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Affirm Card GMV Jumps 115%, Says It Can Weather ‘Recession Scenario’
- Affirm reported a significant increase in gross merchandise value (GMV) during its fiscal third quarter, with all but one spending category showing gains.
- 1.8 million new consumers transacted within Affirm's growing ecosystem, demonstrating the appeal of paying over time.
- The company experienced a 115% year-over-year growth in GMV for the Affirm Card, with 2 million active cardholders.
- Revenues for the quarter increased by 36% to $783 million, driven by 0% APR monthly installments that grew by 44%.
- Affirm's total active consumers reached 21.9 million, up 23% from the previous year, with 20% increase in merchant tallies to 358,000.
- Guidance for the current quarter suggests $815 million to $845 million in revenue, slightly below Street's consensus of around $840 million.
- Affirm's strategic preparation aims to navigate any macroeconomic scenario, with tools to manage business effectively even in a recession.
- The company expects increased demand as shoppers seek more payment options and merchants aim to make price increases more acceptable.
- In a potential recession scenario, Affirm estimates a ~50% increase in credit stress could impact GMV growth by 10 percentage points.
- Affirm's ability to adapt includes adjusting exposure limits and utilizing cash flow underwriting, leveraging past experiences to manage external factors.
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