Affirm Posts Most Profitable Q4 Ever, Unveils Leadership Changes and Expansion Plans
Affirm Holdings (NASDAQ: AFRM) said its fiscal fourth quarter was the most profitable in its history, excluding the release of a tax valuation allowance, as the buy now, pay later company told investors it sees further room to expand beyond online checkout, deepen merchant adoption and grow internationally.
CEO Max Levchin used the earnings call to announce a reshuffling of his management team. Pat Suh was promoted to senior vice president and general manager of global markets, while Michael Linford was promoted to president. Levchin said the moves are designed to support execution and give him more time to work on products that may not materially contribute to results until fiscal 2029 and beyond.
Affirm has already extended its product lineup past traditional point-of-sale installment loans, Levchin said, pointing to the Affirm Card, an account product and financing for business purchases. The company still generates most of its revenue from credit products, but management expects to keep moving into additional product categories, verticals and use cases.
A particular focus is physical retail, where Levchin said Affirm sees significant upside even though in-store operations are more complex than online checkout. About 30% of Affirm Card transactions currently occur offline, according to an analyst question, though that activity remains a small slice of total gross merchandise volume. The company’s innovation team is trying to improve in-store approvals and payment delivery, including weak connectivity in large stores, point-of-sale systems that may not support QR codes and transaction-size adjustments. Levchin said Affirm plans to introduce “uniquely Affirm-specific” features in the coming quarters, but he did not offer specifics.
“The bar for error is much lower” in stores than online, Levchin noted, because a failed transaction in a physical checkout line is far more disruptive for consumers.
Merchant adoption remains another obvious growth lever. Affirm is live at 80 of the top 250 e-commerce sites and with roughly 10% of e-commerce merchants overall, a base Levchin described as an “enormous” greenfield opportunity. He acknowledged that large retailers can take time to sign because of complex or outdated technology systems. But he said the sales organization is still signing merchants individually and, in some cases, in groups, and that merchants increasingly understand the value of offering Affirm at checkout.
The company also sees faster movement from merchant launch to meaningful impact. Levchin cited the recent Crate & Barrel launch and said coordination around merchant onboarding, marketing and performance reporting has improved. Transactions per user per year are rising, helped by broader merchant availability and the Affirm Card.
On the product side, management highlighted continued growth in Pay in X options, including Pay in 4 and longer-term zero-interest financing funded by merchants and other partners. Zero-interest programs broaden Affirm’s appeal to consumers across the credit spectrum, Levchin said, including shoppers who could otherwise pay with cash or a credit card.
CFO Rob O’Hare said Pay in 4 growth accelerated during the quarter after a large merchant with a relatively low average order value made the product an evergreen part of its financing program. Affirm tailors financing choices to a merchant’s products and basket sizes, and may offer different loan structures as transaction values increase, he said.
O’Hare added that direct-to-consumer products carry a higher proportion of interest-bearing loans, with more than 80% of that product set interest-bearing. The scaling of products such as the Affirm Card has contributed to a modest shift toward interest-bearing loans, even as the company has increased zero-percent offers within point-of-sale integrations.
Levchin said the Affirm Card has a 19% attach rate relative to active users and generates roughly twice the usage of a typical customer relationship. He expects both adoption and spending per cardholder to increase, and said the company will add card-specific features while keeping the financing programs available through its standard point-of-sale experience.
On credit risk, Levchin said Affirm does not view underwriting as a binary decision to broadly tighten or loosen lending. Instead, the company evaluates transaction-level risk in real time and can adjust approvals across particular consumer groups, merchants or transaction categories. He said Affirm would slow growth before allowing a significant deterioration in credit outcomes. “Credit target is the input, not the output of the business,” he said, noting the company’s obligation to the capital-markets partners that fund its lending.
O’Hare said Affirm’s fiscal 2027 outlook for revenue less transaction costs reflects recent debt-capital-markets execution and a funding-cost profile that is expected to continue through the year. He expects funding mix to remain broadly consistent with fiscal 2026 and sees any shift toward interest-bearing products as slight. On profitability, management has provided guidance for GAAP operating income and share count but cautioned that the effective GAAP tax rate could be volatile. The company expects a run-rate GAAP tax rate in the mid- to high-20% range, with stock-based compensation and other differences driving fluctuations. Gain-on-sale revenue will vary by quarter depending on non-consolidated asset-backed securitization activity; Affirm completed two such deals in fiscal 2026 and plans a broadly similar funding approach in fiscal 2027.
Internationally, the United Kingdom is still an early-stage opportunity for Affirm, but Levchin said consumer and merchant feedback has been strong. He credited the company’s fee-free approach and said management has not seen a meaningful competitive response so far.
The update comes at a time when BNPL investors are closely watching credit performance, funding costs and the path to sustained profitability. Affirm’s emphasis on its card, in-store commerce and merchant-funded zero-interest offerings suggests the company is trying to widen its revenue base beyond the traditional online installment loan. The leadership changes may also be a signal that Levchin wants to keep near-term execution on track while building toward a longer product roadmap.
Affirm Holdings, Inc. provides point-of-sale consumer lending and payments solutions for online and in-store purchases. Its core product is a buy-now-pay-later platform that enables consumers to split purchases into fixed, transparent installment loans with no hidden fees, and it offers merchant integrations, a consumer mobile app and virtual card capabilities.