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Speaker 1: A firm delivering better than expected earning, sending shares upwards.

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Speaker 1: The company's fourth quarter revenue and first quarter revenue forecast,

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Speaker 1: both coming in ahead of estimate. CEO Max Levchin saying

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Speaker 1: the company had quote a killer quarter. Max joins us

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Speaker 1: now here in San Francisco. I spent enough time with

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Speaker 1: you to know that when you say something like that,

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Speaker 1: you mean it. I wouldn't say that you're prone to

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Speaker 1: superlatives like that. Why why a killer quarter?

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Speaker 2: Numbers speak for themselves, could go beyond that.

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Speaker 1: Come on, tell me the story of what's happening behind

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Speaker 1: your platform and your user base.

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Speaker 2: I think there's a real momentum.

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Speaker 3: You can tell by looking at our metrics and the

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Speaker 3: qualitative measures that we take, and just the fact that

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Speaker 3: we've outperformed the credit card industry, which is our direct

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Speaker 3: competitor in terms of managing credit, and just the sheer

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Speaker 3: number of launchers and merchant signings. Every metric that I

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Speaker 3: could cast my eye on, say wow, that is it

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Speaker 3: really good quarter?

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Speaker 2: So you know, sometimes we got to take a bath.

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Speaker 1: Let's say the buy now pay Lata space is let's

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Speaker 1: say more competitive since last year on the program. Maybe

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Speaker 1: in that time Caroline, and I spoke with the Klan,

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Speaker 1: the CEO, for example. They seem very optimistic, particularly about

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Speaker 1: the United States. Yet you continue to grow. I don't

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Speaker 1: have the data for market share, but could you just

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Speaker 1: contextualize your performance in that sense?

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Speaker 3: Well, I think we are outpacing them reasonably well in

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Speaker 3: terms of our growth relative to there is, at least

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Speaker 3: according to the stated numbers. Not that I am too competitive,

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Speaker 3: but I'm very competitive, let's be honest. But the reality

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Speaker 3: is it's a giant market and all of us together

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Speaker 3: add up to less than ten percent of e commerce,

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Speaker 3: and all of us are now looking at offline and

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Speaker 3: so just the real share taking that's taking place is

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Speaker 3: happening against cash, against credit cards, against debit cards, all

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Speaker 3: the other payment types, and so there's just an incredible

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Speaker 3: amount of road.

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Speaker 2: Available to all of us and firm in particular, What.

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Speaker 4: Does that mean in terms of the macro context?

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Speaker 1: Then?

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Speaker 4: Max, how confident are you of the US consumer the

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Speaker 4: global consumer right now?

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Speaker 3: Well, we're about to launch in the UK, so we'll

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Speaker 3: find out exactly how confident I should be about the

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Speaker 3: UK consumer. But the US consumer again, look at our

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Speaker 3: investor supplement. Credit card companies have built and built and

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Speaker 3: built up their delinquencies and ours remained very firmly in control.

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Speaker 3: Our consumer is borrowing and shopping and paying back, which

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Speaker 3: is really important for our credit business.

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Speaker 2: But so far, so good.

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Speaker 3: We do not see a major slowdown. We do not

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Speaker 3: see a significant pullback and demand.

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Speaker 2: There's always new industries.

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Speaker 3: A quarter or two ago, I was lamenting the loss

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Speaker 3: of interest and electronics it came back roaring through the

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Speaker 3: last quarter. Travel is a little bit softer. I think

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Speaker 3: people got their COVID post COVID fix. But all in all,

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Speaker 3: consumer is effectively shopping and buying and paying back and

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Speaker 3: I don't see problems.

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Speaker 4: Meanwhile, you're taking a bow and the market in particular

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Speaker 4: likes the focus on profitability. Now I hate to bring

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Speaker 4: them up again, but Karner actually did post a profit,

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Speaker 4: even though they're still a private company that aying a

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Speaker 4: twenty billion dollar valuation and they're cunning costs by leaning

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Speaker 4: into AI. Is that something that you look at, Max,

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Speaker 4: something that you feel you have to compete into.

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Speaker 3: Well, good news is that we've been in the AI

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Speaker 3: business since inception, so one hundred percent of our loans

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Speaker 3: are underwritten individually, every single time, entirely buying machines, and

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Speaker 3: so we've been on the machine learning and AI training

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Speaker 3: since Baser. And we don't think of it as a

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Speaker 3: way to replace.

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Speaker 2: Humans or to get rid of humans.

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Speaker 3: We think of it as a great tool for increasing productivity,

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Speaker 3: to give us an edge in underwriting customer service, et cetera.

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Speaker 2: And so, yes, we're very, very active in AI.

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Speaker 3: We have lots of really fun things happening, both visible

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Speaker 3: and not to the investor eye. But that it's a

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Speaker 3: huge part of what we do in terms of profitability.

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Speaker 3: You know, I said the last night on the Earning Skull,

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Speaker 3: and I just want to make sure I repeated this

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Speaker 3: was not a contortionist thing we just did when we said, hey,

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Speaker 3: profitability is on the horizon.

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Speaker 2: It is very much part of the plan. It's always

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Speaker 2: been part of the plan.

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Speaker 3: It's just now close enough where I can say, here's

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Speaker 3: a date with history. We're going to get gap profitable

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Speaker 3: and move right past it and do more.

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Speaker 1: Max and Carol also bear with me that I am

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Speaker 1: a firm customer in the sense that you know, I

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Speaker 1: used the firm to finance a specific thing for what

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Speaker 1: it's worth. It was the Peloton tread. But the reason

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Speaker 1: I did. It is actually an emphsis on point of sale,

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Speaker 1: so when you go through, the audience is fermitted. If

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Speaker 1: you go and try buy something from peloton Is, it's

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Speaker 1: a kind of a weird transaction, but you're presented with

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Speaker 1: the firm as an option almost straight away. Do you

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Speaker 1: negotiate that aggressively for those kind of bigger ticket items.

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Speaker 3: I'm not sure individual deals are worth commenting on, but

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Speaker 3: every deal where we are presented at the point of sale,

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Speaker 3: and every deal where you see it up funnel as

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Speaker 3: one might call it before you even get into the checkouts,

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Speaker 3: are absolutely directly integrated. So we go to the merchant,

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Speaker 3: we spend a lot of time with them making sure

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Speaker 3: that we are as helpful as possible to their ability

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Speaker 3: to sell, be it a pelt On tread or a

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Speaker 3: mattress or anything in between.

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Speaker 2: And that is what gives us a huge advantage.

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Speaker 3: The consumer has the confidence and the clarity of what

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Speaker 3: it might cost them to borrow money to buy something.

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Speaker 2: Max.

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Speaker 1: While you're here, could I please ask you, as a

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Speaker 1: story out from Bloomberg Law about a firm facing a

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Speaker 1: class action suit after the evolved bank breach situation, comment

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Speaker 1: on that please.

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Speaker 3: Probably a very bad ideas in comment on ongoing or

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Speaker 3: potential future litigation.

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Speaker 2: So I'm not sure I have anything to say on that.

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Speaker 3: You know, I said it the day of evolved News,

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Speaker 3: which is certainly unfortunate that the firm card numbers were

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Speaker 3: all safe. We did not need to rotate them and

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Speaker 3: give people a new car. That is now confirmed. No

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Speaker 3: card numbers have been leaked and our consumers are safe.

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Speaker 3: If you have your Affirm card, please continue using it.

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Speaker 3: It works just fine.

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Speaker 2: Thank you.

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Speaker 4: Thanks lev Chin, It's always great to have you on

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Speaker 4: the show.

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Speaker 2: We appreciate it.

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Speaker 4: It's taking about the CEO of Affirm