10-Q – 2025-11-06 – afrm-20250930.htm

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

Discount Rate 30.00 % 30.00 % 30.00 %
Program Profitability 1.00 % 3.28 % 2.84 %

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 %

(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 interim condensed 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 September 30, 2025, we estimated the fair value of future settlements using a discounted cash flow model.
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The following table summarizes the activity related to the fair value of the risk sharing assets (in thousands):
Three Months Ended September 30,
2025 2024
Fair value at beginning of period $ 43,179   $ 33,884  
Initial transfers of financial assets 6,508   10,377  
Cash settlements ( 8,340 ) —  
Subsequent changes in fair value 218   1,069  
Fair value at end of period $ 41,565   $ 45,330  

The following table summarizes the activity related to the fair value of the risk sharing liabilities (in thousands):
Three Months Ended September 30,
2025 2024
Fair value at beginning of period $ 90   $ 918  
Cash settlements ( 90 ) —  
Subsequent changes in fair value 883  
Fair value at end of period $ —   $ 1,801  

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 September 30, 2025 and June 30, 2025:

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

Risk sharing assets Discount Rate 7.13 % 20.00 % 18.08 %
Loss Rate 3.33 % 4.94 % 4.14 %
Prepayment Rate 19.39 % 21.46 % 20.30 %
Risk sharing liabilities Discount Rate 20.00 % 20.00 % 20.00 %
Loss Rate 3.48 % 5.24 % 4.41 %

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 %

(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):

September 30, 2025 June 30, 2025
Risk sharing assets
Prepayment Rate assumption:
Prepayment Rate decrease of 25% $ ( 1,808 ) $ ( 1,896 )
Prepayment Rate decrease of 50% $ ( 3,736 ) $ ( 3,923 )
Loss Rate assumption:
Loss Rate increase of 25% $ ( 14,633 ) $ ( 15,150 )
Loss Rate increase of 50% $ ( 29,971 ) $ ( 30,277 )
Discount Rate assumption:
Discount Rate increase of 25% $ ( 1,109 ) $ ( 903 )
Discount Rate increase of 50% $ ( 1,789 ) $ ( 1,745 )
Risk sharing liabilities
Loss Rate assumption:
Loss Rate increase of 25% $ 8,170   $ 16,946  
Loss Rate increase of 50% $ 17,403   $ 24,676  
Discount Rate assumption:
Discount Rate increase of 25% $ —   $ —  
Discount Rate increase of 50% $ —   $ —  

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 September 30, 2025 and June 30, 2025 (in thousands):

September 30, 2025
Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value
Assets:
Loans held for sale $ 12   $ —   $ 12   $ —   $ 12  
Loans held for investment, net 6,809,376   —   —   7,291,039   7,291,039  

Total assets $ 6,809,388   $ —   $ 12   $ 7,291,039   $ 7,291,051  
Liabilities:
Convertible senior notes, net (1)
$ 1,127,668   $ —   $ 1,207,239   $ —   $ 1,207,239  
Notes issued by securitization trusts 4,830,819   —   —   4,867,800   4,867,800  
Funding debt (2)
1,796,177   —   —   1,796,438   1,796,438  
Total liabilities $ 7,754,664   $ —   $ 1,207,239   $ 6,664,238   $ 7,871,477  

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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 (1)
$ 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 (2)
1,640,514   —   —   1,640,765   1,640,765  
Total liabilities $ 7,627,369   $ —   $ 1,205,287   $ 6,509,745   $ 7,715,032  

(1) As of September 30, 2025, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 221.7 million and $ 210.9 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 906.0 million and $ 996.3 million, respectively. 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. 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.
(2) As of September 30, 2025 and June 30, 2025, debt issuance costs in the amount of $ 18.3 million and $ 17.7 million, respectively, was included within funding debt.     

13.    Stockholders’ Equity

Common Stock

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

September 30, 2025 June 30, 2025

Available outstanding under equity compensation plans 38,330,379   39,122,013  
Available for future grant under equity compensation plans 65,963,471   53,851,610  
Total 104,293,850   92,973,623  

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 interim condensed consolidated balance sheets.

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
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share and originally had 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 September 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. Refer to Note 5.   Balance Sheet Components for more information on the asset and related amortization during the period. The remaining grant-date fair value of the warrants will be recognized within our interim condensed 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 three months ended September 30, 2025 and 2024, a total of $ 46.2 million and $ 112.5 million, respectively, was recognized within sales and marketing expense, which included $ 5.2 million for both periods in amortization expense of the commercial agreement asset and $ 41.0 million and $ 107.3 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested.

The following table summarizes the warrants activity during the three months ended September 30, 2025:

Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Life (years)
Warrants outstanding, June 30, 2025 18,500,000   $ 81.08 3.90
Granted —   — 0.00
Exercised —   — 0.00
Cancelled —   — 0.00
Warrants outstanding, September 30, 2025
18,500,000   $ 81.08 3.60
Vested and exercisable, September 30, 2025
11,340,727   $ 69.14 3.60

On September 30, 2025, the weighted-average grant date fair values for outstanding warrants and exercisable warrants were $ 86.76 and $ 93.65 , respectively.

Share Repurchases

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 three month periods ended September 30, 2025 and 2024.

14.    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, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to employees, officers, directors, and consultants. As of September 30, 2025, the maximum number of shares of common stock which may be issued under the Plan is 192,859,800 Class A shares and there were 65,963,471 shares of Class A common stock available for future grants under the Plan.

Stock Options

Stock option awards generally vest over a period of four years , with some awards vesting 25 % on the 12 month anniversary of the vesting commencement date and the remaining 75 % vesting ratably over the next three years . The contractual term is 10 years from the date of grant, or three months after termination of employment.

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The following table summarizes our stock option activity for the three months ended September 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, 2025
12,955,978   $ 19.12   5.18

Exercised ( 1,686,317 ) 17.65  
Forfeited, expired or canceled ( 31,617 ) 35.89  
Balance as of September 30, 2025
11,238,044   19.29   5.01
Vested and exercisable, September 30, 2025
9,392,988   $ 17.55   4.42 $ 522,816  
Vested and exercisable, and expected to vest thereafter (1) September 30, 2025
11,236,193   $ 19.31   5.01 $ 605,384  

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

There were no options granted during the three months ended September 30, 2025. As of September 30, 2025, unrecognized compensation expense related to unvested stock options was approximately $ 34.0 million, which is expected to be recognized over a remaining weighted-average period of 2.0 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”). 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. We incurred stock-based compensation expense of $ 5.5 million and $ 12.4 million during the three months ended September 30, 2025 and 2024, respectively, associated with the Value Creation Award as a component of general and administrative expense within the interim condensed consolidated statements of operations and comprehensive income (loss).

The following table summarizes our Value Creation Award activity for the three months ended September 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, 2025
12,500,000   $ 49.00   5.29
Exercised ( 1,333,332 ) 49.00  
Balance as of September 30, 2025
11,166,668   49.00   5.29
Vested and exercisable, September 30, 2025
2,666,668   $ 49.00   5.29 $ 64,213  

As of September 30, 2025, unrecognized compensation expense related to the Value Creation Award was approximately $ 6.3  million, which is expected to be recognized over a remaining weighted-average period of 0.3 years.

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Restricted Stock Units

RSUs 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 three years .

The following table summarizes our RSU activity during the three months ended September 30, 2025:

Number of Shares Weighted Average Grant Date Fair Value
Non-vested at June 30, 2025
13,666,035   $ 30.98  
Granted 5,662,211   67.50  
Vested ( 3,231,575 ) 36.76  
Forfeited, expired or canceled ( 433,760 ) 35.72  
Non-vested at September 30, 2025
15,662,911   $ 42.86  

As of September 30, 2025, unrecognized compensation expense related to unvested RSUs was approximately $ 633.7 million, which is expected to be recognized over a remaining weighted-average period of 1.6 years.

Performance Stock Units

In September 2025, we granted PSUs to select executives and employees. Vesting is contingent upon completion of a continuous three-year service period and the achievement of company financial performance goals, including target growth rates for revenue less transaction costs and adjusted operating income. The number of shares that vest at the end of the performance period will range between 0 % and 200 % of the target shares based on actual performance against the applicable targets, which will be measured at the end of each fiscal year and averaged at the end of the three-year period. We record stock-based compensation expense for the number of PSUs that are probable of vesting based on the estimated achievement of the performance conditions. If the minimum conditions are not met, any recognized compensation cost will be reversed. The expense is recognized on a straight-line basis over the three-year period.

The following table summarizes our PSU activity during the three months ended September 30, 2025:

Number of Shares Weighted Average Grant Date Fair Value
Non-vested at June 30, 2025
—   $ —  
Granted 262,756   89.91  

Non-vested at September 30, 2025
262,756   $ 89.91  

As of September 30, 2025, unrecognized compensation expense related to unvested PSUs was approximately $ 23.3 million, which is expected to be recognized over a remaining weighted-average period of 2.8 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 19.2 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 September 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
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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):

Three Months Ended September 30,
2025 2024
General and administrative $ 55,773   $ 62,804  
Technology and data analytics 24,764   25,972  
Sales and marketing 5,076   5,195  
Processing and servicing 240   262  
Total stock-based compensation in operating expenses 85,853   94,233  
Capitalized into property, equipment and software, net 52,885   49,478  
Total stock-based compensation $ 138,738   $ 143,711  

15.    Income Taxes

The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and the tax effect of discrete items occurring during the quarter. Our quarterly provision and the estimate of the annual effective tax rate are subject to significant variation due to several factors, including variability in the pre-tax jurisdictional mix of earnings and the impact of discrete items.

For the three months ended September 30, 2025, we recorded income tax expense (benefit) of $ 2.3 million which was primarily attributable to various foreign income taxes. For the three months ended September 30, 2024, we recorded income tax expense (benefit) of $ 1.9 million which was primarily attributable to various U.S state and foreign income taxes.

As of September 30, 2025, we continue to recognize a full valuation allowance against our U.S. federal and state and certain foreign net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize the existing deferred tax assets.

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16.    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):

Three Months Ended September 30,
2025 2024
Class A Class B Class A Class B
Numerator:
Net income (loss) attributable to common stockholders - basic $ 70,741   $ 9,953   $ ( 86,570 ) $ ( 13,652 )
Net income (loss) attributable to common stockholders - diluted $ 71,257   $ 9,437   $ ( 86,570 ) $ ( 13,652 )
Denominator:
Weighted average shares of common stock - basic 289,507,745   40,730,460   274,886,393   43,348,162  
Dilutive effect of stock equivalents:
Restricted stock units 8,022,382   —   —   —  
Stock options, including early exercise of options 8,664,133   —   —   —  
Value creation award vested shares 1,312,716   —   —   —  
Employee stock purchase plan shares 40,967   —   —   —  
Weighted average shares of common stock - diluted 307,547,943   40,730,460   274,886,393   43,348,162  
Net income (loss) per share:
Basic $ 0.24   $ 0.24   $ ( 0.31 ) $ ( 0.31 )
Diluted $ 0.23   $ 0.23   $ ( 0.31 ) $ ( 0.31 )

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:

Three Months Ended September 30,
2025 2024
Common stock warrants 7,840,727   5,734,551  
Restricted stock units 4,962,779   24,352,160  
Stock options, including early exercise of options 131,859   17,011,341  

Employee stock purchase plan shares —   210,893  
Total 12,935,365   47,308,945  

17.   Segment 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 interim condensed consolidated statement of operations and comprehensive income (loss). Refer to the interim condensed consolidated
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statement of operations and comprehensive income (loss) for further information related to our revenues, expenses, and net income.

Refer to the interim condensed 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 interim condensed consolidated balance sheets.

Refer to Note 3. Revenue for further information on the types of products and services the Company derives its revenues from.

18.    Subsequent Events

On November 6, 2025, we entered into a second amended and restated Installment Financing Services Agreement (the “Restated Agreement”) with Amazon.com Services LLC (“Amazon Services”) and Amazon Payments, Inc., which will supersede and replace the existing commercial agreement (the “Existing Agreement”) on February 1, 2026 (the “Effective Date”). The Restated Agreement has an initial term of five years and will automatically extend for subsequent one-year periods unless either party provides notice. The Existing Agreement remains in effect until the Effective Date.
In connection with entry into the Restated Agreement, on November 2, 2025, we and Amazon Services entered into a second amendment (the “Second Amendment”) to the amended and restated warrant (as amended) to purchase up to an aggregate of 15,000,000 shares of Class A common stock, $ 0.00001 par value per share (the “Warrant Shares”), of the Company. The Second Amendment (i) maintains the exercise price of $ 100.00 per share for Warrant Shares that vest based on the number of new users acquired prior to February 1, 2026 and (ii) sets an exercise price of $ 63.06 per share for Warrant Shares that vest based on the number of new users acquired on or after February 1, 2026. We expect the Second Amendment to result in incremental sales and marketing expense of $ 35 to $ 40 million, which will be recognized as the Warrant Shares vest, based upon satisfaction of the vesting conditions, which we expect to occur during the period from February 2026 through November 2028.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended June 30, 2025 included in our Annual Report on Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our planned investments to drive future growth, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” of this Form 10-Q and our most recently filed Annual Report on Form 10-K for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are building the next generation payment network. We believe that by using modern technology, strong engineering talent, and a mission-driven approach, we can reinvent payments and commerce. Our solutions, which are built on trust and transparency, are designed to make it easier for consumers to spend and save responsibly and with confidence, easier for merchants and commerce platforms to convert sales and grow, and easier for commerce to thrive.
Our point-of-sale solutions allow consumers to pay for purchases in fixed amounts without deferred interest, late fees, or penalties. We empower consumers to pay over time rather than paying for a purchase entirely upfront. This increases consumers’ purchasing power and gives them more control and flexibility. Our platform facilitates both true 0% APR payment options and interest-bearing loans. On the merchant side, we offer commerce enablement, demand generation, and consumer acquisition tools. Our solutions empower merchants to more efficiently promote and sell their products, optimize their consumer acquisition strategies, and drive incremental sales. We also provide valuable product-level data and insights — information that merchants cannot easily get elsewhere — to better inform their strategies. Finally, for consumers, our app unlocks the full suite of Affirm products for a delightful end-to-end consumer experience. Consumers can use our app to apply for installment loans, and upon approval, they can use the Affirm Card digitally online or in-stores to complete a purchase. Additionally, consumers can manage the pre and post purchase split of Affirm Card transactions into a loan, manage payments, open a high-yield savings account, and access a personalized marketplace.
Our Company is predicated on the principles of simplicity, transparency, and putting people first. By adhering to these principles, we have built enduring, trust-based relationships with consumers and merchants that we believe will set us up for long-term, sustainable success. We believe our innovative approach uniquely positions us to define the future of commerce and payments.
Technology and data are at the core of everything we do. Our expertise in sourcing, aggregating, and analyzing data has been what we believe to be the key competitive advantage of our platform since our founding. We believe our proprietary technology platform and data give us a unique advantage in pricing risk. We use data to inform our risk scoring in order to generate value for our consumers, merchants, and capital partners. We also prioritize building our own technology and investing in product and engineering talent as we believe these are enduring competitive advantages that are difficult to replicate. Our solutions use the latest in machine learning, artificial intelligence, cloud-based technologies, and other modern tools to create differentiated and scalable products.
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Three Months Ended September 30,
2025 2024 $ %
(in thousands, except percentages)
Total revenue, net $ 933,337   $ 698,479   $ 234,858   34   %
Total operating expenses 869,676   831,102   38,574   5   %
Operating income (loss) $ 63,661   $ (132,623) $ 196,284   148   %
Other income, net 19,358  34,303  (14,945) (44) %
Income (loss) before income taxes $ 83,019   $ (98,320) $ 181,339   184   %
Income tax expense 2,326  1,902  424  22  %
Net income (loss) $ 80,694   $ (100,222) $ 180,916   181   %

Our Financial Model

Our Revenue Model
We have three main loan product offerings: Pay-in-X, 0% annual percentage rate (“APR”) monthly installment loans and interest-bearing monthly installment loans. Pay-in-X primarily consists of short-term payment plans with one to four 0% APR installments.
From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction. Merchant fees depend on the individual arrangement between us and each merchant and vary based on the terms of the product offering; we generally earn larger merchant fees on 0% APR financing products. For the three months ended September 30, 2025 and 2024, Pay-in-X represented 15% and 14%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 13% and 11%, respectively.
From consumers, we earn interest income on the simple interest loans that we originate or purchase from our originating bank partners. Interest rates charged to our consumers vary depending on the transaction risk, creditworthiness of the consumer, the repayment term selected by the consumer, the amount of the loan, and the individual arrangement with a merchant. Because our consumers are never charged deferred or compounding interest, late fees, or penalties on the loans, we are not incentivized to profit from our consumers’ hardships. In addition, interest income includes the amortization of any discounts or premiums on loan receivables created upon either the purchase of a loan from one of our originating bank partners or our direct origination of a loan. For the three months ended September 30, 2025 and 2024, interest bearing loans represented 72% and 75% of total GMV facilitated through our platform, respectively.
In order to accelerate our ubiquity, we facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. Similarly, we also facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App. When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.
Our Loan Origination and Servicing Model
When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model. Once approved for the loan, the consumer then selects their preferred repayment option. A portion of these loans are funded and issued by our originating bank partners, which include Cross River Bank, an FDIC-insured New Jersey state-chartered bank, Celtic Bank, an FDIC-insured Utah state-chartered industrial bank, and Lead Bank, an FDIC-insured Missouri state-chartered bank. These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and other laws. Under this arrangement, we must comply with our originating bank partners' credit policies and underwriting procedures, and our originating bank partners maintain ultimate authority to decide whether to originate a loan or not. When an originating bank partner originates a loan, it funds the loan through its own funding
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sources and may subsequently offer and sell the loan to us. Pursuant to our agreements with these partners, we are obligated to purchase the loans facilitated through our platform that such partner offers us and our obligation is secured by cash deposits. To date, we have purchased all of the loans facilitated through our platform and originated by our originating bank partners. When we purchase a loan from an originating bank partner, the purchase price is equal to the outstanding principal balance of the loan, plus a fee and any accrued interest. The originating bank partner also retains an interest in the loans purchased by us through a loan performance fee that is payable by us on the aggregate principal amount of a loan that is paid by a consumer. Refer to Note 12. Fair Value of Financial Assets and Liabilities in the notes to the interim condensed consolidated financial statements for more information on the performance fee liability.

We are also able to originate loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., and across most states in the U.S. through our consolidated subsidiaries. We directly originated approximately $1.9 billion, or 18% and $1.3 billion, or 17%, for the three months ended September 30, 2025 and 2024, respectively.
We act as the servicer on all loans that we originate directly or purchase from our originating bank partners and earn a servicing fee on loans held by third parties, including bank partners prior to loan purchase and third-party loan buyers if subsequently sold as part of our funding strategy. In the normal course of business, we do not sell the servicing rights on any of the loans. To allow for flexible staffing to support overflow and seasonal traffic, we partner with several sub-servicers to manage consumer care, first priority collections, and third-party collections in accordance with our policies and procedures.

Factors Affecting Our Performance
Our performance has been and may continue to be affected by many factors, including those identified below, as well as the factors discussed in the section titled “Risk Factors” in this Form 10-Q and in our most recently filed Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as updated from time to time in our filings with the SEC.
Expanding our Network, Diversity, and Mix of Funding Relationships
Our capital efficient funding model is integral to the success of our platform. As we scale the number of transactions on our network and grow GMV, we maintain a variety of funding relationships in order to support our network. Our diversified funding relationships include warehouse facilities, securitization trusts, variable funding notes, forward flow arrangements, and partnerships with banks. Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model. As of both September 30, 2025 and June 30, 2025, our equity capital as a percentage of our total platform portfolio was 4%. The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.
Mix of Business on Our Platform
The shifts in merchant volumes and products offered in any period affect our operating results. These shifts impact GMV, revenue, our financial results, and our key operating metric performance for that period. Differences in loan product mix result in varying loan terms, APRs, and payment frequencies.
Product and economic terms of commercial agreements vary among our merchants, which may impact our results. For example, our low average order value (“AOV”) products generally benefit from shorter duration, but also have lower revenue as a percentage of GMV when compared to high AOV products. Merchant mix shifts are driven in part by the products offered by the merchant, the economic terms negotiated with the merchant, merchant-side activity relating to the marketing of their products, whether or not the merchant is fully integrated within our network, and general economic conditions affecting consumer demand. Our revenue as a percentage of GMV in any given period varies across products. As such, as we continue to expand our network to include more merchants and product offerings, revenue as a percentage of GMV may vary.
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Additionally, our commercial agreements with our platform partners, the expansion of our consumer eligibility criteria, along with the growing repeat usage of our Affirm Card offerings, are driving an increase in low AOV transactions. As a result, while we expect that transactions per active consumer may increase, revenue as a percentage of GMV may decline in the medium term to the extent that a greater portion of our GMV comes from Affirm Card and other low-AOV offerings.
Seasonality
We experience seasonal fluctuations in our business as a result of consumer spending patterns, including Affirm Card, which we expect to mimic the seasonality of our general business in the near term. Historically, our GMV has been the strongest during our fiscal second quarter due to increases in retail commerce during the holiday season and our loan delinquencies are at their lowest during our fiscal third and fourth quarter, as consumer savings benefit from tax refunds. Adverse events that occur during our second fiscal quarter could have a disproportionate effect on our financial results for the fiscal year.
Macroeconomic Environment
We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations. Since 2022, the U.S. Federal Reserve has maintained an elevated federal funds interest rate. Despite the Federal Reserve’s decision to begin to decrease the federal funds interest rate in September 2024, uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods. Simultaneously, economic uncertainty and unpredictability, including the prospect of economic recession and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact consumer spending. These challenges have affected, and may continue to affect, our business and results of operations in the following ways:
• Shifts in consumer demand: We have experienced, and may continue to experience, fluctuations in consumer demand across different merchandise categories due to economic uncertainty, inflationary pressures, elevated interest rates, and other macroeconomic factors. If such conditions deteriorate in future periods, consumer demand may be negatively impacted.

• Elevated borrowing costs: The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs in recent fiscal periods. However, the overall interest rate environment remains elevated compared to historical levels, and there is continued uncertainty as to whether and to what extent the Federal Reserve may decrease the federal funds rate further in the future. To the extent the current elevated interest rate environment persists, our transaction costs may remain elevated when compared to historical fiscal periods.

• Volatile capital markets: Since fiscal 2024, capital markets have shown improvement against recent periods. Strong loan performance has allowed us to add substantial capacity across funding channels. Despite these improvements, uncertainties remain in the macroeconomic environment, especially with regard to inflation, the prospect of recession, the magnitude, duration and impact of tariffs on global trade, and the potential for increased unemployment. To address these uncertainties, we leverage our diverse capital ecosystem consisting of multiple funding channels, a diverse set of counterparties, and varying maturity debt schedule to support resilience across various macroeconomic conditions and economic cycles.

Consumer Credit Optimization and Loan Performance

We continue to optimize our underwriting and take other actions to manage consumer loan repayment, increase collections and minimize losses. For example, we offer loan modifications to borrowers experiencing financial difficulty to provide greater flexibility for consumers to repay their obligations, through payment deferrals or loan re-amortizations. A payment deferral extends the next payment due date, and while a consumer may receive more than one deferral, the total deferral period may not exceed three months. A loan re-amortization lowers the monthly payments by extending the term, which may not exceed twenty-four months.
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These loan modification programs also impact our delinquency rates, and such impact can vary over time. The volume of loan modifications during the fiscal quarter ended September 30, 2025 decreased compared to the same period in 2024. Loans modified within the last three and twelve months represent 0.12% and 0.20%, respectively, of the outstanding principal balance of loans held on our balance sheet as of September 30, 2025. Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification. An unknown percentage of loans which have been modified and are current as of September 30, 2025 may become delinquent or charge off in the future. We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.

Regulatory Developments

We are subject to the regulatory and enforcement authority of the Consumer Financial Protection Bureau (the “CFPB”) as a facilitator, servicer, acquirer or originator of consumer credit. As such, the CFPB has in the past requested reports concerning our organization, business conduct, markets, and activities, and we expect that the CFPB will continue to do so from time to time in the future.
U.S. Income Tax Developments
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law, which included certain modifications to U.S. tax law. The Company is currently evaluating the future impact of these provisions of the Act on our Consolidated Financial Statements.
Additionally, if our recent trend of pretax earnings continues, we believe it is reasonably possible that we may have sufficient positive evidence within the next 12 months to conclude that a significant portion of the domestic valuation allowance is no longer needed. The timing and amount of any valuation allowance release is subject to change based on multiple factors, including our profitability and the extent to which we believe we can sustain it over time. Release of any portion of the valuation allowance would result in the recognition of certain deferred tax assets with a potential corresponding decrease to income tax expense for the period the release is recorded, which would represent a non-cash benefit.

Key Operating Metrics

We focus on several key operating metrics to measure the performance of our business and help determine our strategic direction. In addition to revenue, net income (loss), and other results under U.S. GAAP, the following tables set forth key operating metrics we use to evaluate our business.

Three Months Ended September 30,
2025 2024 % Change
(in billions)
GMV $ 10.8  $ 7.6  42  %

GMV
We measure GMV to assess the volume of transactions that take place on our platform. We define GMV as the total dollar amount of all transactions on the Affirm platform during the applicable period, net of refunds. GMV does not represent revenue earned by us; however, it is an indicator of the success of our merchants and the strength of our platform.
For the three months ended September 30, 2025, GMV was $10.8 billion, which represented an increase of approximately 42%, as compared to the same period in 2024. Overall, the increase in GMV was driven by growth in several key areas including our top five merchants and platform partners, our direct to consumer products, including Affirm Card, and overall increases in our active merchant base, active consumers and average transactions per consumer.

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During the three months ended September 30, 2025, GMV growth was diversified across categories and loan products, primarily driven by our services and travel and ticketing categories, as well as our 0% APR installment loans. For the three months ended September 30, 2025, GMV from 0% APR monthly installment loans was $1.4 billion which represented an increase of approximately 74% from $826.0 million for the three months ended September 30, 2024.

For the three months ended September 30, 2025, the top five merchants and platform partners represented approximately 44% of total GMV, as compared to 47% for the three months ended September 30, 2024. GMV attributable to Amazon during the three months ended September 30, 2025 and September 30, 2024 represented 21% and 23%, respectively, of total GMV.

September 30, 2025 September 30, 2024 % Change
(in thousands, except per consumer data)
Active consumers 24,128  19,491  24  %
Transactions per active consumer 6.1  5.1 20  %

Active Consumers
We assess consumer adoption and engagement by the number of active consumers across our platform. Active consumers are the primary measure of the size of our network. We define an active consumer as a consumer who completes at least one transaction on our platform during the 12 months prior to the measurement date.
As of September 30, 2025, we had approximately 24.1 million active consumers, which represented an increase of 24% compared to approximately 19.5 million active consumers as of September 30, 2024. The increase was primarily due to a high retention rate of existing consumers and the acquisition of new consumers through an expansion in active merchants and platform partnerships.
Transactions per Active Consumer
We believe the value of our network is amplified with greater consumer engagement and repeat usage, highlighted by increased transactions per active consumer. Transactions per active consumer is defined as the average number of transactions that an active consumer has conducted on our platform during the 12 months prior to the measurement date.
As of September 30, 2025, we had approximately 6.1 transactions per active consumer, an increase of 20% compared to September 30, 2024. The increase was primarily due to platform growth, a higher frequency of repeat users driven by consumer engagement, and growth of Affirm Card active consumers. As of September 30, 2025 and September 30, 2024, Affirm Card represented approximately 11% and 9% of the total number of transactions.
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Results of Operations

The following tables set forth selected interim condensed consolidated statements of operations and comprehensive income (loss) data for each of the periods presented:

Three Months Ended September 30,
2025 2024 $ %
(in thousands, except percentages)
Revenue
Merchant network revenue $ 251,147  $ 184,339  $ 66,808  36  %
Card network revenue 69,330  47,480  21,850  46  %
Total network revenue 320,477  231,819  88,658  38  %
Interest income (1)
454,122  377,064  77,058  20  %
Gain on sales of loans (1)
119,049  63,613  55,436  87  %
Servicing income 39,689  25,983  13,706  53  %
Total revenue, net 933,337   698,479   234,858   34   %
Operating expenses (2)

Loss on loan purchase commitment 71,552  54,237  17,315  32  %
Provision for credit losses 162,752  159,824  2,928  2  %
Funding costs 110,027  104,145  5,882  6  %
Processing and servicing 133,807  95,146  38,661  41  %
Technology and data analytics 168,106  134,290  33,816  25  %
Sales and marketing 78,491  145,233  (66,742) (46) %
General and administrative 144,941  138,482  6,459  5  %
Restructuring and other —  (255) 255  (100) %
Total operating expenses 869,676   831,102   38,574   5   %
Operating income (loss) $ 63,661   $ (132,623) $ 196,284   148   %
Other income, net 19,358  34,303  (14,945) (44) %
Income (loss) before income taxes $ 83,019   $ (98,320) $ 181,339   184   %
Income tax expense 2,326  1,902  424  22  %
Net income (loss) $ 80,694   $ (100,222) $ 180,916   181   %

(1) Upon purchase of a loan from our originating bank partners at a price above the fair market value of the loan or upon the origination of a loan with a par value in excess of the fair market value of the loan, a discount is included in the amortized cost basis of the loan. For loans held for investment, this discount is amortized over the life of the loan into interest income. For loans held for sale, when a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans. However, the cumulative value of the loss on loan purchase commitment or loss on origination, the interest income recognized over time from the amortization of discount while retained, and the release of discount into gain on sales of loans, together net to zero over the life of the loan. The following table details activity for the discount, included in loans held for investment, for the periods indicated:

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Three Months Ended September 30,
2025 2024
(in thousands)
Balance at the beginning of the period $ 102,680  $ 98,527 
Additions from loans purchased or originated, net of refunds 106,089  78,189 
Amortization of discount (71,316) (56,697)
Unamortized discount released on loans sold (30,773) (20,155)
Impact of foreign currency translation (370) 339 
Balance at the end of the period $ 106,310  $ 100,203 

(2) Amounts include stock-based compensation as follows:

Three Months Ended September 30,
2025 2024
(in thousands)
General and administrative $ 55,773  $ 62,804 
Technology and data analytics 24,764  25,972 
Sales and marketing 5,076  5,195 
Processing and servicing 240  262 
Total stock-based compensation in operating expenses 85,853  94,233 
Capitalized into property, equipment and software, net 52,885  49,478 
Total stock-based compensation $ 138,738  $ 143,711 

Comparison of the Three Months Ended September 30, 2025 and 2024

Merchant network revenue
Merchant network revenue is impacted by both GMV and the mix of loans originated on our platform as merchant fees vary based on loan characteristics. In particular, merchant network revenue as a percentage of GMV typically increases with longer-term, non interest-bearing loans with higher AOVs, and decreases with shorter-term, interest-bearing loans with lower AOVs.
Merchant network revenue increased by $66.8 million, or 36%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase is primarily attributed to an increase of $3.2 billion, or 42%, in GMV for the three months ended September 30, 2025, compared to the same period in 2024. GMV from our top five merchants and platform partners for the three months ended September 30, 2025, increased 33% compared to the same period in 2024. Our number of active consumers also grew, reaching 24.1 million, as of September 30, 2025, up from approximately 19.5 million as of September 30, 2024.
Transactions per active consumer increased from 5.1 as of September 30, 2024 to 6.1 as of September 30, 2025. The increase in active consumers and transactions per active consumer is partially offset by a decrease in AOV. For the three months ended September 30, 2025, AOV was $260, down from $279 for the same period in 2024. The decrease in AOV is driven by the diversification of our merchant base and our ongoing initiative to drive repeat usage of our platform beyond one-time high AOV purchases.
Card network revenue
Card network revenue increased by $21.9 million, or 46%, for the three months ended September 30, 2025, compared to the same period in 2024. Card network revenue growth is correlated with the growth of GMV processed by our issuer processors. As such, the increase is primarily driven by $3.7 billion of GMV processed
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through our issuer processors, an increase of approximately 50% for the three months ended September 30, 2025, as compared to the same period in 2024. This was driven by increased card activity primarily through Affirm Card and our one-time-use virtual debit cards, as well as growth in existing and new merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services. Card network revenue is also impacted by the mix of merchants as different merchants can have different interchange rates depending on their industry or size, among other factors.
Interest income
Interest income increased by $77.1 million, or 20%, for the three months ended September 30, 2025, compared to the same period in 2024. Generally, interest income is correlated with the changes in the average balance of loans held for investment, which increased by 19% to $7.1 billion for the three months ended September 30, 2025, compared to the same period in 2024.
Gain on sales of loans
Gain on sales of loans increased by $55.4 million, or 87%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase is driven by higher loan sale volume to third-party loan buyers and favorable transaction economics which are impacted by the composition of our loan portfolio sold and other market factors. We sold loans with an unpaid principal balance of $4.9 billion for the three months ended September 30, 2025, compared to $2.8 billion for the same period in 2024, an increase of 76%.
Servicing income
Servicing income includes net servicing fee revenue and fair value adjustments for servicing assets and liabilities, and is recognized for loan portfolios sold to third-party loan buyers and for loans held within our off-balance sheet securitizations. Servicing fee revenue varies by contractual servicing fee arrangement and is earned as a percentage of the average unpaid principal balance of loans held by each counterparty where we have a servicing agreement. We reduce servicing income for certain fees we are required to pay per our contractual servicing arrangement.
With respect to fair value adjustments, we remeasure the fair value of servicing assets and liabilities each period and recognize the change in fair value in servicing income. We utilize a discounted cash flow approach to remeasure the fair value of servicing rights. Because we earn servicing income based on the outstanding principal balance of the portfolio, fair value adjustments are impacted by the timing and amount of loan repayments. As such, over the term of each loan portfolio sold, fair value adjustments for servicing assets will decrease servicing income and fair value adjustments for servicing liabilities will increase servicing income. We discuss our valuation methodology and significant Level 3 inputs for servicing assets and liabilities within Note 12. Fair Value of Financial Assets and Liabilities in the notes to the interim condensed consolidated financial statements.
Servicing income increased by $13.7 million, or 53%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase was primarily due to an increase in net servicing fee revenue which is calculated as a percentage of the unpaid principal balance of off-balance sheet loans. The average unpaid principal balance of off-balance sheet loans increased from $5.4 billion during the three months ended September 30, 2024, to $8.4 billion during the same period in 2025, an increase of 57%.
Loss on loan purchase commitment
We purchase certain loans from our originating bank partners that are processed through our platform and put back to us by our originating bank partners. 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 in our interim condensed consolidated statements of operations and comprehensive income (loss). These costs are incurred on a per loan basis.
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Loss on loan purchase commitment increased by $17.3 million, or 32%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to an increase in total volume of loans purchased. During the three months ended September 30, 2025, we purchased $8.7 billion of loans from our originating bank partners, compared to $6.4 billion in the same period in 2024, representing an increase of 36%. Of the total loans purchased, 0% APR installment loans represented $1.3 billion during the three months ended September 30, 2025, and $0.8 billion for the same period in 2024, an increase of $0.5 billion.
Provision for credit losses
Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses within our interim condensed consolidated balance sheet, which represents management’s estimate of future losses on loans and other receivables. In the event that our loans and receivables outperform our expectation and/or we reduce our expectation of credit losses in future periods, we may release reserves and thereby reduce the allowance for credit losses, yielding income in the provision for credit losses. The provision is determined based on our estimate of expected future losses on loans originated during the period and held for investment on our balance sheet, changes in our estimate of future losses on loans outstanding as of the end of the period and the net charge-offs incurred in the period.
Provision for credit losses increased by $2.9 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily driven by an increase in the provision expense for loans held for investment which increased by $1.6 million, or 1%. Higher provision for credit losses for loans held for investment resulted from a $1.1 billion or 19% increase in the average balance of loans held for investment during the three months ended September 30, 2025 compared to the same period in 2024, and a year over year increase in the allowance rate from to 5.6% as of September 30, 2024 to 5.9% as of September 30, 2025. The allowance rate increased as a result of changes in loan mix, including holding a higher percentage of seasoned and longer term loans on our balance sheet as of September 30, 2025. The impact of the increase in average loan balance and a higher allowance rate was offset by an increase in recoveries during the three months ended September 30, 2025 relative to the same period during the prior year.
Funding costs
Funding costs consist of interest expense and the amortization of fees for certain borrowings collateralized by our loans including warehouse credit facilities and consolidated securitizations, sale and repurchase agreements collateralized by our retained securitization interests, and other costs incurred in connection with funding the purchases and originations of loans. Funding costs for a given period are driven by the average outstanding balance of funding debt and notes issued by securitization trusts as well as our contractual interest rate and distribution of loans across funding facilities, net of the impact of any designated cash flow hedges.
Funding costs increased by $5.9 million, or 6%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase is primarily due to an increase of funding debt and notes issued by securitization trusts during the three months ended September 30, 2025. The average total of funding debt from warehouses and securitizations for the three months ended September 30, 2025 was $6.5 billion, compared to $5.4 billion during the same period in 2024, an increase of $1.1 billion, or 21%. This was partially offset by favorable repricing within our securitizations. The increase was also attributable to a larger volume of on-balance sheet loans being retained during the period. The average on-balance sheet loan balance was $7.1 billion for the three months ended September 30, 2025, an increase of 19% compared to $6.0 billion during the same period in 2024.
Processing and servicing

Processing and servicing expense consists primarily of payment processing fees, third-party customer support and collection expense, salaries and personnel-related costs of our customer care team, platform fees, and allocated overhead.
Processing and servicing expense increased by $38.7 million, or 41%, for the three months ended September 30, 2025, compared to the same period in 2024. This increase is driven partially by an increase in
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payment processing fees of $23.5 million, or 42%, related to an increase of $2.9 billion, or 41%, in payment volume for the three months ended September 30, 2025, compared to the same period in 2024.
During the three months ended September 30, 2025, our platform fees increased by $11.0 million, or 52%, due to an increase in volume with a large enterprise partner. Additionally, our customer service and collection costs increased by $6.4 million, or 43%, for the three months ended September 30, 2025, compared to the same period in 2024. This is driven by growth in our overall loan portfolio, including both loans held for investment and loans serviced for third parties, due to the increase in the number of consumer transactions. The number of consumer transactions increased by 52% during the three months ended September 30, 2025, from continued growth at our merchants and platform partners.
Technology and data analytics
Technology and data analytics expense consists primarily of the salaries, stock-based compensation, and personnel-related costs of our engineering, product, and credit and analytics employees, as well as the amortization of internally-developed software and technology intangible assets, and our infrastructure and hosting costs.
Technology and data analytics expense increased by $33.8 million, or 25%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase is partially driven by amortization of internally-developed software which increased by $19.3 million, or 43%, for the three months ended September 30, 2025, compared to the same period in 2024, as a result of an increase in the number of capitalized projects. Capitalized projects in service grew by 59% from approximately 1,000 projects as of September 30, 2024 to 1,590 projects as of September 30, 2025. Data infrastructure and hosting costs increased by $8.9 million, or 38%, for the three months ended September 30, 2025, compared to the same period in 2024. The increase in data infrastructure and hosting costs was primarily driven by an increase in the number of consumer transactions. During the three months ended September 30, 2025, the number of consumer transactions increased by 52% from continued growth at our merchants and platform partners. Stock-based compensation and payroll and personnel-related costs increased by $3.3 million, or 6%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to an increase in headcount.
Sales and marketing
Sales and marketing costs consist of the expense related to warrants and other share-based payments granted to our enterprise partners, salaries and personnel-related costs, and costs of marketing and promotional activities.
Sales and marketing expense decreased by $66.7 million, or 46%, during the three months ended September 30, 2025, compared to the same period in 2024. The decrease was primarily driven by a $66.3 million, or 62%, decrease in Amazon warrant expense during the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a portion of the warrants becoming fully vested as of December 2024.
General and administrative
General and administrative expenses consist primarily of expenses related to our finance, legal, risk operations, human resources, and administrative personnel. General and administrative expenses also include costs related to fees paid for professional services, including legal, tax and accounting services, allocated overhead, and certain discretionary expenses incurred from operating our technology platform.
General and administrative expense increased by $6.5 million, or 5%, during the three months ended September 30, 2025, compared to the same period in 2024. The increase is primarily due to increases in professional services, related to consulting and legal fees, as well as, software and subscriptions.
Other income, net
Other income, net includes interest earned on our money market funds included in cash and cash equivalents and restricted cash, interest earned on securities available for sale, impairment or other adjustments to
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the cost basis of non-marketable equity securities held as cost, gains and losses on derivative agreements not designated within a hedging relationship, amortization of convertible debt issuance cost as well as gains (losses) on extinguishment, revolving credit facility issuance costs, fair value adjustments related to contingent liabilities, and other income or expense arising from activities that are unrelated to our primary business.
Other income, net, decreased by $14.9 million, or 44%, during the three months ended September 30, 2025, compared to the same period in 2024. The decrease for the three months ended September 30, 2025, was primarily driven by a $18.1 million, or 92%, reduction in gain recognized on the early extinguishment of convertible debt reflecting fewer repurchases, compared to the same period in 2024. This was partially offset by the absence of investment impairments during the three months ended September 30, 2025, compared to a $3.0 million impairment for the same period in 2024.

Liquidity and Capital Resources

Sources and Uses of Funds
We maintain a capital-efficient model through a diverse set of funding sources. When we originate a loan directly or purchase a loan originated by our originating bank partners, we often utilize warehouse credit facilities with certain lenders to finance our lending activities or loan purchases. We sell the loans we originate or purchase from our originating bank partners to whole loan buyers and securitization investors through forward flow arrangements and securitization transactions, and earn servicing fees from continuing to act as the servicer on the loans. We proactively manage the allocation of loans on our platform across various funding channels based on several factors including, but not limited to, internal risk limits and policies, capital market conditions and channel economics. Our excess funding capacity and committed and long-term relationships with a diverse group of existing funding partners help provide flexibility as we optimize our funding to support the growth in loan volume.
Our principal sources of liquidity are cash and cash equivalents, available for sale securities, available capacity from warehouse and revolving credit facilities, securitization trusts, forward flow loan sale arrangements, and certain cash flows from our operations. As of September 30, 2025, we had $2.2 billion in cash and cash equivalents and available for sale securities, $5.4 billion in available funding debt capacity, excluding our purchase commitments from third party loan buyers, and $330.0 million in borrowing capacity available under our revolving credit facility. We believe our principal sources of liquidity are sufficient to meet both our existing operating, working capital, and capital expenditure requirements and our currently planned growth for at least the next 12 months.
The following table summarizes our cash, cash equivalents and investments in debt securities (in thousands):

September 30, 2025 June 30, 2025
Cash and cash equivalents (1)
$ 1,428,848  $ 1,354,455 
Investments in short-term debt securities (2)
612,804  652,491 
Investments in long-term debt securities (2)
199,638  218,934 
Cash, cash equivalent and investments in debt securities
$ 2,241,290  $ 2,225,880 

(1) 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, agency bonds, commercial paper, and government bonds purchased with an original maturity of three months or less.
(2) Securities available for sale at fair value primarily consist of certificates of deposits, corporate bonds, municipal bonds, commercial paper, agency bonds, and government bonds. Short-term securities have maturities less than or equal to one year, and long-term securities range from greater than one year to less than five years.

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Debt
Debt as of September 30, 2025 primarily includes funding debt, notes issued by securitization trusts, convertible senior notes and our revolving credit facilities. A detailed description of each of our borrowing arrangements is included in Note 8. Debt in the notes to the interim condensed consolidated financial statements.
The following table summarizes the future maturities of our warehouse credit facilities, variable funding notes, sale and repurchase agreements, and notes issued by securitizations trusts as of September 30, 2025:

Maturity Fiscal Year Borrowing Capacity Principal Outstanding
(in thousands)
2026 $ —  $ — 
2027 1,850,000  459,355 
2028 1,646,843  901,115 
2029 1,250,000  1,269,841 
2030 947,623  897,754 
Thereafter 6,300,000  3,118,112 
Total $ 11,994,466   $ 6,646,177  

Warehouse Credit Facilities
Our warehouse credit facilities allow us to borrow up to an aggregate of $5.2 billion, and mature between 2027 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 September 30, 2025, we have drawn an aggregate of $1.2 billion on our warehouse credit facilities. As of September 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 September 30, 2025, the aggregate commitment amount of these facilities was $644.5 million on a revolving basis, of which $460.1 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 September 30, 2025, we have drawn an aggregate of $65.2 million on our VFN. As of September 30, 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
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future date and price. These repurchase agreements have a term equaling the contractual life of the securitization notes pledged. We had $21.3 million in debt outstanding under our sale and repurchase agreements disclosed within funding debt in the interim condensed consolidated balance sheets as of September 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 9. Securitization and Variable Interest Entities in the notes to the interim condensed 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 September 30, 2025, there are no borrowings outstanding under the facility. The facility contains certain covenants and restrictions, including certain financial maintenance covenants. As of September 30, 2025, we were in compliance with all applicable covenants in the agreements. Refer to Note 8. Debt in the notes to the interim condensed consolidated financial statements for further details on our revolving credit facility.
Convertible Senior Notes
Our convertible senior notes have an aggregate principal balance of $1.1 billion, and bear no interest, in the case of the 2026 Notes, and bear an interest rate of 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 8. Debt in the notes to the interim condensed 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:

Three Months Ended September 30,
2025 2024
(in thousands)
Net cash provided by operating activities 374,572  196,867 
Net cash used in investing activities (139,611) (574,999)
Net cash provided by financing activities 110,086  465,625 

Cash Flows from Operating Activities
Our largest sources of operating cash are fees charged to merchant partners on transactions processed through our platform and interest income from consumers’ loans. Our primary uses of cash from operating activities are for general and administrative, technology and data analytics, funding costs, processing and servicing, and sales and marketing expenses.
Net cash provided by operating activities was $374.6 million for the three months ended September 30, 2025, which reflected adjustments for significant non-cash items, including provision for losses, amortization of premiums and discounts on loans, gain on sale of loans, commercial agreement warrant expense, stock-based compensation, depreciation and amortization, and changes in operating assets and liabilities. Total adjustments and changes in operating assets and liabilities collectively resulted in a net increase in operating cash flows of $293.9 million.

Net cash provided by operating activities was $196.9 million for the three months ended September 30, 2024, which reflected adjustments for significant non-cash items, including provision for credit losses, amortization of premiums and discounts on loans, gain on sale of loans, commercial agreement warrant expense, stock-based compensation, depreciation and amortization, and changes in operating assets and liabilities. Total adjustments and changes in operating assets and liabilities collectively resulted in a net increase in operating cash flows of $297.1 million.
Cash Flows from Investing Activities
Net cash used in investing activities was $139.6 million for the three months ended September 30, 2025. Cash outflows were primarily driven by purchases and origination of loans held for investment of $9.8 billion, purchases of securities available for sale of $146.5 million, and property, equipment and software additions of $54.4 million. Cash inflows included $5.4 billion from principal repayments and other loan servicing activity, $4.3 billion in proceeds from the sale of loans held for investment, and $216.4 million of proceeds from maturities and repayments of securities available for sale.
Net cash used in investing activities was $575.0 million for the three months ended September 30, 2024, Cash outflows were primarily driven by purchases and origination of loans held for investment of $6.4 billion, purchases of securities available for sale of $136.7 million, and property, equipment and software additions of $44.2 million. Cash inflows included $4.1 billion of principal repayments and other loan servicing activity, $1.6 billion in proceeds from the sale of loans held for investment, and $215.7 million of proceeds from maturities and repayments of securities available for sale.
Cash Flows from Financing Activities
Net cash provided by financing activities was $110.1 million for the three months ended September 30, 2025. Cash inflows were driven by $9.1 billion in proceeds from the issuance of secured debt, including funding debt and securitization notes and certificates, and $94.8 million from the exercise of common stock options and warrants and employee contributions to ESPP. Cash outflows included $8.9 billion related to principal repayments
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on secured debt, $24.8 million related to the extinguishment of a portion of our 2026 Notes and $112.3 million for taxes paid on vested equity awards.
Net cash provided by financing activities was $465.6 million for the three months ended September 30, 2024. Cash inflows were primarily driven by $3.9 billion in proceeds from the issuance of secured debt, including funding debt and securitization notes and certificates. Cash outflows included $3.3 billion related to principal repayments on secured debt, $120.1 million related to the extinguishment of a portion of our 2026 Notes, and $63.2 million related to taxes paid on vested equity awards.

Contractual Obligations

There were no material changes outside of the ordinary course of business in our commitments and contractual obligations for the three months ended September 30, 2025 from the commitments and contractual obligations disclosed in the section titled “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations ,” set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, which was filed with the SEC on August 28, 2025.

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in activities that are not reflected within our interim condensed 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.

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 September 30, 2025, the aggregate outstanding balance of loans held by third-party investors and off-balance sheet securitizations was $8.5 billion. Refer to Note 9. Securitization and Variable Interest Entities and Note 12. Fair Value of Financial Assets and Liabilities of the accompanying notes to our interim condensed consolidated financial statements for more information.
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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 critical accounting policies and estimates on an ongoing basis and update them as necessary based on changes in market conditions or factors specific to us. There have been no material changes in our significant accounting policies or critical accounting estimates during the three months ended September 30, 2025.
For a complete discussion of our significant accounting policies and critical accounting estimates, refer to our Annual Report on Form 10-K for the year ended June 30, 2025 within Note 2 to the Notes to Consolidated Financial Statements and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Estimates. ”
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Item 3. 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 September 30, 2025, included $807.4 million 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 September 30, 2025, we estimate that a hypothetical instantaneous 100 basis point upward parallel shock to interest rates would have a less than $70.0 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 September 30, 2025 and June 30, 2025, we were exposed to credit risk on $7.2 billion and $7.0 billion, respectively, of loans held within our interim condensed consolidated balance sheet. Loan receivables are diversified geographically. As of both September 30, 2025 and June 30, 2025, approximately 11% of loan receivables related to customers residing in the state of California. Approximately 10% of loan receivables related to customers residing in the state of Texas as of both September 30, 2025 and June 30, 2025. No other states or provinces represent 10% or more of total loan receivables.

In addition, we have credit risk exposure in relation 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 September 30, 2025 and June 30, 2025, we have sold $9.3 billion and $8.6 billion, respectively, in unpaid principal balance loans which are subject to risk sharing arrangements, of which our maximum exposure to losses was $85.8 million and $91.1 million, respectively. The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $54.3 million and $38.9 million as of September 30, 2025 and September 30, 2024, respectively. The fair value of residual interests in structured transactions was $4.0 million as of September 30, 2025, of which our maximum exposure to losses was $16.2 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 4. 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 Quarterly Report on Form 10-Q 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.

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 September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on the Effectiveness of Internal Control

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 because of 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 internal controls as necessary or appropriate for our business but such improvements will be subject to the same inherent limitations outlined in this section.

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Part II - Other Information

Item 1. Legal Proceedings

Please refer to Note 7. Commitments and Contingencies of the accompanying notes to our interim condensed consolidated financial statements .

From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business. We are not presently a party to any such other legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition, or cash flows. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

The risks described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 could materially and adversely affect our business, financial condition, results of operations, cash flows, future prospects, and the trading price of our Class A common stock. The risks and uncertainties described therein are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial may also become important factors that adversely affect our business.

You should carefully read and consider such risks, together with all of the other information in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, in this Quarterly Report on Form 10-Q (including the disclosures in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our interim condensed consolidated financial statements and related notes), and in the other documents that we file with the SEC.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.
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Item 5. Other Information

(c)      Rule 10b5-1 Trading Plans

During the three months ended September 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 September 12, 2025 , Katherine Adkins , our Chief Legal Officer and Chief Compliance 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). Ms. Adkins’ Rule 10b5-1 Trading Plan provides for the exercise of up to 119,037 employee stock options and the sale of the underlying shares of our Class A common stock pursuant to one or more limit orders on or after December 12, 2025 until June 30, 2026 , or earlier if all transactions under the trading arrangement are completed.

On September 15, 2025 , Siphelele Jiyane , our Chief Accounting Officer , adopted a Rule 10b5-1 Trading Plan. Ms. Jiyane’s Rule 10b5-1 Trading Plan provides for the sale of up to 72,086 shares of our Class A common stock pursuant to one or more limit orders on or after December 15, 2025 until June 30, 2026 , or earlier if all transactions under the trading arrangement are completed.

No other directors or officers, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the three months ended September 30, 2025.

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Item 6. Exhibits

Incorporated by Reference

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

10.1+ Form of RSU Agreement pursuant to the Affirm Holdings, Inc. Amended and Restated 2012 Stock Plan
X

10.2+
Form of P SU Agreement pursuant to the Affirm Holdings, Inc. Amended and Restated 2012 Stock Plan
X

10.3+
Cash Incentive Plan
10-K 001-39888 10.21 August 28, 2025
10.4+
Officer Severance Plan
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

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

+ Denotes management contract or compensatory plan or arrangement.

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SIGNATURES

    Pursuant to the requirements 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: November 6, 2025
By: /s/ Max Levchin
Max Levchin
Chief Executive Officer
(Principal Executive Officer)

By: /s/ Rob O’Hare
Rob O’Hare
Chief Financial Officer
(Principal Financial Officer)

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