A firm delivering better than expected earning, sending shares upwards. The company's fourth quarter revenue and first quarter revenue forecast, both coming in ahead of estimate. CEO Max Levchin saying the company had quote a killer quarter. Max joins us now here in San Francisco. I spent enough time with you to know that when you say something like that, you mean it. I wouldn't say that you're prone to superlatives like that. Why why a killer quarter?
Numbers speak for themselves, could go beyond that.
Come on, tell me the story of what's happening behind your platform and your user base.
I think there's a real momentum.
You can tell by looking at our metrics and the qualitative measures that we take, and just the fact that we've outperformed the credit card industry, which is our direct competitor in terms of managing credit, and just the sheer number of launchers and merchant signings. Every metric that I could cast my eye on, say wow, that is it really good quarter?
So you know, sometimes we got to take a bath.
Let's say the buy now pay Lata space is let's say more competitive since last year on the program. Maybe in that time Caroline, and I spoke with the Klan, the CEO, for example. They seem very optimistic, particularly about the United States. Yet you continue to grow. I don't have the data for market share, but could you just contextualize your performance in that sense?
Well, I think we are outpacing them reasonably well in terms of our growth relative to there is, at least according to the stated numbers. Not that I am too competitive,
but I'm very competitive, let's be honest. But the reality is it's a giant market and all of us together add up to less than ten percent of e commerce, and all of us are now looking at offline and so just the real share taking that's taking place is happening against cash, against credit cards, against debit cards, all the other payment types, and so there's just an incredible amount of road.
Available to all of us and firm in particular, What.
Does that mean in terms of the macro context?
Then?
Max, how confident are you of the US consumer the global consumer right now?
Well, we're about to launch in the UK, so we'll find out exactly how confident I should be about the UK consumer. But the US consumer again, look at our investor supplement. Credit card companies have built and built and built up their delinquencies and ours remained very firmly in control. Our consumer is borrowing and shopping and paying back, which is really important for our credit business.
But so far, so good.
We do not see a major slowdown. We do not see a significant pullback and demand.
There's always new industries.
A quarter or two ago, I was lamenting the loss of interest and electronics it came back roaring through the last quarter. Travel is a little bit softer. I think people got their COVID post COVID fix. But all in all, consumer is effectively shopping and buying and paying back and I don't see problems.
Meanwhile, you're taking a bow and the market in particular likes the focus on profitability. Now I hate to bring them up again, but Karner actually did post a profit, even though they're still a private company that aying a twenty billion dollar valuation and they're cunning costs by leaning into AI. Is that something that you look at, Max, something that you feel you have to compete into.
Well, good news is that we've been in the AI business since inception, so one hundred percent of our loans are underwritten individually, every single time, entirely buying machines, and so we've been on the machine learning and AI training since Baser. And we don't think of it as a way to replace.
Humans or to get rid of humans.
We think of it as a great tool for increasing productivity, to give us an edge in underwriting customer service, et cetera.
And so, yes, we're very, very active in AI.
We have lots of really fun things happening, both visible and not to the investor eye. But that it's a huge part of what we do in terms of profitability. You know, I said the last night on the Earning Skull, and I just want to make sure I repeated this was not a contortionist thing we just did when we said, hey, profitability is on the horizon.
It is very much part of the plan. It's always been part of the plan.
It's just now close enough where I can say, here's a date with history. We're going to get gap profitable and move right past it and do more.
Max and Carol also bear with me that I am a firm customer in the sense that you know, I used the firm to finance a specific thing for what it's worth. It was the Peloton tread. But the reason I did. It is actually an emphsis on point of sale, so when you go through, the audience is fermitted. If you go and try buy something from peloton Is, it's a kind of a weird transaction, but you're presented with
the firm as an option almost straight away. Do you negotiate that aggressively for those kind of bigger ticket items.
I'm not sure individual deals are worth commenting on, but every deal where we are presented at the point of sale, and every deal where you see it up funnel as one might call it before you even get into the checkouts, are absolutely directly integrated. So we go to the merchant, we spend a lot of time with them making sure that we are as helpful as possible to their ability to sell, be it a pelt On tread or a mattress or anything in between.
And that is what gives us a huge advantage.
The consumer has the confidence and the clarity of what it might cost them to borrow money to buy something.
Max.
While you're here, could I please ask you, as a story out from Bloomberg Law about a firm facing a class action suit after the evolved bank breach situation, comment on that please.
Probably a very bad ideas in comment on ongoing or potential future litigation.
So I'm not sure I have anything to say on that.
You know, I said it the day of evolved News, which is certainly unfortunate that the firm card numbers were all safe. We did not need to rotate them and give people a new car. That is now confirmed. No card numbers have been leaked and our consumers are safe. If you have your Affirm card, please continue using it. It works just fine.
Thank you.
Thanks lev Chin, It's always great to have you on the show.
We appreciate it.
It's taking about the CEO of Affirm