Zane Keller: Thank you, Max. With that, we will now take your questions. Operator, please open the line for our first question.

Operator: All right. Thank you. Our first question comes from the line of Rob Wildhack with Autonomous Research. Please proceed with your question.

Robert Wildhack: Good morning, guys. Maybe one on the quarter and then one bigger picture question too. But near term, the slides called out that the majority of the benefit from pricing initiatives will be realized by the end of this fiscal year. That all makes sense, but wondering if you could quantify how much the pricing initiatives have been helping volume growth in recent periods?

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