Affirm Is Growing Faster Than Rest of the Industry, CEO Says

(Bloomberg) -- Affirm Holdings Inc. chief executive officer Max Levchin said his firm is growing faster than other buy now, pay later companies such as Klarna Bank AB. 

“I think we are outpacing them reasonably well in terms of our growth relative to theirs, at least according to the stated numbers,” Max Levchin said in a Bloomberg Television interview Thursday, referring to Klarna. “I think there’s a real momentum – you can tell by looking at our metrics.”

Revenue at Affirm jumped 49% in the first half of 2024, compared with a 27% gain at Klarna. Affirm’s fiscal fourth-quarter earnings, made public on Wednesday, “spoke for themselves” when they topped Wall Street estimates, Levchin said. The company said it expects to be profitable by the fiscal fourth quarter of 2025, and the shares soared 35% Thursday.

Klarna, which is preparing an initial public offering, reported results earlier this week that showed it turned a profit for the quarter ending in June, compared with a loss in the same period a year earlier.

Buy now, pay later firms came under scrutiny earlier this year when the US Consumer Financial Protection Bureau said they should be treated more like credit-card companies — which must investigate disputes, refund returned products or voided service, and provide billing statements. The financial regulator has since given buy now, pay later companies an enforcement grace period to comply with the new rule.

Apple Inc. has said it would shut down its proprietary pay-later option in June, removing one competitor from the crowded sector that also includes Block Inc.’s Afterpay.

Levchin said there’s still a “giant market” for buy now, pay later firms to compete against existing payment options such as cash and credit cards. And so far, consumers are faring well, he said.

“Our consumer is borrowing and shopping and paying back, which is very important for a credit business,” he said. “So far, so good.”

--With assistance from Ed Ludlow and Caroline Hyde.

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