Great, you are asking a good question, as opposed to stonks92 who doesn't care about the business at all and just like arguing against people with no evidence.
Bad debt is a key concern for the business (just like some unexpected spending like car accident that make your budget tighter while you are paying monthly interest for your property). Have a look at the bad debt trend from Affirm's Q1 presentation:
The bad debt in the first HY will generally be higher than the second half in most of the years, and the trend is increasing from July to Nov and then dropping to a relatively stable level for the rest of the year. This partly explains why the US bad debt rate increased from 1.1-1.2% to 1.4% and expected to increase to 1.5-1.6% in Q2 (check ZIP's Q1 report). If FY25 keeps the same trend as previous years, the bad debt will drop after the Christmas. For AU business, the cycle is different. the bad debt is decreasing and may increase again in the second half (depending on the AU macro environment).
Of course we have to wait and see how the bad debt actually moves. Hope this is helpful. DYOR
(20min delay)