An inflation-pinched U.S. consumer is helping drive buy now, pay later demand at Affirm Holdings, especially for shorter loans without interest, according to a readout by the company on its latest financial results.
The BNPL company reported 41% growth in its short-term installment product without interest for the fiscal fourth quarter over the year-earlier period, when it reported quarterly financial results on Thursday.
That category represented 15% of Affirm’s total loan mix, compared to interest-bearing loans, which made up 72% of the loans. The latter category grew by 36% year-over-year, Affirm said. The rest of the loans are longer term with 0% interest financing.
“The U.S. consumer undoubtedly sees the higher gas prices, so (we) can’t ignore that,” Affirm CEO Max Levchin said Friday in a CNBC interview. “They’re also coming to us to help manage those prices across all the various inflationary points.” However, he added, “the Affirm consumer is healthy.”
Average order value declined 4% due to the growth of the zero-interest installment product, which tends to carry lower order totals, Affirm said. Several merchant partners also agreed to fund the shorter-term installment loans “on an evergreen basis” for some select transactions, Affirm said.
In his quarterly shareholder letter, Levchin noted “plenty of room” for growth as Affirm is available at just 10% of U.S. e-commerce merchants and about 80 of the 250 largest online commerce sites. Levin also said that while Affirm has boosted its debit cardholder count to about 5.2 million consumers, that was only 19% of active Affirm users for the recent 12 months ending with the quarter, leaving additional room for card growth.
San Francisco-based Affirm also announced that it had promoted Chief Operating Officer Michael Linford to president, a title he now shares with Libor Michalek. Linford will oversee legal and compliance matters, revenue and global markets as part of his expanded role.
Levchin wrote that he also plans to spend more time with a small internal team that reports to him “and works exclusively on early proofs of concept for some of our craziest ‘it-will-never-work-except …’ ideas.”
For the fiscal fourth quarter, Affirm reported $1.62 billion net income from $69.2 million in the same period of 2025, boosted by a $1.5 billion noncash tax benefit that Affirm could now realize. The company had accrued tax benefits from past financial losses, but had to offset that amount under accounting rules. Affirm has been profitable and expects to generate future taxable income, leading to the accounting change, a spokesperson said.
Total revenue for the quarter rose 33% to $1.17 billion from a year ago.
Affirm sees more demand for its product during inflationary periods “because folks are budgeting, they’re more thoughtful about how they want to use their money and we’re there to help,” Levchin said Friday in the television interview. “In times of faster growth in the economy, more feelings of abundance, people come to us for more discretionary purchases.”
