Affirm Holdings, Inc. (NASDAQ:AFRM) Q4 2023 Earnings Call Transcript

I’m quite happy with how it’s shaping up. We have a lot of work to do. There’s certainly room to create consumer rewards that we have not yet launched, but that’s a big leap towards why would you pick this card from all the other ones you have in your wallet and that’s coming. Once we get there, let’s see what part of the pay now and pay later spend will get. One other thoughts are a little bit unrelated. I think it’s a little bit dangerous to compare to directly to either debit cards or credit cards when you look at Affirm card, is neither. It really is a new product. There’s not quite like anything like this on the market right now. And so in terms of — am I surprised? No, but mostly because we had expectations that it will be successful because we’ve seen the demand.

And we’ll just try to take as much volume as we can.

Michael Linford: And then just on the margin point, as we outlined in the letter, we’re actually not starting from zero with the direct-to-consumer business. We have a virtual card product today. That’s one of our most profitable products because it is direct-to-consumer, and we own the whole experience. And that really does give us a lot of advantages. And of the many things that Affirm card does, one of the easiest to understand is it simply takes that experience and turns it into a form factor consumers are super used to and really expands the amount of times you can use the card, use it offline. You can use it in a lot more use cases, whether or not you’re integrated with Affirm. And so that part is really unsurprising. We always knew that, that part of the business was going to be really successful.

I do think that we want to continue to make it used more. But remember, we are still running at 42% of the transactions being pay now transactions. So we’re getting the frequency that we want out of the card even if the GMV isn’t there because the AOVs are obviously much lower on doughnuts and coffee than they are on bikes and catches.

Michael Ng: Great. Thanks, Max. Thanks, Michael.

Operator: And we have reached the end of the question-and-answer session. And I’ll now turn the call back over to Zane Keller for closing remarks.

Zane Keller: Thank you, everybody, for joining the call today, and we look forward to speaking with you all next quarter.

Operator: And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation