Affirm CEO Says Consumer 'Really Healthy'

Bloomberg

Watch Affirm CEO Says Consumer 'Really Healthy' - Bloomberg on Dailymotion

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00:00There's a lot of emphasis, at least from Bloomberg Intelligence in-house, on card and that driving

00:06volumes. But what we've learned across this earnings period in your domain is it's worth

00:11spending a minute on the underlying behaviors of your consumers that drove this growth in the

00:16quarter. What are you seeing? So despite the vibe session we're seeing in the market today in the

00:23last few days, a firm's consumer is really healthy. They're shopping, they're buying, they're paying

00:28their bills, they're energized by the upcoming holidays. I think, frankly, the rumors of the

00:34American consumer's death are greatly exaggerated. It's interesting because different segments of the

00:39technology sector tell different stories right now. Is there a specific product category or method of

00:45spending that is demonstrating that more than others? I think we are quite unique in a sense.

00:51A firm's brand, our promise really is use us when it matters to you because you'll have total control

00:57and great degree of transparency. And as the outside pressures, even the stories you read,

01:03weigh people down, it's easy to say, you know what, a firm is at least the one thing that's going to keep

01:07me clear and in good control. And so we think people are coming to us a little bit more. Certainly we saw

01:14great demand for our recent zero-day promotion. But, you know, I think so far so good, at least in the

01:21firm consumer world. The funny thing is, Max, sometimes the market likes to see use of a firm

01:27or maybe more standard buy now, pay later offerings as the vibe session. Is that not the case?

01:34You know, we had 24, more than 24 million active consumers last quarter. At this point,

01:39it's really dangerous to just say, oh, the firm consumer is doing X or Y. We have quite a number of

01:43segments. Folks that are using our zero percent promotions are typically leaning into just, frankly,

01:50saving money and getting a great deal. Folks that favor longer terms to repay care a lot less about

01:56total costs, very much care about individual cash flow. And so depending on sort of which segment

02:00you look at, you'll see a slightly different behavior. I think the unifying factor is they're

02:05all getting a really clear deal. There are no late fees. There's no gimmicks. There's no gotchas.

02:09And that's the way they keep coming back to us.

02:12And while you keep seeing growth merchandise volumes going up and to the right, what's interesting is your

02:16partnership model. And it really works. Well, Amazon, Shopify, Apple, Costco. Where else do the

02:21partnerships make sense, Max?

02:23You know, to be honest, everywhere, we just announced the really strong push into services.

02:30So for a long time, you would think of buying out, pay later as a thing you buy and pay over time.

02:34People buy more than things. They remodel their kitchens. They refurbish various parts of their house

02:39and just announced the great partnership with Service Titan, Vagara, a variety of other platforms.

02:44So we partner very widely because this model really works for any purchase, you know, anything from a

02:50couple of hundred dollars all the way out to thousands.

02:52What about you leaning into the moment? There is a lot of competition and smaller scale.

02:57And many times you stand out because they're more dependent on late fees and other such charges.

03:02Would you do any M&A? Is this the environment in which you'd look to do that?

03:05You know, I think our current growth tracks so well, I'm not sure I have a lot of time

03:13to consider M&A. But, you know, never say never. Obviously, we're doing really well.

03:19The company is performing. I always found that building is my strong suit.

03:26But, you know, who knows?

03:29Max, this earnings season, we've had the opportunity to speak to the CEOs of Chime, Robinhood,

03:35SoFi, and now you. I appreciate there are differences in those companies.

03:40But in how people transact with money, what you all have in common is looking at varied products that you offer.

03:49What is your new product strategy going into 26?

03:52And do you have any sort of ideas about this generational wealth transfer that all the others are going on about at the moment?

03:58You know, I think we are a payments company. First and foremost, our job is to be there, be available.

04:05You know, we talk a lot about there are many doors, digital and real world, where there are lots of logos of payment systems.

04:11Our job is to be on every door, to be available, to make sure we are there to serve when people are buying goods or services.

04:16And so we're very, very focused on executing what we have.

04:19You know, 42% doesn't come easy, and we'll keep trying to hit really good growth.

04:27You know, I've learned the hard way not to pronounce new products.

04:30We have all sorts of really exciting things we're cooking.

04:32You know, have me back, and I'll announce it when it's ready to go.

04:35You know, I'll announce it when it's ready to go.

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