10-K – 2025-08-28 – afrm-20250630.htm

Warehouse Credit Facilities
Our warehouse credit facilities allow us to borrow up to an aggregate of $4.9 billion, and mature between 2026 and 2032. We may continue to pledge new receivables to allow us to borrow up to the commitment amount throughout the revolving period for each facility. The length of the revolving period, the maximum amount we may borrow against pledged collateral balance during the revolving period, and the length of the amortization period prior to the maturity date varies across borrowing facilities depending on negotiated loan terms. As of June 30, 2025, we have drawn an aggregate of $1.1 billion on our warehouse credit facilities. As of June 30, 2025, we were in compliance with all applicable covenants in the agreements.
We use various credit facilities to finance the origination of loan receivables in Canada. Similar to our U.S. warehouse credit facilities, borrowings under these agreements are referred to as funding debt, and proceeds from the borrowings may only be used for the purposes of facilitating loan funding and origination. These facilities are secured by Canadian loan receivables pledged to the respective facility as collateral, maturing between 2028 and 2030. As of June 30, 2025, the aggregate commitment amount of these facilities was $607.7 million on a revolving basis, of which $391.0 million was drawn.
As we continue to expand in new geographies, we intend to add the necessary funding capacity to support our growth objectives.
Variable Funding Note
We have entered into a syndicated revolving loan agreement through a securitization master trust which is utilized to fund the purchase and origination of loans. In connection with the loan agreement, the master trust issued a variable funding note (“VFN”), where borrowings will be secured by loan collateral sold to the master trust. Our VFN allows us to borrow up to an aggregate of $1.4 billion and matures in 2032. As of June 30, 2025, we have drawn an aggregate of $107.4 million on our VFN and have an aggregate of $1.2 billion available. As of June 30,
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2025, we were in compliance with all applicable covenants in the agreements.

Sale and Repurchase Agreements
We entered into various sale and repurchase agreements pursuant to our retained interests in our off-balance sheet securitizations where we have sold these securities to a counterparty with an obligation to repurchase at a future date and price. These repurchase agreements have a term equaling the contractual life of the securitization notes pledged. We had $31.2 million in debt outstanding under our sale and repurchase agreements disclosed within funding debt in the consolidated balance sheets as of June 30, 2025.
Securitizations
We finance the origination and purchase of loans though our asset-backed securitization program using a combination of amortizing, revolving and variable funding structures. In connection with our program, we sponsor and establish trusts (deemed to be VIEs) which issue securities collateralized by the loans we sell to the trust. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. For these VIEs, the creditors have no recourse to the general credit of Affirm and the liabilities of the VIEs can only be settled by the respective VIEs’ assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. Refer to Note 10. Securitization and Variable Interest Entities in the notes to the consolidated financial statements for further details.
Revolving Credit Facility
Our revolving credit facility has an aggregate commitment amount of $330.0 million, with a final maturity date of June 26, 2027. Proceeds from the borrowings under this facility will be used for general corporate purposes in the ordinary course of business. As of June 30, 2025, there are no borrowings outstanding under the facility. The facility contains certain covenants and restrictions, including certain financial maintenance covenants. As of June 30, 2025, we were in compliance with all applicable covenants in the agreements. Refer to Note 9. Debt in the notes to the consolidated financial statements for further details on our revolving credit facility.

Convertible Senior Notes

Our convertible senior notes have an aggregate principal balance of $1.2 billion, and bear no interest, in the case of the 2026 Notes, and 0.75% per year, in the case of the 2029 Notes, which is payable semiannually. The 2026 Notes mature on November 15, 2026, and the 2029 Notes mature on December 15, 2029, in each case unless earlier converted, redeemed, or repurchased in accordance with their terms. Refer to Note 9. Debt in the notes to the consolidated financial statements for further details.

Other Funding Sources
Forward Flow Loan Sale Arrangements
We have forward flow loan sale arrangements that facilitate the sale of whole loans across a diverse third-party investor base. Forward flow arrangements are generally fixed term in nature, with term lengths ranging between one to three years, during which we periodically sell loans to each counterparty based on the terms of our negotiated agreement. As part of our capital strategy, we seek to partner with counterparties that can provide long-term, stable funding to support the ongoing growth and diversification of our loan portfolio.
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Cash Flow Analysis

The following table provides a summary of cash flow data during the periods indicated:

June 30, 2025 June 30, 2024
(in thousands)
Net cash provided by operating activities $ 793,909  $ 450,138 
Net cash used in investing activities $ (1,083,064) $ (1,325,149)
Net cash provided by financing activities $ 751,425  $ 913,149 

Operating Activities
Net cash provided by operating activities was $793.9 million for the year ended June 30, 2025. Net profit of $52.2 million was adjusted for the add back of non-cash items and other adjustments by $791.5 million, and changing operating assets net of operating liabilities resulting in a net decrease in operating cash flows of $49.8 million. The non-cash item adjustments are primarily attributable to $616.7 million provision for credit losses, $271.6 million commercial agreement warrant expense, $321.4 million stock-based compensation expense, and $225.1 million depreciation and amortization expense, which were partially offset by $381.6 million gain on sale of loans, and $233.8 million amortization of premiums and discounts on loans. The net decrease in cash from changes in operating assets and liabilities of $49.8 million was primarily driven by an increase in accounts receivable of $85.0 million and a decrease in accrued expenses and other liabilities of $48.9 million partially offset by an increase in accounts payable of $41.8 million and an increase in payable to third-party loan owners of $52.1 million.
Net cash provided by operating activities was $450.1 million for the year ended June 30, 2024. Net loss of $517.8 million was adjusted for the add back of net non-cash items by $1.0 billion, offset by a net decrease in operating cash flows from net changes in our operating assets and liabilities of $63.0 million. The non-cash item adjustments are primarily attributable to $460.6 million provision for credit losses, $406.7 million commercial agreement warrant expense, $344.5 million stock-based compensation expense, and $169.0 million depreciation and amortization expense, which were partially offset by $197.2 million gain on sale of loans and $187.7 million amortization of premiums and discounts on loans. The net decrease in cash from changes in operating assets and liabilities was primarily driven by an increase of accounts receivable of $167.8 million, a decrease in accrued expenses and other liabilities of $55.2 million, which was partially offset by an increase in payable to third-party loans owners of $105.8 million. In addition, cash used for the purchase and origination of loans held for sale was $4.2 billion, which was offset by cash proceeds generated from the sale of loans held for sale of $4.2 billion.
Investing Activities
Net cash used in investing activities was $1.1 billion for the year ended June 30, 2025, which consisted of outflows related to $32.5 billion of purchases and origination of loans held for investment, including originated and purchased loans of $6.1 billion and $26.4 billion, respectively, during the period, $823.9 million of purchases of securities available for sale, and $192.2 million of property, equipment and software additions. Inflows related to $18.7 billion of principal repayments of loans, $12.6 billion of proceeds from sale of loans held for investment, and $1.2 billion of proceeds from maturities of securities available for sale.
Net cash used in investing activities was $1.3 billion for the year ended June 30, 2024, which consisted of outflows related to $21.5 billion of purchases and origination of loans held for investment, including originated and purchased loans of $4.3 billion and $17.2 billion, respectively, during the period, $1.0 billion of purchases of securities available for sale, and $159.3 million of property, equipment and software additions. Inflows related to $14.1 billion of principal repayments of loans, $6.1 billion of proceeds from sale of loans held for investment, and $1.1 billion of proceeds from maturities of securities available for sale.

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Financing Activities
Net cash provided by financing activities was $751.4 million for the year ended June 30, 2025, primarily consisted of net cash inflows of $1.6 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts, as well as cash inflows of $903.4 million from the issuance of the 2029 Notes, net of debt issuance costs. This was partially offset by cash outflows of $1.0 billion related to the repurchase and extinguishment of a portion of our 2026 Notes, $250.0 million related to repurchase of common stock shares in connection with the issuance of the 2029 Notes, $262.6 million related to borrowing and repayment of funding debt, and cash outflows of $303.8 million related to taxes paid on vested RSUs.

Net cash provided by financing activities was $913.1 million for the year ended June 30, 2024, primarily consisted of net cash inflows of $1.1 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts as well as net cash inflows of $59.2 million related to borrowing and repayment of funding debt. This was partially offset by net cash outflows of $189.2 million related to taxes paid on vested RSUs.

Contractual Obligations

Payments Due By Period
Total Less than
1 Year 1 - 3 Years 3 - 5 Years More than
5 Years
(in thousands)
Funding debt $ 1,640,514  $ 183,181  $ 942,012  $ 176,145  $ 339,176 
Notes issued by securitization trusts 4,833,855  —  —  3,093,765  1,740,090 
Operating lease commitments (1)
36,380  16,575  8,006  7,367  4,432 
Purchase obligations (2)
535,410  125,979  237,043  172,388  — 
Convertible senior notes (3)
1,153,000  —  247,880  905,120  — 
Total $ 8,199,159  $ 325,735  $ 1,434,941  $ 4,354,785  $ 2,083,698 

(1) Operating lease amounts include minimum rental payments under our non-cancelable leases primarily for office facilities. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases.
(2) Purchase obligations amounts primarily include minimum purchase commitments for cloud computing web services entered into in the ordinary course of business.
(3) The 2026 and 2029 Notes have a net balance of $247.9 million and $905.1 million, respectively. The 2026 Notes do not bear interest and the 2029 Notes will bear interest at a fixed rate of 0.75% per year, payable semiannually in arrears on June 15 and December 15 of each year. The 2026 and 2029 Notes mature on November 15, 2026 and December 15, 2029, respectively.

The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in activities that are not reflected within our consolidated balance sheets, generally referred to as off-balance sheet arrangements. These activities involve transactions with unconsolidated VIEs, including securitization and forward flow transactions. Across these transactions, ongoing involvement typically includes contractual loan servicing arrangements and loan repurchase obligations in connection with breaches in ordinary course of business representations and warranties.
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We have entered into unconsolidated securitization transactions where Affirm is the sponsor and risk retention holder, Affirm could experience a loss of up to 5% of both the senior notes and residual trust certificates. In the unlikely event principal payments on the loans backing any off-balance sheet securitization are insufficient to pay holders of senior notes and residual trust certificates, including any retained interests held by Affirm, then any amounts we contributed to the securitization reserve accounts may be depleted.

Under certain other forward flow loan sale arrangements with third-party loan buyers, we have entered into risk sharing agreements where we may be required to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold.

In addition to risk sharing arrangements, we may hold beneficial interests in certain off-balance sheet VIEs that have been established by third-party loan buyers in connection with structured transactions. These beneficial interests represent our right to receive a portion of the residual cash flows from the underlying loans sold in connection with these transactions.

Risk sharing arrangements and beneficial interests are considered variable interests in the unconsolidated VIEs holding the loan assets transferred, as their value is exposed to the performance of those loans. For off-balance sheet VIEs where we hold variable interest, we have determined that our exposure to transaction economics is insignificant relative to the expected losses or residual returns.

As of June 30, 2025, the aggregate outstanding balance of loans held by third-party investors and off-balance sheet securitizations was $7.8 billion. Refer to Note 10. Securitization and Variable Interest Entities and Note 13. Fair Value of Financial Assets and Liabilities of the accompanying notes to our consolidated financial statements for more information.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP and requires us to make certain estimates and judgments that affect the amounts reported in our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because certain of these accounting policies require significant judgment, our actual results may differ materially from our estimates. To the extent that there are differences between our estimates and actual results, our future consolidated financial statement presentation, financial condition, results of operations, and cash flows may be affected.
We evaluate our significant estimates on an ongoing basis. We believe the estimates, discussed below, have the greatest potential effect on our consolidated financial statements and are therefore deemed critical in understanding and evaluating our financial results. For further information, our significant accounting policies are described in Note 2. Summary of Significant Accounting Policies within the notes to the consolidated financial statements.
Loss on Loan Purchase Commitment and Loss on Loan Origination
We purchase certain loans from our originating bank partners that are processed through our platform that our originating bank partner puts back to us. In certain instances, our originating bank partners may originate loans with zero or below market interest rates that we are required to purchase. In these instances, we may be required to purchase the loan for a price in excess of the fair market value of such loans, which results in a loss. These losses are recognized as loss on loan purchase commitment in our consolidated statements of operations and comprehensive income (loss).

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Similarly, we may originate certain loans via our wholly-owned subsidiaries, with zero or below market interest rates. In these instances, the par value of the loans originated is in excess of the fair market value of such loans, resulting in a loss, which we record as a reduction to network revenue.
For both loans originated by our bank partners and loans originated through our subsidiaries, the loss is measured as the difference between the estimated fair value of the loan and the par amount of the loan at origination.
The fair value of a loan is estimated based on the present value of expected future cash flows, using both observable and unobservable inputs, including the expected timing and amount of losses, the discount rate, and the recovery rate. These inputs are based on historical performance of loans facilitated through our platform, as well as the consideration of market participant requirements. While our estimate reflects assumptions we believe a market participant would use to calculate fair value, significant judgment is required.
Allowance for Credit Losses
The allowance for credit losses on loans held for investment is determined based on management’s current estimate of expected credit losses over the remaining contractual term, historical credit losses, consumer payment trends, estimates of recoveries, and future expectations as of each balance sheet date. We immediately recognize an allowance for expected credit losses upon origination of a loan. Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented within our consolidated statements of operations and comprehensive income (loss). We have made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is reversed.

In estimating the allowance for credit losses, management utilizes a migration analysis of delinquent and current loan receivables. Migration analysis is a technique used to estimate the likelihood that a loan receivable will progress through various stages of delinquency and to charge-off. The analysis focuses on the pertinent factors underlying the quality of the loan portfolio. These factors include historical performance, the age of the receivable balance, seasonality, consumer credit-worthiness, changes in the size and composition of the loan portfolio, delinquency levels, bankruptcy filings and actual credit loss experience. We also take into consideration certain qualitative factors, in which we adjust our quantitative baseline using our best judgement to consider the inherent uncertainty regarding future economic conditions and consumer loan performance. For example, we consider the impact of current economic and environmental factors at the reporting date that did not exist over the period from which historical experience was used.

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the allowance for credit losses. Loans are charged-off in accordance with our charge-off policy, as the contractual principal becomes 120 days past due or meets other charge-off policy requirements. Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses.

The underlying assumptions, estimates, and assessments we use to provide for losses are updated periodically to reflect our view of current conditions, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for credit losses. It is possible that we will experience loan losses that are different from our current estimates.

Recent Accounting Pronouncements

Refer to Note 2. Summary of Significant Accounting Policies within the notes to the consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have operations within the United States, Canada and U.K., and we are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and interest rates. Our market risk exposure is primarily the result of fluctuations in interest rates. Foreign currency exchange rates do not pose a material market risk exposure, as our current operations are primarily in the U.S.
Interest Rate Risk
Our securities available for sale at fair value as of June 30, 2025 included $0.9 billion of marketable debt securities with maturities greater than three months. An increase in interest rates would have an adverse impact on the fair market value of our fixed rate securities while floating rate securities would produce less income than expected if interest rates were to decrease. Because our investment policy is to invest in conservative liquid investments and because our business strategy does not rely on generating material returns from our investment portfolio, we do not expect our market risk exposure on marketable debt securities to be significant.
Continued volatility in interest rates and inflation, which may persist longer than previously expected, may adversely impact our consumers’ spending levels, and ability and willingness to pay outstanding amounts owed to us. Elevated interest rates may lead to higher payment obligations on our future credit products but also for consumers’ other financial commitments, including their mortgages, credit cards, and other types of loans. Therefore, elevated interest rates may lead to increased delinquencies, charge-offs, and allowances for loans and interest receivable, which could have an adverse effect on our operating results.
We rely on a variety of funding sources with varying degrees of interest rate sensitivities. Certain of our funding arrangements bear a variable interest rate. Given the fixed interest rates charged on the loans that we purchase from our originating bank partners or originate ourselves, a rising variable interest rate would reduce our interest margin earned in these funding arrangements. Additionally, certain of our loan sale agreements are repriced on a recurring basis using a mechanism tied to interest rates as well as loan performance. Increases in interest rates could reduce our loan sale economics. We also rely on securitization transactions, with notes typically bearing a fixed coupon. For future securitization issuances, higher interest rates could have several outcomes. For consolidated securitizations, higher interest rates may result in higher coupons paid and therefore higher funding costs. For transactions that are not consolidated, higher interest rates may impact overall deal economics which are a function of numerous transaction terms.
We maintain an interest rate risk management program which measures and manages the potential volatility of earnings that may arise from changes in interest rates. We use interest rate derivatives to mitigate the effects of changes in interest rates on our variable rate debt, which eliminates some, but not all, of the interest rate risk. Some of these contracts are designated as cash flow hedges for accounting purposes. For those contracts designated as cash flow hedges, the effective portion of the gain or loss on the derivatives is recorded in other comprehensive income (loss) and is reclassified into funding costs in the same period the hedged transaction affects earnings. Factoring in the interest rate risk management program and the repricing of investment securities, as of June 30, 2025, we estimate that a hypothetical instantaneous 100 basis point upward parallel shock to interest rates would have a less than $65.0 million adverse impact on our cash flows associated with our market risk sensitive instruments over the next 12 months. This measure projects the changes in cash flows associated with all assets and liabilities, including derivatives, based on contractual market rate-based repricing conditions over a twelve-month time horizon. It considers forecasted business growth and anticipated future funding mix.
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Credit Risk
We have credit risk primarily related to our consumer loans held for investment. We are exposed to default risk on both loan receivables purchased from our originating bank partners and loan receivables that are directly originated. The ultimate collectability of a substantial portion of the loan portfolio is susceptible to changes in economic and market conditions. To manage this risk, we utilize our proprietary underwriting models to make lending decisions, score, and price loans in a manner that we believe is reflective of the credit risk. Other credit levers, such as user limits and/or down payment requirements, are used to determine the likelihood of a consumer being able to pay.

To monitor portfolio performance, we utilize a wide range of internal and external metrics to review user and loan populations. Each week, management reviews performance for each consumer segment, typically split by ITACs model score at the time of origination, financial product originated, age of loan, and delinquency status. Internal performance trendlines are measured against external factors such as unemployment, CPI, and consumer sentiment to determine what changes, if any, in risk strategy is warranted.

As of June 30, 2025 and June 30, 2024, we were exposed to credit risk on $7.0 billion and $5.7 billion, respectively, of loans held within our consolidated balance sheet. Loan receivables are diversified geographically. As of both June 30, 2025 and June 30, 2024, approximately 11% of loan receivables related to consumers residing in the state of California. Approximately 10% of loan receivables related to customers residing in the state of Texas as of June 30, 2025 but did not exceed 10% as of June 30, 2024. No other states or provinces exceeded 10%.

In addition, we have credit risk exposure related to certain off-balance sheet loans sold to third parties where we have entered into risk sharing arrangements, retained interests in unconsolidated securitization trusts and our residual interests in structured transactions. As of June 30, 2025 and June 30, 2024, we have sold $8.6 billion and $4.2 billion, respectively, in unpaid principal balance loans which are subject to risk sharing arrangements, of which our maximum exposure to losses was $91.1 million and $81.2 million, respectively. This amount includes our maximum potential loss with respect to risk sharing liabilities of $24.5 million and the fair value of risk sharing assets of $66.6 million, as of June 30, 2025. The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $75.5 million and $51.7 million as of June 30, 2025 and June 30, 2024, respectively, of which our maximum exposure to losses was $76.9 million and $51.9 million, respectively. The fair value of residual interests in structured transactions was $2.3 million as of June 30, 2025, of which our maximum exposure to losses was $15.6 million.

We are also exposed to credit risk in the event of nonperformance by the financial institutions holding our cash and the issuers of our cash equivalents and available for sale securities. We maintain our cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. We manage this risk by conducting business with well-established financial institutions, diversifying our counterparties and having guidelines regarding credit rating and investment maturities to safeguard liquidity. Although, we are not substantially dependent on a single financing source and have not historically experienced any credit losses related to these financial institutions, if multiple financing sources were to be unable to fulfill their funding obligations to us, it could have a material adverse effect on our financial condition, results of operations and cash flows.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

AFFIRM HOLDINGS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
Report of Independent Registered Public Accounting Firms (PCAOB ID No. 34 )
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Consolidated Balance Sheets
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Consolidated Statements of Operations and Comprehensive Income (Loss)
86

Consolidated Statement of Stockholders' Equity (Deficit)
87

Consolidated Statements of Cash Flows
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Notes to Consolidated Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Affirm Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Affirm Holdings, Inc. and subsidiaries (the "Company") as of June 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 28, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses — Refer to Notes 2 and 4 to the financial statements
Critical Audit Matter Description
The allowance for credit losses (ACL) is a material estimate of the Company. In estimating the ACL, management utilizes a migration analysis of delinquent and current loan receivables. The analysis focuses on the pertinent factors underlying the quality of the loan portfolio. These factors, include historical performance, the age of the receivable balance, customer credit-worthiness, changes in the size and composition of the loan portfolio, delinquency levels, and actual credit loss experience.
We identified the ACL for U.S. and Canada loans as a critical audit matter given the subjective nature and amount of judgment required in developing the estimate. Performing audit procedures to evaluate the reasonableness
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of the ACL required a high degree of auditor judgment, an increased extent of audit effort, credit specialists, and the need to involve more experienced audit professionals.

How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the allowance for credit losses included the following procedures, among others:
• We tested the design and effectiveness of controls over the ACL.
• We tested management’s process for estimating the ACL, which included involving our credit specialists to evaluate the appropriateness of the models and methodologies.
• We evaluated the accuracy and completeness of the data used to estimate the allowance for credit losses.

/s/ Deloitte & Touche LLP
San Francisco, California
August 28, 2025
We have served as the Company's auditor since 2020.

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AFFIRM HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share amounts)

June 30, 2025 June 30, 2024
Assets
Cash and cash equivalents $ 1,354,455   $ 1,013,106  
Restricted cash 401,968   282,293  
Securities available for sale at fair value 871,425   1,131,628  
Loans held for sale —   36  
Loans held for investment 7,025,534   5,670,056  
Allowance for credit losses ( 396,929 ) ( 309,097 )
Loans held for investment, net 6,628,606   5,360,959  
Accounts receivable, net 426,177   353,028  
Property, equipment and software, net 572,637   427,686  
Goodwill 534,156   533,439  
Intangible assets 12,935   13,502  
Commercial agreement assets 57,210   104,602  
Other assets 295,360   299,340  
Total assets $ 11,154,929   $ 9,519,619  
Liabilities and stockholders’ equity
Liabilities:
Accounts payable $ 82,820   $ 41,019  
Payable to third-party loan owners 211,700   159,643  
Accrued interest payable 24,465   24,327  
Accrued expenses and other liabilities 157,272   147,429  
Convertible senior notes, net 1,153,000   1,341,430  
Notes issued by securitization trusts 4,833,855   3,236,873  
Funding debt 1,622,808   1,836,909  
Total liabilities 8,085,919   6,787,630  
Commitments and contingencies (Note 8)

Stockholders’ equity:
    Class A common stock, par value $ 0.00001 per share: 3,030,000,000 shares authorized, 284,378,565 shares issued and outstanding as of June 30, 2025; 3,030,000,000 shares authorized, 267,305,456 shares issued and outstanding as of June 30, 2024
2   2  
    Class B common stock, par value $ 0.00001 per share: 140,000,000 shares authorized, 40,734,234 shares issued and outstanding as of June 30, 2025; 140,000,000 authorized, 43,747,575 shares issued and outstanding as of June 30, 2024
1   1  
Additional paid in capital 6,140,893   5,862,555  
Accumulated deficit ( 3,056,818 ) ( 3,109,004 )
Accumulated other comprehensive loss ( 15,069 ) ( 21,565 )
Total stockholders’ equity 3,069,009   2,731,989  
Total liabilities and stockholders’ equity $ 11,154,929   $ 9,519,619  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS, CONT.
(in thousands, except shares and per share amounts)

    The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The liabilities in the table below include liabilities for which creditors do not have recourse to the general credit of the Company. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate upon consolidation.

June 30, 2025 June 30, 2024
Assets of consolidated VIEs, included in total assets above
Restricted cash $ 192,638   $ 145,829  
Loans held for investment 6,828,758   5,461,660  
Allowance for credit losses ( 365,656 ) ( 242,991 )
Loans held for investment, net 6,463,101   5,218,669  
Accounts receivable, net 3,032   2,961  
Other assets 2,558   10,676  
Total assets of consolidated VIEs $ 6,661,329   $ 5,378,135  
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable $ 2,833   $ 2,830  
Accrued interest payable 23,998   24,220  
Accrued expenses and other liabilities 2,797   11,115  
Notes issued by securitization trusts 4,833,855   3,236,873  
Funding debt 1,592,139   1,794,984  
Total liabilities of consolidated VIEs 6,455,621   5,070,022  
Total net assets of consolidated VIEs $ 205,707   $ 308,113  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share amounts)

June 30, 2025 June 30, 2024 June 30, 2023
Revenue
Merchant network revenue $ 882,658   $ 674,607   $ 507,600  
Card network revenue 231,308   151,401   119,338  
Total network revenue 1,113,966   826,008   626,938  
Interest income 1,608,221   1,204,355   685,217  
Gain on sales of loans 381,622   197,153   188,341  
Servicing income 120,602   95,483   87,489  
Total revenue, net $ 3,224,412   $ 2,322,999   $ 1,587,985  
Operating expenses
Loss on loan purchase commitment $ 242,264   $ 180,395   $ 140,265  
Provision for credit losses 616,683   460,628   331,860  
Funding costs 425,451   344,253   183,013  
Processing and servicing 457,849   343,249   257,343  
Technology and data analytics 589,723   501,857   615,818  
Sales and marketing 434,847   576,405   638,280  
General and administrative 545,053   525,291   586,398  
Restructuring and other ( 184 ) 6,768   35,870  
Total operating expenses 3,311,685   2,938,846   2,788,847  
Operating loss $ ( 87,273 ) $ ( 615,847 ) $ ( 1,200,862 )
Other income, net 148,737   100,320   211,617  
Income (loss) before income taxes $ 61,464   $ ( 515,527 ) $ ( 989,245 )
Income tax expense (benefit) 9,279   2,230   ( 3,900 )
Net income (loss) $ 52,186   $ ( 517,757 ) $ ( 985,345 )
Other comprehensive income (loss)
Foreign currency translation adjustments $ 6,025   $ ( 13,655 ) $ ( 8,143 )
Unrealized gain (loss) on securities available for sale, net 3,297   6,857   ( 882 )
Gain (loss) on cash flow hedges ( 2,826 ) 656   751  
Net other comprehensive income (loss) 6,496   ( 6,142 ) ( 8,274 )
Comprehensive income (loss) $ 58,682   $ ( 523,899 ) $ ( 993,619 )
Per share data:
Net income (loss) per share attributable to common stockholders for Class A and Class B
Basic $ 0.16   $ ( 1.67 ) $ ( 3.34 )
Diluted $ 0.15   $ ( 1.67 ) $ ( 3.34 )
Weighted average common shares outstanding
Basic 322,851,873   309,857,129   295,343,466  
Diluted 341,023,566   309,857,129   295,343,466  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(in thousands, except share amounts)

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity
Shares (1)
Amount
Balance as of June 30, 2022 287,365,373   $ 3   $ 4,231,303   $ ( 1,605,902 ) $ ( 7,149 ) $ 2,618,255  
Issuance of common stock upon exercise of stock options 947,792   —  4,593   —  —  4,593  
Issuance of common stock in acquisition —  —  13,674   —  —  13,674  
Issuance of common stock, employee share purchase plan 954,475   —  11,482   —  —  11,482  
Forfeiture of common stock related to acquisition ( 258,905 ) —  —  —  —  — 
Vesting of restricted stock units 7,849,919   —  —  —  —  — 
Vesting of warrants for common stock —  —  421,934   —  —  421,934  
Repurchases of common stock ( 12,437 ) —  ( 109 ) —  —  ( 109 )
Stock-based compensation —  —  531,817   —  —  531,817  
Tax withholding on stock-based compensation —  —  ( 73,844 ) —  —  ( 73,844 )
Foreign currency translation adjustments —  —  —  —  ( 8,143 ) ( 8,143 )
Unrealized loss on securities available for sale —  —  —  —  ( 882 ) ( 882 )
Unrealized gain on cash flow hedges —  —  —  —  751   751  
Net loss —  —  —  ( 985,345 ) —  ( 985,345 )
Balance as of June 30, 2023 296,846,217   $ 3   $ 5,140,850   $ ( 2,591,247 ) $ ( 15,423 ) $ 2,534,183  
Issuance of common stock upon exercise of stock options 2,826,973   —  22,922   —  —  22,922  

Issuance of common stock, employee share purchase plan 578,222   —  10,217   —  —  10,217  

Vesting of restricted stock units 10,801,619   —  —  —  —  — 
Vesting of warrants for common stock —  —  406,714   —  —  406,714  

Stock-based compensation —  —  471,021   —  —  471,021  
Tax withholding on stock-based compensation —  —  ( 189,169 ) —  —  ( 189,169 )
Foreign currency translation adjustments —  —  —  —  ( 13,655 ) ( 13,655 )
Unrealized gain on securities available for sale —  —  —  —  6,857   6,857  
Unrealized gain on cash flow hedges —  —  —  —  656   656  
Net loss —  —  —  ( 517,757 ) —  ( 517,757 )
Balance as of June 30, 2024 311,053,031   $ 3   $ 5,862,555   $ ( 3,109,004 ) $ ( 21,565 ) $ 2,731,989  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY, CONT.
(in thousands, except share amounts)

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity
Shares (1)
Amount
Balance as of June 30, 2024 311,053,031   $ 3   $ 5,862,555   $ ( 3,109,004 ) $ ( 21,565 ) $ 2,731,989  
Issuance of common stock upon exercise of stock options 4,479,891   —  47,104   —  —  47,104  
Issuance of common stock, employee share purchase plan 397,246   —  13,589   —  —  13,589  
Issuance of common stock upon exercise of warrants 3,499,453   —  —  —  —  — 
Repurchases of common stock ( 3,526,590 ) —  ( 250,000 ) —  —  ( 250,000 )
Vesting of restricted stock units 9,209,768   —  —  —  —  — 
Vesting of warrants for common stock —  —  271,562   —  —  271,562  
Stock-based compensation —  —  499,894   —  —  499,894  
Tax withholding on stock-based compensation —  —  ( 303,811 ) —  —  ( 303,811 )
Foreign currency translation adjustments —  —  —  —  6,025   6,025  
Unrealized gain on securities available for sale —  —  —  —  3,297   3,297  
Unrealized loss on cash flow hedges —  —  —  —  ( 2,826 ) ( 2,826 )
Net income —  —  —  52,186   —  52,186  
Balance as of June 30, 2025 325,112,799   $ 3   $ 6,140,893   $ ( 3,056,818 ) $ ( 15,069 ) $ 3,069,009  

(1) The share amounts listed above combine Class A and Class B stock.

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

June 30, 2025 June 30, 2024 June 30, 2023
Cash flows from operating activities
Net income (loss) $ 52,186   $ ( 517,757 ) $ ( 985,345 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Provision for losses 616,683   460,628   331,860  
Amortization of premiums and discounts on loans ( 233,799 ) ( 187,709 ) ( 141,075 )
Gain on sales of loans ( 381,622 ) ( 197,153 ) ( 188,341 )
Gain on extinguishment of debt ( 82,418 ) ( 12,638 ) ( 89,841 )
Changes in fair value of assets and liabilities 7,146   ( 2,776 ) ( 15,883 )
Amortization of commercial agreement assets 47,392   73,070   85,524  
Amortization of debt issuance costs 30,389   24,546   20,535  
Amortization of discount on securities available for sale ( 44,031 ) ( 22,799 ) ( 36,060 )
Commercial agreement warrant expense 271,562   406,714   421,934  
Stock-based compensation 321,433   344,511   451,709  
Depreciation and amortization 225,076   169,044   134,634  
Impairment of right of use assets —   752   1,244  
Other 13,703   ( 25,331 ) ( 8,825 )
Change in operating assets and liabilities:
Purchases and origination of loans held for sale ( 3,389,953 ) ( 4,212,299 ) ( 6,009,361 )
Proceeds from the sale of loans held for sale 3,389,990   4,211,687   6,174,447  
Accounts receivable, net ( 84,952 ) ( 167,757 ) ( 67,690 )
Other assets ( 12,175 ) 31,228   ( 14,466 )
Accounts payable 41,801   12,417   ( 5,038 )
Payable to third-party loan buyers 52,056   105,791   ( 17,531 )
Accrued interest payable 2,386   11,138   7,915  
Accrued expenses and other liabilities ( 48,943 ) ( 55,169 ) ( 38,165 )
Net cash provided by operating activities 793,909   450,138   12,181  
Cash flows from investing activities
Purchases and origination of loans held for investment ( 32,545,595 ) ( 21,488,547 ) ( 13,586,251 )
Proceeds from the sale of loans held for investment 12,572,254   6,058,799   1,582,501  
Principal repayments and other loan servicing activity 18,655,657   14,147,034   10,028,452  
Acquisition, net of cash and restricted cash acquired —   —   ( 16,051 )
Additions to property, equipment and software ( 192,189 ) ( 159,296 ) ( 120,775 )
Purchases of securities available for sale ( 823,886 ) ( 986,071 ) ( 1,082,147 )
Proceeds from maturities and repayments of securities available for sale 1,215,777   1,136,937   1,537,495  
Other investing inflows 99,917   995   4,706  
Other investing outflows ( 65,000 ) ( 35,000 ) ( 1,000 )
Net cash used in investing activities ( 1,083,064 ) ( 1,325,149 ) ( 1,653,070 )
Cash flows from financing activities
Proceeds from the issuance of convertible notes 920,000   —   —  
Proceeds from the issuance of funding debt 21,174,242   12,639,444   6,894,971  
Proceeds from issuance of notes and certificates by securitization trust 2,500,000   2,350,000   1,150,000  
Principal repayments of funding debt ( 21,387,609 ) ( 12,552,937 ) ( 5,801,531 )
Principal repayments of notes issued by securitization trust ( 900,000 ) ( 1,276,451 ) ( 606,299 )
Payment of debt issuance costs ( 49,233 ) ( 27,302 ) ( 22,443 )
Extinguishment of convertible debt ( 1,012,856 ) ( 63,561 ) ( 206,567 )
Proceeds from exercise of common stock options and warrants and contributions to ESPP 60,692   33,125   15,768  
Payments of tax withholding for stock-based compensation ( 303,811 ) ( 189,169 ) ( 73,845 )
Repurchases of common stock ( 250,000 ) —   ( 109 )
Net cash provided by financing activities 751,425   913,149   1,349,945  
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1,245 ) ( 2,683 ) 81  
Net increase (decrease) in cash, cash equivalents and restricted cash 461,024   35,455   ( 290,863 )
Cash, cash equivalents and restricted cash, beginning of period 1,295,399   1,259,944   1,550,807  
Cash, cash equivalents and restricted cash, end of period $ 1,756,423   $ 1,295,399   $ 1,259,944  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT.
(in thousands)

June 30, 2025 June 30, 2024 June 30, 2023
Reconciliation to amounts on consolidated balance sheets (as of period end)
Cash and cash equivalents 1,354,455   1,013,106   892,027  
Restricted cash 401,968   282,293   367,917  
Total cash, cash equivalents and restricted cash $ 1,756,423   $ 1,295,399   $ 1,259,944  

June 30, 2025 June 30, 2024 June 30, 2023
Supplemental disclosures of cash flow information
Cash payments for interest expense $ 404,377   $ 318,235   $ 163,191  
Cash paid for operating leases 16,575   16,037   16,354  
Cash paid for income taxes 2,736   1,187   808  
Supplemental disclosures of non-cash investing and financing activities
Stock-based compensation included in capitalized internal-use software $ 178,461   $ 126,510   $ 80,108  
Securities retained under unconsolidated securitization transactions 84,718   58,507   —  
Right of use assets obtained in exchange for operating lease liabilities 6,238   —   494  
Issuance of common stock in connection with settlement of contingent consideration liability —   —   13,674  

The accompanying notes are an integral part of these consolidated financial statements.
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AFFIRM HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.    Business Description

Affirm Holdings, Inc. (“Affirm,” the “Company,” “we,” “us,” or “our”), headquartered in San Francisco, California, provides consumers with a simpler, more transparent, and flexible alternative to traditional payment options. Our mission is to deliver honest financial products that improve lives. Through our next-generation commerce platform, agreements with originating banks, and capital markets partners, we enable consumers to confidently pay for a purchase over time. When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model, and once approved, the consumer selects their preferred repayment option. Loans are directly originated or funded and issued by our originating bank partners.

Merchants partner with us to transform the consumer shopping experience and to acquire and convert consumers more effectively through our frictionless point-of-sale payment solutions. Consumers get the flexibility to buy now and make simple regular payments for their purchases and merchants see increased average order value, repeat purchase rates, and an overall more satisfied consumer base. Unlike legacy payment options and our competitors’ product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will owe — no hidden fees, no deferred interest, no penalties.

On June 26, 2025, the Company filed a certificate of conversion with the Secretary of State of the State of Delaware and filed articles of conversion and articles of incorporation with the Secretary of State of the State of Nevada, which as of July 1, 2025, effected a change in our jurisdiction of incorporation from Delaware to Nevada (the “Reincorporation”).

2.    Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

Our financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and variable interest entities (“VIEs”), in which we have a controlling financial interest. These include various business trust entities and limited partnerships established to enter into warehouse credit agreements with certain lenders for funding debt facilities and certain asset-backed securitization transactions. All intercompany accounts and transactions have been eliminated in consolidation. Within the consolidated financial statements and tables presented in the accompanying notes, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes.

Our VIE variable interests arise from contractual, ownership, or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets. We consolidate a VIE when we are deemed to be the primary beneficiary. We assess whether or not we are the primary beneficiary of a VIE on an ongoing basis.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for credit losses, capitalized internal-use software development costs, valuation allowance for deferred tax assets, loss on loan purchase commitment, discount on directly originated loans, the evaluation for impairment of intangible assets and goodwill, the fair value of available for sale debt securities
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including retained interests in our securitization trusts and residual interest in structured transactions, the fair value of risk sharing arrangements, and stock-based compensation. We base our estimates on historical experience, current events, and other factors we believe to be reasonable under the circumstances. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results will be materially affected.

These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ materially from those estimates.

Business Combination

We use the acquisition method of accounting for business combination transactions, and, accordingly, recognize the fair values of assets acquired and liabilities assumed in our consolidated financial statements. Transaction costs related to the acquisition of the acquired company are expensed as incurred. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date.

Cash and Cash Equivalents

Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions and short term highly liquid marketable securities, including money market funds, government and agency securities, and other corporate securities purchased with an original maturity of three months or less.

Restricted Cash

Restricted cash consists primarily of: (i) deposits restricted by standby letters of credit for office leases; (ii) funds held in accounts as collateral for our originating bank partners; (iii) servicing funds held in accounts contractually restricted by agreements with warehouse credit facilities, securitization trusts, and third-party loan owners; and (iv) pledged cash collateral requirements for certain derivative agreements. Our ability to withdraw funds is restricted by contractual provisions under the applicable agreements.

Securities Available for Sale

We hold certain investments in marketable debt securities securitization notes receivable and certificates in unconsolidated securitization trusts, and residual interests in structured transactions which are accounted for under ASC Topic 320, “Investments - Debt Securities” (“ASC 320”). We have classified these investments as available for sale, as defined within ASC 320. These investments are held at fair value with changes in fair value recorded in unrealized gain (loss) on securities available for sale, net within other comprehensive income (loss) , excluding the portion relating to any credit loss. As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline in fair value which management identifies as a credit loss will be recognized as an allowance for credit losses through other income (expense), net. To the extent management intends to sell or may be required to sell a security in an unrealized loss position, we 1) reverse any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and 2) write-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through other income (expense), net.

Interest income for available for sale securities is recorded within other income (expense), net. We also applied the interest accrual guidance in ASC Topic 325, “Investments - Other” (“ASC 325”) relating to beneficial interests for our investments in securitization notes receivable and certificates in unconsolidated securitization trusts and residual interests in structured transactions. Accordingly, we recognize interest income each period based on the effective interest rate calculated using expected cash flows. Changes in the timing of expected cash flows are
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accounted for prospectively through an adjustment to interest income. From time to time, depending on our expectation regarding timing of expected cash flows from the investments, we may elect to place certain investments on non-accrual status, where any interest payment received is recorded as a direct reduction of the investment under the cost recovery method.

Available for sale securities initially purchased with less than 90 days until maturity with quoted transaction prices in an active market are classified as cash and cash equivalents.

Loans Held for Investment

We either originate loans directly or purchase our loans from our originating bank partners pursuant to the terms outlined in the respective executed loan sale program agreements between us and our bank partners. Loan receivables that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are classified as held for investment and are reported at amortized cost, which includes unpaid principal balances, any related premiums including fees paid to our originating bank partners and discounts due to loss on loan purchase commitment for bank partner loans with a fair value below the purchase price, discounts due to loss on directly originated loans with a fair value below loan par at origination, where applicable, adjusted for any charge-offs. The amortized cost is adjusted for the allowance for credit losses within loans held for investment, net.

Loans Held for Sale

We sell certain loans to third-party loan buyers and securitization trusts. At origination a loan is classified as held for sale when the loan is identified as for sale to a third-party loan buyer or to be sold to a securitization trust that is anticipated to be off-balance sheet. Loans classified as held for sale are recorded at the lower of amortized cost or fair value. A loan that is initially designated as held for sale or held for investment may be reclassified when our intent for that loan changes. When a loan held for investment is reclassified to held for sale and reported at fair value, any allowance for the credit loss related to that loan is released and any fair value adjustment to record the loan at the lower of amortized cost or fair value is recorded. Our loans designated as held for sale are generally sold within one to three days of the balance sheet date. Fair value adjustments were not material for loans designated as held for sale as of June 30, 2025 and June 30, 2024.

Transfers of Financial Assets

We account for loan sales in accordance with ASC 860, “Transfers and Servicing” (“ASC 860”) which states that a transfer of financial assets, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale if all of the following conditions are met:

a. The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors;
b. The transferee or beneficial interest holders have the right to pledge or exchange the transferred financial assets; and
c. The transferor does not maintain effective control of the transferred assets.

When the requirements for sale accounting are met, we record the gain or loss on the sale of a loan at the sale date in an amount equal to the proceeds received less the carrying value of the loan, adjusted for initial recognition of assets obtained and liabilities incurred at the date of sale.

Upon the sale of a loan to a third-party loan buyer or unconsolidated securitization trust in which we retain servicing rights, we may recognize a servicing asset or liability. A servicing asset or liability arises when our contractual servicing fee with a counterparty differs from the adequate compensation rate that would be required by a third-party to service the same portfolio of assets, as defined by ASC 860. Servicing assets and liabilities are measured and recorded at fair value and are presented as a component of other assets or accrued expenses and other liabilities, respectively. The recognition of a servicing asset results in a corresponding increase to gain on sales of loans. The recognition of a servicing liability results in a corresponding decrease to gain on sales of loans. The
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servicing rights are remeasured at fair value each period, with the subsequent adjustment recognized in servicing income .

In connection with the sale of a loan to a third-party loan buyer or unconsolidated securitization trust we may also recognize a recourse liability in accordance with ASC 460, “Guarantees” (“ASC 460”) as in certain circumstances we may become required to re-purchase loans from third-party investors due to breaches in representations and warranties. The recognition of a recourse liability results in a corresponding decrease to gain on sales of loans. The recourse liability is amortized over the loan term and remeasured each period based on the outstanding loan balance and changes in our expectation of future repurchase obligations. Subsequent remeasurement of the recourse liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss).

In addition, we may recognize a risk share asset or liability in accordance with ASC 860 in certain arrangements with a third-party loan buyer to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold. The recognition of a risk share asset results in a corresponding increase to gain on sale of loans. The recognition of a risk share liability results in a corresponding decrease to gain on sales of loans. The risk share asset and liability are measured at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” and remeasured each period based on the changes in inputs and assumptions for our expectation of future obligations. Subsequent remeasurement of the risk share asset and liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss).

Allowance for Credit Losses on Loans Held for Investment

The allowance for credit losses on loans held for investment is determined based on management’s current estimate of expected credit losses over the remaining contractual term, historical credit losses, consumer payment trends, estimates of recoveries, and future expectations on individual loans as of each balance sheet date. We immediately recognize an allowance for expected credit losses upon the origination of a loan. Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented within our consolidated statements of operations and comprehensive income (loss). We have made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is reversed.

In estimating the allowance for credit losses, management utilizes a migration analysis of delinquent and current loan receivables. Migration analysis is a technique used to estimate the likelihood that a loan receivable will progress through various stages of delinquency and to charge-off. The analysis focuses on the pertinent factors underlying the quality of the loan portfolio. These factors include historical performance, the age of the receivable balance, seasonality, customer credit-worthiness, changes in the size and composition of the loan portfolio, delinquency levels, bankruptcy filings and actual credit loss experience. We also take into consideration certain qualitative factors where we adjust our quantitative baseline using our best judgment to consider the inherent uncertainty regarding future economic conditions and consumer loan performance. For example, the Company considers the impact of current economic factors at the reporting date that did not exist over the period from which historical experience was used. As of June 30, 2025, we have considered the impact of Federal Reserve monetary policy, labor market trends, tariffs and inflation.

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the allowance for credit losses. Loans are charged-off in accordance with our charge-off policy, as the contractual principal becomes 120 days past due or meets other charge-off policy requirements. Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses. Refer to Note 4. Loans Held for Investment and Allowance for Credit Losses for more information.

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Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, affiliate network partners and servicing fees due from third-party loan owners. For each of these groups, we evaluate accounts receivable to determine management’s current estimate of expected credit losses based on historical experience and future expectations and record an allowance for credit losses. Our allowance for credit losses with respect to accounts receivable was $ 18.8 million and $ 14.9 million as of June 30, 2025 and June 30, 2024, respectively.

Property, Equipment and Software, net

Property, equipment and software consist of computer and office equipment, capitalized internal-use developed software and website development costs and leasehold improvements. Property, equipment and software is stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful lives of the assets, which range from three to seven years . Leasehold improvements are depreciated over the shorter of the improvement’s estimated useful life or the remaining lease term.

We capitalize costs to develop internally developed software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software or website will function and be used as intended. Capitalized internal-use software costs primarily include salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to external consultants. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which range from three to five years . Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades. Capitalized internally developed software costs are included in property, equipment and software, and amortization expense is included in technology and data analytics expense within the consolidated statements of operations and comprehensive income (loss).

Property, equipment and software is tested for impairment when there is an indication that the carrying value of the asset group it belongs to may not be recoverable. This would occur if the undiscounted cash flows estimated to be generated by an asset group are less than its carrying value. When an asset group is determined not to be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset group over its respective fair value and recorded in the period the determination is made.

Goodwill and Intangible Assets

We recognize the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date as goodwill. Goodwill is not amortized but is reviewed for impairment annually and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value.

Identifiable intangible assets include developed technology, merchant relationships, assembled workforce, and trade names resulting from acquisitions, including asset acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis. Acquired intangible assets are presented net of accumulated amortization within the consolidated balance sheets. We review the carrying amounts of intangible assets for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. We measure the
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recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization.

Leases

We determine whether an arrangement is a lease for accounting purposes at contract inception. For operating leases, we record a right-of-use asset (“ROU”) within other assets in our consolidated balance sheets, which represents our right to use an underlying asset for the lease term. A corresponding lease liability, which represents our obligation to make lease payments arising from the lease, is recorded in accrued expenses and other liabilities in our consolidated balance sheets.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To discount the lease payments, we use an incremental borrowing rate derived from a corporate yield curve corresponding with the lease term using information available on the commencement date. We have the option to renew or extend our leases. We include these periods in the lease term when a decision has been made to exercise the option. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

We have elected the practical expedient allowing the combination of lease and non-lease components by class of underlying asset. We have also elected the short-term lease exception and will not recognize right-of-use assets or lease liabilities for qualifying leases with a term of less than 12 months from lease commencement.

Equity Securities Held at Cost

Equity securities held at cost which do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “measurement alternative”).

Gains and losses on the investment due to observable price changes in orderly transaction for an identical or similar investment of the same issuer or impairment, if any, are recognized in other (expense) income, net within our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition.

Funding Debt and Debt Issuance Costs

To finance loans we originate directly or that we purchase from our originating bank partners, we borrow from various lenders through collateralized funding arrangements, which include our warehouse and variable funding note credit facilities secured by pledged loans, and sale and repurchase agreements secured by pledging certain retained interests in our off-balance sheet securitizations. These borrowings are carried at amortized cost. Costs incurred in connection with borrowings, such as banker fees, commitment fees and legal fees, are classified as deferred debt issuance costs. We defer these costs and amortize them on a straight-line basis over the expected term of the debt. Interest payments and amortization of debt issuance costs incurred on funding debt is presented as funding costs within the consolidated statements of operations and comprehensive income (loss). Unamortized debt issuance costs are presented as a reduction of the associated debt.

Notes Issued by Securitization Trusts

In connection with our asset-backed securitization program, we sponsor and establish trusts (deemed to be VIEs) to ultimately purchase loans facilitated by our platform. Where we consolidate the securitization trusts, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts within the consolidated balance sheets. We defer and
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amortize note issuance costs, including banker fees, legal fees and other professional service fees, for consolidated securitization trusts on a straight-line basis over the expected life of the notes. Interest payments and amortization of note issuance costs incurred is presented as funding costs within the consolidated statements of operations and comprehensive income (loss). Unamortized note issuance costs are presented as a reduction of the associated notes.

Income Taxes

Income taxes are accounted for using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as an income tax expense (benefit) in the period that includes the enactment date.

Valuation allowances are provided when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex federal, state, and foreign tax laws and regulations, and positions taken in our tax returns may be subject to challenge by the taxing authorities upon examination. In accordance with applicable accounting guidance, uncertain tax positions are recognized in the financial statements only when it is more likely than not that the positions will be sustained upon examination by the tax authorities, assuming full knowledge of the position and all relevant facts. Interest and penalties, if any, on income tax uncertainties are classified within income tax expense in the income statement.

Fair Value of Assets and Liabilities

ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that use, as inputs, observable market-based parameters to the greatest extent possible.

Additionally, ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

• Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

• Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means.

• Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using
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discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Revenue Recognition

Our revenue consists of five components: merchant network revenue, card network revenue, interest income, gain on sale of loans and servicing income. Refer to Note 3.  Revenue for additional information.

Loss on Loan Purchase Commitment

We purchase certain loans from our originating bank partners that are processed through our platform that our originating bank partner puts back to us. Under the terms of the agreements with our originating bank partners, we are generally required to pay the principal amount plus accrued interest for such loans and fees. In certain instances, our originating bank partners may originate loans with zero or below market interest rates that we are required to purchase. In these instances, we may be required to purchase the loan for a price in excess of the fair market value of such loans, which results in a loss. These losses are recognized as loss on loan purchase commitment within our consolidated statements of operations and comprehensive income (loss). These costs are incurred on a per loan basis.

Due to the nature of this arrangement with our originating bank partners, we recognize a net liability for this commitment when the merchant confirms the transaction. This liability is recorded at fair value, which is determined by the difference between the estimated fair value of the loan and the anticipated purchase price. Upon purchase, the liability is included in the amortized cost basis of the purchased loan as a discount, which is amortized into interest income over the life of the loan.

Platform Partners

We have agreements with third-party platform partners through which we obtain access to certain merchant relationships and utilize them as a means of integrating Affirm services. As we maintain separate agreements with platform partners and merchants, the existence of a platform partner does not typically impact our Principal vs. Agent assessment in relation to the Merchant, where we have concluded that we are the Principal to the merchant customer in providing the facilitation of credit services. We make payments to platform partners for each eligible transaction processed through the platform integration. Payments made to platform partners are recorded in processing and servicing expense as incurred within our consolidated statements of operations and comprehensive income (loss).

Sales and Marketing Costs

Sales and marketing costs include the expense related to warrants and other share-based payments granted to our enterprise partners. Refer to Note 6. Balance Sheet Components for more information on these arrangements. Sales and marketing costs also include salaries and personnel-related costs, costs of marketing and promotional activities, and certain losses on loan origination for loans originated by our wholly-owned subsidiaries. A portion of these costs related to general marketing and promotional activities are considered advertising costs within the meaning of ASC Topic 720, “Other Expenses” (“ASC 720”), and are expensed as incurred. Advertising costs totaled $ 30.8  million, $ 19.2 million and $ 22.6 million for the years ended June 30, 2025, 2024, and 2023, respectively.

Derivative Instruments

We use derivative financial instruments (“derivatives”) to manage exposure to variable interest rates. Our primary objective in holding derivatives is to reduce the volatility in cash flows associated with our funding activities arising from changes in interest rates. We do not employ derivatives for trading or speculative purposes.

We use a combination of interest rate cap agreements and interest rate swaps to manage interest costs and the risk associated with variable interest rates. ASC Topic 815 “Derivatives and Hedging” (“ASC 815”) requires that
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an entity recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value. In accordance with ASC 815, we designate certain derivative instruments as cash flow hedges, while others are not designated as hedges. Certain of our derivative agreements provide for netting arrangements for contracts that settle with the same counterparty, however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes. As such, the fair values are presented gross within other assets and accrued expenses and other liabilities . Offsetting collateral received by or paid to the counterparty is presented gross within accrued expenses and other liabilities or other assets, as applicable, within the consolidated balance sheet. Cash flows associated with our derivative instruments are reported within cash flows from operating activities in the consolidated statements of cash flows.

Cash Flow Hedges

We have interest rate swaps designated as cash flow hedges in order to mitigate our exposure to changes in interest rates related to our funding activities. Swaps that qualify as cash flow hedges are documented and designated as such when we enter into the contracts. In accordance with our risk management policies, we structure our hedges with terms similar to that of the item being hedged. At inception of the hedge accounting relationship and on a quarterly basis, we formally assess whether derivatives designated as cash flow hedges are highly effective in offsetting changes to the forecasted cash flows of the hedged items.

If the cash flow hedges are deemed to be highly effective, the gain or loss on the cash flow hedges are recorded within other comprehensive income (loss) (“OCI”) and reclassified into earnings when the hedged cash flows are recognized in funding costs within the consolidated statements of operations and comprehensive income (loss). The amount that is reclassified into earnings is presented within the consolidated statements of operations and comprehensive income (loss) within funding costs, the same line item in which the hedged transaction is recognized.

Derivatives Not Designated as Hedges

We have interest rate caps and interest rate swaps that are not designated as hedging instruments. We enter into these contracts to manage interest rate risk. Any changes in the fair value of these financial instruments are reflected in other (expense) income, net, within the consolidated statements of operations and comprehensive income (loss).

Refer to Note 12. Derivative Financial Instruments for additional information on our derivative assets and liabilities.

Stock-Based Compensation

We account for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of U.S. GAAP, which requires compensation cost for the grant date fair value of stock-based awards to be recognized over the requisite service period. We have elected to estimate the expected forfeiture rate for service-based awards and only recognize expense for those stock-based awards expected to vest. We estimate the forfeiture rate based on our historical experience with stock-based awards that are granted and forfeited prior to vesting.

The fair value of stock-based awards, granted or modified, is determined on the grant date (or the modification date, if applicable) at fair value, using appropriate valuation techniques.

Service-Based Awards
    
We record stock-based compensation expense for service-based stock options and restricted stock units (“RSUs”) on a straight-line basis over the requisite service period, which is generally one to four years . The fair value of each RSU is equal to the closing stock price on the date of grant. The fair value of each option on the date of grant is determined using the Black Scholes-Merton option pricing model using the single-option award approach. We estimate volatility using a weighted average of our historical volatility and the historical volatility of selected
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comparable publicly-traded companies due to the limited time period of historical market data for our common stock. The risk-free interest rate is determined using a U.S. Treasury rate for the period that coincides with the expected term of the award. We use the simplified method to determine an estimate of the expected term of an employee stock option.

We account for stock-based awards to non-employees, including consultants, in accordance with ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), in which equity-classified awards are measured at the grant date fair value and recognized as expense in the period and manner as though we had paid cash in exchange for goods or services instead of granting a stock-based award.

Performance-Based Awards

Prior to the IPO, we granted RSUs that were subject to two vesting conditions: a service-based vesting condition (i.e., employment over a period of time) and a performance-based vesting condition (i.e., a liquidity event in the form of either certain change in control transactions or an initial public offering). The performance-based condition was met upon the IPO. We record stock-based compensation expense for these awards on an accelerated attribution method over the requisite service period, which is generally four years .

Upon exercise or vesting of a stock-based award, the tax effect of the difference, if any, between the cumulative compensation cost recognized for financial statement purposes and the deduction for income tax purposes, will be recognized as an income tax expense or benefit in the consolidated statement of operations and comprehensive income (loss).

Market-Based Awards

We have granted stock option awards with service-based, performance-based, and market-based vesting conditions. We determined the grant date fair value of these awards by utilizing a Monte Carlo simulation model that incorporates the probability of achievement of the market-based conditions. The Monte Carlo simulation also incorporates assumptions including expected stock price volatility, expected term, and risk-free interest rates. We estimated the volatility of common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies in our industry group. We estimated the expected term of the award based on various exercise scenarios. The risk-free interest rate was determined using a U.S. Treasury rate for the period that coincides with the expected term of the award.

The grant-date fair value of market-based equity awards is recorded as stock-based compensation expense on an accelerated attribution method over the requisite service period if the performance-based conditions are considered probable of being satisfied.

Foreign Currency

We have wholly-owned foreign subsidiaries that use the local currency of their respective country as their functional currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Revenue, expenses, and gains or losses of these subsidiaries are translated into U.S. dollars using average exchange rates for each period. Gains and losses resulting from these translations are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as other income (expense), net, in our consolidated statements of operations and comprehensive income (loss).

Basic and Diluted Net Income (Loss) per Common Share

We calculate net income or loss per share using the two-class method. The two-class method requires income available to common stockholders for the period to be allocated between each class of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had
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been distributed. Our convertible senior notes represent participating securities, and net income will be allocated to these securities in any periods during which a portion of the earnings is required to be attributed to the notes.

We calculate basic net income (loss) per share attributable to common stockholders for Class A and Class B common stock by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding in each class for the period.

We calculate diluted net income per share attributable to common stockholders by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding in each class, after giving consideration to the dilutive effect of our stock options, restricted stock units, employee stock purchase plan shares, convertible debt and common stock warrants that are outstanding during the period. In periods where we have generated a net loss, the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive.

Recently Adopted Accounting Standards

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The new guidance modifies the existing annual and interim segment reporting disclosures. The purpose of the update is to enable investors to better understand an entity’s overall performance and assess potential future cash flows, primarily through enhanced disclosure requirements on significant segment expenses. The ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company adopted the new standard effective June 30, 2025. Refer to Note 19.   Segments and Geographical Information for the enhanced disclosures.

Recent Accounting Pronouncements Not Yet Adopted

Income Taxes

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The new guidance is expected to increase transparency and usefulness of income tax disclosures through improvements to the rate reconciliation, income taxes paid, and other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2024 and should be applied on a prospective basis, although retrospective application is permitted. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

Reporting Comprehensive Income

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” . Subsequent to the issuance of ASU 2024-03, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The new guidance requires disclosure, in the notes to the financial statements, specified information about certain income statement costs and expenses for each interim and annual reporting period. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, and should be applied on a prospective basis, although retrospective application is permitted. Early adoption is permitted. We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

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Debt with Conversion and Other Options

In November 2024, the FASB issued ASU 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” . The new guidance clarifies the requirements for determining whether certain settlements of convertible debt should be accounted for as an induced conversion. The ASU is effective for fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods, and should be applied on a prospective basis, although retrospective application is permitted. Early adoption is permitted. We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

3.    Revenue

The following table presents our revenue disaggregated by revenue source (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Merchant network revenue $ 882,658   674,607   507,600  
Card network revenue 231,308   151,401   119,338  
Interest income 1,608,221   1,204,355   685,217  
Gain on sales of loans 381,622   197,153   188,341  
Servicing income 120,602   95,483   87,489  
Total revenue, net $ 3,224,412   $ 2,322,999   $ 1,587,985  

Merchant Network Revenue — Revenue from Contracts with Customers

Merchant network revenue primarily consists of merchant fees. Merchant partners (or integrated merchants) are generally charged a fee based on gross merchandise volume (“GMV”) processed through the Affirm platform. The fees vary depending on the individual arrangement between us and each merchant and on the terms of the product offering. The fee is recognized at the point in time the merchant successfully confirms the transaction, which is when the terms of the executed merchant agreement are fulfilled.

Our contracts with merchants are defined at the transaction level and do not extend beyond the service already provided (i.e., each transaction represents a separate contract). The fees collected from merchants for each transaction are determined as a percentage of the value of the goods purchased by the consumer from merchants and consider a number of factors including the end consumer’s credit risk and financing term. We do not have any capitalized contract costs, and do not carry any material contract balances.

Our service comprises a single performance obligation to merchants to facilitate transactions with consumers. From time to time, we offer merchants incentives to promote our platform to their customers, such as fee reductions or rebates. These amounts are recorded as a reduction to merchant network revenue.

We may originate certain loans via our wholly-owned subsidiaries, with zero or below market interest rates. In these instances, the par value of the loans originated is in excess of the fair market value of such loans, resulting in a loss on loan origination, which we record as a reduction to merchant network revenue. In certain cases, the losses incurred on loans originated for a merchant may exceed the total merchant network revenue earned on those loans. We record the excess loss amounts as a sales and marketing expense.

A portion of merchant network revenue relates to affiliate network revenue, which is generated when a user makes a purchase on a merchant’s website after being directed from an advertisement on Affirm’s website or mobile application. We earn a fixed placement fee and/or commission as a percentage of the associated sale. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the sale occurs. For the years ended June 30, 2025, 2024, and 2023 affiliate network revenue was $ 123.4 million, $ 95.8 million, and $ 68.7 million, respectively.
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For the years ended June 30, 2025, 2024, and 2023, there were no merchants that exceeded 10% of total revenue.

Card Network Revenue — Revenue from Contracts with Customers

We have agreements with card-issuing partners to facilitate the issuance of physical and one-time-use virtual cards to be used by consumers at checkout. Prior to purchase, consumers can apply at Affirm.com or via the Affirm App and, upon approval, use a physical or virtual card to complete their purchase online or in-store. Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full or pay later, by using a unique post-purchase feature that allows them to instantly apply for an installment loan for any eligible debit transaction. Where applicable, our originating bank partner, or wholly-owned subsidiaries, then originates a loan to the consumer after the transaction is confirmed by the merchant. The merchant is charged interchange fees for each successful card transaction, and a portion of this revenue is shared with us by our card-issuing partners.

Merchants may also elect to utilize our agreement with card-issuing partners as a means of integrating Affirm services. Similarly, for these arrangements with integrated merchants, the merchant is charged interchange fees for each successful card transaction and a portion of this revenue is shared with us. From time to time, we offer certain integrated merchants promotional incentives to promote our platform to their customers, such as rebates of interchange fees incurred by the merchant. These amounts are recorded as a reduction of card network revenue.

Our contracts with our card-issuing partners are defined at the transaction level and do not extend beyond the service already provided. The revenue collected from card-issuing partners for each transaction are determined as a percentage of the interchange fees charged on transactions facilitated on the payment processor network, and revenue is recognized at the point in time the transaction is completed successfully. The amounts collected are presented in revenue, net of associated transaction-related processing fees paid to our card-issuing partners. We have concluded that the revenue collected does not give rise to a future material right because the pricing of each transaction does not depend on the volume of prior successful transactions. We do not have any capitalized contract costs, and do not carry any material contract balances.

Our service comprises a single performance obligation to the card-issuing partner to facilitate transactions with consumers.

A portion of card network revenue relates to incentive payments from card network partners, which we are eligible to receive for reaching certain cumulative volume targets on program cards issued by our card-issuing partners. We earn incentive revenue as a percentage of each associated transaction and estimate the applicable percentage based on observed cumulative volume on program cards. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the transaction is completed successfully.

Interest Income

Interest income consisted of the following components (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Contractual interest income on unpaid principal balance (1)
$ 1,423,439   1,043,019   561,192  
Amortization of discount on loans 254,964   204,654   158,703  
Amortization of premiums on loans ( 21,165 ) ( 16,945 ) ( 17,628 )
Interest receivable charged-off, net of recoveries (2)
( 49,016 ) ( 26,373 ) ( 17,050 )
Total interest income $ 1,608,221   $ 1,204,355   $ 685,217  

(1) Contractual interest income on unpaid principal balance, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 375.9 million and $ 369.7 million for the
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same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.
(2) Interest receivable charged-off, net of recoveries, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 25.8 million and $ 27.5 million for the same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.

We accrue interest income using the effective interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan. Interest income on a loan is accrued daily, based on the finance charge disclosed to the consumer, over the term of the loan based upon the principal outstanding. The accrual of interest on a loan is suspended if a formal dispute with the consumer involving either Affirm or the merchant of record is opened, or a loan is 120 days past due. Upon the resolution of a dispute with the consumer, the accrual of interest is resumed, and any interest that would have been earned during the disputed period is retroactively accrued. As of June 30, 2025, 2024, and 2023, the balance of loans held for investment on non-accrual status was $ 6.2 million, $ 2.6 million, and $ 1.8 million, respectively.

The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements. Past due status is based on the contractual terms of the loans. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is charged-off.

Gain on Sales of Loans

We sell certain loans we originate or purchase from our originating bank partners directly to third-party investors or to securitizations. We recognize a gain or loss on sale of loans sold to third parties or to unconsolidated securitizations by calculating the difference between the proceeds received and the carrying value of the loan. This amount is adjusted for the initial recognition of any assets or liabilities incurred upon sale. These generally include a net servicing asset or liability in connection with our ongoing obligation to continue to service the loans and a liability in connection with our loan repurchase obligation for loans that do not meet certain contractual requirements and such information about the loan was unknown at the time of sale.

Additionally, we recognize a risk sharing asset or liability in certain arrangements where payments are made or received based on the actual versus expected loan performance, as contractually agreed upon with the third party.

Refer to Note 10. Securitization and Variable Interest Entities for further discussion on transfers of loan receivables and Note 13. Fair Value of Financial Assets and Liabilities for further discussion of risk sharing arrangements.

Servicing Income

Servicing income includes contractual fees specified in our servicing agreements with third-party loan owners and unconsolidated securitizations that are earned from providing professional services to manage loan portfolios on their behalf. The servicing fee is calculated on a daily basis by multiplying a set fee percentage (as outlined in the executed agreements with third-party loan owners) by the outstanding loan principal balance. Servicing income also includes fair value adjustments for servicing assets and servicing liabilities.

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4.    Loans Held for Investment and Allowance for Credit Losses

     Loans held for investment consisted of the following (in thousands):

June 30, 2025 June 30, 2024
Unpaid principal balance $ 7,050,447   $ 5,697,965  
Accrued interest receivable 67,953   62,796  
Premiums on loans held for investment 9,818   7,822  
Less: Discount due to loss on loan purchase commitment ( 75,124 ) ( 63,682 )
Less: Discount due to loss on directly originated loans ( 27,559 ) ( 34,829 )
Less: Fair value adjustment on loans acquired through business combination ( 1 ) ( 16 )
Total loans held for investment $ 7,025,534   $ 5,670,056  

Loans held for investment includes loans originated through our originating bank partners and directly originated loans. Loans that are underwritten using our technology platform and originated by our originating bank partners are later purchased by us. We purchased loans from our originating bank partners in the amount of $ 30.0 billion, $ 21.5 billion, and $ 16.2 billion for the years ended June 30, 2025, 2024, and 2023, respectively. We directly originated $ 6.3 billion, $ 4.5 billion, and $ 3.7 billion of loans for the June 30, 2025, 2024, and 2023, respectively.

Our portfolio consists of interest bearing and non-interest bearing consumer loans with original term lengths of up to sixty months originated in markets including the U.S., U.K., and Canada, with the majority of loans originated within the U.S. While we view our loan portfolio as a single product segment, unsecured consumer loans, we consider factors such as country of origin, loan product, origination channel, merchant and various borrower characteristics to predict future losses.

We closely monitor credit quality for our loan receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting, where loan applications are assessed against the credit underwriting policy and procedures for our directly originated loans and originating bank partner loans, and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal historical experience, including the consumer’s prior repayment history on our platform as well as other measures. We combine these factors to establish a proprietary score as a credit quality indicator.

Our proprietary score (“ITACs”) is assigned to most loans facilitated through our technology platform, ranging from zero to 100 , with 100 representing the highest credit quality and therefore the lowest likelihood of loss. The ITACs model analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to: basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes. When a consumer passes both fraud and credit policy checks, the application is assigned an ITACs score. ITACs is also used for portfolio performance monitoring. Our credit risk team closely tracks the distribution of ITACs at the portfolio level, as well as ITACs at the individual loan level to monitor for signs of a changing credit profile within the portfolio. Repayment performance within each ITACs band is also monitored to support both the integrity of the risk scoring models and to measure possible changes in consumer behavior amongst various credit tiers.

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The following tables present an analysis of the credit quality, by ITACs score, of the amortized cost basis excluding accrued interest receivable, by fiscal year of origination on loans held for investment and loans held for sale as of June 30, 2025 and June 30, 2024 (in thousands):

June 30, 2025
Amortized Costs Basis by Fiscal Year of Origination
2025 2024 2023 2022 2021 Prior Total
96+ $ 4,481,684   $ 257,280   $ 43,716   $ 3,328   $ 61   $ 10   $ 4,786,079  
94 – 96 1,795,298   51,201   945   145   7   5   1,847,601  
90 – 94 248,911   7,357   271   66   4   1   256,610  
<90 52,163   950   2   25   2   1   53,143  
No score (1)
2,169   2,892   8,142   850   77   19   14,149  
Total amortized cost basis $ 6,580,225   $ 319,680   $ 53,076   $ 4,414   $ 151   $ 36   $ 6,957,582  

June 30, 2024
Amortized Costs Basis by Fiscal Year of Origination
2024 2023 2022 2021 2020 Prior Total
96+ $ 3,438,135   $ 183,210   $ 10,026   $ 186   $ 10   $ 5   $ 3,631,572  
94 – 96 1,509,125   29,227   463   8   2   4   1,538,829  
90 – 94 287,499   3,575   263   3   1   1   291,342  
<90 45,009   46   309   2   1   —   45,367  
No score (1)
20,680   66,680   12,391   217   94   124   100,186  
Total amortized cost basis $ 5,300,448   $ 282,738   $ 23,452   $ 416   $ 108   $ 134   $ 5,607,296  

(1) This balance represents loan receivables without sufficient data available for use by the Affirm scoring methodology including new markets and certain developing products.   

The following table presents net charge-offs by fiscal year of origination as of year ended June 30, 2025 (in thousands):

June 30, 2025
Net Charge-offs by Fiscal Year of Origination
2025 2024 2023 2022 2021 Prior Total
Current period charge-offs ( 205,624 ) ( 324,013 ) ( 20,444 ) ( 1,576 ) ( 237 ) ( 178 ) ( 552,072 )
Current period recoveries 7,832   23,229   13,051   5,644   1,140   384   51,280  
Current period net charge-offs $ ( 197,792 ) $ ( 300,784 ) $ ( 7,393 ) $ 4,068   $ 903   $ 206   $ ( 500,792 )

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Loan receivables are defined as past due if either the principal or interest have not been received within four calendars days of when they are due in accordance with the agreed upon contractual terms. The following table presents an aging analysis of the amortized cost basis excluding accrued interest receivable of loans held for investment by delinquency status (in thousands):

June 30, 2025 June 30, 2024
Non-delinquent loans $ 6,619,285   $ 5,331,462  
4 – 29 calendar days past due 167,175   134,434  
30 – 59 calendar days past due 66,831   55,021  
60 – 89 calendar days past due 56,554   47,764  
90 – 119 calendar days past due (1)
47,737   38,615  
Total amortized cost basis $ 6,957,582   $ 5,607,296  

(1) Includes $ 47.6  million and $ 38.6 million of loan receivables as of June 30, 2025 and June 30, 2024, respectively, that are 90 days or more past due, but are not on non-accrual status.  

We maintain an allowance for credit losses at a level sufficient to absorb expected credit losses based on evaluating known and inherent risks in our loan portfolio. The allowance for credit losses reflects our estimate of expected lifetime credit losses, which consider the remaining contractual term, historical credit losses, consumer payment trends, estimated recoveries, and future payment expectations as of each balance sheet date. Adjustments to the allowance for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented within our consolidated statements of operations and comprehensive income (loss). When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged off against the allowance for credit losses. Loans are charged off in accordance with our charge-off policy, as the contractual principal becomes 120 days past due. Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses.

The following table details activity in the allowance for credit losses, including charge-offs, recoveries and provision for loan losses (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Balance at beginning of period $ 309,097   $ 204,531   $ 155,392  
Provision for credit losses 588,624   439,581   318,188  
Charge-offs ( 552,072 ) ( 365,711 ) ( 300,058 )
Recoveries of charged-off receivables 51,280   30,696   31,009  
Balance at end of period $ 396,929   $ 309,097   $ 204,531  

Loan Modifications for Borrowers Experiencing Financial Difficulty

We have a loan modification program for borrowers experiencing financial difficulty if certain eligibility criteria are met. A loan is evaluated for modification program eligibility when a borrower self-reports financial hardship, either when a borrower contacts us directly or upon making contact with the borrower to determine eligibility when a loan payment is past due. The objectives of the loan modification program are to offer borrowers assistance during times of financial stress, increase collections, and minimize losses.

We have two primary loan modification strategies: payment deferrals and loan re-amortization. A payment deferral provides the borrower relief by extending the due date for the next payment due. While a borrower may obtain more than one deferral, the total deferral period may not exceed three months . A loan re-amortization provides the borrower relief by lowering monthly payments through extending the term length of the loan; however, the total remaining term may not exceed twenty-four months . In addition, the total interest due from the consumer
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will not exceed the initial total interest due prior to modification, and a loan may not be re-amortized more than once.

The following tables present the amortized cost basis of loans excluding accrued interest receivable that were modified for borrowers experiencing financial difficulty during the years ended June 30, 2025 and 2024, by type of modification (in thousands):

June 30, 2025 June 30, 2024 (1)

Payment deferral $ 11,642   $ 34,641  
Loan re-amortization 225   1,057  
Total $ 11,867   $ 35,698  
% of total loan receivables outstanding 0.17   % 0.64   %

(1) Amounts previously disclosed excluded modifications made to borrowers where the loan was less than 30 days delinquent at the time of modification.

With respect to borrowers who received payment deferrals during the years ended June 30, 2025 and 2024, the length of each deferral period was one month .

With respect to borrowers who received a loan re-amortization during the years ended June 30, 2025 and 2024, the payment amount was reduced by half and the term of the loan was extended between one month and twelve months .

During the modification process, the loans are made current, and payment schedules for these loans are updated according to the modified terms. We closely monitor the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. We hold an allowance for credit losses for modified loans classified as held for investment. Our allowance estimate considers whether a loan has been modified, the delinquency status of the loan on the date of modification, and the increased likelihood that such loan may become delinquent or charge-off in the future.

The following table presents the delinquency status as of June 30, 2025 and June 30, 2024, by amortized cost basis excluding accrued interest receivable, of loan receivables that have been modified within the last 12 months where the borrower was experiencing financial difficulty at the time of modification (in thousands):

June 30, 2025
Payment Deferral Loan Re-amortization Total
Non-delinquent loans $ 7,240   $ 142   $ 7,382  
4 – 29 calendar days past due 1,721   43   1,764  
30 – 59 calendar days past due 959   17   976  
60 – 89 calendar days past due 867   12   879  
90 – 119 calendar days past due 855   11   866  
Total amortized cost basis $ 11,642   $ 225   $ 11,867  

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June 30, 2024 (1)

Payment Deferral Loan Re-amortization Total
Non-delinquent loans $ 19,189   $ 439   $ 19,628  
4 – 29 calendar days past due 5,028   180   5,208  
30 – 59 calendar days past due 2,382   124   2,506  
60 – 89 calendar days past due 4,421   153   4,574  
90 – 119 calendar days past due 3,621   161   3,782  
Total amortized cost basis $ 34,641   $ 1,057   $ 35,698  

(1) Amounts previously disclosed excluded modifications made to borrowers where the loan was less than 30 days delinquent at the time of modification

With respect to modifications during the 12 months preceding June 30, 2025 and June 30, 2024, respectively, where the borrower was experiencing financial difficulty at the time of modification, the amortized cost basis of loans which have been charged off was $ 6.5 million and $ 13.3 million, respectively.

5. Acquisitions

During the years ended June 30, 2025 and 2024, there were no acquisitions accounted for as business combinations and there was one acquisition accounted for during the same period in 2023.

Acquisitions completed during the year ended June 30, 2023

Butter Holdings Ltd

On February 1, 2023, we completed the closing of the transaction contemplated by a share purchase agreement entered into with certain sellers to acquire the entire issued share capital of Butter Holdings Ltd. (“Butter”), a buy now, pay later company based in the United Kingdom. The purchase price was comprised of (i) $ 14.9 million in cash, subject to adjustments in accordance with the purchase agreement, and (ii) $ 1.5 million settlement of subordinated secured notes.

The acquisition date fair value of the consideration transferred for Butter was approximately $ 16.3 million, which consisted of the following (in thousands):

Cash $ 14,863  
Settlement of subordinated secured notes 1,475  
Total acquisition date fair value of the consideration transferred $ 16,337  

The acquisition was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). The acquired identifiable intangible assets have been recorded at their estimated fair values with the excess purchase price assigned to goodwill. The goodwill was primarily attributed to future synergies from integration. The goodwill is not expected to be deductible for income tax purposes.

The following table summarizes the allocation of the consideration paid of approximately $ 16.3 million to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

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Cash and cash equivalents $ 287  
Loans held for investment, net 172  
Accounts receivable, net 11  
Intangible assets 9,243  
Other assets 672  
Total assets acquired 10,385  
Accounts payable 568  
Accrued expenses and other liabilities 2,923  
Total liabilities assumed 3,491  
Net assets acquired 6,894  
Goodwill $ 9,443  
Total purchase price $ 16,337  

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

Fair Value Useful Life (in years)
Lending license $ 9,243   Indefinite

The fair value of the intangible asset was determined by applying the with-and-without method. The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represents Level 3 measurements.

The transaction costs associated with the acquisition were approximately $ 1.8 million for the year ended June 30, 2023, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

6.    Balance Sheet Components

Property, Equipment and Software, net

Property, equipment and software, net consisted of the following (in thousands):

June 30, 2025 June 30, 2024
Internally developed software $ 987,399   $ 630,129  
Leasehold improvements 21,990   21,023  
Computer equipment 9,555   9,827  
Furniture and equipment 9,007   8,913  
Total property, equipment and software, at cost $ 1,027,952   $ 669,892  
Less: Accumulated depreciation and amortization ( 455,315 ) ( 242,206 )
Total property, equipment and software, net $ 572,637   $ 427,686  

Depreciation and amortization expense on property, equipment and software was $ 223.7 million, $ 148.2 million and $ 82.1 million for the years ended June 30, 2025, 2024, and 2023, respectively.

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No impairment losses related to property, equipment and software were recorded during the years ended June 30, 2025, 2024, and 2023.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the years ended June 30, 2025 and 2024 were as follows (in thousands):

Balance as of June 30, 2023 $ 542,571  

Adjustments (1)
( 9,131 )
Balance as of June 30, 2024 $ 533,439  
Adjustments (1)
717  
Balance as of June 30, 2025 $ 534,156  

(1) Adjustments to goodwill during the years ended June 30, 2025 and 2024 primarily pertained to foreign currency translation adjustments.

No impairment losses related to goodwill were recorded during the year ended June 30, 2025. During the year ended June 30, 2024, we recognized goodwill disposal losses of $ 1.0 million included in general and administrative expenses within the consolidated statements of operations and comprehensive income (loss). For the year ended June 30, 2023, no impairment losses related to goodwill were recorded.

Intangible assets consisted of the following (in thousands):

June 30, 2025
Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (in years)
Merchant relationships $ 37,845   $ ( 37,845 ) $ —   0.0
Developed technology 39,443   ( 39,369 ) 74   1.3
Assembled workforce 12,490   ( 12,490 ) —   0.0
Trademarks and domains, definite 1,450   ( 1,355 ) 95   0.6
Trademarks, licenses and domains, indefinite 12,416   —  12,416   Indefinite
Other intangibles 350   —  350   Indefinite
Total intangible assets $ 103,994   $ ( 91,059 ) $ 12,935  

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June 30, 2024
Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (in years)
Merchant relationships $ 37,847   $ ( 36,741 ) $ 1,106   0.1
Developed technology 39,444   ( 39,311 ) 133   0.0
Assembled workforce 12,490   ( 12,490 ) —   0.0
Trademarks and domains, definite 1,450   ( 1,165 ) 285   1.0
Trademarks, licenses and domains, indefinite 11,628   —  11,628   Indefinite
Other intangibles 350   —  350   Indefinite
Total intangible assets $ 103,209   $ ( 89,707 ) $ 13,502  

Amortization expense for intangible assets was $ 1.3 million, $ 20.8 million and $ 52.5 million for the years ended June 30, 2025, 2024 and 2023, respectively. No impairment losses related to intangible assets were recorded during the years ended June 30, 2025, 2024, and 2023.

The expected future amortization expense of these intangible assets as of June 30, 2025 is as follows, by fiscal year (in thousands):

2026 $ 154  
2027 15  
2028 —  
2029 —  
2030 and thereafter —  
Total amortization expense $ 169  

Commercial Agreement Assets

In fiscal year 2022, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). We recognized an asset of $ 133.5 million associated with the portion of the warrants that were fully vested upon grant. The asset was valued based on the fair value of the warrants and represents the probable future economic benefit to be realized over the expected benefit period of four years . For the years ended June 30, 2025, 2024, and 2023, we recognized amortization expense of $ 20.7 million, $ 32.9 million, and $ 41.4 million, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. As of June 30, 2025, the accumulated amortization is $ 121.3 million and the remaining net asset value is $ 12.2 million, which will be recognized over the remaining useful life of 0.6 years. Refer to Note 14. Stockholders’ Equity for further discussion of the warrants.

In fiscal year 2021, we granted warrants in exchange for the opportunity to acquire new merchant partners through a commercial agreement with Shopify Inc. (“Shopify”). We recognized an asset of $ 270.6  million based on the grant-date fair value of the vested warrants. We amortize the asset over the expected benefit period, which was extended from six to nine years during the fiscal year 2025 upon execution of a commercial agreement that superseded and replaced the previous commercial agreement. The benefit period is reevaluated each reporting period. W e recorded amortization expense related to the commercial agreement asset of $ 26.7 million, $ 35.9 million, and $ 35.8 million for the years ended June 30, 2025, 2024, and 2023, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. As of June 30, 2025, the accumulated amortization is $ 225.5 million and the remaining net asset value is $ 45.1 million, which will be recognized over the remaining useful life of 4.0 years.

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Other Assets

     Other assets consisted of the following (in thousands):

June 30, 2025 June 30, 2024
Processing reserves $ 90,826   $ 55,754  
Prepaid expenses 47,027   28,799  
Equity securities held at cost 40,277   37,806  
Risk sharing assets 43,179   33,884  
Prepaid payroll taxes for stock-based compensation 25,188   21,395  
Operating lease right-of-use assets 19,124   21,863  
Foreign deferred tax asset 13,929   21,206  
Other receivables 3,771   18,263  
Derivative instruments 2,644   17,207  
Fixed term deposit —   35,203  
Other assets 9,395   7,960  
Total other assets $ 295,360   $ 299,340  

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

June 30, 2025 June 30, 2024
Accrued expenses $ 72,813   $ 59,613  
Operating lease liability 31,943   39,493  
Collateral held for derivative instruments 2,787   17,643  
Other liabilities 49,729   30,680  
Total accrued expenses and other liabilities $ 157,272   $ 147,429  

7. Leases

We lease office space under operating leases with various expiration dates through 2032. We have the option to renew or extend our leases. Certain lease agreements include the option to terminate the lease with prior written notice ranging from nine months to one year . As of June 30, 2025, we have not considered such provisions in the determination of the lease term, as it is not reasonably certain these options will be exercised. Leases have remaining terms that range from less than one year to seven years .

Several leases require us to obtain standby letters of credit, naming the lessor as a beneficiary. These letters of credit act as security for the faithful performance by us of all terms, covenants and conditions of the lease agreement. We are required to post collateral for the letters of credit in the form of cash or eligible securities. As of June 30, 2025, the collateral totaled $ 4.5 million, which was in the form of securities that have been classified as securities available for sale at fair value in the consolidated balance sheets. As of June 30, 2024, the collateral totaled $ 8.8 million, of which $ 2.0 million was in the form of cash that was classified as restricted cash, and $ 6.8 million was in the form of securities which was classified as securities available for sale at fair value within our consolidated balance sheets.

No impairment charge was incurred related to leases during the fiscal year ended June 30, 2025. During the years ended June 30, 2024 and 2023, we subleased a portion of our leased office space in San Francisco, resulting in
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an impairment charge of $ 0.8 million and $ 1.2 million, respectively, included in general and administrative expense within our consolidated statements of operations and comprehensive income (loss).

Operating lease expense is as follows (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Operating lease expense (1) (2)
$ 11,949   $ 11,549   $ 18,954  

(1) Lease expenses for our short-term leases were immaterial for the years presented.
(2) During the year ended June 30, 2023, we incurred charges of $ 4.7 million, within restructuring and other, within our consolidated statements of operations and comprehensive income (loss), related to a reduction to our ROU lease assets which were attributed to certain leased space we were no longer utilizing for our business operations.

We have subleased a portion of our leased facilities. Sublease income totaled $ 3.8 million, $ 4.6 million, and $ 3.4 million during the years ended June 30, 2025, 2024, and 2023 , respectively .

Lease term and discount rate information are summarized as follows:
June 30, 2025
Weighted average remaining lease term (in years) 4.2
Weighted average discount rate 5.7 %

As of June 30, 2025, future minimum lease payments are as follows (in thousands):

2026 $ 16,575  
2027 4,443  
2028 3,563  
2029 3,618  
2030 3,749  
Thereafter 4,432  
Total lease payments 36,380  
Less imputed interest ( 4,437 )
Present value of total lease liabilities $ 31,943  

8.    Commitments and Contingencies

Loan Repurchase Obligations

Under the normal terms of our whole loan sales to third-party investors, we may become obligated to repurchase loans from investors in certain instances where a breach in representations and warranties is identified. Generally, a breach in representations and warranties could occur where a loan has been identified as subject to verified or suspected fraud, or in cases where a loan was serviced or originated in violation of Affirm’s guidelines. We would only experience a loss if the contractual repurchase price of the loan exceeds the fair value on the repurchase date. As of June 30, 2025, the aggregate outstanding balance of loans held by third-party investors or
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unconsolidated VIEs was $ 7.8 billion, of which we have recorded a repurchase liability of $ 8.7 million within accrued expenses and other liabilities in our consolidated balance sheets.

Legal Proceedings

From time to time, we are subject to legal proceedings and claims in the ordinary course of business. The results of such matters often cannot be predicted with certainty. In accordance with applicable accounting guidance, we establish an accrued liability for legal proceedings and claims when those matters present loss contingencies which are both probable and reasonably estimable.

Kusnier v. Affirm Holdings, Inc.

On December 8, 2022, plaintiff Mark Kusnier filed a putative class action lawsuit against Affirm, Max Levchin, and Michael Linford in the U.S. District Court for the Northern District of California (the “Kusnier action”). On May 5, 2023, plaintiffs Kusnier and Chris Meinsen filed their first amended complaint alleging that the defendants (i) caused Affirm to make materially false and/or misleading statements and/or failed to disclose that Affirm’s BNPL service facilitated excessive consumer debt (including with respect to certain for-profit educational institutions), regulatory arbitrage, and data harvesting; (ii) made false and/or misleading statements about certain public regulatory actions; and (iii) made false and/or misleading statements about whether Affirm’s business model was vulnerable to interest rate changes. On December 20, 2023, the Court granted Affirm’s motion to dismiss the first amended complaint with leave to amend. On January 19, 2024, plaintiffs filed their second amended complaint, which contains only the allegations from the first amended complaint relating to false and/or misleading statements about whether Affirm’s business model was vulnerable to interest rate changes. In light of the above, plaintiffs assert that Affirm violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and that Levchin and Linford violated Section 20(a) of the Exchange Act. Plaintiffs seek class certification, unspecified compensatory and punitive damages, and costs and expenses. Affirm filed its motion to dismiss the second amended complaint on February 2, 2024. On August 26, 2024, the Court granted Affirm’s motion to dismiss with leave to amend. On September 23, 2024, plaintiffs filed a motion for leave to file a motion for reconsideration of the Court's Order granting Affirm's motion to dismiss. On August 14, 2025, the Court resolved plaintiffs' motion in Affirm's favor and directed plaintiffs to file a third amended complaint or stand on their second amended complaint and submit a joint proposed form of judgment.

Quiroga v. Levchin, et al.

On March 29, 2023, plaintiff John Quiroga filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of California (the “Quiroga action”) against Affirm, as a nominal defendant, and certain of Affirm’s current officers and directors as defendants based on allegations substantially similar to those in the Kusnier action at the time of filing. The Quiroga complaint purports to assert claims on Affirm’s behalf for contribution under the federal securities laws, breaches of fiduciary duty, unjust enrichment, and waste of corporate assets, and seeks corporate reforms, unspecified damages and restitution, and fees and costs. On May 1, 2023, the action was stayed by agreement of the parties. The stay can be lifted at the request of either party or upon certain conditions relating to the resolution of the Kusnier action.

Jeffries v. Levchin, et al.

On May 24, 2023, plaintiff Sabrina Jeffries filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of California (the “Jeffries action”) against Affirm, as a nominal defendant, and certain of Affirm's current officers and directors as defendants based on allegations substantially similar to those in the Kusnier and Quiroga actions at the time of filing. The Jeffries complaint purports to assert claims on Affirm's behalf for breach of fiduciary duties, making false statements under federal securities law, unjust enrichment, waste of corporate assets, and aiding and abetting breach of fiduciary duties, and seeks unspecified damages, equitable relief, and fees and costs. On August 15, 2023, the action was stayed by agreement of the parties. The stay can be lifted at the request of either party or upon certain conditions relating to the resolution of the Kusnier action.

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Vallieres v. Levchin, et al.

On September 14, 2023, plaintiff Michael Vallieres filed a shareholder derivative lawsuit in the U.S. District Court for the District of Delaware against Affirm, as a nominal defendant, and certain of Affirm’s current officers and directors as defendants based on allegations substantially similar to those in the Kusnier, Quiroga, and Jeffries actions at the time of filing. The Vallieres complaint purports to assert claims on Affirm's behalf for breach of fiduciary duties, gross management, abuse of control, unjust enrichment, and contribution, and seeks unspecified damages, equitable relief, and fees and costs. On November 30, 2023, the case was stayed by agreement of the parties.

We have determined, based on current knowledge, that the aggregate amount or range of losses that are estimable with respect to our legal proceedings, including the matters described above, would not have a material adverse effect within our consolidated financial position, results of operations or cash flows. Amounts accrued as of June 30, 2025 and June 30, 2024 were not material. The ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty.

Purchase Commitments

We entered into non-cancelable purchase obligations with our third-party cloud computing web services provider, which included annual purchase commitments for the period from March 2023 through February 2030 with an aggregate committed spend of $ 650.0 million during such period. For the years ended June 30, 2025 and 2024, we had remaining purchase commitments of $ 535.4 million and $ 575.9 million, respectively, primarily related to cloud and hosting services. If we fail to meet any of the purchase commitments, we will be required to pay the difference. We pay our cloud-computing web services provider monthly, and we may pay more than the minimum purchase commitment based on usage.

9.    Debt

Debt outstanding as of June 30, 2025 includes amounts classified within our consolidated balance sheets as funding debt, notes issued by securitization trusts, and convertible senior notes. Secured debt includes borrowings from our warehouse facilities, variable funding notes, notes issued by securitization trusts and sale and repurchase agreements. Unsecured debt includes outstanding convertible senior notes and any borrowings on our unsecured revolving credit facility.
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The following table summarizes the components and terms of our secured and unsecured debt as of June 30, 2025 (in thousands):

Interest Rate (1)
Unused Commitment Fees Maturity by Fiscal Year Borrowing Capacity (2)
Debt Outstanding (3)
Debt Outstanding net of unamortized premiums and discount
Secured debt
Funding debt
US warehouse facilities 6.14 % 0.20 % - 0.50 %
2026 - 2032 4,850,000   1,110,832   1,097,559  
International warehouse facilities (4)
4.69 % 0.30 % - 0.45 %
2028 - 2030 607,692   391,025   390,139  
Variable funding notes 5.82 % 0.30 % 2032 1,350,000   107,427   103,879  
Sales and repurchase agreements 5.13 % — 2028 -2029 — 31,231   31,231  
Notes issued by securitization trusts 5.75 % — 2029 - 2034 4,850,000   4,850,000   4,833,855  
$ 11,657,692   $ 6,490,514   $ 6,456,663  
Unsecured debt
Convertible senior notes:
2026 Notes —% — 2027 — 248,704   247,880  
2029 Notes 0.75 % — 2030 — 920,000   905,120  
Revolving credit facility —% 0.20 % 2027 330,000   —   —  
$ 330,000   $ 1,168,704   $ 1,153,000  
Total
$ 11,987,692   $ 7,659,218   $ 7,609,663  

(1) The stated interest rate reflects the fixed or variable interest rate in effect for each of our contractual arrangements as of June 30, 2025, weighted by the outstanding principal balance as of that date. The interest rate resets periodically for our variable rate debt, typically based on a reference rate such as Secured Overnight Financing Rate (“SOFR”) or Canadian Overnight Repo Rate Average (“CORRA”) plus a spread, or an alternative rate based on the cost funds for the lender.
(2) Represents total revolving commitment amount, inclusive of debt outstanding as of June 30, 2025.
(3) Certain loans are pledged as collateral for borrowings in our secured debt facilities, except for our sales and repurchase agreements which are collateralized by securitization notes receivable and certificates retained by the Company and classified as securities available for sale at fair value. The carrying value of these pledged assets was $ 7.0 billion as of June 30, 2025.
(4) As of June 30, 2025, international facilities finance loan receivables originated in Canada.
Maturity by Fiscal Year

The aggregate future maturities of our funding debt, notes issued by securitization trusts and convertible notes consists of the following (in thousands):

June 30, 2025
2026 $ 183,181  
2027 598,502  
2028 592,214  
2029 2,383,583  
2030 1,812,562  
Thereafter 2,089,176  
Total $ 7,659,218  
Deferred debt issuance costs ( 49,555 )
Total funding debt, net of deferred debt issuance costs $ 7,609,663  

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Funding Debt
Warehouse Credit Facilities
Through certain consolidated subsidiaries, which are typically trusts, we enter into secured borrowing arrangements with banks and other financial institutions. Through each of these subsidiaries we enter into a loan or credit and security agreement where we borrow against loans pledged as collateral. Financing terms, including the advance rate and financing spread, vary across these revolving facilities and generally depend on the types of collateral that may be pledged and respective concentration limits. We may continue to pledge new receivables to allow us to borrow up to the commitment amount throughout the revolving period for each facility. The length of the revolving period, the maximum amount we may borrow against pledged collateral balance during the revolving period, and the length of the amortization period prior to the maturity date varies across borrowing facilities depending negotiated terms.

Borrowings under these agreements are classified as funding debt within our consolidated balance sheets and proceeds from the borrowings can only be used for the purposes of funding loans. These borrowing facilities are bankruptcy-remote special-purpose vehicles in which creditors do not have recourse against the general credit of Affirm.

Our funding debt agreements contain certain customary negative covenants and financial covenants including maintaining certain levels of minimum liquidity, maximum leverage, and minimum tangible net worth. As of June 30, 2025, we were in compliance with all applicable covenants in the agreements.

Variable Funding Note

We entered into a syndicated revolving loan agreement through a securitization master trust which funds loans. In connection with the loan agreement, the master trust issued a variable funding note (“VFN”), where borrowings are secured by loan collateral sold to the master trust. Throughout the reinvestment period of the VFN, the master trust periodically issues asset-backed securities, where securitization note proceeds affects the level of utilization of the VFN. Outstanding borrowings under the VFN are classified as funding debt within our consolidated balance sheets.

Sale and Repurchase Agreements

We entered into certain sale and repurchase agreements pursuant to our retained interests in our off-balance sheet securitizations where we have sold these securities to a counterparty with an obligation to repurchase at a future date and price. These repurchase agreements have a term equaling the contractual life of the securitization notes pledged. We record the debt outstanding under our sale and repurchase agreements within our funding debt in the consolidated balance sheets.
Notes Issued by Securitization Trusts

We issue asset-backed securities through securitization trusts using a combination of term, amortizing and revolving structures. Each trust may issue one or more classes of notes, which will be repaid through collections on the loans in accordance with the trust priority of payments. For consolidated securitization trusts, asset-backed notes held by third-party investors are classified as notes issued by securitization trusts in the consolidated balance sheets. Refer to Note 10 Securitization and Variable Interest Entities for additional information.

Revolving Credit Facility

We have a Revolving Credit Agreement with a syndicate of banks for a $ 330.0 million unsecured revolving credit facility. Proceeds of the borrowings under this facility will be used for general corporate purposes in the ordinary course of business. This facility bears interest at a rate equal to, either (a) for SOFR borrowing, a SOFR rate determined by reference to the forward-looking term SOFR rate for the interest period, plus an applicable margin of 1.75 % per annum or (b) for alternative base rate borrowings, a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % per annum, (ii) the rate last quoted by the Wall Street Journal as the
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U.S. prime rate and (iii) the one-month forward-looking term SOFR rate plus 1.00 % per annum, in each case, plus an applicable margin of 0.75 % per annum. The facility contains certain financial covenants which may result in an acceleration of the maturity if not maintained, and requires payment of a monthly unused commitment fee of 0.20 % per annum on the undrawn balance available.

On December 16, 2024, we entered into an amendment to our revolving credit facility in order to permit the incurrence of indebtedness pursuant to the 2029 Senior Convertible Notes. As of June 30, 2025, we were in compliance with all applicable covenants in the agreements.

There were no borrowings outstanding under the facility as of June 30, 2025.

Convertible Senior Notes

2029 Notes

On December 20, 2024, we issued approximately $ 920.0 million in aggregate principal amount of 0.75 % convertible senior notes due 2029 (the “2029 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The total net proceeds from this offering, after deducting debt issuance costs, were approximately $ 903.1 million. The 2029 Notes represent senior unsecured obligations of the Company. The 2029 Notes will bear interest at a fixed rate of 0.75 % per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2025. The 2029 Notes mature on December 15, 2029, unless such Notes are earlier converted, redeemed or repurchased in accordance with their terms.

Each $1,000 of principal of the 2029 Notes will initially be convertible into 9.8992 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 101.02 per share, subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2029 Notes (the “2029 Indenture”). Holders of the 2029 Notes may convert their 2029 Notes at their option at any time on or after September 15, 2029 until close of business on the second scheduled trading day immediately preceding the maturity date of December 15, 2029. Further, holders of the 2029 Notes may convert all or any portion of their 2029 Notes at their option prior to the close of business on the business day immediately preceding September 15, 2029, only under the following circumstances:

1) during any calendar quarter commencing after the calendar quarter ending March 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2029 Notes) per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

4) upon the occurrence of certain specified corporate events.

Upon conversion of the 2029 Notes, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted. If we satisfy our
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conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2029 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period.

No sinking fund is provided for the 2029 Notes. We may redeem for cash all or part of the 2029 Notes on or after December 20, 2027 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any.

If a fundamental change (as defined in the 2029 Indenture) occurs prior to the maturity date, holders of the 2029 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2029 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, if specific corporate events occur prior to the maturity date of the 2029 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2029 Notes in connection with such corporate events.

2026 Notes

On November 23, 2021, we issued $ 1,725 million in aggregate principal amount of 0 % convertible senior notes due 2026 (the “2026 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The total net proceeds from this offering, after deducting debt issuance costs, were approximately $ 1,704 million. The 2026 Notes represent senior unsecured obligations of the Company. The 2026 Notes do not bear interest except in special circumstances described below, and the principal amount of the 2026 Notes does not accrete. The 2026 Notes mature on November 15, 2026.

Each $1,000 of principal of the 2026 Notes will initially be convertible into 4.6371 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 215.65 per share, subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2026 Notes (the “2026 Indenture”). Holders of the 2026 Notes may convert their 2026 Notes at their option at any time on or after August 15, 2026 until close of business on the second scheduled trading day immediately preceding the maturity date of November 15, 2026. Further, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at their option prior to the close of business on the business day immediately preceding August 15, 2026, only under the following circumstances:

1) during any calendar quarter commencing after March 31, 2022 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

4) upon the occurrence of certain specified corporate events.
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Upon conversion of the 2026 Notes, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted. If we satisfy our conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2026 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period.

No sinking fund is provided for the 2026 Notes. We may not redeem the notes prior to November 20, 2024. We may redeem for cash all or part of the notes on or after November 20, 2024 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest, if any.

If a fundamental change (as defined in the 2026 Indenture) occurs prior to the maturity date, holders of the 2026 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, if specific corporate events occur prior to the maturity date of the 2026 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2026 Notes in connection with such corporate events.

Repurchase of a Portion of the 2026 Notes

On December 6, 2023, the Board of Directors authorized the repurchase of up to $ 800 million in aggregate principal amount of the 2026 Notes through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“Rule 10b5-1”), or through a combination thereof, through December 31, 2024. On December 13, 2024, the Board of Directors replaced the December 2023 authorization with an authorization to repurchase up to $ 960 million in aggregate principal amount of the 2026 Notes through December 31, 2024. In connection with these authorizations, during the year ended June 30, 2025, we paid $ 1.0 billion in cash for the repurchase of $ 1.1 billion aggregate principal amount of our 2026 Notes. The carrying amount of the extinguished 2026 Notes was approximately $ 1.1 billion resulting in a $ 82.4 million gain on early extinguishment of debt for the year ended June 30, 2025, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss). We utilized a combination of cash on hand and the net proceeds from the issuance of the 2029 Notes for these repurchases. During the year ended June 30, 2024, we paid $ 63.6 million in cash for the repurchase of $ 76.7 million aggregate principal amount of our 2026 Notes under the December 2023 authorization. The carrying amount of the extinguished 2026 Notes was approximately $ 76.2 million resulting in a $ 12.6 million gain on early extinguishment of debt, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss). The repurchased 2026 Notes were received and canceled.

On May 18, 2025, the Board of Directors authorized the repurchase of up to $ 200.0 million in aggregate principal amount of the 2026 Notes. Note repurchases under the May 2025 authorization may be made from time to time during the period commencing July 1, 2025 through December 31, 2025 through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1, or through a combination thereof. Repurchases are subject to available liquidity, general market and economic conditions, alternate uses for the capital, and other factors, and there is no minimum principal amount of 2026 Notes that the Company is obligated to repurchase. In
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connection with this authorization, there were no repurchases of 2026 Notes during the year ended June 30, 2025. As of June 30, 2025, $ 248.7 million in aggregate principal amount of the 2026 Notes remains outstanding.

The following table summarizes the interest expense recognized related to the convertible senior notes (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Amortization of debt issuance costs
2026 Notes 1,724   3,400   3,900  
2029 Notes 1,764   —   —  
Total amortization of debt issuance costs 3,488   3,400   3,900  
Coupon interest expense (1) (2)
$ 3,656   $ —   $ —  
Total interest expenses related to the convertible notes $ 7,144   $ 3,400   $ 3,900  

(1) Included in our consolidated statement of operations and comprehensive income (loss) within other income, net.
(2) The coupon interest expense is related to the 2029 Notes.

10.  Securitization and Variable Interest Entities

Consolidated VIEs

Warehouse Credit Facilities

We established certain entities, deemed to be VIEs, to enter into warehouse credit facilities for the purpose of purchasing loans from our originating bank partners and funding directly originated loans. Refer to Note 9. Debt for additional information. The creditors of the VIEs have no recourse to the general credit of Affirm and the liabilities of the VIEs can only be settled by the respective VIEs’ assets; however, as the servicer of the loans pledged to our funding facilities, we have the power to direct the activities that most significantly impact the VIEs' economic performance. In addition, we retain significant economic exposure to the pledged loans and therefore, we are the primary beneficiary.

Securitizations

We finance the origination and purchase of loans though our asset-backed securitization program using a combination of amortizing, revolving and variable funding structures. In connection with our program, we sponsor and establish trusts (deemed to be VIEs) which issue securities collateralized by the loans we sell to the trust. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. For these VIEs, the creditors have no recourse to the general credit of Affirm and the liabilities of the VIEs can only be settled by the respective VIEs’ assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs.

We consolidate securitization VIEs when we are deemed to be the primary beneficiary. For these VIEs, it is determined that we have the power to direct the activities that most significantly affect the VIEs’ economic performance and the obligation to absorb losses or right to receive benefits that could potentially be significant to the VIEs. Through our role as the servicer, we have the power to direct the activities that most significantly affect the VIEs’ economic performance. In evaluating whether we have a variable interest that could potentially be significant to the VIE, we consider our retained interests. We also earn a servicing fee which has a senior distribution priority in the payment waterfall. The servicing fees earned from these arrangements are considered variable interests when we also hold significant retained interests in the VIEs and they would absorb losses or receive benefits that are more than an insignificant amount of the VIEs' expected performance.
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In evaluating whether we are the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs. We perform reassessments an ongoing basis to evaluate whether we are the primary beneficiary of the VIEs.

Where we consolidate the securitization trusts, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts in the consolidated balance sheets.

For each securitization, the residual trust certificates represent the right to receive excess cash on the loans each collection period after all fees and required distributions have been made to the note holders on the related payment date. In addition to the retained residual trust certificates, our continued involvement includes loan servicing responsibilities over the life of the underlying loans.

We defer and amortize debt issuance costs for consolidated securitization trusts on a straight-line basis over the expected life of the notes.

The following tables present the aggregate carrying value of financial assets and liabilities from our involvement with consolidated VIEs (in thousands):

June 30, 2025
Assets Liabilities Net Assets
Warehouse credit facilities $ 1,668,181   $ 1,504,136   $ 164,044  
Securitizations (1)
4,993,148   4,951,485   41,663  
Total consolidated VIEs $ 6,661,329   $ 6,455,621   $ 205,707  

June 30, 2024
Assets Liabilities Net Assets
Warehouse credit facilities $ 2,052,881   $ 1,823,794   $ 229,087  
Securitizations 3,325,254   3,246,228   79,026  
Total consolidated VIEs $ 5,378,135   $ 5,070,022   $ 308,113  

(1) As of June 30, 2025, liabilities include a VFN of $ 103.9 million classified as funding debt and asset-backed securities of $ 4.8 billion classified as notes issued from securitization trusts.

Unconsolidated VIEs

We are involved with various unconsolidated VIEs, established for the purposes of securitization and forward flow arrangements. We retain economic exposure as variable interests in these unconsolidated VIEs, which consist of securitization notes receivable and certificates in unconsolidated trusts, residual interests in structured transactions, and risk sharing assets and liabilities. While we continue to be involved with the unconsolidated VIEs through our role as the servicer, we determined that we are not the primary beneficiary as of June 30, 2025. Factors we considered for this determination are that we hold an insignificant variable interest or rights held by other variable interest holders convey power in the unconsolidated VIEs.

Securitization notes receivable and certificates in unconsolidated securitization trust s

We have investments in certain unconsolidated securitization trusts in the form of notes and certificates. These notes and certificates are considered variable interests that absorb a portion of the variability of the trusts. The
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principal and interest payments on these investments are dependent on the performance of the underlying loans held within each trust.

Residual interests in structured transactions

Under certain other forward flow arrangements with third-party loan buyers, we hold a beneficial interest representing our right to receive a portion of the residual cash flows from the underlying loans sold in connection with the transaction. The loans are held in an off-balance sheet VIE that has been established by the third-party loan buyers.

Risk sharing assets and liabilities

Under certain other forward flow arrangements with third-party loan buyers, we have entered into risk sharing agreements where we may be required to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold.

The following information pertains to unconsolidated VIEs where we hold a variable interest but are not the primary beneficiary (in thousands):

June 30, 2025 June 30, 2024
Carrying Amount Maximum Exposure to Losses (4)
Carrying Amount Maximum Exposure to Losses (4)

Securitization notes receivable and certificates in unconsolidated securitization trusts [1]
$ 75,469   $ 76,943   $ 51,670   $ 51,861  
Residual interests in structured transactions [1]
2,284   15,644   —   —  
Risk sharing assets [2]
43,179   66,590   33,884   61,183  
Risk sharing liabilities [3]
( 90 ) 24,467   ( 918 ) 47,335  
Total unconsolidated VIEs $ 120,842   $ 183,644   $ 84,636   $ 160,379  

(1) Presented within Securities available for sale at fair value
(2) Presented within Other assets
(3) Presented within Accrued expenses and other liabilities
(4) Maximum exposure to losses represents our exposure through our continuing involvement as servicer, through our retained interests, and legal or contractual obligation.

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11.    Investments

Cash and Cash Equivalents and Securities Available for Sale

Cash and cash equivalents and securities available for sale, at fair value, consist of the following as of each date presented within the consolidated balance sheets (in thousands):

June 30, 2025 June 30, 2024
Cash and cash equivalents:
Money market funds $ 70,920   $ 63,389  
Agency bonds 3,493   —  
Commercial paper 12,564   57,964  
Government bonds - US 4,995   3,492  
Securities, available for sale:
Certificates of deposit 39,008   34,473  
Corporate bonds 264,199   242,660  
Commercial paper 126,761   239,882  
Agency bonds 7,854   15,159  
Municipal bonds 6,076   3,953  
Government bonds
Non-US 5,340   5,275  
US (1)
344,434   538,556  
Securitization notes receivable and certificates (2)
75,469   51,670  
Residual interests in structured transactions 2,284   —  

Total cash and cash equivalents and securities available for sale: $ 963,397   $ 1,256,473  

(1) As of June 30, 2025 and June 30, 2024, these securities include $ 75.4 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.
(2) These securities include $ 34.5 million and $ 46.7 million as of June 30, 2025 and 2024, respectively, pledged as collateral in connection with sale and repurchase agreements as discussed within Note 9. Debt.

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Securities Available for Sale, at Fair Value

The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of securities available for sale as of June 30, 2025 and June 30, 2024 were as follows (in thousands):

June 30, 2025
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value
Certificates of deposit $ 38,990   $ 18   $ —   $ —   $ 39,008  
Corporate bonds 263,495   759   ( 55 ) —   264,199  
Commercial paper (1)
139,336   7   ( 18 ) —   139,325  
Agency bonds (1)
11,358   —   ( 11 ) —   11,347  
Municipal bonds 6,057   19   —   —   6,076  
Government bonds
  Non-US 5,331   9   —   —   5,340  
     US (2)
349,149   371   ( 91 ) —   349,429  
Securitization notes receivable and certificates (3)
76,279   173   ( 42 ) ( 941 ) 75,469  
Residual interests in structured transactions 2,173   111   —   —   2,284  
Total securities available for sale $ 892,168   $ 1,467   $ ( 217 ) $ ( 941 ) $ 892,477  

June 30, 2024
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value
Certificates of deposit $ 34,468   $ 9   $ ( 4 ) $ —   $ 34,473  
Corporate bonds 243,639   95   ( 1,074 ) —   242,660  
Commercial paper (1)
298,005   7   ( 166 ) —   297,846  
Agency bonds 15,283   —   ( 124 ) —   15,159  
Municipal bonds 3,943   10   3,953  
Government bonds
Non-US 5,310   —   ( 35 ) —   5,275  
US (1) (2)
543,421   33   ( 1,406 ) —   542,048  
Securitization notes receivable and certificates (3)
51,726   699   ( 91 ) ( 664 ) 51,670  

Total securities available for sale $ 1,195,795   $ 853   $ ( 2,900 ) $ ( 664 ) $ 1,193,084  

(1) As of June 30, 2025 and 2024, Agency bonds, Commercial Paper, and US government bonds included $ 21.1 million and $ 61.5 million, respectively, classified as cash and cash equivalents within the consolidated balance sheets.
(2) As of June 30, 2025 and 2024, these securities include $ 75.4 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.
(3) Approximately $ 34.5 million and $ 46.7 million as of June 30, 2025 and 2024, respectively, of these securities have been pledged as collateral in connection with sale and repurchase agreements discussed within Note 9. Debt.

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As of June 30, 2025 and June 30, 2024, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities.

A summary of securities available for sale with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time that individual securities have been in a continuous loss position as of June 30, 2025 and June 30, 2024, are as follows (in thousands):

June 30, 2025
Less than or equal to 1 year Greater than 1 year Total
Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
Certificates of deposit $ 7,711   $ —   $ —   $ —   $ 7,711   $ —  
Corporate bonds 42,842   ( 41 ) 16,978   ( 14 ) 59,820   ( 55 )
Commercial paper 83,701   ( 18 ) —   —   83,701   ( 18 )
Agency bonds 11,347   ( 11 ) —   —   11,347   ( 11 )
Government bonds
Non-US 3,163   —   —   —   3,163   —  
US 189,295   ( 91 ) —   —   189,295   ( 91 )
Total securities available for sale (1)
$ 338,059   $ ( 161 ) $ 16,978   $ ( 14 ) $ 355,037   $ ( 175 )

June 30, 2024
Less than or equal to 1 year Greater than 1 year Total
Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
Certificates of deposit $ 9,647   $ ( 4 ) $ —   $ —   $ 9,647   $ ( 4 )
Corporate bonds 119,353   ( 252 ) 57,846   ( 822 ) 177,199   ( 1,074 )
Commercial paper 245,536   ( 166 ) —   —   245,536   ( 166 )
Agency bonds 10,417   ( 41 ) 4,743   ( 83 ) 15,160   ( 124 )
Government bonds
Non-US —   —   5,275   ( 35 ) 5,275   ( 35 )
US 251,113   ( 185 ) 123,633   ( 1,221 ) 374,746   ( 1,406 )
Total securities available for sale (1)
$ 636,066   $ ( 648 ) $ 191,497   $ ( 2,161 ) $ 827,563   $ ( 2,809 )

(1) The number of securities with unrealized losses for which an allowance for credit losses has not been recorded totaled 67 and 137 as of June 30, 2025 and June 30, 2024, respectively.
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The length of time to contractual maturities of securities available for sale as of June 30, 2025 and June 30, 2024, were as follows (in thousands):

June 30, 2025
Within 1 year Greater than 1 year, less than or equal to 5 years Total
Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value
Certificates of deposit $ 38,990   $ 39,008   $ —   $ —   $ 38,990   $ 39,008  
Corporate bonds 149,435   149,675   114,060   114,524   263,495   264,199  
Commercial paper (1)
139,336   139,325   —   —   139,336   139,325  
Agency bonds (1)
11,358   11,347   —   —   11,358   11,347  
Municipal bonds 3,944   3,950   2,113   2,126   6,057   6,076  
Government bonds
Non-US 3,162   3,162   2,169   2,178   5,331   5,340  
US (1)
326,884   327,076   22,265   22,353   349,149   349,429  
Securitization notes receivable and certificates (2)
—   —   76,279   75,469   76,279   75,469  
Residual interests in structured transactions —   —   2,173   2,284   2,173   2,284  

Total securities available for sale $ 673,109   $ 673,543   $ 219,059   $ 218,934   $ 892,168   $ 892,477  

June 30, 2024
Within 1 year Greater than 1 year, less than or equal to 5 years Total
Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value
Certificates of deposit $ 34,468   $ 34,473   $ —   $ —   $ 34,468   $ 34,473  
Corporate bonds 118,547   118,039   125,092   124,621   243,639   242,660  
Commercial paper (1)
298,005   297,846   —   —   298,005   297,846  
Agency bonds 10,457   10,416   4,826   4,743   15,283   15,159  
Municipal bonds —   —   3,943   3,953   3,943   3,953  
Government bonds
Non-US 2,150   2,150   3,160   3,125   5,310   5,275  
US (1)
465,338   464,298   78,083   77,750   543,421   542,048  
Securitization notes receivable and certificates (2)
—   —   51,726   51,670   51,726   51,670  

Total securities available for sale $ 928,965   $ 927,222   $ 266,830   $ 265,862   $ 1,195,795   $ 1,193,084  

(1) As of June 30, 2025 and 2024, Agency bonds, Commercial paper, and US government bonds included $ 21.1  million and $ 61.5  million, respectively, classified as cash and cash equivalents within the consolidated balance sheets.
(2) Based on weighted average life of expected cash flows as of June 30, 2025 and June 30, 2024.

Gross proceeds from matured or redeemed securities were $ 1.3 billion and $ 1.5 billion for the years ended June 30, 2025 and June 30, 2024, respectively.

For available for sale securities, realized gains and losses were immaterial for the for the years ended June 30, 2025 and June 30, 2024.
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Equity Securities Held at Cost

Equity security investments without a readily determinable fair value held at cost were $ 40.3 million and $ 37.8 million as of June 30, 2025 and June 30, 2024, respectively, and are included in other assets within the consolidated balance sheets.

We recognized impairment of $ 4.6 million for the year ended June 30, 2025 within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with our equity security investments. During the year ended June 30, 2024, we recognized an impairment of $ 14.1 million within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with one of our equity security investments.

For the year ended June 30, 2025, we recognized an upward adjustment of $ 2.6 million within other income, net in the consolidated statement of operations and comprehensive income (loss). For the year ended June 30, 2024, there were no upward or downward adjustments due to observable changes in orderly transactions.

The fair value of the investments was determined utilizing a methodology based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements.

Fixed Term Deposits

Our fixed term deposits matured as of June 30, 2025. For the period ending June 30, 2024, fixed term deposits were $ 35.2 million. Fixed term deposits consisted of interest-bearing deposits held at financial institutions with original maturities greater than three months but no more than twelve months. These deposits were carried at cost, which approximated fair value, and were included in other assets within the consolidated balance sheets.