10-K – 2025-08-28 – afrm-20250630.htm

12.    Derivative Financial Instruments

The following table summarizes the total fair value, including interest accruals, and outstanding notional amounts of derivative instruments as of June 30, 2025 and June 30, 2024 (in thousands):

June 30, 2025 June 30, 2024
Notional Amount Derivative Assets Derivative Liabilities Notional Amount Derivative Assets Derivative Liabilities
Derivatives designated as cash flow hedges
Interest rate contracts - cash flow hedges $ 100,000   $ 86   $ —   $ 150,000   $ 4   $ —  
Derivatives not designated as hedges
Interest rate contracts 405,074   2,558   15   854,589   17,203   38  
Risk sharing assets/liabilities 8,561,709   43,179   90   4,188,544   33,884   918  
Total gross derivative assets/liabilities $ 9,066,783   $ 45,823   $ 105   $ 5,193,133   $ 51,091   $ 956  

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Table of Contents

The following table summarizes the impact of the cash flow hedges on Accumulated Other Comprehensive Income (“AOCI”) (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Balance at beginning of period $ 1,407   $ 751   $ —  
Changes in fair value ( 2,312 ) 2,000   805  
Amounts reclassified into earnings (1)
( 514 ) ( 1,344 ) ( 54 )
Balance at end of period (2)
$ ( 1,419 ) $ 1,407   $ 751  

(1) The amounts reclassified into earnings are presented in the consolidated statements of income (loss) within funding costs.
(2) As of June 30, 2025, we estimated that $ 0.3 million of net derivative losses included in AOCI are expected to be reclassified into earnings within the next 12 months.

The following table summarizes the impact of the derivative instruments on income and indicates where within the consolidated statements of operations and comprehensive income (loss) such impact is reported (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Location of gains (losses) where the effects of derivatives are recorded
The effects of cash flow hedging
Funding costs 514   1,344   54  
The effects of derivatives not designated in hedging relationships
Other income, net ( 4,319 ) 4,479   48,074  

Refer to Note 2.   Summary of Significant Accounting Policies and Note 13. Fair Value of Financial Assets and Liabilities for additional information on our derivative instruments.
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13.    Fair Value of Financial Assets and Liabilities

Financial Assets and Liabilities Recorded at Fair Value

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and June 30, 2024 (in thousands):

June 30, 2025
Level 1 Level 2 Level 3 Total
Assets:
Cash and cash equivalents:
Money market funds $ 70,920   $ —   $ —   $ 70,920  
Agency Bonds —   3,493   —   3,493  
Commercial paper —   12,564   —   12,564  
Government bonds- US —   4,995   —   4,995  
Securities, available for sale:
Certificates of deposit —   39,008   —   39,008  
Corporate bonds —   264,199   —   264,199  
Commercial paper —   126,761   —   126,761  
Agency bonds —   7,854   —   7,854  
Municipal bonds —   6,076   —   6,076  
Government bonds:
Non-US —   5,340   —   5,340  
US —   344,434   —   344,434  
Securitization notes receivable and residual trust certificates —   —   75,469   75,469  
Residual interests in structured transactions —   —   2,284   2,284  
Servicing assets —   —   906   906  
Interest rate derivatives —   2,644   —   2,644  
Risk sharing asset —   —   43,179   43,179  
Total assets $ 70,920   $ 817,368   $ 121,838   $ 1,010,126  
Liabilities:
Servicing liabilities $ —   $ —   $ 41   $ 41  
Performance fee liability —   —   1,870   1,870  
Profit share liability —   —   9,323   9,323  
Risk sharing liability —   —   90   90  
Interest rate derivatives —   15   —   15  
Total liabilities $ —   $ 15   $ 11,324   $ 11,339  

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June 30, 2024
Level 1 Level 2 Level 3 Total
Assets:
Cash and cash equivalents:
Money market funds $ 63,389   $ —   $ —   $ 63,389  
Commercial paper —   57,964   —   57,964  
Government bonds- US —   3,492   —   3,492  
Securities, available for sale:
Certificates of deposit —   34,473   —   34,473  
Corporate bonds —   242,660   —   242,660  
Commercial paper —   239,882   —   239,882  
Agency bonds —   15,159   —   15,159  
Municipal bonds —   3,953   —   3,953  
Government bonds:
Non-US —   5,275   —   5,275  
US —   538,556   —   538,556  
Securitization notes receivable and residual trust certificates —   —   51,670   51,670  
Servicing assets —   —   574   574  
Interest rate derivatives —   17,207   —   17,207  
   Risk sharing asset $ 33,884   $ 33,884  
Total assets $ 63,389   $ 1,158,621   $ 86,128   $ 1,308,138  
Liabilities:
Servicing liabilities $ —   $ —   $ 743   $ 743  
Performance fee liability —   —   1,503   1,503  
Profit share liability —   —   1,974   1,974  
Risk sharing liability —   —   918   918  
Interest rate derivatives —   38   —   38  
Total liabilities $ —   $ 38   $ 5,138   $ 5,176  

As of June 30, 2025 and June 30, 2024, there were no transfers between levels.

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 2)

Cash and Cash Equivalents and Securities Available for Sale

As of June 30, 2025, we held level 2 debt securities classified as cash and cash equivalents and securities available for sale. Management obtains pricing from one or more third-party pricing services for the purpose of determining fair value. Whenever available, the fair value is based on quoted bid prices as of the end of the trading day. When quoted prices are not available, other methods may be utilized including evaluated prices provided by third-party pricing services.

Derivative Instruments

As of June 30, 2025 and June 30, 2024, we used a combination of interest rate cap agreements and interest rate swaps to manage interest costs and the risks associated with variable interest rates. These derivative instruments are classified as Level 2 within the fair value hierarchy, and the fair value is estimated by using third-party pricing
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models, which contain certain assumptions based on readily observable market-based inputs. We validate the valuation output on a monthly basis. Refer to Note 12. Derivative Financial Instruments in the notes to the consolidated financial statements for further details on our derivative instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3)

We evaluate our assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. Since our servicing assets and liabilities, performance fee liability, securitization notes and residual trust certificates, residual interests in structured transactions, profit share liability, and risk sharing arrangements do not trade in an active market with readily observable prices, we use significant unobservable inputs to measure fair value and have classified as level 3 within the fair value hierarchy. This determination requires significant judgments to be made.

The following significant unobservable inputs, as applicable, were used in the fair value measurement of the Company’s Level 3 assets and liabilities:

• Adequate Compensation - The compensation rate is expressed as a percentage of the outstanding loan balance that a willing market participant would require for servicing loans with similar characteristics.
• Discount Rate - The rate used to discount estimated future cash flows to present value in determining fair value. It reflects the rate of return market participants would require to compensate for time value of money plus a premium based on relative risk, liquidity and other market based factors.
• Default Rate - The estimated annualized rate of charge-offs affecting the projected unpaid principal balance and expected term of the loan portfolio.
• Loss Rate - The estimated lifetime rate of loan charge-offs as a percentage of the initial settled principal balance.
• Prepayment Rate - The estimated annualized excess loan payment received in a given month as a percentage of the outstanding principal balance at the beginning of the month minus the scheduled principal payment.
• Refund Rate - The rate of refunded transactions as a percentage of the outstanding loan balance over the remaining life of the loan portfolio.
• Program Profitability - The estimated future profit to be shared with enterprise partners as a percentage of total loans outstanding, based on the terms of the respective commercial agreements.

Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement.

Servicing Assets and Liabilities

We sold loans with an unpaid principal balance of $ 15.8 billion, $ 10.2 billion, and $ 7.5 billion for the years ended June 30, 2025, 2024, and 2023, respectively, for which we retained servicing rights. As of June 30, 2025 and June 30, 2024, we serviced loans which we sold with a remaining unpaid principal balance of $ 7.8 billion and $ 5.1 billion, respectively. We earned $ 120.6 million, $ 95.5 million, and $ 87.5 million of servicing income for the years ended June 30, 2025, 2024, and 2023, respectively.

We use discounted cash flow models to arrive at an estimate of fair value. As of June 30, 2025 and June 30, 2024, the aggregate fair value of the servicing assets was measured at $ 0.9 million and $ 0.6 million, respectively, and presented within other assets in the consolidated balance sheets. As of June 30, 2025 and June 30, 2024, the aggregate fair value of the servicing liabilities was $ 0.04 million and $ 0.7 million, respectively, and presented within accrued expenses and other liabilities in the consolidated balance sheets.
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The following table summarizes the activity related to the aggregate fair value of our servicing assets (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 574   $ 880  
Initial transfers of financial assets 484   —  
Subsequent changes in fair value ( 152 ) ( 306 )
Fair value at end of period $ 906   $ 574  

The following table summarizes the activity related to the aggregate fair value of our servicing liabilities (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 743   $ 1,392  
Initial transfers of financial liabilities —   5,485  
Subsequent changes in fair value ( 702 ) ( 6,134 )
Fair value at end of period $ 41   $ 743  

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of servicing assets and liabilities as of June 30, 2025 and June 30, 2024:

June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (1)

Servicing assets Discount Rate 30.00   % 30.00   % 30.00   %
Adequate Compensation 2.00   % 2.00   % 2.00   %
Default Rate 10.24   % 15.68   % 12.04   %
Servicing liabilities Discount Rate 30.00   % 30.00   % 30.00   %
Adequate Compensation 2.00   % 2.00   % 2.00   %
Default Rate 3.71   % 7.89   % 5.26   %

June 30, 2024
Unobservable Input Minimum Maximum Weighted Average (1)

Servicing assets Discount Rate 30.00   % 30.00   % 30.00   %
Adequate Compensation 2.00   % 2.00   % 2.00   %
Default Rate 9.89   % 22.72   % 10.84   %
Servicing liabilities Discount Rate 30.00   % 30.00   % 30.00   %
Adequate Compensation 2.00   % 2.00   % 2.00   %
Default Rate 2.58   % 4.12   % 3.00   %

(1) Unobservable inputs were weighted by relative fair value

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The following table summarizes the effect that adverse changes in estimates would have on the fair value of the servicing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands):

June 30, 2025 June 30, 2024
Servicing assets
Default Rate assumption:
Default Rate increase of 25% $ 1   $ 1  
Default Rate increase of 50% $ 2   $ 1  
Adequate Compensation assumption:
Adequate Compensation increase of 10% $ ( 1,439 ) $ ( 980 )
Adequate Compensation increase of 20% $ ( 2,879 ) $ ( 1,961 )
Discount Rate assumption:
Discount Rate increase of 25% $ ( 35 ) $ ( 23 )
Discount Rate increase of 50% $ ( 66 ) $ ( 44 )
Servicing liabilities
Default Rate assumption:
Default Rate increase of 25% $ —   $ ( 1 )
Default Rate increase of 50% $ —   $ ( 1 )
Adequate Compensation assumption:
Adequate Compensation increase of 10% $ 4,593   $ 3,153  
Adequate Compensation increase of 20% $ 9,186   $ 6,305  
Discount Rate assumption:
Discount Rate increase of 25% $ ( 1 ) $ ( 19 )
Discount Rate increase of 50% $ ( 1 ) $ ( 37 )

Performance Fee Liability

In accordance with our agreements with our originating bank partners, we pay a fee for each loan that is fully repaid by the consumer, due at the end of the period in which the loan is fully repaid. We recognize a liability upon the purchase of a loan for the expected future payment of the performance fee. This liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the consolidated balance sheets. Any changes in the fair value of the liability are reflected in other income, net, in the consolidated statements of operations and comprehensive income (loss). 

The following table summarizes the activity related to the fair value of the performance fee liability (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 1,503   $ 1,581  
Purchases of loans 2,367   1,775  
Settlements paid ( 2,111 ) ( 1,969 )
Subsequent changes in fair value 111   116  
Fair value at end of period $ 1,870   $ 1,503  

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The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the performance fee liability as of June 30, 2025 and June 30, 2024:

June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (2)

Discount Rate 7.25 % 10.00 % 9.23 %
Refund Rate 1.50 % 1.50 % 1.50 %
Default Rate (1)
0.87 % 4.65 % 3.07 %

June 30, 2024
Unobservable Input Minimum Maximum Weighted Average (2)

Discount Rate 8.50 % 10.00 % 9.81 %
Refund Rate 1.50 % 1.50 % 1.50 %
Default Rate (1)
1.38 % 4.65 % 2.94 %

(1) The Default Rate is net of recoveries
(2) Unobservable inputs were weighted by remaining principal balances

Securitization Notes Receivable and Residual Trust Certificates

As of June 30, 2025, we held notes receivable and residual trust certificates with an aggregate fair value of $ 75.5 million in connection with unconsolidated securitizations. The balances correspond to the 5 % economic risk retention we are required to maintain as the securitization sponsor.

These assets are measured at fair value using a discounted cash flow model, and presented within securities available for sale at fair value in the consolidated balance sheets. Changes in the fair value, other than declines in fair value due to credit recognized as an allowance, are reflected in other comprehensive income (loss) i n the consolidated statements of operations and comprehensive income (loss). Declines in fair value due to credit are reflected in other income, net in the consolidated statements of operations and comprehensive income (loss).

The following table summarizes the activity related to the fair value of the notes receivable and residual trust certificates (in thousands):

June 30, 2025 June 30, 2024
Fair value at beginning of period $ 51,670   $ 18,913  
Additions 84,718   58,508  
Cash received (due to payments) ( 65,560 ) ( 28,738 )
Change in unrealized gain (loss) ( 447 ) 1,083  
Accrued interest 5,368   2,115  
Reversal of (impairment on) securities available for sale ( 280 ) ( 211 )
Fair value at end of period $ 75,469   $ 51,670  

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The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of t he notes receivable and residual trust certificates as o f June 30, 2025 and June 30, 2024:

June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 2.86 % 30.29 % 6.89 %
Default Rate 0.94 % 8.40 % 7.65 %
Prepayment Rate 21.46 % 24.85 % 23.14 %

June 30, 2024
Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 5.73 % 41.41 % 8.93 %
Default Rate 0.95 % 6.98 % 6.17 %
Prepayment Rate 12.40 % 27.70 % 23.33 %

(1) Unobservable inputs were weighted by relative fair value

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the notes receivable and residual trust certificates given hypothetical changes in significant unobservable inputs (in thousands):

June 30, 2025 June 30, 2024
Discount Rate assumption:
Discount Rate increase of 25% $ ( 727 ) $ ( 623 )
Discount Rate increase of 50% $ ( 1,427 ) $ ( 1,223 )
Default Rate assumption:
Default Rate increase of 25% $ ( 2,688 ) $ ( 705 )
Default Rate increase of 50% $ ( 3,698 ) $ ( 1,321 )
Prepayment Rate assumption:
Prepayment Rate change of 25% $ ( 130 ) $ —  
Prepayment Rate change of 50% $ ( 259 ) $ —  
Prepayment Rate decrease of 25% $ —   $ 58  
Prepayment Rate decrease of 50% $ —   $ 116  

Residual Interests in Structured Transactions

As of June 30, 2025, we held residual interests in structured transactions with an aggregate fair value of $ 2.3 million in connection with certain forward flow loan sale transactions.

These assets are measured at fair value using a discounted cash flow model, and presented within securities available for sale at fair value in the consolidated balance sheets. Changes in the fair value, except for credit impairments, are reflected in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

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The following table summarizes the activity related to the fair value of the assets (in thousands):

June 30, 2025
Fair value at beginning of period $ —  
Capital contribution 2,173  
Subsequent changes in fair value 111  
Fair value at the end of period 2,284  

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the residual interests in structured transactions as of June 30, 2025.

June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 20.00 % 20.00 % 20.00 %
Default Rate 8.88 % 8.88 % 8.88 %
Prepayment Rate 48.85 % 48.85 % 48.85 %

(1) Unobservable inputs were weighted by relative fair value

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the residual interests in structured transactions given hypothetical changes in significant unobservable inputs (in thousands):

June 30, 2025
Discount Rate assumption:
Discount Rate increase of 20% $ ( 181 )
Discount Rate increase of 40% $ ( 343 )
Default Rate assumption:
Default Rate increase of 20% $ ( 28 )
Default Rate increase of 40% $ ( 50 )
Prepayment Rate assumption:
Prepayment Rate increase of 20% $ ( 35 )
Prepayment Rate increase of 40% $ ( 64 )

Profit Share Liability

We have commercial agreements with certain enterprise partners, in which we are obligated to share in the profitability of transactions facilitated by our platform. Upon capture of a loan under these programs, we record a liability associated with the estimated future profit to be shared over the life of the loan based on estimated profitability levels of each program. The liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the consolidated balance sheets.

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The following table summarizes the activity related to the fair value of the profit share liability (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 1,974   $ 1,832  
Facilitation of loans 12,967   3,326  
Actual performance ( 13,649 ) ( 5,363 )
Subsequent changes in fair value 8,031   2,179  
Fair value at end of period $ 9,323   $ 1,974  

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of June 30, 2025 and June 30, 2024:

June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 30.00 % 30.00 % 30.00 %
Program Profitability 0.23 % 3.28 % 2.86 %

June 30, 2024
Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 30.00 % 30.00 % 30.00 %
Program Profitability 0.32 % 1.01 % 0.96 %

(1) Unobservable inputs were weighted by relative fair value.

Risk Sharing Arrangements

In connection with certain capital funding 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. Loan performance is evaluated at a cohort level based on the month loans were sold.

We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in our consolidated statements of operations and comprehensive income (loss). For each counterparty, we have recognized a net asset or net liability based on the estimated fair value of future payments we expect to receive from or make to the counterparty. As of June 30, 2025, we estimated the fair value of future settlements using a discounted cash flow model.

The following table summarizes the activity related to the fair value of the risk sharing assets (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 33,884   $ —  
Initial transfers of financial assets 27,658   41,669  
Cash settlements ( 21,134 ) —  
Subsequent changes in fair value 2,771   ( 7,785 )
Fair value at end of period $ 43,179   $ 33,884  

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The following table summarizes the activity related to the fair value of the risk sharing liabilities (in thousands):
June 30, 2025 June 30, 2024
Fair value at beginning of period $ 918   $ —  
Cash settlements ( 1,599 ) —  
Subsequent changes in fair value 771   918  
Fair value at end of period $ 90   $ 918  

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the risk sharing arrangements as of June 30, 2025 and June 30, 2024:
June 30, 2025
Unobservable Input Minimum Maximum Weighted Average (1)

Risk sharing assets Discount Rate 20.00 % 20.00 % 20.00 %
Loss Rate 3.32 % 4.91 % 4.13 %
Prepayment Rate 19.84 % 22.89 % 21.34 %
Risk sharing liabilities Discount Rate 20.00 % 20.00 % 20.00 %
Loss Rate 3.47 % 5.35 % 4.42 %

June 30, 2024
Unobservable Input Minimum Maximum Weighted Average (1)

Risk sharing assets Discount Rate 20.00 % 20.00 % 20.00 %
Loss Rate 3.00 % 4.69 % 3.66 %
Prepayment Rate 23.36 % 33.29 % 28.48 %
Risk sharing liabilities Discount Rate 20.00 % 20.00 % 20.00 %
Loss Rate 3.25 % 5.29 % 4.28 %

(1) Unobservable inputs were weighted by principal balance of loans sold under each cohort

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The following table summarizes the effect that adverse changes in estimates would have on the fair value of the risk sharing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands):

June 30, 2025 June 30, 2024
Risk sharing assets
Prepayment Rate assumption:
Prepayment Rate decrease of 25% $ ( 1,896 ) $ —  
Prepayment Rate decrease of 50% $ ( 3,923 ) $ —  
Prepayment Rate increase of 25% $ —   $ 572  
Prepayment Rate increase of 50% $ —   $ 1,131  
Loss Rate assumption:
Loss Rate increase of 25% $ ( 15,150 ) $ ( 7,315 )
Loss Rate increase of 50% $ ( 30,277 ) $ ( 14,528 )
Discount Rate assumption:
Discount Rate increase of 25% $ ( 903 ) $ ( 1,211 )
Discount Rate increase of 50% $ ( 1,745 ) $ ( 2,323 )
Risk sharing liabilities
Loss Rate assumption:
Loss Rate increase of 25% $ 16,946   $ 22,333  
Loss Rate increase of 50% $ 24,676   $ 41,677  
Discount Rate assumption:
Discount Rate increase of 25% $ —   $ ( 19 )
Discount Rate increase of 50% $ —   $ ( 37 )

Financial Assets and Liabilities Not Recorded at Fair Value

The following table presents the fair value and our assessment of the classification of this measurement within the fair value hierarchy for financial assets and liabilities held at amortized cost as of June 30, 2025 and June 30, 2024 (in thousands):
June 30, 2025
Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value
Assets:

Loans held for investment, net $ 6,628,606   $ —   $ —   $ 7,085,840   $ 7,085,840  

Total assets $ 6,628,606   $ —   $ —   $ 7,085,840   $ 7,085,840  
Liabilities:
Convertible senior notes, net (2)
1,153,000   —   1,205,287   —   1,205,287  
Notes issued by securitization trusts 4,833,855   —   —   4,868,980   4,868,980  
Funding debt (3)
1,640,514   —   —   1,640,765   1,640,765  
Total liabilities $ 7,627,369   $ —   $ 1,205,287   $ 6,509,745   $ 7,715,032  

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June 30, 2024
Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value
Assets:
Loans held for sale (1)
$ 36   $ —   $ 36   $ —   $ 36  
Loans held for investment, net 5,360,959   —   —   5,616,973   5,616,973  
Other assets (1)
43,212   —   43,212   —   43,212  
Total assets $ 5,404,207   $ —   $ 43,248   $ 5,616,973   $ 5,660,221  
Liabilities:
Convertible senior notes, net (2)
1,341,430   —   1,124,773   —   1,124,773  
Notes issued by securitization trusts 3,236,873   —   —   2,506,929   2,506,929  
Funding debt (3)
1,851,699   —   —   1,851,685   1,851,685  
Total liabilities $ 6,430,002   $ —   $ 1,124,773   $ 4,358,614   $ 5,483,387  

(1) Amortized cost approximates fair value for loans held for sale and other assets.
(2) As of June 30, 2025 , includes convertible senior notes due 2026 with a carrying amount and fair value of $ 247.9 million and $ 232.7 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 905.1 million and $ 972.6 million, respectively. As of June 30, 2024, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 1.3 billion and $ 1.1 billion, respectively. The estimated fair value of the convertible senior notes is determined based on a market approach, using the estimated or actual bids and offers of the notes in an over-the-counter market on the last business day of the period.
(3) As of June 30, 2025 and June 30, 2024, debt issuance costs in the amount of $ 17.7 million and $ 14.8 million was included within funding debt.

14.    Stockholders’ Equity

Common Stock

We had shares of common stock reserved for issuance as follows:

June 30, 2025 June 30, 2024
Available outstanding under equity compensation plans 39,122,013   47,622,117  
Available for future grant under equity compensation plans 53,851,610   43,492,755  
Total 92,973,623   91,114,872  

The common stock is not redeemable. We have two classes of common stock: Class A common stock and Class B common stock. Each holder of Class A common stock has the right to one vote per share of common stock. Each holder of Class B common stock has the right to 15 votes and can be converted at any time into one share of Class A common stock. Holders of Class A and Class B common stock are entitled to notice of any stockholders’ meeting in accordance with the bylaws of the corporation, and are entitled to vote upon such matters and in such manner as may be provided by law. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the common stock are entitled to receive, when and as declared by the Board of Directors, out of any assets of the corporation legally available therefore, such dividends as may be declared from time to time by the Board of Directors.

Common Stock Warrants

Common stock warrants are included as a component of additional paid in capital within the consolidated balance sheets.
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In November 2021, we granted warrants to purchase 22,000,000 shares of common stock in connection with our commercial agreements with Amazon. 7,000,000 of the warrant shares have an exercise price of $ 0.01 per share and a term of 3.5 years. A portion of these warrants were fully vested at the grant date and the remainder were fully vested as of December 31, 2024. As of June 30, 2025, 3,500,000 of these warrants have been exercised. In February 2025, the term for the remaining unexercised warrant shares were extended for an additional 4.0 years. The remaining 15,000,000 warrant shares have an exercise price of $ 100 per share and a term of 7.5 years. We valued the warrants at the grant date using the Black-Scholes-Merton option pricing model.

The remaining grant-date fair value of the warrants will be recognized within our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense as the warrants vest, based upon Amazon’s satisfaction of the vesting conditions. During the years ended June 30, 2025, 2024, and 2023, a total of $ 292.3 million, $ 439.6 million, and $ 463.3 million, respectively, was recognized within sales and marketing expense which included $ 20.7 million, $ 32.9 million, and $ 41.4 million, respectively, in amortization expense of the commercial agreement asset, and $ 271.6 million, $ 406.7 million, and $ 421.9 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested.

As of June 30, 2025, unrecognized compensation expense related to the unvested warrants was approximately $ 586.2 million, which is expected to be recognized over a remaining weighted-average period of 3.4 years.

The following table summarizes the warrants activity during the year ended June 30, 2025:

Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Life (years)
Warrants outstanding, June 30, 2024 22,000,000   $ 68.19 3.60
Granted —   — 0.00
Exercised ( 3,500,000 ) 0.01 0.00
Canceled
—   — 0.00
Warrants outstanding, June 30, 2025 18,500,000   $ 81.08 3.90
Warrants exercisable, June 30, 2025 10,771,754   $ 67.51 3.90

There were no warrants granted during the years ended June 30, 2024 and 2023. On June 30, 2025, the weighted-average grant date fair values for outstanding warrants and exercisable warrants were $ 86.76 and $ 94.59 , respectively.

Share Repurchases

In connection with the offering of the 2029 Notes, in December 2024, the Board of Directors authorized the repurchase of up to $ 350.0 million of common stock through open market purchases, privately negotiated transactions or through a combination thereof. The authorization terminated on December 31, 2024 and did not obligate the Company to acquire any particular amount of its common stock. Pursuant to this authorization, we utilized net proceeds from the offering, as well as cash on hand, to complete the repurchase of 3.5 million shares of Class A common stock from certain holders of the 2026 notes in privately negotiated transactions for an aggregate purchase price of approximately $ 250.0 million. Refer to Note 9. Debt in the notes to the consolidated financial statements for more information on the 2029 Notes.

We record share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. Our policy for share retirements is to deduct the par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.

There were no share repurchases during the year ended June 30, 2024.
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15.    Equity Incentive Plans

2012 Stock Plan

Under our Amended and Restated 2012 Stock Plan (the “Plan”), we may grant incentive and nonqualified stock options, restricted stock, and restricted stock units (“RSUs”) to employees, officers, directors, and consultants. As of June 30, 2025, the maximum number of shares of common stock which may be issued under the Plan is 176,604,160 Class A shares and there were 53,851,610 shares of Class A common stock available for future grants under the Plan.

Stock Options

For stock options granted before our IPO in January 2021, the minimum expiration period is seven years after termination of employment or 10 years from the date of grant. For stock options granted after our IPO, the minimum expiration period is three months after termination of employment or 10 years from the date of grant. Stock options generally vest over a period of four years or with 25 % vesting on the 12 month anniversary of the vesting commencement date, and the remainder vesting on a pro-rata basis each month over the next three years .

The following table summarizes our stock option activity for the year ended June 30, 2025:

Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)
Balance as of June 30, 2024 16,794,697   $ 15.84   5.63
Granted 677,433   44.66  
Exercised ( 4,484,133 ) 10.56  
Forfeited, expired or canceled ( 32,019 ) 34.21  
Balance as of June 30, 2025 12,955,978   19.12   5.18
Vested and exercisable, June 30, 2025 10,615,703   $ 16.81   4.51 $ 557,041  
Vested and exercisable, and expected to vest thereafter (1) June 30, 2025
12,914,059   $ 19.06   5.16 $ 648,399  

(1) Options expected to vest reflect the application of an estimated forfeiture rate.

The weighted-average grant date fair value of options granted for the years ended June 30, 2025, 2024, and 2023, was $ 31.74 , $ 16.37 , and $ 10.92 , respectively. The aggregate intrinsic value of options exercised was approximately $ 234.5 million, $ 79.0 million, and $ 12.6 million for the years ended June 30, 2025, 2024, and 2023, respectively. The total fair value of stock options vested during the years ended June 30, 2025, 2024, and 2023 was $ 26.8 million, $ 24.3 million, and $ 39.5 million, respectively.

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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 with the weighted-average assumptions set forth in the table below. Volatility is based on historical volatility rates obtained from certain public companies that operate in the same or related business as us since there is a limited 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 set forth. We used the simplified method to determine an estimate of the expected term of an employee share option.

June 30, 2025 June 30, 2024 June 30, 2023
Volatility 80 % 75 % 59 %
Risk-free interest rate 3.46 % - 4.35 %
4.21 % - 4.36 %
2.88 % - 3.87 %

Expected term (in years) 6.06 6.05 6.04
Expected dividend yield — — —

As of June 30, 2025, unrecognized compensation expense related to unvested stock options was approximately $ 39.4 million, which is expected to be recognized over a remaining weighted-average period of 2.2 years.

Value Creation Award

In November 2020, the Company ’ s Board of Directors approved a long-term, multi-year performance-based stock option grant providing Mr. Levchin with the opportunity to earn the right to purchase up to 12,500,000 shares of the Company ’ s Class A common stock (the “Value Creation Award”).

As discussed below, the Value Creation Award will only be earned, if at all, in the event the price of our Class A common stock attains stock price hurdles that are significantly in excess of the Company's IPO price per share, over a period of five years , subject to Mr. Levchin’s continued service to the Company.

The Value Creation Award is divided into ten tranches, each of which Mr. Levchin may earn by satisfying a performance condition within a five-year period following the IPO. The performance condition for each tranche will be satisfied on the date the 90 average trading day volume weighted share price of the Company’s Class A common stock exceeds certain specified stock price hurdles, presented in the table below, which were determined based on a target percentage of share price appreciation from the IPO price. Once earned as a result of satisfying the performance condition, the options will vest and become exercisable over a five-year period that commenced at the time of the IPO, subject to Mr. Levchin’s continued service to the Company, in annual amounts equal to 15 %, 15 %, 20 %, 25 % and 25 %, respectively. The per share exercise price of the Value Creation Award is $ 49.00 , the price to the public in the IPO.

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Tranche Stock Price Hurdle Number of Options
1 $ 65.66   1,000,000  
2 $ 82.32   1,000,000  
3 $ 98.98   1,000,000  
4 $ 115.64   1,000,000  
5 $ 132.30   1,000,000  
6 $ 148.47   1,000,000  
7 $ 165.13   1,000,000  
8 $ 181.79   1,000,000  
9 $ 247.94   2,250,000  
10 $ 371.91   2,250,000  
Total 12,500,000  

We recognize stock-based compensation on these awards based on the grant date fair value using an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable of being satisfied. During the years ended June 30, 2025, 2024, and 2023, we incurred stock-based compensation expense of $ 36.5 million, $ 64.6 million, and $ 94.6 million, respectively, associated with the Value Creation Award as a component of general and administrative expense within the consolidated statements of operations and comprehensive income (loss). As of the beginning of the 12 month period ended June 30, 2025, 4,000,000 shares had vested based on conditions met in prior periods. No additional shares vested during the year ended June 30, 2025. As of June 30, 2025, none of these awards have been exercised.

As of June 30, 2025, unrecognized compensation expense related to the Value Creation Award was approximately $ 11.8  million, which is expected to be recognized over a remaining weighted-average period of 0.5 years.

Restricted Stock Units

RSUs granted prior to the IPO 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 a change of control or an initial public offering, each as defined in the Plan), both of which must be met in order to vest. The performance-based condition was met upon the IPO. We record stock-based compensation expense for those RSUs on an accelerated attribution method over the requisite service period, which is generally four years . RSUs granted after IPO are subject to a service-based vesting condition. We record stock-based compensation expense for service-based RSUs on a straight-line basis over the requisite service period, which is generally one to four years .

The following table summarizes our RSU activity during the year ended June 30, 2025:

Number of Shares Weighted Average Grant Date Fair Value
Non-vested at June 30, 2024 18,327,420   $ 27.68  
Granted 12,038,819   34.59  
Vested ( 14,517,850 ) 30.18  
Forfeited, expired or canceled ( 2,182,354 ) 28.48  
Non-vested at June 30, 2025 13,666,035   $ 30.98  

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As of June 30, 2025, unrecognized compensation expense related to unvested RSUs was approximately $ 394.1 million, which is expected to be recognized over a remaining weighted-average period of 1.5 years.

2020 Employee Stock Purchase Plan

On November 18, 2020, our Board of Directors adopted and approved the 2020 Employee Stock Purchase Plan (“ESPP”). The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum effort towards the success of the Company and that of its affiliates. A total of 16.0 million shares of Class A common stock are reserved and available for issuance under the ESPP and 2.1 million shares have been issued as of June 30, 2025. The ESPP provides for six-month offering periods beginning December 1 and June 1 of each year. At the end of each offering period, shares of our Class A common stock are purchased on behalf of each ESPP participant at a price per share equal to 85 % of the lesser of (1) the fair market value of the Class A common stock on first day of the offering period (the grant date) or (2) the fair market value of the Class A common stock on the last day of the offering period (the purchase date). We use the Black-Scholes-Merton option pricing model to measure the fair value of the purchase rights issued under the ESPP at the first day of the offering period, which represents the grant date. We record stock-based compensation expense on a straight-line basis over each six-month offering period, the requisite service period of the award.

Stock-Based Compensation Expense

The following table presents the components and classification of stock-based compensation (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
General and administrative $ 216,323   $ 228,334   $ 239,923  
Technology and data analytics 87,707   96,596   181,396  
Sales and marketing 16,535   16,374   25,914  
Processing and servicing 868   3,207   4,476  
Total stock-based compensation in operating expenses 321,433   344,511   451,709  
Capitalized into property, equipment and software, net 178,461   126,510   80,108  
Total stock-based compensation $ 499,894   $ 471,021   $ 531,817  

16.    Restructuring and other

In February 2023, we committed to a restructuring plan (the “February 2023 Plan”) that included reducing our workforce and vacating a portion of our San Francisco office. The February 2023 Plan was completed during fiscal 2024, and we do not expect future costs or payments related to the plan.
As of June 30, 2025, we had no outstanding liability related to previously accrued exit and disposal costs. For the years ended June 30, 2024 and 2023, exit and disposal costs were $ 6.8 million and $ 35.9 million, respectively.
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17.    Income Taxes

The U.S. and foreign components of income (loss) before income taxes for the years ended June 30, 2025, 2024, and 2023 are as follows (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
U.S. $ 42,949   $ ( 518,093 ) $ ( 974,074 )
Foreign 18,515   2,566   ( 15,171 )
Total income (loss) before income taxes $ 61,464   $ ( 515,527 ) $ ( 989,245 )

Income tax expense (benefit) for the years ended June 30, 2025, 2024, and 2023 is summarized as follows (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Current
Federal $ 1,565   $ —   $ —  
State 176   1,442   759  
Foreign 425   392   408  
Total current expense $ 2,166   $ 1,834   $ 1,167  
Deferred
Federal $ 139   $ 139   $ 137  
State ( 212 ) 333   249  
Foreign 7,186   ( 76 ) ( 5,453 )
Total deferred expense 7,113   396   ( 5,067 )
Income tax (benefit) expense $ 9,279   $ 2,230   $ ( 3,900 )

The income tax expense for the year ended June 30, 2025 was primarily attributable to U.S. federal and various foreign income taxes, while the income tax expense for the year ended June 30, 2024 was primarily attributable to various U.S state and foreign income taxes and the tax amortization of certain intangibles. The income tax benefit for the year ended June 30, 2023 was primarily attributable to deferred taxes recognized by certain foreign subsidiaries and partially offset by various U.S. state and other foreign income taxes.

The following is a reconciliation of the U.S. statutory federal income tax rate to our effective tax rate for the years ended June 30, 2025, 2024, and 2023:

June 30, 2025 June 30, 2024 June 30, 2023
U.S. statutory federal income tax rate 21.0   % 21.0   % 21.0   %
State and local income taxes, net of federal tax benefit 6.8   % 8.9   % 7.7   %
Foreign rate differential 1.7   % ( 0.1 ) % 0.1   %
California state tax law change 26.3   % —   % —   %
Stock-based compensation ( 228.9 ) % ( 5.1 ) % ( 14.9 ) %
Non-deductible compensation expense 70.0   % ( 5.6 ) % ( 2.2 ) %
Tax benefit related to tax credits, net ( 67.5 ) % 4.3   % 0.9   %
Impact of change in fair value of contingent consideration —   % —   % 0.2   %
Change in unrecognized tax benefits 27.0   % ( 1.7 ) % ( 0.4 ) %
Change in tax status of a foreign subsidiary 14.6   % —   % —   %
Other 0.8   % —   % ( 0.1 ) %
Change in valuation allowance 143.0   % ( 22.1 ) % ( 11.9 ) %
Effective income tax rate 14.8   % ( 0.4 ) % 0.4   %

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Significant components of deferred tax assets and liabilities are as follows (in thousands):
June 30, 2025 June 30, 2024
Net operating loss carryforwards $ 1,034,551   $ 1,071,737  
Allowance for credit losses 116,570   97,400  
Stock-based compensation 16,789   23,182  
Stock warrants 142,143   100,369  
Operating lease liabilities 8,386   11,457  
Capitalized R&E including internally developed software 62,325   6,977  
Tax credit carryforwards 108,026   88,190  
Other 11,685   22,216  
Total deferred tax assets $ 1,500,475   $ 1,421,528  

Right-of-use lease assets ( 5,021 ) ( 6,330 )
Other ( 3,686 ) ( 3,921 )
Total deferred tax liabilities $ ( 8,707 ) $ ( 10,251 )
Valuation allowance ( 1,479,926 ) ( 1,392,205 )
Deferred tax assets (liabilities), net of valuation allowance $ 11,842   $ 19,072  

We continue to recognize a full valuation allowance against our U.S. federal and state and certain foreign net deferred tax assets. The valuation allowance increased by $ 87.7 million during the year ended June 30, 2025. We will release the domestic valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized.

As of June 30, 2025, we had pretax U.S. federal net operating loss ("NOL") carryforwards of approximately $ 3.2 billion, state NOL carryforwards of $ 4.9 billion, Canadian NOL carryforwards of $ 24.0 million, and U.K. NOL carryforwards of $ 27.6 million. If not utilized, certain U.S. federal and state NOL carryforwards will begin to expire in 2029, whereas others have an unlimited carryforward period, and foreign NOL carryforwards will begin to expire in 2041, with others that have an unlimited carryforward period as well. Additionally, as of June 30, 2025, we also had U.S. federal and state research and development tax credit carryforwards of $ 129.6 million and $ 64.0 million, respectively. The U.S. federal research and development tax credit carryforwards will begin to expire in 2041 while the state research and development tax credits may be carried forward indefinitely. As of June 30, 2025, the Company also had other state tax credit carryforwards of $ 2.1 million, which will begin to expire in 2026 if not utilized.

Of the above NOL carryforwards, approximately $ 25.5 million pretax U.S. federal NOL carryforwards and $ 34.8 million state NOL carryforwards are from domestic acquisitions, which may be subject to an annual utilization limitation under Internal Revenue Code Section 382.

The future utilization of all domestic NOL and tax credit carryforwards may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383 and similar state provisions, due to ownership changes that may have occurred previously or that could occur in the future. Any limitation may result in the expiration of all or a portion of the NOL carryforwards before utilization.

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The Company accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”) . The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
Beginning balance $ 61,514   $ 51,850   $ 47,867  
Gross increase for tax positions related to the current year 18,543   8,931   5,828  
Gross increase for tax positions related to prior years —   733   —  
Gross decrease for tax positions related to prior years ( 809 ) —   ( 1,845 )
Ending balance $ 79,248   $ 61,514   $ 51,850  

As of June 30, 2025, the Company had no unrecognized tax benefits related to uncertain tax positions that, if recognized, would impact the effective tax rate. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease within the next twelve months.

Interest and penalties on unrecognized tax benefits are recorded as a component of tax expense. During the years ended June 30, 2025, 2024, and 2023, we did not recognize accrued interest and penalties related to unrecognized tax benefits.

We file U.S. federal and state income tax returns as well as various foreign income tax returns with varying statutes of limitation. With respect to the Company’s major tax filings, all tax years remain open to examination due to the carryover of unused net operating losses.

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18.    Net Income (Loss) per Share Attributable to Common Stockholders

The following table presents basic and diluted net income (loss) per share attributable to common stockholders for Class A and Class B common stock (in thousands, except share and per share data):

June 30, 2025 June 30, 2024 June 30, 2023
Class A Class B Class A Class B Class A Class B
Numerator:
Net income (loss) attributable to common stockholders - basic $ 45,456   $ 6,730   $ ( 430,789 ) $ ( 86,968 ) $ ( 785,080 ) $ ( 200,265 )
Net income (loss) attributable to common stockholders - diluted $ 45,815   $ 6,371   $ ( 430,789 ) $ ( 86,968 ) $ ( 785,080 ) $ ( 200,265 )
Denominator:
Weighted average shares of common stock - basic 281,215,807   41,636,066   257,810,094   52,047,035   235,316,821   60,026,645  
Dilutive effect of stock equivalents:
Restricted stock units 8,863,942   —   —   —   —   —  
Stock options, including early exercise of options 8,950,174   —   —   —   —   —  
Value creation award vested shares 346,434   —   —   —   —   —  
Employee stock purchase plan shares 11,143   —   —   —   —   —  
Weighted average shares of common stock - diluted 299,387,500   41,636,066   257,810,094   52,047,035   235,316,821   60,026,645  
Net income (loss) per share:
Basic $ 0.16   $ 0.16   $ ( 1.67 ) $ ( 1.67 ) $ ( 3.34 ) $ ( 3.34 )
Diluted $ 0.15   $ 0.15   $ ( 1.67 ) $ ( 1.67 ) $ ( 3.34 ) $ ( 3.34 )

The following common stock equivalents were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their inclusion would have been anti-dilutive:

June 30, 2025 June 30, 2024 June 30, 2023
Common stock warrants 7,302,216   5,700,587   5,859,226  
Restricted stock units 664,243   18,327,420   21,653,196  
Stock options, including early exercise of options 905,835   16,794,697   18,505,138  

Employee stock purchase plan shares 157,615   216,846   485,465  
Total 9,029,909   41,039,550   46,503,025  

19.    Segments and Geographical Information

The Company is managed on a consolidated basis as a single operating and reportable segment. This reflects the way in which our Chief Operating Decision Maker (“CODM”), the Chief Executive Officer of Affirm Holdings, Inc., regularly reviews internally reported financial information. Net income is the primary measure of segment profit and loss reviewed by the CODM. Net income is used in the budget and forecast process, to assess business performance, and to make decisions on strategy and resource allocation.

The CODM is regularly provided with the consolidated expenses presented within the consolidated statement of operations and comprehensive income (loss). Refer to the consolidated statement of operations and comprehensive income (loss) for further information related to our revenues, expenses, and net income.

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Refer to the consolidated statement of cash flows for further information related to significant noncash items including depreciation and amortization expense.

The CODM does not review segment assets at a different level than the amounts presented within the consolidated balance sheets.

Revenue

Revenue by geography is based on the billing addresses of the borrower or the location of the merchant’s national headquarters. Refer to 3.  Revenue for further information on the types of products and services the Company derives its revenues from. The following table sets forth revenue by geographic area (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023
United States $ 3,105,121   $ 2,225,605   $ 1,540,044  
Canada 119,009   97,394   47,423  
Other 282   —   518  
Total $ 3,224,412   $ 2,322,999   $ 1,587,985  

Long-Lived Assets

The following table summarizes our long-lived assets, which consists of property, equipment and software, net and operating lease right-of-use assets, by geographic area (in thousands):

June 30, 2025 June 30, 2024
United States $ 590,044   $ 447,287  
Canada 1,104   1,811  
Other 614   451  
Total $ 591,761   $ 449,549  

20.  Subsequent Events

Subsequent to June 30, 2025 through the date the consolidated financial statements were filed with the SEC, we paid $ 24.8 million in cash for the repurchase of $ 26.4 million aggregate principal amount of our 2026 Notes under the May 2025 authorization. The carrying amount of the extinguished 2026 Notes was approximately $ 26.3 million resulting in a $ 1.5 million gain on early extinguishment of debt. The repurchased 2026 Notes were received and canceled.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our CEO and CFO concluded that such disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K and designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms and is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company. In order to evaluate the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, management has conducted an assessment, including testing, of 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 (“COSO”).

Internal control over financial reporting refers to the process, designed under the supervision and with the participation of management, including our CEO and our CFO, and overseen by the Company’s Board of Directors, to provide reasonable, but not absolute, assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The effectiveness of any system of internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, no matter how well designed and operated, can only provide reasonable, not absolute assurance, that its objectives will be met. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our
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internal controls as necessary or appropriate for our business but such improvements will be subject to the same inherent limitations outlined in this section.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025. Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of June 30, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP.

Deloitte & Touche LLP, the Company’s independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025, and its report is included below.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Affirm Holdings, Inc. and subsidiaries (the “Company”) 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 (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2025, of the Company and our report dated August 28, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP
San Francisco, California
August 28, 2025

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ITEM 9B. OTHER INFORMATION

(b)      Rule 10b5-1 Trading Plans
During the three months ended June 30, 2025, the following directors and officers of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, as follows:

On June 12, 2025 , Rob O’Hare , our Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement providing for the sale of the Company’s Class A common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Mr. O’Hare’s Rule 10b5-1 Trading Plan provides for (i) the exercise of up to 66,591 employee stock options, plus additional employee stock options that were unexercised under Mr. O’Hare’s previous Rule 10b5-1 Trading Plan entered into on December 6, 2024, and the sale of the underlying shares of our Class A common stock, and (ii) the sale of additional shares of our Class A common stock to be received upon the vesting of RSUs to occur on various dates within the duration of the trading arrangement, pursuant to one or more limit orders, on or after October 1, 2025 until March 31, 2026 , or earlier if all transactions under the trading arrangement are completed.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to the sections titled “Board of Directors and Corporate Governance,” “Executive Officers” and “Other Matters” of our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2025.

Our board of directors has adopted a Code of Ethics and Business Conduct (the “Code of Conduct”) applicable to all officers, directors and employees, including our principal executive, principal financial and principal accounting officers, which is available on our website (investors.affirm.com) under “Corporate Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding future amendments to certain provisions of the Code of Conduct and waivers of the Code of Conduct granted to executive officers and directors by posting such information at the website address specified above within four business days following the date of the amendment or waiver.

Our board of directors has adopted an insider trading policy which governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees and other covered persons and is designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the sections titled “Board of Directors and Corporate Governance” and “Executive Compensation” of our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2025.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to the sections titled “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” of our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2025.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to the sections titled “Board of Directors and Corporate Governance” and “Certain Relationships and Related-Party Transactions” of our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2025.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to the section titled “Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm” of our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2025.

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PART IV
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed as a part of this Annual Report on Form 10-K:
(a) Financial Statements

Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8, of this Annual Report on Form 10-K.

(b) Financial Statement Schedules

All schedules have been omitted because the required information is not present or not present in amounts sufficient to require submission of the schedules, or because the information required is included in Part II, Item 8, of this Annual Report on Form 10-K.

(c) Exhibits

Incorporated by Reference

Exhibit Number
Description
Form
File No.
Exhibit
Filing Date
Filed Herewith

2.1 Plan of Conversion of Affirm Holdings, Inc.
8-K 001-39888 2.1 June 26, 2025
3.1 Articles of Incorporation of Affirm Holdings, Inc.
8-K 001-39888 3.1 June 26, 2025
3.2 Bylaws of Affirm Holdings, Inc.
8-K 001-39888 3.2 June 26, 2025
4.1 Description of Capital Stock
X
4.2 Second Replacement Warrant to Purchase Class A Common Stock of Affirm Holdings, Inc., by and between Affirm Holdings, Inc. and Amazon.com Services LLC, dated as of February 14, 2025*
10-Q 001-39888 4.1 May 9, 2025
4.3 Amended and Restated Warrant to Purchase Class A Common Stock of Affirm Holdings, Inc., by and between Affirm Holdings, Inc. and Amazon.com Services LLC, dated as of October 27, 2023*
10-Q 001-39888 4.1 February 8, 2024
4.4 First Amendment to the Amended and Restated Warrant to Purchase Class A Common Stock of Affirm Holdings, Inc., by and between Affirm Holdings, Inc. and Amazon.com Services LLC, dated as of July 29, 2024
10-Q 001-39888 4.1 November 7, 2024
4.5 Indenture, dated November 23, 2021, between Affirm Holdings, Inc. and Wilmington Trust, National Association, as trustee
8-K 001-39888 4.1 November 23, 2021
4.6 Form of 0% Convertible Senior Note due 2026 (included in Exhibit 4. 5 )
8-K 001-39888 4.2 November 23, 2021
4.7 Indenture, dated December 20, 2024, between the Company and Wilmington Trust, National Association, as trustee
8-K 001-39888 4.1 December 20, 2024
4.8 Form of 0.75% Convertible Senior Note due 2029 (included in Exhibit 4.7)
8-K 001-39888 4.2 December 20, 2024
10.1 Form of Indemnification Agreement between the Company and its directors and officers
X
10.2 Revolving Credit Agreement, dated as of February 4, 2022, among Affirm, Inc., Affirm Holdings, Inc., certain lenders identified therein, and Barclays Bank PLC
8-K 001-39888 10.1 February 10, 2022
10.3 Amendment No. 1 to Revolving Credit Agreement, dated August 15, 2022, between Affirm, Inc., Affirm Holdings, Inc., certain lenders identified therein, and Barclays Bank PLC
10-Q 001-39888 10.1 November 8, 2022
10.4 Amendment No. 2 to Revolving Credit Agreement, dated June 26, 2024, between Affirm, Inc., Affirm Holdings, Inc., certain lenders identified therein, and Barclays Bank PLC
8-K 001-39888 10.1 July 1, 2024
10.5 Amendment No. 3 to Revolving Credit Agreement, dated December 16, 2024, between Affirm, Inc., Affirm Holdings, Inc., certain lenders identified therein, and Barclays Bank PLC
10-Q 001-39888 10.1 February 6, 2025
10.6 Loan Sale Agreement, dated as of September 18, 2020, by and between Celtic Bank Corporation and Affirm, Inc.*
10-K 001-39888 10.4 August 25, 2023

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10.7 Amendment No. 1 to Loan Sale Agreement, dated as of October 27, 2023, by and between Celtic Bank Corporation and Affirm, Inc.
10-Q 001-39888 10.1 February 8, 2024
10.8 Marketing and Servicing Agreement, dated as of September 18, 2020, by and between Celtic Bank Corporation and Affirm, Inc.*
10-K 001-39888 10.5 August 25, 2023
10.9 Amendment No. 1 to Marketing and Servicing Agreement, dated as of October 27, 2023, by and between Celtic Bank Corporation and Affirm, Inc.
10-Q 001-39888 10.2 February 8, 2024
10.10 Global Customer Installment Program Agreement, dated February 14, 2025, by and between Shopify Inc. and Affirm, Inc.*
10-Q 001-39888 10.1 May 9, 2025
10.11 Amended and Restated Installment Financing Services Agreement, dated as of November 10, 2021, by and among Affirm Holdings, Inc., Amazon.com Services LLC and Amazon Payments, Inc.*
8-K 001-39888 10.1 November 10, 2021
10.12 First Amendment to Amended and Restated Installment Financing Services Agreement, dated as of October 2, 2023, by and between Affirm, Inc., Amazon.com Services LLC and Amazon Payments, Inc.*
10-Q 001-39888 10.2 November 8, 2023
10.13 Second Amendment to Amended and Restated Installment Financing Services Agreement, dated as of February 2, 2024, by and between Affirm, Inc., Amazon.com Services LLC and Amazon Payments, Inc.*
10-Q 001-39888 10.1 May 8, 2024
10.14 Third Amendment to Amended and Restated Installment Financing Services Agreement, dated as of April 4, 2024, by and between Affirm, Inc., Amazon.com Services LLC and Amazon Payments, Inc.*
10-Q 001-39888 10.1 November 7, 2024
10.15 Fourth Amendment to Amended and Restated Installment Financing Services Agreement, dated as of October 25, 2024, by and between Affirm, Inc., Amazon.com Services LLC and Amazon Payments, Inc.*
10-Q 001-39888 10.1 February 6, 2025
10.16 Transaction Agreement, dated as of November 10, 2021, by and between Affirm Holdings, Inc. and Amazon.com Services LLC*
8-K 001-39888 10.2 November 10, 2021
10.17+ Amended and Restated 2012 Stock Plan
10-Q 001-39888 10.3 February 8, 2023
10.18+ Form of Stock Option Agreement pursuant to the Affirm Holdings, Inc. Amended and Restated 2012 Stock Plan
10-Q 001-39888 10.4 February 14, 2022
10.19+ Form of RSU Agreement pursuant to the Affirm Holdings, Inc. Amended and Restated 2012 Stock Plan
10-Q 001-39888 10.5 February 14, 2022
10.20+ 2020 Employee Stock Purchase Plan
S-1/A 333-250184 10.3 November 20, 2020
10.21+ Cash Incentive Plan
X
10.22+ Officer Severance Plan
X
19.1 Insider Trading Policy
10-K 001-39888 19.1 August 28, 2024
21.1 Subsidiaries of the Company
X
23.1 Consent of Deloitte & Touche LLP, independent registered public accountant
X
24.1 Power of Attorney (see signature page hereto) X
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X

31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X

32.1† Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X

32.2† Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X

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97.1 Policy for the Recovery of Erroneously Awarded Compensation
10-K 001-39888 97.1 August 28, 2024
101.INS
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
X

101.SCH
Inline XBRL Taxonomy Extension Schema Document
X

101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X

101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X

101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
X

101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) X

† Furnished herewith.
+ Denotes management contract or compensatory plan or arrangement.

* Portions of the exhibit have been omitted as the Company has determined that: (i) the omitted information is not material; and (ii) the Company customarily and actually treats the omitted information as private or confidential.

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ITEM 16. FORM 10-K SUMMARY

None.
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SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

AFFIRM HOLDINGS, INC.

Date: August 28, 2025
By: /s/ Max Levchin
Max Levchin
Chief Executive Officer
(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below hereby constitutes and appoints Max Levchin, Rob O’Hare and Katherine Adkins, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Name Title Date
/s/ Max Levchin Chairman of the Board of Directors and Chief Executive Officer August 28, 2025

Max Levchin (principal executive officer)

/s/ Rob O’Hare Chief Financial Officer August 28, 2025

Rob O’Hare (principal financial officer)

/s/ Siphelele Jiyane Chief Accounting Officer
August 28, 2025

Siphelele Jiyane (principal accounting officer)

/s/ Richard Galanti Director August 28, 2025

Richard Galanti

/s/ Brian D. Hughes Director
August 28, 2025

Brian D. Hughes

/s/ Jeremy Liew Director August 28, 2025

 Jeremy Liew

/s/ Libor Michalek President and Director August 28, 2025

Libor Michalek

/s/ Christa S. Quarles Director August 28, 2025

Christa S. Quarles

/s/ Jacqueline D. Reses Director August 28, 2025

Jacqueline D. Reses

/s/ Manolo Sanchez
Director August 28, 2025

Manolo Sanchez

/s/ Noel Watson
Director August 28, 2025

Noel Watson

164