Yahoo Finance

Well earlier this week at the 2024 Goldman Sachs Communacopia Technology Conference, Yahoo Finance's Brian Sozzi sat down with Affirm CEO and talked about the company's plans for growth in the year ahead. Take a listen.

Yahoo Finance is continuing its coverage at the Goldman Sachs Communacopia Conference in San Francisco. Talking all things tech, media. But let's stay focused on tech right now. Bringing a firm founder and CEO Max Levchin. Max, good to see you again. It's been another year in the books. I think I just saw you here, but nonetheless, we're here again.

Good to see you.

What is the state of your business?

It is great. We've just reported our final quarter of fiscal 24. We killed it. We grew north of 30% on GMV, north of 45% on revenue for both the quarter and the year. And we made a public commitment to get gap profitable in fiscal 25. So firing on all pistons, just growing and making money.

I've been talking to you, I think since pretty much the founding of the company, but it feels like the past two quarters something has clicked in the business and it's entered a new gear. Are you entering a different chapter?

Not to be overly self-critical, strategies remain the same, the mission has remained the same, the core values remain the same, the executive team has largely remained the same. I think what I've figured out is how to talk about our business so finally investors and others can understand what they're up to, but we've always done exactly what we said we would and it's always worked for us.

Do you still see yourself as BNPL?

No, the one thing that I wish I could rewind the clock on is to not use those four dreaded letters in our S1. We're much more than BNPL. We are payments first and foremost. We're financial services. We have this deep relationship with consumers. We serve 300,000 merchants that are actively transacting with us. There's a lot to us than just BNPL. In the moment, it seemed like a cool acronym to get behind. It is now one of many things we do.

That's interesting because I talked to to Robin Hood co-founder Vlad Tenev, and he his company's gone through a metamorphosis too as well, focusing more on wealth management, trading of course, but I mean, your company, is it fair to say it's just matured, but in a good way? Obviously, you're still growing, but there's something else going on here besides from looking back to when you started the company.

We're definitely moving from startup mode to growth mode, for lack of a better term. For a while, I think we took growth for granted and we're just trying to keep all the balls in the air and build systems and processes to ensure we can deliver on the promise we represented. At this point, we know how to plan, we know how to keep our eyes on the current quarter or the current day, but also make real plans to win in our market 5 years out, 10 years out, 30 years out. So we think of ourselves as a forever company. I think for a long time as a startup, you say that, but you mean, let's survive another week. At this point, it's very real where we're thinking what will this thing look like 20 years from now. And I hope I'm here to run it then, but I'm

Well, you will be. What is it what does it look like 20 years from now?

You know, from the very beginning we've said we're trying to build a modern answer to American Express. I admire American Express greatly. I think it's a wonderful brand. It's a great service to its consumers, but it is a club, a club with a velvet rope and you've got to be good enough to be on the right side of the rope. I wanted to build a payment system, a payment network, reach merchants, serve consumers, offer access to credit, but for everyone, for anyone who wants to be a part of something that stands for no late fees, no deferred interest, real transparency, real pro-consumer attitude, helping people get the things they want without having to get into debt that they can't repay. And that that's what we are today. That's where we got to. So this is the state of Affirm now. The next few steps are just get bigger, just get more services, more consumers, more merchants, etc.

What makes you so passionate about what you do?

I'm generally a passionate guy. We've just talked about cycling. I can talk your head off on that topic too. Um, I love financial services. It's the largest market, I think in the world. Everyone eventually has to buy something or sometimes sell something. It's the market that, if left its own devices, devolves into all sorts of gotchas and gimmicks and squirrely behaviors and no one ever talks about how much they love their bank. No one ever talks about how much they think their credit card is on their side. They like sometimes talk about points, but they never say this is this is the real deal.

I've always thought of you as living in two worlds. Now you're doing financial services, but I mean, look, I grew up following your career when you were early days of PayPal. Um, and you're very plugged into AI and the tech scene. I mean, we're here in California and we might get an AI bill. Do you support that? And do you think AI is that big of a risk to society?

I think there are two ways to think about AI, and I think I said this exact thing last year, so stop me if you heard this one before. Um, there's techno-optimists and techno-doomerists. I made that one up, but you know what I mean. It's catchy. I'm a techno-optimist. I think the future of AI as far as I can see, and that is what we're doing at Affirm, is more productivity. We don't need to lose jobs. We don't need to cut heads. We don't have a plan to eliminate 700 jobs because the robots will do it. We're going to give a robot, or more than one robot, agents, as they're now being conveniently called, to all of our customer service folks, and our engineers are going to get pair programmers that can help them be more productive. We use a lot of AI today in just running of the enterprise and we expect to do a lot more than that. None of it is threatening. All of it is more productivity. The AI doomerism is all about, well, first thing I'm going to harvest some of that free labor and fire all these people. That's a shorthand for saying, well, and one day someone's going to show me out the door because a smarter AI will do my job. And I just don't want to live in that future. I intend to build the former.

It's good. I like it.

Do the models themselves that others are working on, is that a are those a risk as they ingest more information and spit it out in whatever form?

You know, there are risks associated with AI, less to do with the models themselves and more to do with what the models are allowed to do in the real world if left completely unsupervised. So I'm not diminishing or dismissing the need for controls and model governance and oversight and thoughtful rule making even. I would just not want to shut it all down to quote another AI doomerist. I'm I'm familiar with. We are looking at one of the greatest new inventions of our time. Like this is the American Prometheus is a great book about the nuclear age and it mostly played out to our advantage. Nuclear energy we get today is a marvel we didn't anticipate at the turn of last century. We should treat AI in a similar fashion. It can go wrong if we let models, especially poorly trained ones, ironically, go and do things to see what happens, but I think mostly it will just do amazing things for us, just like nuclear power stations provide power in places where you can't get it in other ways. So I'm I'm I'm optimistic, but also pragmatic.