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| Available outstanding under equity compensation plans | | | | | | |
| Available for future grant under equity compensation plans | | | | | | |
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The common stock is not redeemable. We have classes of common stock: Class A common stock and Class B common stock. Each holder of Class A common stock has the right to vote per share of common stock. Each holder of Class B common stock has the right to votes and can be converted at any time into 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.
shares of common stock in connection with our commercial agreements with Amazon. of the warrant shares have an exercise price of $ per share and originally had a term of 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 March 31, 2025, of these warrants have been exercised. In February 2025, the term for the remaining unexercised warrant shares were extended for an additional years. The remaining warrant shares have an exercise price of $ per share and a term of 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 and nine months ended March 31, 2025, a total of $ million and $ million, respectively, was recognized within sales and marketing expense, which included $ million and $ million, respectively, in amortization expense of the commercial agreement asset and $ million and $ million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested. During the three and nine months ended March 31, 2024, a total of $ million and $ million, respectively, was recognized within sales and marketing expense, which included $ million and $ million, respectively, in amortization expense of the commercial agreement asset and $ million and $ million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested.
Share Repurchases
In connection with the offering of the 2029 Notes, in December 2024, the Board of Directors authorized the repurchase of up to $ million of common stock through open market purchases, privately negotiated transactions or through a combination thereof. The authorization terminated on December 31, 2024 and did not obligate the Company to acquire any particular amount of its common stock. Pursuant to this authorization, we utilized net proceeds from the offering, as well as cash on hand, to complete the repurchase of million shares of Class A common stock from certain holders of the 2026 notes in privately negotiated transactions for an aggregate purchase price of approximately $ million. Refer to Note 8. Debt in the notes to the interim condensed consolidated financial statements for more information on the 2029 Notes.
We record share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. Our policy for share retirements is to deduct the par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.
14.
Class A shares. As of March 31, 2025 and June 30, 2024, there were and shares of Class A common stock, respectively, available for future grants under the Plan.
Stock Options
For stock options granted before our IPO in January 2021, the minimum expiration period is after termination of employment or years from the date of grant. For stock options granted after our IPO, the minimum expiration period is after termination of employment or years from the date of grant.
or with % vesting on the month anniversary of the vesting commencement date, and the remainder vesting on a pro-rata basis each month over the next .
| | $ | | | | | | | | Granted | | | | | | | | | | |
| Exercised | | () | | | | | | | | |
| Forfeited, expired or cancelled | | () | | | | | | | | |
Balance as of March 31, 2025 | | | | | | | | | | |
Vested and exercisable, March 31, 2025 | | | | | $ | | | | | | $ | | |
Vested and exercisable, and expected to vest thereafter(1) March 31, 2025 | | | | | $ | | | | | | $ | | |
(1)Options expected to vest reflect the application of an estimated forfeiture rate.
The weighted-average grant date fair value of options granted during the nine months ended March 31, 2025 was $. As of March 31, 2025, unrecognized compensation expense related to unvested stock options was approximately $ million, which is expected to be recognized over a remaining weighted-average period of 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 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 $ million and $ million during the three and nine months ended March 31, 2025, respectively, and $ million and $ million during the three and nine months ended March 31, 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).
As of March 31, 2025, unrecognized compensation expense related to the Value Creation Award was approximately $ million, which is expected to be recognized over a remaining weighted-average period of years.
vesting conditions: a service-based vesting condition (i.e., employment over a period of time) and a performance-based vesting condition (i.e., a liquidity event in the form of either a change of control or an initial public offering, each as defined in the Plan), both of which must be met in order to vest. The performance-based condition was met upon the IPO. We record stock-based compensation expense for those RSUs on an accelerated attribution method over the requisite service period, which is generally . RSUs granted after IPO are subject to a service-based vesting condition. We record stock-based compensation expense for service-based RSUs on a straight-line basis over the requisite service period, which is generally one to .
| | $ | | | | Granted | | | | | | |
| Vested | | () | | | | |
| Forfeited, expired or cancelled | | () | | | | |
Non-vested at March 31, 2025 | | | | | $ | | |
As of March 31, 2025, unrecognized compensation expense related to unvested RSUs was approximately $ million, which is expected to be recognized over a remaining weighted-average period of 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 million shares of Class A common stock are reserved and available for issuance under the ESPP and million shares have been issued as of March 31, 2025. The ESPP provides for offering periods beginning December 1 and June 1 of each year. At the end of each offering period, shares of our Class A common stock are purchased on behalf of each ESPP participant at a price per share equal to % 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 offering period, the requisite service period of the award.
| | $ | | | | $ | | | | $ | | | | Technology and data analytics | | | | | | | | | | | | |
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| Total stock-based compensation | | $ | | | | $ | | | | $ | | | | $ | | |
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million and $ million, respectively.16.
million and $ million, respectively, which was primarily attributable to various U.S. state and foreign income taxes. For the three and nine months ended March 31, 2024, we recorded income tax expense (benefit) of $ million and $ million, respectively, which was primarily attributable to deferred taxes recognized by certain foreign subsidiaries, various U.S. state and other foreign income taxes, and the tax amortization of certain intangibles.
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| | $ | | | | $ | () | | | $ | () | | | Net income (loss) attributable to common stockholders - diluted | | $ | | | | $ | | | | $ | () | | | $ | () | |
| Denominator: | | | | | | | | |
| Weighted average shares of common stock - basic | | | | | | | | | | | | |
| Dilutive effect of stock equivalents: | | | | | | | | |
| Restricted stock units | | | | | | | | | | | | |
| Stock options, including early exercise of options | | | | | | | | | | | | |
| Value creation award vested shares | | | | | | | | | | | | |
| Employee stock purchase plan shares | | | | | | | | | | | | |
| Weighted average shares of common stock - diluted | | | | | | | | | | | | |
| Net income (loss) per share: | | | | | | | | |
| Basic | | $ | | | | $ | | | | $ | () | | | $ | () | |
| Diluted | | $ | | | | $ | | | | $ | () | | | $ | () | |
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| | Three Months Ended March 31, | | Nine Months Ended March 31, |
| | 2024 | | 2024 |
| | Class A | | Class B | | Class A | | Class B |
| Numerator: | | | | | | | | |
| Net loss attributable to common stockholders - basic | | $ | () | | | $ | () | | | $ | () | | | $ | () | |
| Net loss attributable to common stockholders - diluted | | $ | () | | | $ | () | | | $ | () | | | $ | () | |
| Denominator: | | | | | | | | |
| Weighted average shares of common stock - basic | | | | | | | | | | | | |
| Weighted average shares of common stock - diluted | | | | | | | | | | | | |
| Net loss per share: | | | | | | | | |
| Basic | | $ | () | | | $ | () | | | $ | () | | | $ | () | |
| Diluted | | $ | () | | | $ | () | | | $ | () | | | $ | () | |
| | | | | | | | | | | Stock options, including early exercise of options | | | | | | | | | | | | |
| Common stock warrants | | | | | | | | | | | | |
| Value creation award | | | | | | | | | | | | |
| Employee stock purchase plan shares | | | | | | | | | | | | |
| Total | | | | | | | | | | | | |
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, 2024 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 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 March 31, | | Nine Months Ended March 31, |
| 2025 | | 2024 | | $ | | % | | 2025 | | 2024 | | $ | | % |
| (in thousands, except percentages) |
| Total revenue, net | $ | 783,135 | | | $ | 576,157 | | | $ | 206,978 | | | 36 | % | | $ | 2,347,995 | | | $ | 1,663,814 | | | $ | 684,181 | | | 41 | % |
| Total operating expenses | 791,527 | | | 736,946 | | | 54,581 | | | 7 | % | | 2,493,332 | | | 2,206,201 | | | 287,131 | | | 13 | % |
| Operating loss | $ | (8,393) | | | $ | (160,789) | | | $ | 152,396 | | | (95) | % | | $ | (145,337) | | | $ | (542,387) | | | $ | 397,050 | | | (73) | % |
| Other income, net | 13,738 | | | 27,743 | | | (14,005) | | | (50) | % | | 135,221 | | | 70,999 | | | 64,222 | | | 90 | % |
| Income (loss) before income taxes | $ | 5,345 | | | $ | (133,046) | | | $ | 138,391 | | | (104) | % | | $ | (10,116) | | | $ | (471,388) | | | $ | 461,272 | | | (98) | % |
| Income tax expense | 2,541 | | | 890 | | | 1,651 | | | 186 | % | | 6,942 | | | 1,233 | | | 5,709 | | | 463 | % |
| Net income (loss) | $ | 2,804 | | | $ | (133,936) | | | $ | 136,740 | | | (102) | % | | $ | (17,058) | | | $ | (472,621) | | | $ | 455,563 | | | (96) | % |
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 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 and nine months ended March 31, 2025, Pay-in-X represented 15% and 14%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 13% and 12%, respectively. For the three and nine months ended March 31, 2024, Pay-in-X represented 14% and 15%, 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 and nine months ended March 31, 2025, interest bearing loans represented 72% and 74%, respectively, of total GMV facilitated through our platform. For both the three and nine months ended March 31, 2024, interest bearing loans represented 72% of total GMV facilitated through our platform
In order to accelerate our ubiquity, we facilitate the issuance of 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 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 several states in the U.S. through our consolidated subsidiaries. For the three and nine months ended March 31, 2025, we directly originated approximately $1.5 billion, or 17%, and $4.5 billion, or 17%, respectively, of loans compared to approximately $1.1 billion, or 17%, and $3.3 billion, or 17%, for the same period in 2024.
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, 2024, 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, 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 March 31, 2025 and June 30, 2024, our equity capital as a percentage of our total platform portfolio has remained relatively unchanged at 5%. 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 durations, APR, and mix of 0% APR and interest-bearing financings.
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.
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. Starting in fiscal 2023, the macroeconomic environment began to present a number of challenges to our business. In response to continued inflationary pressure, the U.S. Federal Reserve rapidly raised the federal funds interest rate from March 2022 through July 2023. 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, 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: Over the past two fiscal years, we have experienced varying levels of consumer demand across different categories of merchandise. This is due to economic uncertainty, recessionary concerns, inflationary pressures and elevated interest rates. If macroeconomic conditions deteriorate in future periods, consumer demand may be negatively impacted.
•Increased borrowing costs: The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs. Despite this, 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. As a result, we may continue to experience higher transaction costs.
•Volatile capital markets: Since fiscal 2024, capital markets have shown improvement against recent periods, which has been evidenced by substantial additions across our funding channels due to our strong loan performance. However, 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 funding channels and counterparties, which contribute to our 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.
These loan modification programs also impact our delinquency rates, and such impact can vary over time. As disclosed in Note 4. Loans Held for Investment and Allowance for Credit Losses in the notes to the interim condensed consolidated financial statements, in fiscal 2024, we expanded the eligibility of our loan modification programs, which resulted in a modest benefit to delinquency rates for loans held for investment during that period. The volume of loan modifications during the fiscal quarter ended March 31, 2025 decreased compared to the same period in 2024. Loans modified during the three and twelve months ended March 31, 2025, represent 0.09% and 0.21%, respectively, of the outstanding principal balance of loans held on our balance sheet. 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 March 31, 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. In addition, we are supervised by the CFPB, which enables it, among other things, to conduct comprehensive and rigorous examinations to assess our compliance with consumer financial protection laws, which in turn could result in matters requiring attention, enforcement investigations and actions, regulatory fines and mandated changes to our business products, policies and procedures.
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.
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| | Three Months Ended March 31, | | Nine Months Ended March 31, |
| | 2025 | | 2024 | | % Change | | 2025 | | 2024 | | % Change |
| | (in billions) |
| GMV | | $ | 8.6 | | | $ | 6.3 | | | 36 | % | | $ | 26.3 | | | $ | 19.4 | | | 36 | % |
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 and nine months ended March 31, 2025, GMV was $8.6 billion and $26.3 billion, respectively, which represented an increase of approximately 36%, as compared to the same periods in 2024. 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, such as Affirm Card, and overall increases in our active merchant base, active consumers and average transactions per consumer.
During the three and nine months ended March 31, 2025, GMV growth was diversified across categories and loan products, primarily driven by our general merchandise and electronics categories as well as our 0% APR installment loans. General merchandise grew 38% and 41% and electronics grew 34% and 34% for the three and nine months ended March 31, 2025, respectively. GMV across our travel and ticketing, equipment and auto, and other categories grew more than 20% year over year. Additionally, GMV growth from 0% APR installment loans was 44% and 52% during the three and nine months ended March 31, 2025, respectively, when compared to the same periods in 2024.
For the three and nine months ended March 31, 2025, our top five merchants and platform partners represented approximately 45% and 48%, respectively, of total GMV, as compared to 42% and 45%, respectively, for the three and nine months ended March 31, 2024. GMV attributable to Amazon during the three and nine months ended March 31, 2025 represented 21% and 23%, respectively, of total GMV. GMV attributable to Amazon during both the three and nine months ended March 31, 2024 represented 20% of total GMV.
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| | March 31, 2025 | | March 31, 2024 | | % Change |
| | (in thousands, except per consumer data) |
| Active consumers | | 21,888 | | | 18,134 | | | 21 | % |
| Transactions per active consumer | | 5.6 | | | 4.6 | | 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 March 31, 2025, we had approximately 21.9 million active consumers, which represented an increase of 21% compared to approximately 18.1 million active consumers as of March 31, 2024. The increase was primarily due to a high retention rate of existing consumers, as well as continued adoption of the Affirm Card, 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 March 31, 2025, we had approximately 5.6 transactions per active consumer, an increase of 20% compared to March 31, 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 March 31, 2025, Affirm Card represented approximately 10% of the total number of transactions compared to approximately 6% as of March 31, 2024.
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:
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| Three Months Ended March 31, | | Nine Months Ended March 31, |
| 2025 | | 2024 | | $ | | % | | 2025 | | 2024 | | $ | | % |
| (in thousands, except percentages) |
| Revenue | | | | | | | | | | | | | | | |
| Merchant network revenue | $ | 213,973 | | | $ | 159,292 | | | $ | 54,681 | | | 34 | % | | $ | 643,207 | | | $ | 493,599 | | | $ | 149,608 | | | 30 | % |
| Card network revenue | 58,572 | | | 35,676 | | | 22,896 | | | 64 | % | | 164,194 | | | 108,421 | | | 55,773 | | | 51 | % |
| Total network revenue | 272,545 | | | 194,968 | | | 77,577 | | | 40 | % | | 807,401 | | | 602,020 | | | 205,381 | | | 34 | % |
Interest income (1) | 402,701 | | | 315,712 | | | 86,989 | | | 28 | % | | 1,189,132 | | | 866,737 | | | 322,395 | | | 37 | % |
Gain on sales of loans (1) | 75,838 | | | 40,183 | | | 35,655 | | | 89 | % | | 264,739 | | | 127,170 | | | 137,569 | | | 108 | % |
| Servicing income | 32,050 | | | 25,294 | | | 6,756 | | | 27 | % | | 86,723 | | | 67,887 | | | 18,836 | | | 28 | % |
| Total revenue, net | 783,135 | | | 576,157 | | | 206,978 | | | 36 | % | | 2,347,995 | | | 1,663,814 | | | 684,181 | | | 41 | % |
Operating expenses (2) | | | | | | | | | | | | | | | |
| Loss on loan purchase commitment | 57,290 | | | 44,143 | | | 13,147 | | | 30 | % | | 181,805 | | | 132,639 | | | 49,166 | | | 37 | % |
| Provision for credit losses | 147,252 | | | 122,443 | | | 24,809 | | | 20 | % | | 460,056 | | | 343,019 | | | 117,037 | | | 34 | % |
| Funding costs | 107,631 | | | 90,449 | | | 17,182 | | | 19 | % | | 319,539 | | | 248,997 | | | 70,542 | | | 28 | % |
| Processing and servicing | 118,398 | | | 88,209 | | | 30,189 | | | 34 | % | | 329,504 | | | 254,083 | | | 75,421 | | | 30 | % |
| Technology and data analytics | 152,620 | | | 124,828 | | | 27,792 | | | 22 | % | | 435,123 | | | 377,626 | | | 57,497 | | | 15 | % |
| Sales and marketing | 74,022 | | | 132,950 | | | (58,928) | | | (44) | % | | 355,293 | | | 441,081 | | | (85,788) | | | (19) | % |
| General and administrative | 134,303 | | | 128,721 | | | 5,582 | | | 4 | % | | 412,196 | | | 401,832 | | | 10,364 | | | 3 | % |
| Restructuring and other | 12 | | | 5,203 | | | (5,191) | | | (100) | % | | (184) | | | 6,924 | | | (7,108) | | | (103) | % |
| Total operating expenses | 791,527 | | | 736,946 | | | 54,581 | | | 7 | % | | 2,493,332 | | | 2,206,201 | | | 287,131 | | | 13 | % |
| Operating loss | $ | (8,393) | | | $ | (160,789) | | | $ | 152,396 | | | (95) | % | | $ | (145,337) | | | $ | (542,387) | | | $ | 397,050 | | | (73) | % |
| Other income, net | 13,738 | | | 27,743 | | | (14,005) | | | (50) | % | | 135,221 | | | 70,999 | | | 64,222 | | | 90 | % |
| Income (loss) before income taxes | $ | 5,345 | | | $ | (133,046) | | | $ | 138,391 | | | (104) | % | | $ | (10,116) | | | $ | (471,388) | | | $ | 461,272 | | | (98) | % |
| Income tax expense | 2,541 | | | 890 | | | 1,651 | | | 186 | % | | 6,942 | | | 1,233 | | | 5,709 | | | 463 | % |
| Net income (loss) | $ | 2,804 | | | $ | (133,936) | | | $ | 136,740 | | | (102) | % | | $ | (17,058) | | | $ | (472,621) | | | $ | 455,563 | | | (96) | % |
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(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. 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 March 31, | | Nine Months Ended March 31, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (in thousands) |
| Balance at the beginning of the period | $ | 103,433 | | | $ | 100,900 | | | $ | 98,527 | | | $ | 96,576 | |
| Additions from loans purchased or originated, net of refunds | 86,723 | | | 69,545 | | | 265,676 | | | 200,641 | |
| Amortization of discount | (65,639) | | | (53,960) | | | (186,450) | | | (150,102) | |
| Unamortized discount released on loans sold | (19,939) | | | (12,493) | | | (71,826) | | | (43,003) | |
| Impact of foreign currency translation | 39 | | | (779) | | | (1,310) | | | (899) | |
| Balance at the end of the period | $ | 104,617 | | | $ | 103,213 | | | $ | 104,617 | | | $ | 103,213 | |
(2) Amounts include stock-based compensation as follows:
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| Three Months Ended March 31, | | Nine Months Ended March 31, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (in thousands) |
| General and administrative | $ | 50,344 | | | $ | 51,947 | | | $ | 170,868 | | | $ | 184,070 | |
| Technology and data analytics | 21,309 | | | 21,105 | | | 70,957 | | | 78,808 | |
| Sales and marketing | 3,749 | | | 3,858 | | | 13,426 | | | 13,628 | |
| Processing and servicing | 205 | | | 165 | | | 687 | | | 3,092 | |
| Total stock-based compensation in operating expenses | 75,607 | | | 77,075 | | | 255,938 | | | 279,598 | |
| Capitalized into property, equipment and software, net | 44,369 | | | 30,981 | | | 138,555 | | | 99,441 | |
| Total stock-based compensation | $ | 119,976 | | | $ | 108,056 | | | $ | 394,493 | | | $ | 379,039 | |
Comparison of the Three and Nine Months Ended March 31, 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 $54.7 million, or 34%, and $149.6 million, or 30%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase is primarily attributed to an increase of $2.3 billion, or 36%, and $6.9 billion, or 36%, in GMV for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase in GMV is a result of continued growth at our top five merchants and platform partners representing approximately 45% and 48% for the three and nine months ended March 31, 2025, respectively, compared to 42% and 45% for the three and nine months ended March 31, 2024, respectively. Our active merchant base and the number of active consumers also grew, reaching approximately 358 thousand and 21.9 million, respectively, as of March 31, 2025, up from approximately 292 thousand and 18.1 million, respectively, as of March 31, 2024.
With respect to the frequency and mix of transactions, the transactions per active consumer increased from 4.6 as of March 31, 2024 to 5.6 as of March 31, 2025. The increase in active consumers and transactions per active consumer is partially offset by a decrease in AOV. For both the three and nine months ended March 31, 2025, AOV was $273, down from $293 and $292 for the same period in 2024. The decrease in AOV is driven by the diversification of our merchant base, with accelerated growth in some of our largest interest bearing merchant programs, 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 $22.9 million, or 64%, and $55.8 million, or 51%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. Card network revenue growth is correlated with the growth of GMV processed by our card-issuing partners. As such, the increase is primarily driven by $2.9 billion and $8.4 billion of GMV processed through our card-issuing partners, an increase of 44% and 42% for the three and nine months ended March 31, 2025, respectively, as compared to the same periods in 2024. This was driven by increased card activity primarily through our single use virtual cards and Affirm Card, as well as growth in existing and new merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services, which grew from approximately 1,700 merchants as of March 31, 2024 to 35,000 merchants as of March 31, 2025. 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 $87.0 million, or 28%, and $322.4 million, or 37%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. Generally, interest income is correlated with the changes in the average balance of loans held for investment, which increased by 25% to $6.7 billion and 29% to $6.4 billion for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. As a result, interest income from interest-bearing loans increased by $96.1 million, or 35%, and $334.8 million, or 45%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024.
Gain on sales of loans
Gain on sales of loans increased by $35.7 million, or 89%, and $137.6 million, or 108%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods 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 $3.6 billion and $11.0 billion for the three and nine months ended March 31, 2025, respectively, compared to $2.1 billion and $7.3 billion for the same period in 2024.
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 $6.8 million, or 27%, and $18.8 million, or 28%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase is 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 $5.1 billion and
$4.7 billion during the three and nine months ended March 31, 2024, respectively, to $7.1 billion and $6.3 billion, respectively, during the same period in 2025, an increase of 40% and 32%, respectively.
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.
Loss on loan purchase commitment increased by $13.1 million, or 30%, and $49.2 million, or 37%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily due to an increase in total volume of loans purchased. During the three and nine months ended March 31, 2025, we purchased $7.1 billion and $21.6 billion, respectively, of loans from our originating bank partners, compared to $5.1 billion and $15.6 billion, respectively, in the same period in 2024, representing an increase of 38% for both periods, respectively. Of the total loans purchased during the three and nine months ended March 31, 2025, $337.1 million and $1.1 billion represented 0% APR installment loans, respectively, an increase of 46% and 57%, compared to the same periods in 2024.
Provision for credit losses
Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses on our interim condensed consolidated balance sheet, which represents management’s estimate of future losses. In the event that our loans outperform 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 $24.8 million, or 20%, and $117.0 million, or 34%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily driven by growth in the volume of loans held for investment. For the three and nine months ended March 31, 2025 and March 31, 2024, the average balance of loans held for investment was $6.7 billion, an increase of $1.4 billion, or 25%, and $6.4 billion, an increase of $1.4 billion, or 29%, respectively, as compared to the same periods in 2024. The allowance for credit losses as a percentage of loans held for investment was 5.7% as of March 31, 2025, 5.5% as of June 30, 2024, and 5.3% as of March 31, 2024. The increase in the allowance rate from March 31, 2024 is primarily driven by adjustments in our credit criteria in light of increasing interest income generated by our loans and changes in the loan mix.
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 $17.2 million, or 19%, and $70.5 million, or 28%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase is primarily due to an increase of funding debt and notes issued by securitization trusts during the three and nine months ended March 31, 2025. The average total of funding debt from warehouses and securitizations for the three and nine months ended
March 31, 2025 was $6.1 billion and $5.7 billion, respectively, compared to $4.8 billion and $4.4 billion, respectively, during the same period in 2024, an increase of $1.3 billion, or 28%, and $1.4 billion, or 31%, respectively. 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 $6.7 billion and $6.4 billion for the three and nine months ended March 31, 2025, respectively, an increase of 25% and 29% compared to $5.4 billion and $4.9 billion during the same period in 2024, respectively.
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 $30.2 million, or 34%, and $75.4 million, or 30%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. This increase is driven primarily by an increase in payment processing fees of $16.9 million, or 32%, and $49.3 million, or 35%, related to increased payment volume for the three and nine months ended March 31, 2025, respectively. During the three and nine months ended March 31, 2025, our platform fees increased by $5.2 million, or 28%, and $20.1 million, or 35%, respectively, due to an increase in volume with a large enterprise partner. Additionally, our customer service and collection costs increased by $5.4 million, or 44%, and $13.0 million, or 36%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods 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 46% during the three and nine months ended March 31, 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 $27.8 million, or 22%, and $57.5 million, or 15%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase is primarily driven by amortization of internally-developed software which increased by $14.9 million, or 35%, and $43.9 million, or 39%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, as a result of an increase in the number of capitalized projects. Capitalized projects in service grew by 88% from approximately 760 projects as of March 31, 2024 to 1,430 projects as of March 31, 2025. Data infrastructure and hosting costs increased by $7.4 million, or 36%, and $14.2 million, or 22%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods 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 and nine months ended March 31, 2025, the number of consumer transactions increased by 46% from continued growth at our merchants and platform partners. Stock-based compensation and payroll and personnel-related costs increased by $3.9 million, or 8%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in headcount. For the nine months ended March 31, 2025, the increases were partially offset by a decrease of $4.2 million, or 2%, in stock-based compensation and payroll and personnel-related costs, compared to the same period in 2024, primarily due to higher capitalized compensation costs related to internally-developed software.
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, costs of marketing and promotional activities.
Sales and marketing expense decreased by $58.9 million, or 44%, and $85.8 million, or 19% during the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The decrease was primarily driven by a $59.9 million, or 62%, and $76.5 million, or 25%, decrease in Amazon warrant expense during the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily due to a portion of the warrants becoming fully vested as of December 2024. Additionally, amortization expense related to the Amazon commercial agreement decreased by $1.8 million, or 26%, and $12.2 million, or 44%, during the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily due to the renewal of the commercial partnership agreement in February 2024, which extended the amortization period of the commercial agreement asset,
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 $5.6 million, or 4%, and $10.4 million, or 3%, during the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024. The increase is primarily due to increases in payroll and personnel costs, employee benefit expenses, 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 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 $14.0 million, or 50%, during the three months ended March 31, 2025, compared to the same period in 2024. The decrease for the three months ended March 31, 2025, was primarily driven by a $6.8 million, or 146%, adjustment to the fair value of our derivative instruments not designated as hedges. We recognized a gain of $5.4 million on the early extinguishment of convertible debt during the three months ended March 31, 2024, compared to no activity during the three months ended March 31, 2025. Additionally, during the three months ended March 31, 2025, interest income on our marketable securities decreased by $5.0 million, or 22%, compared to the same period in 2024.
Other income, net, increased by $64.2 million, or 90%, during the nine months ended March 31, 2025, compared to the same period in 2024. The increase for the nine months ended March 31, 2025, was primarily driven by a $77.1 million gain on the early extinguishment of convertible debt compared to gain of $5.4 million during the nine months ended March 31, 2024. The increase, is partially offset by a decrease of $6.3 million, or 216%, adjustment to the fair value of our derivative instruments not designated as hedges. Additionally, the increase is partially offset by a decrease of $7.1 million, or 67%, in other non-operating income related to the wind-down of the Returnly business and our partnership with a third-party return provider during the nine months ended March 31, 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 March 31, 2025, we had $2.1 billion in cash and cash equivalents and available for sale securities, $4.4 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):
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| | March 31, 2025 | | June 30, 2024 |
Cash and cash equivalents (1) | | $ | 1,351,148 | | | $ | 1,013,106 | |
Investments in short-term debt securities (2) | | 537,159 | | | 865,766 | |
Investments in long-term debt securities (2) | | 243,011 | | | 265,862 | |
| Cash, cash equivalent and investments in debt securities | | $ | 2,131,318 | | | $ | 2,144,734 | |
(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, commercial paper, government bonds, and other corporate securities 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.
Debt
Debt as of March 31, 2025 primarily includes funding debt, notes issued by securitization trust, 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 and notes issued by securitizations trusts as of March 31, 2025:
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| Maturity Fiscal Year | | Borrowing Capacity | | Principal Outstanding |
| | (in thousands) |
| 2025 | | $ | — | | | $ | — | |
| 2026 | | 1,900,000 | | | 674,875 | |
| 2027 | | 150,000 | | | 82,764 | |
| 2028 | | 783,203 | | | 555,996 | |
| 2029 | | 2,363,306 | | | 2,403,923 | |
| Thereafter | | 5,191,602 | | | 2,309,237 | |
| Total | | $ | 10,388,111 | | | $ | 6,026,795 | |
Warehouse Credit Facilities
Our warehouse credit facilities allow us to borrow up to an aggregate of $4.6 billion, mature between 2026 and 2032 and subject to covenant compliance, generally permit borrowings up to 4 - 12 months prior to the final maturity date. As of March 31, 2025, we have drawn an aggregate of $1.5 billion on our warehouse credit facilities. As of March 31, 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 March 31, 2025, the aggregate commitment amount of these facilities was $588.1 million on a revolving basis, of which $364.1 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 $1.2 billion and matures in 2032. As of March 31, 2025, we have drawn an aggregate of $0.1 billion on our VFN and have an aggregate of $1.1 billion available. As of March 31, 2025, we were in compliance with all applicable covenants in the agreements.
Sale and Repurchase Agreements
We entered into various sale and repurchase agreements pursuant to our retained interests in our off-balance sheet securitizations where we have sold these securities to a counterparty with an obligation to repurchase at a future date and price. These repurchase agreements have a term equaling the contractual life of the securitization notes pledged. We had $44.2 million in debt outstanding under our sale and repurchase agreements disclosed within funding debt in the interim condensed consolidated balance sheets as of March 31, 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
On December 16, 2024, we entered into an amendment to our revolving credit facility in order to permit the incurrence of indebtedness pursuant to the 2029 Senior Convertible Notes. Our revolving credit facility, has an aggregate commitment amount of $330.0 million, with a final maturity date of June 26, 2027. As of March 31, 2025, there are no borrowings outstanding under the facility. The facility contains certain covenants and restrictions, including certain financial maintenance covenants. As of March 31, 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 $1.2 billion, and bear no interest, in the case of the 2026 Notes, and 0.75% per year, in the case of the 2029 Notes, which is payable semiannually. The 2026 Notes mature on November 15, 2026, and the 2029 Notes mature on December 15, 2029, in each case unless earlier converted, redeemed, or repurchased in accordance with their terms. Refer to Note 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.
Cash Flow Analysis
The following table provides a summary of cash flow data during the periods indicated:
| | | | | | | | | | | | | | |
| | Nine Months Ended March 31, |
| | 2025 | | 2024 |
| | (in thousands) |
| Net cash provided by operating activities | | 719,272 | | | 381,375 | |
| Net cash used in investing activities | | (628,550) | | | (787,516) | |
| Net cash provided by financing activities | | 364,166 | | | 767,180 | |
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 $719.3 million for the nine months ended March 31, 2025. Net loss of $17.1 million was adjusted for the add back of non-cash items and other adjustments increasing operating cash flows by $632.2 million, and changing operating assets net of operating liabilities resulting in a net increase in operating cash flows of $104.2 million. The non-cash item adjustments are primarily attributable to
$460.1 million provision for credit losses, $230.1 million commercial agreement warrant expense, $255.9 million stock-based compensation expense, and $161.1 million depreciation and amortization expense, which were partially offset by $264.7 million gain on sale of loans, and $171.8 million amortization of premiums and discounts on loans. The net increase in cash from changes in operating assets and liabilities was primarily driven by an increase in accounts receivable of $123.9 million, and a $17.4 million increase in payable to third-party loan owners, partially offset by a decrease in other assets of $18.0 million and a decrease in accrued expenses and other liabilities of $18.8 million.
Net cash provided by operating activities was $381.4 million for the nine months ended March 31, 2024. Net loss of $472.6 million was adjusted for the add back of net non-cash items and other adjustments increasing operating cash flows by $826.8 million, and changing operating assets net of operating liabilities resulting in an increase in operating cash flows of $27.2 million. The net changes in cash from changes in operating assets and liabilities was primarily driven by an increase in cash proceeds generated from the sale of loans held for sale of $3.2 billion, which was offset by cash used for purchases and origination of loans held for sale of $3.1 billion, an increase to other assets of $58.2 million, an increase in accounts payable of $6.6 million, partially offset by a decrease in accounts receivable of $105.8 million, and a $44.0 million increase in payable to third-party loan owners.
Cash Flows from Investing Activities
Net cash used in investing activities was $628.6 million for the nine months ended March 31, 2025, which consisted of outflows related to $22.7 billion of purchases and origination of loans held for investment, including originated and purchased loans of $4.4 billion and $18.3 billion, respectively, during the period, $553.6 million of purchases of securities available for sale, and $141.1 million of property, equipment and software additions. Inflows related to $13.6 billion of principal repayments of loans, $8.1 billion of proceeds from sale of loans held for investment, and $984.4 million of proceeds from maturities of securities available for sale.
Net cash used in investing activities was $787.5 million for the nine months ended March 31, 2024, which consisted of outflows related to $15.6 billion of purchases and origination of loans held for investment, including originated and purchased loans of $3.2 billion and $12.4 billion, respectively, during the period, $461.2 million of purchases of securities available for sale, and $121.0 million of property, equipment and software additions. Inflows related to $10.3 billion of principal repayments of loans, $4.2 billion of proceeds from sale of loans held for investment, and $891.9 million of proceeds from maturities of securities available for sale.
Cash Flows from Financing Activities
Net cash provided by financing activities was $364.2 million for the nine months ended March 31, 2025, and primarily consisted of net cash inflows of $850.0 million from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts, $920.0 million from proceeds, net of debt issuance costs, related to the issuance of the 2029 Notes, and $48.7 million related to borrowing and repayment of funding debt. This was partially offset by net cash outflows of $1.0 billion related to the extinguishment and repurchase of a portion of our 2026 Notes, $250.0 million related to repurchase of common stock shares in connection with the issuance of the 2029 Notes, and net cash outflows of $241.6 million related to taxes paid on vested RSUs.
Net cash provided by financing activities was $767.2 million for the nine months ended March 31, 2024, and primarily consisted of net cash inflows of $1.1 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts. This was partially offset by net cash outflows of $158.9 million related to borrowing and repayment of funding debt.
Contractual Obligations
There were no material changes outside of the ordinary course of business in our commitments and contractual obligations for the three and nine months ended March 31, 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, 2024, which was filed with the SEC on August 28, 2024.
Off-Balance Sheet Arrangements
In the ordinary course of business, we engage in activities that are not reflected on our interim condensed consolidated balance sheets, generally referred to as off-balance sheet arrangements. These activities involve transactions with unconsolidated VIEs, including our sponsored securitization transactions, which we contractually service.
For off-balance sheet loan sales where servicing is the only form of continuing involvement, we could experience a loss if we were required to repurchase a loan due to a breach in representations and warranties associated with our loan sale or servicing contracts.
For 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. Refer to Note 9. Securitization and Variable Interest Entities in the notes to the interim condensed consolidated financial statements for further details.
As of March 31, 2025, the aggregate outstanding balance of loans held by third-party investors and off-balance sheet securitizations was $6.8 billion.
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 and nine months ended March 31, 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, 2024 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.”
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have operations within the United States, Canada and the United Kingdom, 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
As of March 31, 2025, we held $780.2 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. Higher 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, higher 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, including borrowings from our warehouse facilities and our securitization variable funding note. 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, which issue asset-backed securities 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 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 March 31, 2025, we estimate that a hypothetical instantaneous 100 basis point upward parallel shock to interest rates would have a less than $60.0 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.
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, 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 March 31, 2025 and June 30, 2024, we were exposed to credit risk on $6.6 billion and $5.7 billion, respectively, of loans held on our interim condensed consolidated balance sheet. Loan receivables are diversified geographically. As of March 31, 2025 and June 30, 2024, 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 March 31, 2025 but did not exceed 10% as of June 30, 2024. No other states or provinces exceeded 10%.
In addition, we have credit risk exposure in relation to certain off-balance sheet loans sold to third parties where we have entered into risk sharing arrangements and through our retained interests in unconsolidated securitization trusts. As of March 31, 2025 and June 30, 2024, we have sold $7.8 billion and $4.2 billion, respectively, of unpaid principal balance of loans which are subject to risk sharing arrangements, of which our maximum exposure to losses was $94.3 million and $81.2 million, respectively. This amount includes our maximum potential loss with respect to risk sharing liabilities of $33.1 million and the fair value of risk sharing assets of $61.2 million, as of March 31, 2025. The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $50.9 million and $23.8 million as of March 31, 2025 and March 31, 2024, respectively.
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.
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 March 31, 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.
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, 2024 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, 2024, 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.
Except as may be reflected in the updated risk factors included below, 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, 2024.
Risks Related to Our Indebtedness
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including our 0% convertible senior notes due 2026 (the “2026 Notes”) and our 0.75% convertible senior notes due 2029 (the “2029 Notes”), depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes and/or the 2029 Notes, to repay the 2026 Notes and/or the 2029 Notes at maturity or to repurchase the 2026 Notes and/or the 2029 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2026 Notes and/or the 2029 Notes.
Holders will have the right to require us to repurchase their 2026 Notes or 2029 Notes, as applicable, upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes or the 2029 Notes, as applicable, to be repurchased, plus accrued and unpaid special interest in the case of the 2026 Notes, or accrued and unpaid interest in the case of the 2029 Notes, in each case, if any. In addition, upon conversion of the 2026 Notes or the 2029 Notes, as applicable, we will be required to make cash payments for each $1,000 in principal amount of 2026 Notes or 2029 Notes, as applicable, converted of at least the lesser of $1,000 and the sum of the daily conversion values as described in the indenture governing the 2026 Notes or the indenture governing the 2029 Notes, as applicable. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefore or pay cash with respect to the 2026 Notes or the 2029 Notes, as applicable, being converted. In addition, our ability to repurchase the 2026 Notes or the 2029 Notes, as applicable, or to pay cash upon conversions of the 2026 Notes or the 2029 Notes, as applicable, may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase 2026 Notes or the 2029 Notes, as applicable, at a time when the repurchase is required or to pay any cash payable on future conversions of the 2026 Notes or the 2029 Notes, as applicable, would constitute a default under the indenture governing the 2026 Notes or the indenture governing the 2029 Notes, as applicable. A default under the indenture governing the 2026 Notes or the indenture governing the 2029 Notes, as applicable, or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2026 Notes or the 2029 Notes, as applicable, or make cash payments upon conversions thereof.
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.
Item 5. Other Information
(c) Rule 10b5-1 Trading Plans
During the three months ended March 31, 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:
, , our , a Rule 10b5-1 trading arrangement providing for the sale of the Company's Class A common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Mr. Linford’s Rule 10b5-1 Trading Plan provides for the exercise of up to 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 May 16, 2025 until , or earlier if all transactions under the trading arrangement are completed.
, , our , a Rule 10b5-1 Trading Plan. Mr. Levchin’s Rule 10b5-1 Trading Plan provides for the exercise of up to 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 June 20, 2025 until , or earlier if all transactions under the trading arrangement are completed.
No other directors or officers, as defined in Rule 16a-1(f), and/or 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 March 31, 2025.
Item 6. Exhibits
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Incorporated by Reference | | |
Exhibit Number | | Description | | Form | | File No. | | Exhibit | | Filing Date | | Filed Herewith |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| 4.1 | | | | | | | | | | | | | X |
| 10.1 | | | | | | | | | | | | | X |
| 10.2+ | | | | | | | | | | | | | X |
| 10.3+ | | | | | | | | | | | | | X |
31.1 | | | | | | | | | | | | | X |
31.2 | | | | | | | | | | | | | X |
32.1 | | | | | | | | | | | | | X |
32.2 | | | | | | | | | | | | | 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. |
| * | | Portions of the exhibit have been omitted as the Company has determined that: (i) the omitted information is not material; and (ii) the Company customarily and actually treats the omitted information as private or confidential. |
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: May 8, 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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