Affirm CEO Levchin Bullish on Economy Despite Market Jitters

In the face of market skepticism, Affirm CEO Max Levchin remains optimistic about both his company’s performance and the broader economic landscape, highlighting the disconnect between consumer sentiment and actual spending behaviors.

“There’s a real inconsistency in the vibe where people are stressed out about the economy, yet they’re shopping, they’re buying, and they’re paying their bills,” Levchin said during an appearance on CNBC’s “Squawk Box” following the company’s quarterly earnings report.

Despite Affirm’s shares dropping approximately 6% in pre-market trading after providing what some analysts considered weaker-than-expected revenue guidance, Levchin pointed to strong fundamentals: 36% year-over-year growth in both transaction volume and revenue, alongside a 53% increase in the company’s preferred profit measure.

“The economy appears to be on solid footing right now,” Levchin stated, emphasizing employment as the critical metric for his credit business. “The only metric that I really care about running a credit business is employment. If employment is strong, everything’s going to be just fine—and employment has been really strong.”

This assessment aligns with recent findings from Bank of America Institute, which similarly reported continued consumer strength despite economic anxieties, attributing this resilience to a robust job market and rising wages.

The buy-now-pay-later (BNPL) pioneer also highlighted consistent credit performance among its users, noting that delinquency rates remain stable and in line with company expectations. This stands in contrast to the mere 1% increase in traditional credit card and debit card spending versus Affirm’s 36% growth, suggesting a significant market share shift toward BNPL options.

When questioned about cryptocurrency’s potential impact on Affirm’s business model, Levchin maintained his previously expressed views: “Bitcoin in particular is a fantastic store of value… Stablecoin has really nailed this exceptional use case of very fast foreign cross-border money transfer.”

As Affirm expands internationally—having recently launched in the United Kingdom after establishing operations in Canada—Levchin acknowledges that cryptocurrency technologies could accelerate the trend away from traditional financial tools. “Insofar as people become more comfortable with tools that don’t look as traditional as the things that worked for their parents, yes, I think the secular trend is towards using things like Affirm to replace credit cards,” he explained.

The company attributes much of its recent growth to 0% interest promotions, where merchants subsidize consumer financing costs. “Many merchants have reached out to us and said that really worked for us over the holiday season. Let’s do it again,” Levchin noted, highlighting the strategy’s success across various retail categories.

Thirteen years after founding a company that challenged industry norms by eliminating late fees and interest compounding, Levchin remains confident in Affirm’s value proposition: “It took consumers and merchants and sort of the universe about a decade to figure out what we are and just how different and important what we have found to work really is.”

Source: CNBC “Squawk Box” interview