Affirm unveils a new artificial intelligence solution designed for retailers

Affirm Introduces BoostAI for Enhanced Promotional Testing

• Key Takeaway: Affirm is piloting a new artificial intelligence solution, BoostAI, which enables merchants to conduct sophisticated A/B testing on promotional financing offers.
• Industry Context: The launch of this tool coincides with the rising demand for 0% financing deals, a trend supported by Affirm’s successful three-day promotional events, even during October.
• Current Adoption: At present, BoostAI is being utilized by a select group of Affirm’s partners, including 47 large enterprises and several hundred small and medium-sized businesses.

Affirm is developing an AI-driven platform aimed at helping merchants increase participation in merchant-sponsored promotional financing programs.

BoostAI leverages machine learning to let businesses experiment with different financing promotions through A/B testing, helping them identify which offers are most effective at boosting sales. A/B testing is a common practice in the tech sector for comparing two options to determine which yields better results in terms of user engagement or preference.

For Affirm, this technology represents a new avenue to generate additional revenue for its merchant partners.

Affirm CEO Max Levchin commented during the company’s recent earnings call, “This approach increasingly resembles an advertising model rather than a traditional cost of acceptance model.”

BoostAI is designed to work alongside Affirm’s existing AI-powered promotional platform, AdaptAI, which allows retailers to provide customers with tailored incentives such as special APR rates, unique repayment terms, or cash-back offers.

According to Affirm, merchants using BoostAI have experienced a 5% to 15% rise in gross merchandise volume. The tool is currently in use by a limited number of enterprise clients and hundreds of smaller businesses. Levchin noted, “We are still in the early stages with BoostAI.”

Consumer Response to Financing Promotions

Shoppers remain highly receptive to special financing deals, which have played a significant role in Affirm’s ability to achieve profitability ahead of schedule. Many of these offers, including 0% APR deals, are funded by merchants and have proven effective for attracting new customers.

Growth in gross merchandise volume from 0% APR buy now, pay later (BNPL) loans has outpaced Affirm’s overall growth, reaching a 60% increase. Around 60,000 merchants are now offering these rates, nearly four times as many as the previous year. As of December 31, 2025, Affirm reported approximately 478,000 active merchant partners, a 42% year-over-year increase.

Affirm also shared that over 65% of loan applications included a 0% APR offer, and 39% of all transactions during the quarter were completed with a 0% APR.

Currently, 67% of Affirm’s loans carry interest, but the company has increasingly promoted 0% APR offers. In October, Affirm launched a three-day sales event inspired by Amazon Prime Days. Dubbed “The Big Nothing,” this event contributed to 15% of Affirm’s gross merchandise volume for the month and led to a surge in daily sign-ups for the Affirm Card.

Affirm’s Financial Performance

Affirm reported “moderately positive” results for its fiscal second quarter ending December 31, according to TD Cowen analyst Moshe Orenbuch.

Orenbuch noted, “Revenue exceeded our projections and surpassed expectations across most categories, including merchant network revenue, interest income, and gains on sales, thanks to robust growth on the Affirm platform.”

Affirm’s revenue reached $1.12 billion, marking a 30% increase from the previous year and surpassing analyst forecasts of $1.06 billion (S&P Capital IQ). Net income rose to $129.6 million, or $0.37 per diluted share, up 61%. Analysts had anticipated net income of $92.7 million, or $0.27 per share. Gross merchandise volume climbed 36% to $13.8 billion.

Operating expenses grew by 15% to $1 billion, primarily due to increased infrastructure costs associated with higher transaction volumes.