Affirm Prints January ABS Under 100bps, Expects GMV to Revert from 40–45% Surge
Affirm’s January ABS printed with spreads under 100 basis points and was heavily oversubscribed, expanding funding ties to CPPIB and Prudential. Affirm expects GMV growth to revert to the mean as it laps a prior quarter with 40–45% year-over-year expansion from Walmart, despite accelerating Q2 growth even without that partner.
1. Merchant-Funded Zero-Percent Promotions
Affirm emphasized that merchant-funded 0% offers are dollar-accretive despite lower margins per transaction, driving higher engagement and attracting quality consumers. Management highlighted tests of “Zero Percent Days,” finding they influenced purchase decisions rather than simply pulling demand forward within quarters.
2. Q2 GMV Growth and Walmart Lapping
In Q2, Affirm recorded accelerating year-over-year GMV growth even after parting ways with Walmart, which had driven roughly 40–45% growth in the prior-year period. As the company laps that elevated base, it anticipates a reversion to more normalized growth levels.
3. Strong Funding Backdrop and Investor Base
Affirm’s January asset-backed security print achieved spreads under 100 basis points and was well oversubscribed, broadening relationships with institutional investors like CPPIB and Prudential. Management described the funding environment as stable, supporting ongoing product expansion and merchant distribution efforts.