Affirm: Transactions Per Active Customer Gain 30% Year Over Year

Affirm posted results Thursday evening (Aug. 24) that showed continued embrace of buy now, pay later (BNPL) — and repeat transactions per active customer.

The company’s earnings supplementals detailed a 25% rise in gross merchandise volume to $5.5 billion.

The average order value declined to $317 from $368 in last year’s fourth quarter.

The company also noted that the direct-to-consumer gross merchandise value (GMV), via the Affirm Card (the company’s debit card), was $129 million in the fourth quarter.

And drilling down into some transaction-level granularity, the company said that 17% of its transactions were Pay in 4.

Per the earnings materials, one-time virtual card and Affirm Card GMV accelerated sequentially to 37% year over year (YoY). More than 40% of Affirm Card transactions are “pay now,” management said on the call and in published materials.

The active consumer count was 18%, Affirm said, to 16.5 million. Transactions per active consumer in the most recent quarter stood at 3.9, up from 3 at the end of the 2022 fiscal year. Active merchant count was more than 254,000, and during the quarter, the tally of merchants with more than $1,000 in trailing 12 months GMV was up 16%.

Where Consumers Are Spending

As for the categories where consumers are spending, and where they are not: general merchandise volume growth was up 61% YoY, fashion/beauty gained 14%. Sporting goods and outdoor-related purchases’ volume slipped 32%, trailed by home/lifestyle, which gave up 9%.

The company also revealed that delinquency rates improved sequentially, as the 30+ day delinquency rate was 2.3%, 0.3% better than the previous quarter.

CEO Max Levchin noted during the conference call with analysts that, with emphasis on Affirm Card, “We’re finally able to brag about the Affirm Card’s progress. We’re energized by the momentum we’re seeing and are investing significant energy into making the card the top of wallet choice for our consumers.”

During the question and answer session with analysts, Levchin said that though the card has been growing, “in the very immediate future, a majority of the growth of GMV will certainly come from existing partnerships with platforms. We’re still quite actively signing up new merchants.”

Asked about the impact of student loan repayments beginning this fall, management stated that the repayments may equate to a “modest headwind.”

Later in the call, Levchin said in-store commerce represents the “next frontier” for BNPL, and added that “frequency is the single most important thing we can focus on in terms of just building out the network. And most people still shop in stores at least as much as online,” and perhaps as much as “four times more.”

Investors bid the stock 9% higher after hours.