What changed in this filing

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Item 1. Business

2026-08-27 compared with 2025-08-28 · 124 added, 167 removed, 287 unchanged (50% of the section changed)

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Our solutions, which are built on trust and transparency, are designed to make it easier for consumers to spend and save responsibly and with confidence, easier for merchants and commerce platforms to convert sales and grow, and easier for commerce to thrive.

Legacy payment options, archaic systems, and traditional risk and credit underwriting models can be harmful, deceptive, and restrictive to both consumers and merchants.

We believe that they are not well-suited for increasingly digital and mobile-first commerce, and are built on legacy infrastructure that does not support the innovation required for modern commerce to evolve and flourish.

Our platform is designed to address these problems.

Our company is predicated on the principles of simplicity, transparency, and putting people first.

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Our proprietary technology’s ability to price and assess risk at a transaction level provides a unique advantage compared to legacy payment and credit systems.

Our approach to risk management is core to our business model and has led to lower fraud rates, higher approval rates compared to traditional credit underwriting models, and lower credit losses.

Our models have been built on extensive data points, including data from approximately 343 million loans.

Our approach to risk management is core to our business model and has contributed to lower fraud rates, higher approval rates, and lower credit losses compared to traditional credit underwriting models serving customers with similar credit risk profiles.

Our models have been built on extensive data points, including data from approximately 553 million loans to date.

Furthermore, our risk management models are designed to continuously improve over time, becoming more precise and efficient with each transaction.

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Our platform is explicitly designed and engineered to integrate with a wide range of merchants.

This is a point of differentiation for us, as we can accommodate and partner with merchants to serve their payment needs across a wide variety of industries, transactions, average order values (“AOV”), and consumer profiles.

This is a point of differentiation for us, as we partner with merchants to serve their payment needs across industries, transactions, average order values (“AOV”), and consumer profiles.

As of June 30, 2026, we had approximately 571 thousand active merchants, ranging from small businesses to large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence.

As used herein, “merchants” may reference merchants and/or e-commerce platforms.

Our merchants span a diverse range of industries, including electronics, equipment and auto, fashion and beauty, general merchandise, home and lifestyle, sporting goods and outdoors, and travel and ticketing.

Our merchants span a diverse range of industries, including electronics, equipment and auto, fashion and beauty, general merchandise, home and lifestyle, services, sporting goods and outdoors, and travel and ticketing.

We have three main loan product offerings:

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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;

Merchant fees depend on the individual arrangement between us and each merchant and may vary based on the loan terms and product offering;

we generally earn larger merchant fees on 0% APR financing products.

For fiscal year ended June 30, 2025 , Pay-in-X and 0% APR installment loans represented 14% and 13%, respectively, of total gross merchandise volume (“GMV”) facilitated through our platform.

For fiscal year ended June 30, 2026 , Pay-in-X and 0% APR installment loans represente d 16% and 14% , respectively, of total gross

merchandise volume (“GMV”) facilitated through our platform.

For fiscal year ended June 30, 2025, Pay-in-X and 0% APR installment loans represented 14% and 13%, respectively, of total GMV facilitated through our platform.

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Interest rates charged to our consumers vary depending on several factors including 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.

The interest-bearing transactions we facilitate only include simple interest.

Because consumers are not charged deferred or compounding interest or late fees, we are not incentivized to profit from our consumers’ mistakes or misfortunes.

The interest-bearing transactions we facilitate carry only simple interest.

Because we do not charge deferred interest, compounding interest, or late fees, we believe our business model aligns our economic incentives with prudent underwriting and successful consumer loan repayment.

For the fiscal years ended June 30, 2026 and 2025 , interest-bearing monthly installment loans represented 70% and 72% , respectively, of total GMV.

We also facilitate the issuance of the Affirm Card, a debit card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or apply to pay over time for their purchase through the Affirm App.

Similarly, we also facilitate the issuance of one-time-use virtual cards directly to consumers through our App, allowing them to shop with merchants that are not integrated with Affirm.

Merchants may also elect to use the virtual card as a method to facilitate the offering of installment loans to allow their customers to pay over time.

Similarly, we also facilitate the issuance of virtual cards directly to consumers through our App, allowing them to shop with merchants that are not integrated with Affirm.

Merchants may also elect to utilize our agreements with card-issuing partners as a means of integrating Affirm services.

Merchants are charged an interchange fee for each successful card transaction, and a portion of this revenue is shared with us by our card-issuing partners.

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Our business transforms the way consumers and merchants transact by creating a powerful platform built upon honest financial products.

We started our business with our foundational pay-over-time solution at checkout, and have since continued to innovate and expand our product suite by building and acquiring solutions that address the evolving needs of both consumers and merchants.

Our platform comprises three core elements:

point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app.

We started our business with our foundational pay-over-time solution at checkout, and have since continued to innovate and expand our product suite by building solutions that address the evolving needs of both consumers and merchants.

The current suite of solutions we provide to our consumers and merchants is outlined below:

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• Affirm at Checkout.

When purchasing from one of our partner merchants, consumers can choose Affirm as a payment method, giving them the option to pay over time with terms ranging from weeks to years.

We monitor merchants’ creditworthiness, consumer complaints and dispute rates, changes in consumer repayment behavior, and other data to give consumers the confidence that merchants integrated with Affirm are committed to delivering honest and delightful experiences.

When purchasing from one of our merchant partners, consumers can choose Affirm as a payment method, giving them the option to pay over time with personalized terms ranging from weeks to years.

We monitor merchants’ creditworthiness, consumer complaints and dispute rates, changes in consumer repayment behavior, and other data to help identify and screen out fraudulent or otherwise problematic merchants.

• Consumer-first borrowing.

Our products make it easy for consumers to apply for a loan and complete a quick, real-time eligibility check.

If approved, consumers receive either monthly or one to four 0% APR installments, where they pay no interest, or interest-bearing monthly installment loans, where they pay fixed amounts of interest that do not compound.

If approved, consumers may be offered either Pay-in-X or 0% APR monthly installment loans, where they pay no interest, or interest-bearing monthly installment loans, where they pay fixed, non-compounding interest.

We underwrite each transaction individually and do not charge late fees.

Our proprietary risk model has consistently outperformed traditional credit models, enabling us to better help eligible consumers finance their purchases.

Under this model, consumers do not pay more than what they agreed to at checkout, even if they miss or are late on a payment.

• Affirm Marketplace.

Our Affirm App and website provide tailored and exclusive offers from merchants based on consumers’ preferences.

Consumers can apply at affirm.com or via the Affirm App and, upon approval, receive a one-time-use virtual card to use online or in-store.

During the fiscal year ended June 30, 2025, 24% of our transactions occurred on the Affirm marketplace.

• Affirm Card.

Affirm Card allows consumers to link a bank account to pay in full, or apply to pay over time through the Affirm App.

Users can take advantage of an in-app post-purchase feature that allows them to instantly apply for an installment loan for any eligible debit transaction.

Consumers can also apply for a pre-purchase installment loan via the Affirm App and, upon approval, use the Affirm Card online or in-store to complete their purchase.

Under this model, the amount a consumer agrees to at checkout is the most they will ever pay, with no late fees or other additional charges.

• Affirm Card and the Affirm Marketplace.

Affirm Card allows consumers to apply to pay over time through the Affirm App, or to pay in full by linking a bank account or an Affirm Money Account.

Prior to checkout, consumers can apply for a pre-purchase installment loan via the app and, upon approval, use the Affirm Card online or in-store to complete their purchase.

Alternatively, users can use an in-app post-purchase feature to instantly apply for an installment loan within a limited period following any eligible

debit transaction.

Consumers can transact either via a physical debit card or a virtual debit card.

In addition, consumers can access Affirm pay-over-time functionality through select third-party payment and digital wallet channels.

Our app and website also provide tailored and exclusive merchant offers based on consumers’ preferences through various shopping experiences powered by the Affirm Marketplace.

Consumers can apply at affirm.com or via the app and, upon approval, receive an offer for use with the Affirm Card, a virtual card, or directly at the point of sale.

During the fiscal year ended June 30, 2026, 25% of our transactions were initiated through mobile app and website channels as well as Affirm Card.

• Affirm Money Account.

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• Affirm at Checkout .

Our direct Application Programming Interface (API) provides a simple and compliant solution that allows merchants to easily incorporate Affirm into their payment and product pages with minimal investment.

The integration process is supported by extensive developer documentation and a dedicated team to assist with any issues.

Merchants can integrate Affirm into their checkout experience through our direct Application Programming Interface (“API”) or one of our platform partners.

We provide a simple and compliant integration experience that allows merchants to easily incorporate Affirm into their payment and product pages with minimal investment.

Our integration experience is supported by extensive developer documentation and a dedicated team to assist with any issues.

Once integrated, merchants can achieve incremental sales, expand their target markets, and increase customer conversion, while Affirm handles the regulatory aspects of the loans facilitated through our platform.

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Merchants can offer either one or a combination of 0% APR and interest-bearing pay-over-time offerings.

Offering 0% APR financing to their customers is a compelling revenue accelerator for merchants, who are able to solve affordability for their customers without resorting to discounts.

Merchants have the ability to subsidize and determine the range of interest rates to be paid by their customers.

Offering 0% APR financing to their customers is a compelling revenue accelerator for merchants, who can increase conversion and average order value without resorting to discounts.

Merchants can determine the range of interest rates their customers are offered and may choose to subsidize those rates.

• Affirm prequalification.

By giving consumers the ability to prequalify, Affirm’s offering can be integrated earlier in the consumer’s journey.

This may result in fewer abandoned carts and higher conversion rates.

Prequalification also personalizes the shopping experience, as consumers may receive customized offers based on their approved amount.

• Brand-sponsored and other promotional strategies.

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Our merchant dashboard provides a robust user interface through which each merchant can view transaction data, manage charges, and manage their merchant account, while also offering insightful analytics and a client success team to help them understand product performance and optimize conversion and consumer acquisition costs.

• Affirm App and marketplace.

Merchants also have access to the Affirm App, which provides a marketplace that allows them to efficiently reach consumers through featured placements and personalized advertisements.

• Affirm prequalification.

By giving consumers the ability to prequalify, Affirm’s offering can be integrated earlier in the consumer’s journey.

We believe this results in fewer abandoned carts and higher conversion rates.

Prequalification also personalizes the shopping experience for consumers, once they are prequalified they may receive customized offers based on their approval amount.

• Affirm App and the Affirm Marketplace.

Merchants can participate in the Affirm Marketplace to reach consumers through featured placements, personalized advertisements and tailored offers within the Affirm App and other consumer experiences.

Our Competitive Advantages

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We benefit from self-reinforcing network effects, which are advantages that compound with each additional consumer and merchant that joins our network:

• As consumers learn about the key benefits of our solutions, we believe more and more will choose to use our platform, and our consumer base will continue to grow.

• As consumers learn about the key benefits of our solutions, more and more have chosen to use our platform, resulting in a growing consumer base.

• The larger our consumer ecosystem, the more valuable it is to merchants, and the more compelling it is for merchants to offer Affirm as a payment option.

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We prioritize building our own technology and investing in engineering talent, as we believe these are enduring competitive advantages that are difficult to replicate.

Our direct API also allows merchant partners to easily integrate Affirm.

Our integration experience also allows merchant partners to easily integrate Affirm through our direct API or one of our platform partners.

From the smallest direct-to-consumer online brand to the largest merchants running on mainframe computers, the technical aspects of integrating with Affirm are quick and painless.

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We use data to inform our analysis and decision-making, including risk assessment, in a way that empowers consumers and generates value for our merchants and funding sources.

Our technology is built to handle the immense scale of our data-driven operations — we are capable of processing thousands of checkouts per minute, often relaying underwriting decisions within seconds.

Our machine learning-based risk models are calibrated and validated on an extensive amount of data from over 343 million loans, and are custom built to effectively detect fraud, price risk, and provide customized recommendations.

data beyond traditional credit scores, such as transaction history and credit usage, and our own repayment history, to predict repayment ability, and leverage this with real-time response data.

Our technology is built to handle the immense scale of our data-driven operations — we are capable of processing thousands of checkouts per minute in multiple countries, often relaying underwriting decisions within seconds.

Our machine learning-based risk models are calibrated and validated on an extensive amount of data from over 553 million loans to date, and are custom built to effectively detect fraud, price risk, and provide customized recommendations.

We consider data beyond traditional credit scores, such as transaction history and credit usage, and our own repayment history, to predict repayment ability, and leverage this with real-time response data.

Better outcomes generated by our proprietary risk models

We believe our risk model informs our ability to better assess risk.

Unlike legacy payment and credit systems, we can assess and price risk at a transaction level, rather than relying solely on a static consumer credit score.

We believe our proprietary risk model has translated this advantage into the ability to facilitate a greater volume of transactions from a wider and more diverse segment of consumers.

The greater accuracy of our risk model also generally benefits our provision for credit losses on loans we retain.

The accuracy of our risk model also generally benefits our provision for credit losses on loans we retain.

Our continuously-learning risk model benefits from increasing scale.

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Our ability to quickly assess, price, and manage risk enables us to generate high quality assets that attract funding sources and generate predictable servicing and interest income as consumers repay over time.

Our risk model is designed to comply with our originating bank partners’ credit policies and underwriting procedures and is designed to support lower fraud rates and higher approval rates compared to traditional credit underwriting models.

Our risk model is designed to comply with our originating bank partners’ credit policies and underwriting procedures and our direct lending entity’s underwriting policies, and is designed to support lower fraud rates and higher approval rates compared to traditional credit underwriting models.

For more information on how our risk model automates the underwriting process for our originating bank partners, see “— Regulatory Environment — State and provincial licensing requirements and regulation.”

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Our diverse and durable funding model consists of four primary channels — warehouse credit facilities, programmatic issuance of term and revolving securitization transactions (including revolving securitizations via Affirm’s master trust), pass-through loan sales, and forward flow loan sale arrangements.

Within each channel, we endeavor to maximize our financial flexibility by partnering with a broad spectrum of counterparty profiles including depository institutions, investment banks, strategic investment funds, pension funds, asset managers, and insurance companies.

We endeavor to maximize our financial flexibility by partnering with a broad spectrum of counterparty profiles including depository institutions, investment banks, hedge funds, pension funds, asset managers, and insurance companies.

By maintaining access to a diversified array of long-term funding sources and leveraging our proprietary underwriting process at the point-of-sale, we are able to monetize high-quality financial assets at scale.

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Morgan Chase, Citibank, Bank of America, Capital One, Bread Financial, and American Express;

technology solutions provided by payment companies such as Visa and MasterCard;

mobile wallets such as PayPal;

and other pay-over-time solutions offered by companies such as Block and Klarna as well as new pay-over-time offerings by legacy financial and payments companies, including those mentioned above.

mobile wallets and other pay-over-time solutions offered by companies such as PayPal, Block and Klarna;

and new pay-over-time offerings by legacy financial and payments companies, including those mentioned above.

Additionally, some merchants are increasingly offering proprietary pay-over-time options to customers, and in some cases, these are presented parallel to our offerings at checkout.

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• Innovate on new consumer product solutions .

To expand consumers' purchasing power, deliver personalized benefits through AdaptAI (Affirm’s AI-powered personalized promotion platform), and help them discover the best offers, we are delivering a new generation of financial products and experiences designed to meet their evolving needs.

To expand consumers' purchasing power and deliver personalized benefits and offers, we are delivering a new generation of financial products and experiences designed to meet their evolving needs, including AdaptAI (Affirm’s AI-powered personalized promotion platform).

• Increase merchant feature functionality.

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We aim to continue driving repeat use of our platform as we serve consumers beyond their initial purchase via our consumer-centric tools and offerings, and the increased diversity of merchants on our network.

We believe expanding into consumers’ daily and in-store spending will be key in driving repeat usage and will position us to increase engagement with both consumers and merchants.

Affirm Card is an important component of this strategy because consumers using Affirm Card to date often have a higher transaction frequency per user and greater in-store usage.

We believe continuing to expand the use of Affirm across a broader range of online and in-store purchases is key to driving repeat usage and will position us to further increase engagement with both consumers and merchants.

Affirm Card is an important component of this strategy because consumers using Affirm Card to date often have a higher transaction frequency per user, greater in-store usage, and use Affirm across new and existing merchant categories within our network.

If successful, we believe that this strategy will lead to increased transaction volume on our platform, as well as the expansion of our consumer and merchant network.

As of June 30, 2025, we had approximately 5.8 transactions per active consumer, an increase of approximately 20% compared to June 30, 2024 and an increase of 52% compared to June 30, 2023.

As of June 30, 2026, we had approximately 7.0 transactions per active consumer, an increase of approximately 20% compared to June 30, 2025 and an increase of 44% over the two-year period since June 30, 2024.

Expand consumer reach

We will continue marketing to increase brand awareness with consumers and highlight the value of our platform.

We will continue marketing to increase brand awareness, strengthen our web and direct-to-consumer presence, and highlight the value of our platform.

We believe this will attract new consumers to try Affirm as a payment option.

As we add more consumers to our network, we expect our models to become more efficient and robust, allowing us to provide our platform (and the loans it facilitates) to a growing spectrum of consumers.

The more consumers that we serve, the better our systems understand how to identify responsible consumers, and the more consumers we can acquire and approve.

We also intend to continue expanding our products to serve a broader range of consumer needs.

As we add more consumers to our network, we expect our models to become more efficient and robust, enhancing our ability to assess risk and supporting the acquisition and approval of a broader spectrum of consumers.

Expand merchant reach

• Deepen penetration with existing merchants.

Today, Affirm transactions represent a small percentage of the total transaction volume for our merchants.

As more consumers become aware of the ease and transparency of using Affirm, and as we proactively build relationships with merchants through our dedicated sales and customer success teams, we believe we can significantly increase our share of existing merchants’ overall transaction volumes.

Affirm represents a small percentage of our merchants’ total transaction volume today, which we believe we can grow as consumer demand for Affirm rises, as our sales and customer success teams deepen merchant relationships, and as we expand Affirm across more of their channels and platforms.

• Increase the number of our merchant partnerships .

We believe we have the opportunity to significantly increase the number of integrated merchants on our network through both our dedicated sales team and platform partner and merchant acquirer partnerships.

Additionally, simple, direct API integration means bringing on new merchants can be a seamless process.

We believe we have the opportunity to continue to increase the number of integrated merchants on our network through both our dedicated sales team and platform partner and merchant acquirer partnerships.

Additionally, our simple integration experience enables merchants to incorporate Affirm with minimal investment.

As we continue to generate results for merchants, we believe more will join our platform in order to offer Affirm as an option to their customers.

Expand to new markets

Our platform is broadly available to merchants and eligible consumers in the United States, Canada and the United Kingdom (“U.K.”), and we expect to continue expanding internationally in both western Europe and Australia.

Our platform is broadly available to merchants and eligible consumers in the United States, Canada and the United Kingdom (“U.K.”).

Additionally, we began a limited launch of our platform in Australia in the first quarter of fiscal year 2027.

We expect to continue expanding internationally in continental Europe and Australia.

We believe merchants and consumers anywhere can benefit from a more transparent, fair, and honest way to engage in commerce, and we see an opportunity to generate value in many new markets around the world through our platform.

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Our sophisticated fraud models utilize approximately 350 other data points in order to make a near-instantaneous decision on whether to block a transaction.

There are also secondary rules that, when triggered, are designed to send a transaction to fraud investigators.

We also use a combination of machine learning models and rules to inform real-time transaction decisions and identify transactions for potential review by fraud investigators.

• Credit check capabilities.

Our risk model takes five top-of-mind data inputs from the user and turns them into a total of over 500 data points in order to assess the credit risk of new consumers.

Our risk model takes key user identifiers and transaction details and turns them into a total of over 1,000 data points in order to assess the credit risk of new consumers.

Our algorithms model out the repayment probability on a month-to-month basis, and combine these probabilities with the term length, purchase size, merchant, and item being purchased, in order to price and score risk.

In the vast majority of cases, we can complete these checks and calculations in a matter of seconds, automating the underwriting process pursuant to our originating bank partners’ underwriting policies.

We use application and transaction data to train our model, including data from approximately 343 million loans.

We use application and transaction data to train our model, including data from approximately 553 million loans to date.

• Modeling improvements.

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During these updates, new signals are captured, and older data interrogated and re-tested to help our models continue to evolve.

We have automated the process of constructing, training, calibrating, validating, and updating our models, which allow our scientists and engineers to focus on research, flexibility, and speed.

We have automated the process of constructing, training, calibrating, validating, and updating our models, which allow our scientists and engineers to focus on research,

flexibility, and speed.

Our models are designed to enable us to adjust our models quickly and efficiently in response to changes in the environment.

• Designed for continued innovation and flexibility.

Our deep technological talent and capabilities have enabled us to strategically build core systems (including our own ledger) and infrastructure in-house, allowing us to gain what we believe is a significant competitive advantage as we continue to innovate and iterate, and develop new capabilities across multiple disciplines.

The flexibility of our custom-built technological infrastructure means we can incorporate new merchants, platforms, data sources, models, capital partnerships, and other elements without necessarily adding significant overhead.

Our deep technological talent and capabilities have enabled us to strategically build core systems and data infrastructure in-house, allowing us to gain what we believe is a significant competitive advantage as we continue to innovate and iterate, and develop new capabilities across multiple disciplines.

• Data privacy and security .

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We have historically relied on the strength of our merchant relationships and positive user experience to develop our brand and grow our network.

We have achieved significant merchant and consumer adoption without investing heavily in sales and marketing.

We are focused on the effectiveness of sales and marketing spending.

We have achieved significant merchant and consumer adoption while maintaining a disciplined approach that considers the effectiveness of our sales and marketing spending.

We also utilize dedicated sales teams to grow our merchant base and leverage strategic partnerships with other platforms to expand our merchant and consumer base.

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.

We experience seasonal fluctuations in our business as a result of consumer spending patterns.

Historically, our GMV has tended to be higher during our second and fourth fiscal quarters, due to increases in retail commerce during the holiday season and other promotional activity.

Our loan delinquencies tend to be at their lowest during our fiscal third and fourth quarters, as consumer savings benefit from tax refunds.

Adverse events that occur during these quarters could have a disproportionate effect on our financial results for the fiscal year.

Human Capital Resources

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• People come first.

We consider our impact on people’s lives before we think about our own interests.

This means that we do not and will not take advantage of our consumers.

Unlike much of the consumer lending industry, we do not capitalize on consumer misfortunes through practices such as late fees and deferred or compounding interest.

Our success is aligned with our consumers’ success.

In fact, we depend on it.

This means that we do not and will not take advantage of our consumers nor do we capitalize on consumer misfortunes through practices such as late fees and deferred or compounding interest.

• No fine print.

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That is why there are no hidden fees or tricks associated with the loans facilitated through our platform.

What you see is what you get.

• It’s on us.

We take full accountability for our actions, never shirking responsibility or passing the buck.

Affirmers own problems and solutions, and we hold each other accountable.

• Simpler is better.

We make complex things simple and clear.

Financial products and payments have traditionally been fraught with complexity.

We found a better way, a way that brings consumers the simplicity they need and merchants the results they want.

Affirm’s products bring consumers the simplicity they need and merchants the results they want.

• Push the envelope.

We never stop innovating, taking smart risks, and raising the bar.

Talented people are attracted to Affirm because we empower them to innovate, create robust systems, and take smart risks.

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In service of our high performance culture, we strive to attract and retain employees with a broad range of backgrounds, experiences, and skills, which we believe are important as we scale our business and strengthen Affirm's culture.

Our Diversity and Inclusion Steering Committee (“DISC”) is an internal committee made up of senior leaders from across Affirm.

DISC’s overarching purpose is to advance belonging and inclusion in order to create an environment where individuals from all backgrounds can thrive and everyone has an equal opportunity to succeed.

Our board of directors’ role in human capital resource management

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Employee incentives and benefits

We provide equity incentives to our employees through the grant of stock options and restricted stock units (“RSUs”) under our equity incentive plan to align their interests with stockholders as “owners” of our company.

We also have adopted an Employee Stock Purchase Plan (“ESPP”) pursuant to which eligible employees can purchase shares of our Class A common stock at a discount from the fair market value.

We provide equity incentives to our employees through the grant of performance stock units (“PSUs”) and restricted stock units (“RSUs”) under our equity incentive plan to align their interests with stockholders as “owners” of our company.

We also offer an Employee Stock Purchase Plan (“ESPP”) allowing eligible employees to purchase shares of our Class A common stock at a discount to fair market value.

We believe these incentive programs allow us to be competitive with comparable companies in our industry by giving us the resources to attract, motivate and retain talented individuals.

We offer comprehensive benefits, including medical, dental, vision, life insurance, paid time off, various voluntary insurance programs, and a 401(k) retirement plan for U.S.

Our employee assistance program, financial wellness benefits, legal protection benefits, and identification theft protection benefits offer employees information, referrals, and short-term counseling for personal issues affecting their work or personal life as an added layer of protection.

We offer comprehensive benefits, including medical, dental, vision, life insurance, paid time off, various voluntary insurance programs, and retirement savings benefits.

Our employee assistance program, financial wellness benefits, legal protection benefits, and identity theft protection benefits offer employees information, referrals, and short-term counseling for personal issues affecting their work or personal life as an added layer of protection.

In addition, we offer perks, such as employer-sponsored digital spending wallets, mental health benefits, family & fertility benefits and generous leave and time-off policies, which we believe enhance employee productivity, satisfaction and loyalty.

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We operate in a rapidly evolving regulatory environment and are subject to extensive regulation, both directly and indirectly, by way of our partnership with our originating bank partners, under U.S.

federal law, the laws of Canada and the U.K., and the laws of the states and provinces in which we operate, among others.

federal law, the laws of Canada, the U.K.

and Australia, and the laws of the states and provinces in which we operate, among others.

These laws cover all aspects of our business and include privacy laws, consumer protection laws, and contractual obligations.

We could become subject to additional legal or regulatory requirements if laws or regulations change in the jurisdictions in which we operate.

We could become subject to additional legal or regulatory requirements if laws or regulations change in

the jurisdictions in which we operate.

These could include the need to obtain new and different types of licenses in order to conduct our business, such as for lending, brokering, servicing, collections, or money transmission.

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Our operations must satisfy the laws and standards of each individual U.S.

state and territory, Canadian province and U.K.

country in which we operate.

state and territory, Canadian province, U.K.

country, and Australian state and territory in which we operate.

This means that when individual states, territories or provinces differ in how they allow financing to be provided and used, we must operate consistently in accordance with the most comprehensive requirements.

Our policies and practices approach these requirements with the goal of managing the long-term viability and flexibility of our business model.

As such, we have established a business model pursuant to which we may originate loans directly through our platform under our lending, servicing, and brokering licenses across various jurisdictions in the U.S., Canada, and U.K., and we may also purchase loans originated by our originating bank partners through our platform.

As such, we have established a business model pursuant to which we may originate loans directly through our platform under our lending, servicing, and brokering licenses across various jurisdictions in the U.S., Canada, U.K., and Australia, and we may also purchase loans originated by our originating bank partners through our platform.

Substantially all of the loans facilitated through our platform in the U.S.

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The application of state and provincial licensing requirements to our business model is not always clear, and while we believe we are in material compliance as of June 30, 2026 with applicable licensing requirements, regulators may request or require that we obtain additional licenses or other authorizations in the future, which may subject our business to additional restrictions or requirements.

Several states have begun enacting legislation specifically focused on buy now, pay later (“BNPL”) lending.

For example, New York enacted the Buy-Now-Pay-Later Act (N.Y.

Banking Law Article 14-B, §§ 735-749), and Illinois recently enacted the Buy-Now-Pay-Later Loan Consumer Protection Act (SB 3561).

We are monitoring developments in these states, as well as potential BNPL legislation in other jurisdictions, and evaluating the applicability of these laws to our products and platform.

State interest rate treatment

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We rely on our originating bank partners’ authority under federal law to establish interest rates and charge interest on the loans our originating bank partners originate through our platform.

Cross River Bank generally allows a consumer loan borrower to agree to any annual rate of interest up to 30%, and our other originating bank partners, including Celtic Bank, generally allow a consumer loan borrower to agree to any annual rate of interest up to 36%, in each case calculated in accordance with the FDIC Federal Interest Rate Authority rule discussed above and other applicable law.

Celtic Bank and Lead Bank generally allow a consumer loan borrower to agree to any annual rate of interest up to 36%, while Cross River Bank generally allows a consumer loan borrower to agree to any annual rate of interest up to 30%, in each case calculated in accordance with the FDIC Federal Interest Rate Authority rule discussed above and other applicable law.

However, if the legal structure underlying our relationship with our originating bank partners was successfully challenged, we may be found to be in violation of state licensing requirements and state laws regulating interest rates and other aspects of consumer lending.

In the event of such a challenge or if our arrangements with our originating bank partners were to change or end for any reason, we would need to rely on an alternative bank relationship, find an alternative bank relationship, rely on existing state licenses, obtain new state licenses, pursue a federal charter, offer consumer loans, and/or be subject to the interest rate limitations and loan product requirement limitations of certain states.

There are two examples of claims that have been raised that could each, separately or jointly, result in this outcome in some or all states.

The FDIC stated that its Federal Interest Rate Authority Rule was promulgated in part to codify the “valid when made” doctrine due to court decisions such as the one in Madden v.

Midland Funding, LLC, 786 F.3d 246 (2d Cir.

denied, 136 S.Ct.

2505 (June 27, 2016).

Midland Funding, the Second Circuit ruled that federal preemption generally applicable to national banks did not apply to non-bank assignees if the assignee was not acting on behalf of the bank, if the bank no longer had an interest in the loan, or such determination did not significantly interfere with the bank’s exercise of its federal banking powers.

Under this rationale, the Second Circuit did not preempt state interest rate limitations that might apply to the non-bank assignees.

The Second Circuit’s holding in the Madden case is binding on federal courts in the states of New York, Connecticut, and Vermont.

Following the Madden decision, there have been a number of lawsuits in other parts of the country making similar allegations.

Under the Federal Interest Rate Authority Rule promulgated by the FDIC, which is the interest rate authority of state-chartered banks (such as our originating bank partners), the interest rate applicable to a loan originated by a state-chartered bank on the date of origination will carry with the loan irrespective of ownership (i.e., the interest rate is “valid when made”).

The OCC issued a similar rule on May 29, 2020 with respect to loans originated by national banks.

State attorneys general of the states of California, New York and Illinois have filed a lawsuit against the OCC alleging that the OCC had no statutory authority to issue its May 29, 2020 rule regarding

the permissibility of interest rates on loans purchased from a national bank and failed to follow required procedures in promulgating the rule.

State attorneys general of the states of California, Illinois, Massachusetts, Minnesota, New Jersey, New York, and North Carolina, together with the District of Columbia, filed a similar lawsuit against the FDIC regarding the FDIC Federal Interest Rate Authority Rule.

This lawsuit was decided in favor of the FDIC pursuant to the Northern District of California’s decision in California v.

FDIC, 2022 U.S.

LEXIS 22719 (N.D.

8, 2022), in which the court expressly upheld the validity of the FDIC Federal Interest Rate Authority Rule, distinguishing it from the similar rule issued by the OCC.

However, it is uncertain whether these or other state attorneys general will file similar suits with respect to any other rule regarding the permissibility of interest rates by the FDIC, OCC or other regulators.

Notably, the FDIC and OCC rules underscore that they do not address the question of whether a bank or insured branch of a foreign bank is a real party in interest with respect to a loan or has an economic interest in the loan under state law, e.g.

which entity is the “true lender.” Federal Interest Rate Authority, 85 Fed.

44146 (July 22, 2020).

Before and after the Federal Interest Rate Authority went into effect, there have also been both private litigation and governmental enforcement actions seeking to recharacterize a lending transaction, claiming that the named lender was not the true lender, and that instead another entity was the true lender or the de facto lender.

These claims are traditionally based upon state lending laws, other statutory provisions, or state common law through which a private litigant or governmental agency could seek to license, regulate, or prohibit the activities of the entity they consider the true lender or de facto lender.

Any such litigation or enforcement action with respect to a loan facilitated through our platform against us, any successor servicer, prior owners, or subsequent transferees of such loans (including our originating bank partners) could subject them to claims for damages, disgorgement, or other penalties or remedies.

On October 27, 2020, under the Trump Administration, the OCC promulgated a final rulemaking setting forth standards for determining the true lender of a loan issued by a national bank.

On June 30, 2021, President Biden signed a Congressional Review Act resolution to repeal the OCC's true lender rule, and the OCC may not issue any substantially similar rule without subsequent statutory authorization.

Further, it is unclear whether these rules will be given effect by courts and regulators in a manner that actually mitigates risks relating to state interest rate limits and related risks to us, our originating bank partners, any other program participant, or the loans facilitated through our platform.

While most enforcement and litigation has historically targeted high-interest rate programs (i.e.

> 100% APR), which we consider to be inconsistent with our company mission and values, we nonetheless could be subject to litigation, whether private or governmental, or administrative action regarding the above claims.

The potential consequences of an adverse determination could include the inability to collect loans at the interest rates contracted for, licensing violations, the loans being found to be unenforceable or void, the reduction of interest or principal, or other penalties or damages.

Third-party purchasers of loans facilitated through our platform also may be subject to scrutiny or similar litigation, whether based upon the inability to rely upon the “valid when made” doctrine or because a party other than the originating bank is deemed the true lender.

Money transmission

Through our wholly-owned subsidiary, Affirm Payments, LLC (“Affirm Payments”), we hold licenses to operate as a money transmitter (or its equivalent) in certain states and jurisdictions of the U.S.

Affirm Payments is actively seeking additional licenses and certifications of this nature, but there can be no assurance we will be able to obtain them or the timeline with which this will happen.

Affirm Payments is also registered with the U.S.

Department of the Treasury's Financial Crimes Enforcement Network ("FinCEN") as a money services business.

As a licensed money transmitter, we have obligations and restrictions with respect to the investments of consumer funds, recurrent reporting, and bonding.

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Any of the aforementioned scenarios could impose substantial costs and or harm our business.

regulatory oversight

In addition to the U.S.

and Canada, we provide a similar lending service in the U.K.

through our U.K.

International regulatory oversight

We provide lending services outside the United States through local subsidiaries that hold the applicable lending licenses and authorizations in each jurisdiction, and we monitor the laws and regulations governing BNPL and consumer credit activities in these markets, all of which are subject to ongoing interpretation and change.

We operate through our Canadian subsidiary, Affirm Canada Holdings Ltd., which holds lending licenses and is subject to both federal and provincial regulatory frameworks.

The Retail Payment Activities Act (S.C.

177) came into full effect on September 8, 2025, requiring payment service providers and BNPL firms performing regulated payment functions to register with the Bank of Canada and to comply with operational risk management, funds-safeguarding, and reporting obligations.

Our lending activities are also regulated at the provincial level under each province's consumer protection legislation, which imposes varying requirements regarding disclosure of cost of borrowing, advertising of credit terms, and consumer remedies.

No Canadian province has enacted legislation specifically targeting BNPL products, but provincial consumer protection laws of general application, including requirements applicable to lenders and installment sale contracts, may apply to our activities.

United Kingdom .

We operate through our U.K.

subsidiary, Affirm U.K.

Limited is authorized and regulated by the U.K.

Financial Conduct Authority (“FCA”) and carries out regulated activity in the U.K.

The FCA has statutory objectives that direct how it operates.

The FCA’s strategic objective is to ensure that the relevant markets function well.

The FCA’s operational objectives are (a) securing an appropriate degree of protection for consumers, (b) protecting and enhancing the integrity of the U.K.

financial system, and (c) promoting effective competition in the interests of consumers.

The FCA regulates and supervises Affirm U.K.

Limited’s consumer credit activities.

The FCA adopts a pre-emptive approach to supervision based on making forward-looking judgments about a firm’s business model, product strategy and how the business is run.

The FCA has a range of supervisory tools available to it, including (but not limited to) meetings with management, desk-based reviews, making recommendations and on-site inspections.

The laws and regulations applicable to consumer credit activities are subject to interpretation and change and we continue to monitor this on an ongoing basis.

Limited, which is authorized and regulated by the Financial Conduct Authority (“FCA”) to carry out regulated consumer credit activity.

The FCA's strategic objective is to ensure that relevant markets function well, and its operational objectives are to secure an appropriate degree of consumer protection, protect and enhance the integrity of the U.K.

financial system, and promote effective competition in the interests of consumers.

On July 25, 2026, new FCA regulations for the BNPL market came into force, bringing the previously unregulated deferred-payment credit (“DPC”) sector under the remit of the FCA and its DPC rules.

We operate through our Australian subsidiary, Affirm Australia Pty.

Ltd., which holds an Australian credit license permitting lending activities and is regulated by the Australian Securities and Investments Commission (“ASIC”).

The Australian Government amended the National Consumer Credit Protection Act 2009 to extend the application of the National Credit Code to BNPL contracts, also known as low cost credit contracts (“LCCCs”).

Effective June 10, 2025, lenders engaging in credit activities involving LCCCs must hold an Australian credit license with the appropriate authorizations, subject to transitional arrangements, and ASIC has published Regulatory Guide 281, Low cost credit contracts, to assist providers in complying with key obligations.

federal consumer protection requirements

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In addition to acts of intentional discrimination, the ECOA has been interpreted by federal regulators and courts to prohibit creditors from maintaining policies and practices that, while facially neutral, result in a disproportionate, adverse impact on applicants or consumers in protected groups.

For this reason, a loan decisioning or credit scoring model must not use any variable that may be deemed a proxy for a protected characteristic such as race, ethnicity, or sex.

For this reason, a loan decisioning or credit scoring model must not use any

variable that may be deemed a proxy for a protected characteristic such as race, ethnicity, or sex.

Further, the variables used in the model must be supported by documented, legitimate business justifications where the model results in a disproportionate effect on applicants or consumers of certain demographic groups;

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• the Military Lending Act and similar state laws, which provide disclosure requirements, interest rate limitations, substantive conduct obligations, and prohibitions on certain behavior relating to loans made to covered borrowers, which include both servicemembers and their dependents;

• the Servicemembers Civil Relief Act and similar state laws, which allows active duty military members to suspend or postpone certain civil obligations so that the military member can devote his or her full attention to military duties;

• requirements pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in response to the COVID-19 pandemic, including requirements relating to debt collection and credit reporting.

• the Servicemembers Civil Relief Act and similar state laws, which allow active duty military members to suspend or postpone certain civil obligations so that the military member can devote his or her full attention to military duties.

In addition, many states and local jurisdictions have consumer protection laws analogous to, or in addition to, the federal laws listed above, such as usury laws, state debt collection practices laws, and requirements regarding loan disclosures and terms, credit discrimination, credit reporting, money transmission, recordkeeping, the arranging of loans made by third parties, and unfair or deceptive business practices.

We are also subject to data protection laws and regulations, such as the EU General Data Protection Regulation (“GDPR”), Canada’s Personal Information Protection and Electronic Documents Act, the U.K.’s Data Protection Act of 2018 and similar state laws such as the California Consumer Privacy Act (the “CCPA”), which includes limitations and requirements surrounding the use, disclosure, and other processing of certain personal information about California residents.

We are also subject to regulation by the Consumer Financial Protection Bureau (“CFPB”) under the Dodd-Frank Act and other acts described herein, and we are subject to the CFPB’s supervision and enforcement authority with respect to our compliance with these requirements as a facilitator, servicer, acquirer, or originator of consumer credit.

We are also subject to data protection laws and regulations, such as the EU General Data Protection Regulation (“GDPR”), Canada’s Personal Information Protection and Electronic Documents Act, the U.K.’s Data Protection Act of 2018, Australia's Privacy Act 1988, and similar state laws such as the California Consumer Privacy Act (the “CCPA”), which includes limitations and requirements surrounding the use, disclosure, and other processing of certain personal information about California residents.

We are also subject to regulation by the Consumer Financial Protection Bureau (“CFPB”) under the Dodd-Frank Act and other acts described herein, and we are subject to the CFPB’s enforcement authority with respect to our compliance with these requirements 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 the CFPB may continue to do so from time to time in the future.

Additionally, the CFPB’s supervision of us enables it, among other things, to conduct comprehensive and rigorous examinations to assess our compliance with consumer financial protection laws, which could result in investigations, enforcement actions, regulatory fines and mandated changes to our business products, policies and procedures.

The CFPB, through its supervision and enforcement authority, could increase our compliance costs, potentially hinder our ability to respond to marketplace changes, impose requirements to alter products and services that would make them less attractive to consumers and impair our ability to offer products and services profitably.

The CFPB, through enforcement authority, could increase our compliance costs, potentially hinder our ability to respond to marketplace changes, impose requirements to alter products and services that would make them less attractive to consumers and impair our ability to offer products and services profitably.

The CFPB is authorized to pursue administrative proceedings or litigation for violations of federal consumer financial laws.

In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties.

proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties.

Also, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations under Title X, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties).

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It is possible that federal regulators could promulgate rulemakings and bring enforcement actions that materially impact our business and the business of our originating bank partners.

These regulators may augment requirements that apply to loans facilitated by our platform, or impose new programs and restrictions and could

otherwise revise or create new regulatory requirements that apply to us (or our bank partners), impacting our business, operations, and profitability.

On May 22, 2024, the CFPB issued an Interpretive Rule, “Truth in Lending (Regulation Z);

Use of Digital User Accounts to Access Buy Now, Pay Later Loans,” under the Truth in Lending Act (the “Interpretive Rule”) that extended to Buy Now, Pay Later (BNPL) providers certain requirements applicable to credit card providers.

The Interpretive Rule was effective on July 30, 2024.

However, on June 2, 2025, the CFPB subsequently confirmed retraction of the Interpretive Rule in its status report to the Court in the case brought by the trade group challenging the interpretive rule.

Consumer Fin.

1:24-cv-2966-ACR, Status Report (D.D.C.

June 2, 2025).

The CFPB also previously announced in a blog post that it would “not prioritize enforcement actions taken on the basis of the [Interpretive Rule].” Consumer Fin.

Bureau, CFPB Announcement Regarding Enforcement Actions Related to Buy Now, Pay Later Loans (May 6, 2025).

These regulators may augment requirements that apply to loans facilitated by our platform, or impose new programs and restrictions and could otherwise revise or create new regulatory requirements that apply to us (or our bank partners), impacting our business, operations, and profitability.

The federal regulatory framework applicable to online marketplaces such as our platform is evolving and uncertain, and additional requirements may apply to our business in the future.

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We are subject to compliance obligations related to U.S.

anti-money laundering (“AML”) laws and regulations due, in part, to our partnership with our originating bank partners.

anti-money laundering (“AML”) laws and regulations both directly through our subsidiary Affirm Payments, a registered money services business and licensed money transmitter, and through our partnership with our originating bank partners.

With our international footprint, we are also subject to international AML laws and regulations.

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Our AML program is also designed to prevent our products from being used to facilitate business in certain countries or territories, or with certain individuals or entities, including those on designated lists promulgated by the U.S.

Department of the Treasury’s Office of Foreign Assets Controls and other U.S.

Department of the Treasury’s Office of Foreign Assets Control and other U.S.

sanctions authorities.

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We collect, store, use, disclose, transfer, and otherwise process a wide variety of information, including personal information, for various purposes in our business, including to help provide for the integrity of our services and to provide features and functionality to our consumers and merchants.

This aspect of our business, including the collection, storage, use, disclosure, transfer, processing, and protection of the information, including personal information, we acquire in connection with our consumers’ and merchants’ use of our services, is subject to

numerous privacy, cybersecurity, and other laws and regulations in the U.S.

This aspect of our business, including the

collection, storage, use, disclosure, transfer, processing, and protection of the information, including personal information, we acquire in connection with our consumers’ and merchants’ use of our services, is subject to numerous privacy, cybersecurity, and other laws and regulations in the U.S.

and foreign jurisdictions, including the GLBA and its implementing regulations.

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However, these laws, agreements, and procedures provide only limited protection.

As of June 30, 2025, we owned 23 registered trademarks and 1 trademark applications in the United States, 101 registered trademarks and 19 trademark applications in various foreign jurisdictions, and 27 issued patents, 36 pending patent applications in the United States, and 64 pending patent applications in various foreign jurisdictions.

As of June 30, 2026, we owned 21 registered trademarks and 1 trademark application in the United States, 101 registered trademarks and 4 trademark applications in various foreign jurisdictions, 30 issued patents and 48 pending patent applications in the United States, and 1 issued patent and 67 pending patent applications in various foreign jurisdictions.

Although we take steps to protect our intellectual property and proprietary rights, we cannot be certain that the steps we have taken will be sufficient or effective to prevent the unauthorized access, use, copying, or the reverse engineering of our technology and other proprietary information, including by third parties who may use our technology or other proprietary information to develop services that compete with ours.

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Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.

From time to time, we may also use our investor relations website (investors.affirm.com), webcasts, press releases, conference calls, and social media as a means of disclosing information about the Company, including information which could be deemed

to be material to investors.

Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our website as soon as reasonably practicable after we file such material electronically with, or furnish it to, the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business