“I expect 0% volume to go up a lot in agentic,” Levchin told analysts Thursday (Nov. 5).
The fiscal first quarter earnings call also drew questions about borrowers falling behind. Affirm shares fell more than 9% in extended trading after losing nearly 8% during the regular session. Revenue rose 35% to $1.3 billion, above analyst estimates, while the share of U.S. loan balances at least 30 days past due rose to 2.9% in September. That was up 35 basis points from June and nine basis points from a year earlier, excluding short-term Pay in X and Peloton loans.
Levchin attributed much of the quarterly increase in delinquencies to seasonality and said short loan terms limit how long Affirm is exposed if it gets underwriting wrong. Chief Financial Officer Rob O’Hare said a September test of loan approvals and originations increased the company’s provision for credit losses. Affirm kept the loans from the test on its balance sheet.
Levchin said about 1 million SKUs in the Affirm app carry brand-funded promotions. Under that setup, a manufacturer can subsidize an interest-free loan on a specific item sold through a retailer. Levchin said Affirm is building tools that could eventually let a seller’s AI agent make one of those financing offers to a shopper’s agent. He added that some borrowers on tight budgets could still favor a longer, interest-bearing loan if it brings the monthly payment within reach.
Smaller Baskets and More Purchases
Spending on the Affirm Card more than doubled to $3.3 billion, and active cardholders more than doubled to 6 million. Levchin said about 30% of card transactions happen in stores. Setting up a payment plan before tapping or swiping remains the most common use, though customers can also split an eligible debit purchase afterward. O’Hare said more than 80% of Affirm Card loans have historically carried interest.
Transactions and gross merchandise volume each rose 34%, with volume reaching $14.4 billion. Affirm said lowering minimum purchase amounts helped lift transaction counts and brought the average order value down to $258. Active consumers rose 19% to 28.7 million, and transactions per active consumer also rose 19% to 7.3 over the trailing year.
General merchandise was Affirm’s largest spending category, as noted in investor materials. Services volume rose 65%, helped by software partners, while home and lifestyle volume grew 44%, aided by a home improvement retailer and an online furnishings marketplace. The number of active merchants rose 48% to about 621,000.
“Generally speaking, you can expect AI commerce to be more than a little bit messy,” Levchin said. He pointed to agents making purchases consumers didn’t want and to the risk of fraud. He described using data and machine learning to manage risk, leaving open who would bear liability for fraud involving an AI agent.
Affirm plans to introduce card-specific financing offers this quarter and is preparing to pilot Edge, which would make its installment loans available through other issuers’ debit cards. O’Hare said Affirm’s fiscal 2027 outlook calls for at least 30% growth in gross merchandise volume.
