Affirm Soars into 2025 with Record-Breaking Q1 Results
Affirm, a leading financial technology company, has kicked off the year 2025 on a high note, reporting outstanding first-quarter results. In a recent conference call, executives from the company discussed the key drivers behind their success and provided insight into their future plans.
The quarter saw significant growth in revenue as a percentage of Gross Merchandise Value (GMV), with the business earning more through interest income from pricing initiatives, benefits in the capital markets, and upside with merchants. This led to an impressive 10-20 basis point improvement in Revenue Less Transaction Costs (RLTC) margins.
"We're able to earn more through both the interest income from the pricing initiatives," said Michael Linford, Chief Operating Officer. "We continue to enjoy benefits in the capital markets, so impacting things like on sale. And of course, we have further upside with merchants in the form of events like what you're seeing with these flexible credentials."
The company's decision to reinvest excess RLTC back into growth through foregone revenue, 0% or APR incentive offers, and operating expense investments has contributed to their strong performance. As Max Levchin, Founder and CEO, stated during the call, "We're firing all business... getting ready for a really good holiday season."
A key highlight of the quarter was the company's ability to maintain its underwriting posture, despite expectations of a margin of around 3.8% RLTC in Q2. Max Levchin noted that their focus remains on having "really strong credit results" and that everything else falls into place from there.
Affirm's Q1 results demonstrate the company's continued momentum and commitment to delivering exceptional value to its customers and partners. As they move forward, investors and analysts alike will be watching with interest to see how the company builds on this success.
