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In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
+Added: These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
+Added: References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
Risk Factor Summary
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• The loss of the services of our Founder and Chief Executive Officer, as well as our inability to attract and retain highly skilled employees, could materially and adversely affect our business, results of operations, financial condition, and future prospects.
−Removed: • We have a history of operating losses and may not achieve sustained profitability.
+Added: • We may not be able to sustain profitability.
• Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
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• If our originating bank partner model is successfully challenged or deemed impermissible, we could be found to be in violation of licensing, interest rate limit, lending, or brokering laws and face penalties, fines, litigation, or regulatory enforcement.
−Removed: • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our executive officers, employees and directors and their affiliates.
+Added: • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our executive officers, employees
+Added: and directors and their affiliates.
As a result of our dual class structure of our common stock, the trading price of our Class A common stock may be depressed.
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Furthermore, having a diversified mix of commercial partners is important to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of commercial partner or industry.
−Removed: Our continued success also is dependent on our ability to successfully grow and develop relationships with our commercial partners, particularly early-stage relationships with large e-commerce retailers and platforms such as Apple Pay.
+Added: Our continued success also is dependent on our ability to successfully grow and develop relationships with our commercial partners, particularly early-stage relationships with large e-commerce retailers and platforms such as Intuit.
The pace of development, integration and rollout of these early-stage relationships is often unpredictable and is generally not within our control.
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If an exclusivity period with a commercial partner lapses, we may experience a decrease in GMV with the commercial partner, which may adversely impact our results of operations.
−Removed: In addition, our agreements with our commercial partners generally have terms that range from approximately 12 months to 36 months (with a majority auto-renewing), and some of our partners can terminate these agreements without cause upon 30 to 90 days’ prior written notice.
+Added: In addition, our agreements with our commercial partners generally have terms that range from approximately 12 months to 36 months (with a majority auto-renewing), and some of our partners can terminate these agreements without cause upo n 30 to 90 days’ prior written not ice.
We may, therefore, be compelled to renegotiate our agreements with commercial partners from time to time, possibly upon terms significantly less favorable to us than the terms included in our existing agreements with those commercial partners.
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the number and variety of commercial partners and the mix of products available through our platform;
−Removed: the manner in which consumers may use our products, including the ease of use relative to competitor products and the extent of information we require consumers to provide to use our products;
+Added: manner in which consumers may use our products, including the ease of use relative to competitor products and the extent of information we require consumers to provide to use our products;
our brand and reputation;
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and services and products offered by competitors.
−Removed: If we fail to retain our relationship with existing consumers, if we do not attract new consumers to our platform and products, or if we do
−Removed: not continually expand usage and volume from consumers on our platform, our business, results of operations, financial condition, and prospects would be materially and adversely affected.
+Added: If we fail to retain our relationship with existing consumers, if we do not attract new consumers to our platform and products, or if we do not continually expand usage and volume from consumers on our platform, our business, results of operations, financial condition, and prospects would be materially and adversely affected.
We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our business, results of operations, financial condition, and future prospects.
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Morgan Chase, Citibank, Bank of America, Capital One, Bread Financial and American Express;
−Removed: technology solutions provided by payment companies such as Visa and MasterCard;
−Removed: mobile wallets such as PayPal;
−Removed: other pay-over-time solutions offered by companies such as Block and Klarna;
+Added: mobile wallets and other pay-over-time solutions offered by companies such as PayPal, Block and Klarna;
and pay-over-time offerings by legacy financial and payments companies, including those mentioned above.
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As discussed in Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and as may be updated from time to time in the Company’s future periodic reports and other filings with the SEC, a single commercial partner, or a small number of commercial partners, may represent a disproportionately large amount of our revenue and/or GMV during any given fiscal period.
−Removed: The loss of, or decrease in business with, any one of our significant commercial partner relationships, such as with Amazon or Shopify, due to a lapse in exclusivity or otherwise, would adversely affect our business.
−Removed: To the extent that any commercial partner constitutes a material portion of our total revenue or GMV for a fiscal period for which financial results are being reported in a Quarterly Report on Form 10-Q or Annual Report on Form 10-K, we will disclose the respective percentage contribution in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for that period.
+Added: The loss of, or decrease in business with, any one of our significant commercial partner relationships, such as with Amazon or Shopify, would adversely affect our business.
+Added: To the extent that any commercial partner constitutes a material portion of our total revenue or GMV for a fiscal period for which financial results are being reported in a Quarterly Report on
+Added: Form 10-Q or Annual Report on Form 10-K, we will disclose the respective percentage contribution in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for that period.
The concentration of a significant portion of our business and transaction volume with a limited number of commercial partners, or type of partner or industry, exposes us disproportionately to any of those commercial partners choosing to no longer partner with us or choosing to partner with a competitor, to the economic performance of those partners or industry or to any events, circumstances, or risks affecting such partners or industry.
In addition, a material modification in the production levels (including supply chain issues impacting component parts of products sold by our commercial partners), the imposition of tariffs on global trade and/or financial operations of any significant commercial partner could affect the results of our operations, financial condition, and future prospects.
−Removed: We currently rely on a small number of originating bank partners, including Celtic Bank and Lead Bank (“Primary Originating Banks”), to originate substantially all of the loans facilitated through our platform, and a single issuing bank partner, Evolve Bank & Trust (“Card Issuing Bank”), to issue the Affirm Card.
−Removed: If our relationship with any of our Primary Originating Banks or our Card Issuing Bank terminates, or if any Primary Originating Bank or our Card Issuing Bank were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, and we are unable to engage another originating bank partner or card issuing bank partner on a timely basis or at all, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.
+Added: We currently rely on a small number of originating bank partners, including Celtic Bank and Lead Bank (“Primary Originating Banks”), to originate substantially all of the loans facilitated through our platform, and a small number of card issuing bank partners, including Evolve Bank & Trust and Stride Bank (“Card Issuing Banks”), to issue the Affirm Card.
+Added: If our relationship with any of our Primary Originating Banks or Card Issuing Banks terminates, or if any Primary Originating Bank or Card Issuing Bank were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, and we are unable to engage another originating bank partner or card issuing bank partner on a timely basis or at all, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.
As of the end of fiscal 2026, we relied on two Primary Originating Banks to originate a majority of the loans facilitated through our platform and to comply with various federal, state, and other laws, with the balance of the loans facilitated on our platform being originated directly under our lending, servicing, and brokering licenses in Canada and across various states in the United States through our consolidated subsidiaries.
Our Primary Originating Banks originate substantially all partner bank originated loans facilitated through our platform.
−Removed: In addition, as of the end of fiscal 2025, we relied on a single Card Issuing Bank to issue the Affirm Card, and we had entered into a payments program partnership with Stride Bank to be an additional issuing bank of the Affirm Card upon launch of the program.
−Removed: Each of our Primary Originating Banks and our Card Issuing Bank handles a variety of consumer and commercial financing programs.
+Added: In addition, as of the end of fiscal 2026, we relied on two Card Issuing Banks to issue the Affirm Card.
+Added: Even if our relationships with our originating bank partners remain intact, these partners may lack the operational capacity, capital resources, regulatory headroom, or technological infrastructure to keep pace with our growing origination volumes.
+Added: As our GMV increases and we expand into new product categories, geographies, and merchant verticals, our originating bank partners must scale their compliance, underwriting, and loan-processing capabilities accordingly.
+Added: If one or more of our bank partners is unable or unwilling to accommodate increased origination volumes on a timely basis, we may be forced to limit loan originations, slow our growth, or allocate a disproportionate share of volume to our remaining bank partners, which would increase our concentration risk.
+Added: Adding new originating bank partners to supplement capacity requires significant lead time for regulatory approvals, systems integration, and compliance onboarding, and there is no assurance that we could do so on acceptable terms or within a timeframe that avoids disruption to our business.
+Added: Each of our Primary Originating Banks and Card Issuing Banks handles a variety of consumer and commercial financing programs:
• The Celtic Bank loan program agreement had an initial three-year term that expired in calendar year 2023.
The term automatically renewed for an additional one-year term and will continue to automatically renew in one-year terms thereafter unless either party provides notice of its intent not to renew.
−Removed: The Lead Bank loan program agreement has an initial three-year term which will expire in calendar year 2026.
−Removed: The term will automatically renew for additional one-year terms thereafter unless either party provides notice of its intent not to renew.
−Removed: The Evolve Bank loan program agreement has an initial two-year term that expired in calendar year 2023.
−Removed: The term automatically renewed for an additional one-year term and will continue to automatically renew in one-year terms thereafter unless either party provides notice of its intent not to renew.
−Removed: The Stride Bank loan program agreement has an initial five-year term which will expire in calendar year 2030.
+Added: • The Lead Bank loan program agreement had an initial three-year term which expired during fiscal 2026.
+Added: The term automatically renew ed for an additional one-year term and will continue to automatically renew for additional one-year terms thereafter unless either party provides notice of its intent not to renew.
+Added: • The Evolve Bank issuing program agreement has an initial two-year term that expired in calendar year 2023.
+Added: The term automatically renewed for an additional one-year term and will continue to automatically renew in three-month terms unless either party provides notice of its intent not to renew.
+Added: • The Stride Bank issuing program agreement has an initial five-year term which will expire in calendar year 2030.
The term will automatically renew in one-year terms thereafter unless either party provides notice of its intent not to renew.
−Removed: In addition, upon the occurrence of certain early termination events, either we or any of our Primary Originating Banks or Card Issuing Bank may terminate the respective agreement immediately upon the occurrence of certain termination events.
−Removed: Our agreements with our Primary Originating Banks and Card Issuing Bank do not prohibit those banks from working with our competitors or from offering competing services, and each of those banks currently offer loan programs or other issuing services, as applicable, through other competing platforms.
+Added: In addition, upon the occurrence of certain early termination events, either we or any of our Primary Originating Banks or Card Issuing Banks may terminate the respective agreement immediately upon the occurrence of certain termination events.
+Added: Our agreements with our Primary Originating Banks and Card Issuing Banks do not prohibit those banks from working with our competitors or from offering competing services, and each of those banks currently offers loan programs or other issuing services, as applicable, through other competing platforms.
Each Primary Originating Bank and Card Issuing Bank could decide not to work with us for any reason upon termination of the applicable agreement, could make working with us cost-prohibitive, or could decide to enter into an exclusive or more favorable relationship with one or more of our competitors.
In addition, each Primary Originating Bank and Card Issuing Bank may not perform as expected under our respective agreement.
−Removed: We could in the future have disagreements or disputes with our Primary Originating Banks or Card Issuing Bank, which could negatively impact or threaten our relationship with other banks with whom we may seek to partner.
+Added: We could in the future have disagreements or disputes with our Primary Originating Banks or Card Issuing Banks, which could negatively impact or threaten our relationship with other banks with whom we may seek to partner.
For a further discussion of our relationship with our Primary Originating Banks, particularly the regulations applicable to this relationshi p, see “ Business — Regulatory Environment .”
−Removed: If any of our Primary Originating Banks or our Card Issuing Bank were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, or if our relationship with any Primary Originating Bank or our Card Issuing Bank were to otherwise terminate for any reason (including, but not limited to, its failure to comply with regulatory actions), we may need to implement an additional substantially similar arrangement with another bank, obtain additional state licenses, or curtail our operations.
+Added: If any of our Primary Originating Banks or Card Issuing Banks were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, or if our relationship with any Primary Originating Bank or Card Issuing Bank were to otherwise terminate for any reason (including, but not limited to, its failure to comply with regulatory actions), we may need to implement an additional substantially similar arrangement with another bank, obtain additional state licenses, or curtail our operations.
If we need to enter into alternative arrangements with a different bank to replace our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all.
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If we are unable to enter into an alternative arrangement with different banks to fully replace or supplement our relationship with any Primary Originating Bank, we would potentially need to obtain additional state licenses to enable us to originate loans directly, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all.
−Removed: Moreover, with respect to our Card Issuing Bank, transitioning card issuance activities to a new bank may result in the need to replace existing virtual or physical cards, which may disrupt or delay consumer transactions.
+Added: Moreover, with respect to our Card Issuing Banks, transitioning card issuance activities to a new bank may result in the need to replace existing virtual or physical cards, which may disrupt or delay consumer transactions.
We may not be able to sustain our revenue and GMV growth rates, or our growth rate of related key operating metrics, in the future.
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Our solution is a technology-driven platform that relies on innovation to remain competitive.
−Removed: The process of developing new technologies and products, such as the Affirm Card, which offers pay-over-time functionality in the Affirm App, is complex, and we seek to build our own technology using the latest in artificial intelligence (“AI”) and machine learning (together, “AI/ML”), cloud-based technologies, and other tools to differentiate our products and technologies.
+Added: The process of developing new technologies and products, such as Affirm Edge, which embeds Affirm's pay-over-time functionality directly into customers’ primary banking and credit union apps, and AdaptAI, which is Affirm’s AI-powered personalized promotion platform, is complex, and we seek to build our own technology using the latest in artificial intelligence (“AI”) and machine learning (together, “AI/ML”), cloud-based technologies, and other tools to differentiate our products and technologies.
In addition, our dedication to incorporating technological advancements into our platform requires significant financial and personnel resources and talent.
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For example, our competitors or other third parties may incorporate AI into their products and services more quickly or more successfully than us, which could impair our ability to compete effectively.
−Removed: In addition, we may not be able to effectively implement new technology-driven products and services, including the Affirm Card or AdaptAI (Affirm’s AI-powered personalized promotion platform), as quickly as competitors or be successful in marketing these products and services to consumers and commercial partners.
−Removed: Moreover, the profile of potential consumers
−Removed: using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve or have served in the past, which may lead to higher levels of delinquencies or defaults than we have historically experienced.
+Added: In addition, we may not be able to effectively implement new technology-driven products and services, such as Affirm Edge or AdaptAI, as quickly as competitors or be successful in marketing these products and services to consumers and commercial partners.
+Added: Moreover, the profile of potential consumers using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve or have served in the past, which may lead to higher levels of delinquencies or defaults than we have historically experienced.
If we are unable to successfully and timely innovate and continue to deliver a superior commercial partner and consumer experience, we could experience reputational damage and decreased demand for our products and technologies and our growth, business, results of operations, financial condition, and future prospects could be materially and adversely affected.
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As a result of these risks, we could experience increased claims, reputational damage, or other adverse effects, which could be material.
−Removed: The profile of potential consumers using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve or have served in the past, which may lead to higher levels of delinquencies or defaults than we have historically experienced.
Additionally, we can provide no assurance that we will be able to develop, commercially market, and achieve acceptance of our new products and technologies.
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Our high-velocity, capital efficient funding model is integral to the success of our commerce platform.
−Removed: To support this model and the growth of our business, we must maintain a variety of funding arrangements, including warehouse credit facilities, securities repurchase agreements, securitization trusts, pass-through securitizations, master trust facilities, and forward flow arrangements with a diverse set of funding sources.
+Added: To support this model and the growth of our business, we must maintain a variety of funding arrangements, including warehouse credit facilities, securities repurchase agreements, securitization trusts, pass-through securitizations, master trust facilities, and forward flow arrangements with a diverse set of funding sources , including private credit funds and other institutional investors .
If we are unable to maintain access to, or to expand, our network and diversity of funding arrangements, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.
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Disruptions in the credit markets or other factors, such as the current inflationary environment, elevated interest rates and increasing recessionary concerns, could adversely affect the availability, diversity, cost, and terms of our funding arrangements.
−Removed: In addition, our funding sources may reassess their exposure to our industry and either curtail access to uncommitted financing capacity, fail to renew or extend facilities, or impose higher costs to access our funding.
+Added: In addition, our funding sources may reassess their exposure to our industry and either curtail access to uncommitted financing capacity, fail to renew or extend facilities, or impose higher costs to access funding.
While most of our facilities are committed capital, some facilities are uncommitted, which may allow such funding providers to, among other things, reduce available funding limits, subject to certain structural protections (including penalty fees in certain transactions).
Further, our debt financing and loan sale forward flow facilities are generally fixed term in nature, with term lengths ranging between one to three years, during which we have access to committed and uncommitted capital pursuant to such facilities.
−Removed: If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, we would need to secure additional sources of funding or reduce our operations significantly.
+Added: If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, we may need to secure additional sources of funding or reduce our operations.
The availability and diversity of our funding arrangements depends on various factors and are subject to numerous risks, many of which are outside of our control.
+Added: A portion of our funding is provided by private credit funds and other institutional investors through forward flow arrangements.
+Added: These counterparties are subject to their own liquidity, fundraising, leverage, and market conditions.
+Added: In particular, certain of these counterparties may be structured as pooled investment vehicles whose investors may request redemptions or be unable to meet capital calls, which could limit the funds available to purchase loans from us.
+Added: One or more of these counterparties have experienced redemption pressures in the past, and if additional counterparties experience redemption pressures, fundraising shortfalls, or have other constraints on available capital, they may be unable to fulfill purchase commitments (which may constitute a default under the respective forward flow arrangement), seek to renegotiate commercial terms, or fail to renew existing arrangements.
+Added: Any such reduction in participation could reduce our funding capacity, increase our cost of funds, require us to retain more loans on our balance sheet, or constrain our ability to originate loans, any of which could adversely affect our business, financial condition, and results of operations.
The agreements governing our funding arrangements require us to comply with certain covenants.
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Due to the negative bias toward our industry, certain financial institutions have restricted access to available financing by participants in our industry, and we may have more limited access to institutional capital than other businesses.
−Removed: Future prevailing capital market conditions and potential disruptions in the capital markets may adversely affect our efforts to arrange additional financing on terms that are satisfactory to us, if at all.
+Added: Future prevailing capital market conditions and potential disruptions in the capital markets may adversely affect our efforts to arrange additional financing on terms that are
+Added: satisfactory to us, if at all.
If adequate funds are not available, or are not available on acceptable terms, we may not have sufficient liquidity to fund our operations, make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges and this, in turn, could adversely affect our ability to advance our strategic plans.
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Our ability to attract consumers to our platform and to build trust in our platform and products is significantly dependent on our ability to effectively evaluate consumer credit profiles and likelihoods of default.
−Removed: If any of the credit risk or fraud models we use contain programming or other errors or is ineffective or the data provided by consumers or third parties is incorrect or stale, or if we are unable to obtain accurate data from consumers or third parties (such as credit reporting agencies), the loan pricing and approval process through our platform could be negatively affected, resulting in mispriced or misclassified loans or incorrect approvals or denials of loans.
−Removed: This could damage our reputation and relationships with consumers, our funding sources, our originating bank partners, and our commercial partners, which could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: If any of the credit risk or fraud models we use contain programming or other errors or are ineffective or the data provided by consumers or third parties is incorrect or stale, or if we are unable to obtain accurate data from consumers or third parties (such as credit reporting agencies), the loan pricing and approval process through our platform could be negatively affected, resulting in mispriced or misclassified loans or incorrect approvals or denials of loans.
+Added: This could damage our reputation and relationships with consumers, our funding sources, our originating bank partners, and our commercial
+Added: partners, which could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.
Additionally, if we make errors in the development, validation, or implementation of any of the models or tools used in connection with the loans facilitated through our platform, and those that we purchase and securitize or sell to investors, those investors may experience higher delinquencies and losses.
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If loans facilitated through our platform do not perform, or significantly underperform, we may incur financial losses on the loans we purchase, we hold on our balance sheet, or that are subject to certain risk sharing agreements, which may adversely impact our financial condition and results of operations as well as result in the loss of confidence of our funding sources.
−Removed: In recent fiscal years, we have retained more loans on our balance sheet than we have historically, and these loans are funded through our consolidated securitizations and warehouse lines.
−Removed: For these loans and any future loans facilitated through our platform that we purchase from our originating bank partners that may be held for investment on our balance sheet, we bear the entire credit risk in the event of consumer default with respect to these loans.
+Added: We retain some loans on our balance sheet, and these loans are primarily funded through our consolidated securitizations and warehouse lines.
+Added: For these loans and any future loans facilitated through our platform that are held for investment on our balance sheet, we bear the entire credit risk in the event of consumer default with respect to these loans.
In addition, non-performance, or even significant underperformance, of the loan receivables that we own could have an adverse effect on our business.
Additionally, our funding model relies on a variety of funding arrangements, including warehouse credit facilities, securitization trusts, master trust facilities, and forward flow arrangements with a variety of funding sources.
−Removed: Any significant underperformance of the loans facilitated through our platform may adversely impact our relationship with such funding sources and result in their loss of confidence in us, which could lead to the
−Removed: termination of our existing funding arrangements, which would have a material adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: Any significant underperformance of the loans facilitated through our platform may adversely impact our relationship with such funding sources and result in their loss of confidence in us, which could lead to the termination of our existing funding arrangements, which would have a material adverse effect on our business, results of operations, financial condition, and future prospects.
In addition, in connection with certain capital funding arrangements with third-party loan buyers, we have entered into risk sharing agreements where we may be required to make a payment to the loan buyer if actual losses on the loans sold exceed agreed-upon expected losses, subject to a cap based on a percentage of the principal balance of loans sold.
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Generative AI may create inaccurate, incomplete or misleading outputs, reflect unintended biases, or produce other discriminatory or unexpected results, errors or inadequacies, any of which may not be easily detectable.
−Removed: While we have processes and controls in place designed to mitigate the risks associated with using generative AI, including human involvement in the training and monitoring of our AI tools and the alignment of our AI development policies and procedures with guidelines for secure development practices, if the content, analyses, or recommendations that generative AI assists in producing or our products and services are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be adversely affected and we may incur additional costs, including in the form of damages or fines.
+Added: While we have processes and controls in place designed to mitigate the risks associated with using generative AI, including human involvement in the training and monitoring of our AI tools and the alignment of our AI development policies and procedures with guidelines for secure development practices, if the content,
+Added: analyses, or recommendations that generative AI assists in producing or our products and services are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be adversely affected and we may incur additional costs, including in the form of damages or fines.
To the extent that we do not have sufficient rights to use the data used in, or produced by, the AI tools employed in our business and operations, we may be subject to litigation by the owners of the content or other materials that comprise such data.
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We have implemented policies and procedures designed to mitigate these risks, including reviewing vendor terms and monitoring AI outputs for potential infringement.
−Removed: However, these measures may not be sufficient to prevent all instances of infringement or loss of IP rights, The rapidly evolving regulatory landscape surrounding AI technologies presents additional risks.
+Added: However, these measures may not be sufficient to prevent all instances of infringement or loss of IP rights.
+Added: The rapidly evolving regulatory landscape surrounding AI technologies presents additional risks.
New or proposed legislation and regulations across various jurisdictions may impose significant compliance burdens, restrict certain AI applications, or require specific governance frameworks for AI systems.
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Although we have taken, and continue to take, steps designed to mitigate the risks associated with the use of AI in our business, including, among other things, engaging with regulatory bodies, investing in AI governance, and fostering transparent and ethical use of AI in our products, solutions and services, our use of AI may present ethical, reputational, technical, operational, legal, competitive and regulatory risks, any of which could adversely affect our business, financial condition, results of operations and future prospects.
−Removed: Any acquisitions, strategic investments, alliances, divestitures and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations.
−Removed: In pursuing our business strategy, we routinely conduct discussions and evaluate opportunities for possible acquisitions, strategic investments, joint ventures and other transactions.
−Removed: We have in the past acquired or invested in, and we continue to seek to acquire or invest in, businesses, technologies, or other assets that we believe could complement or expand our business.
+Added: Lastly, our employees use AI tools to perform regular job responsibilities.
+Added: In connection with employee AI usage, we incur, and expect to continue to incur, costs to procure, deploy, and govern AI tools.
+Added: These costs, including licenses, usage-based fees, infrastructure, training, and oversight, may increase as adoption grows.
+Added: We may not achieve the productivity, efficiency, quality, or cost-saving benefits we anticipate from employee AI use, whether because of uneven adoption, the need for human review of AI outputs, limits on use with sensitive data, vendor pricing or performance changes, or other factors.
+Added: If AI-related costs rise faster than expected, or if expected benefits do not materialize, our operating expenses and results of operations could be adversely affected.
+Added: Any acquisitions, strategic investments, new businesses, alliances, divestitures and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations.
+Added: In pursuing our business strategy, we routinely conduct discussions and evaluate opportunities for possible acquisitions, strategic investments, new businesses, joint ventures and other transactions.
+Added: We have in the past acquired or invested in, and we continue to seek to acquire or invest in, businesses, technologies, or other assets that we believe could complement or expand our business, including acquisitions of new lines of business that are adjacent to or outside of our existing ecosystems or geographic territories .
+Added: As we grow, the pace and scale of acquisitions may increase and may include larger acquisitions than we have completed historically.
The identification, evaluation, and negotiation of potential acquisition or strategic investment or other transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed.
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In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, any of which could harm our business and negatively impact our results of operations, including risks that:
−Removed: • the transaction may not advance our business strategy or may harm our growth (or profitability);
+Added: • the transaction may not advance our business strategy or may harm our growth, profitability, or reputation;
• we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all;
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• we may experience difficulty, and may not be successful in, integrating technologies, IT or business enterprise systems, culture, or management or other personnel of the acquired business;
−Removed: • we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business;
+Added: • we may incur significant acquisition costs and transition costs, including the assumption of ongoing expenses of the acquired business, and if the acquired business does not perform as expected, we may incur impairment charges, restructuring or wind-down costs, or experience other negative impacts to our business;
• we may not realize the expected benefits or synergies from the transaction in the expected time period, or at all;
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• acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and data security, and our due diligence process may not identify compliance issues or other liabilities.
+Added: Moreover, acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures;
• we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, legal, regulatory, or tax exposure and may subject us to additional controls, policies, procedures, liabilities, litigation, costs of compliance or remediation, or other adverse effects on our business, operating results, or financial condition;
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Business decisions or other actions or omissions of the controlling shareholders, management, or other persons or entities who control companies in which we invest may adversely affect the value of our investment, result in litigation or regulatory action against us, and damage our reputation and brand.
+Added: Furthermore, if such investments are not successful, we may be required to write down all or a portion of our equity investments in such companies, which would result in financial losses.
Furthermore, we have in the past, and may in the future, also choose to divest certain businesses or product lines.
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Further expansion of our operations internationally will subject us to new challenges and risks.
−Removed: We currently operate in the United States, Canada, the U.K., Spain and Poland (we do not currently facilitate loans in Spain or Poland) and plan to further expand our business internationally in the future.
−Removed: Managing new and existing international operations, including our planned expansion into the Netherlands, France, Germany and Australia, requires us to comply with new regulatory frameworks and additional resources and controls.
+Added: We currently operate in the United States, Canada, the U.K., Australia, Spain and Poland (we do not currently facilitate loans in Spain or Poland) and plan to further expand our business internationally in the future.
+Added: Managing new and existing international operations, including our planned expansion into the Netherlands, France and Germany, requires us to comply with new regulatory frameworks and additional resources and controls.
International expansion subjects our business to risks associated with international operations, including:
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• difficulties in obtaining required licenses and/or authorizations to do business in new countries and territories;
−Removed: • compliance with multiple, potentially conflicting, and changing governmental laws and regulations, including those relating to banking, anti-money laundering, securities, employment, tax, privacy, data protection, such as the EU General Data Protection Regulation (GDPR), artificial intelligence, such as the EU Artificial Intelligence Act, and climate disclosure, such as the Corporate Sustainability Reporting Directive (CSRD);
+Added: • compliance with multiple, potentially conflicting, and changing governmental laws and regulations, including those relating to banking, anti-money laundering, securities, employment, tax, privacy, data protection, such as the EU General Data Protection Regulation (GDPR), artificial intelligence, such as the EU Artificial Intelligence Act, and climate disclosure, such as the Corporate Sustainability Reporting Directive (CSRD) and Australian Sustainability Reporting Standards (ASRS);
• compliance with financial system regulations, including the U.K.
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• regional economic and political conditions.
−Removed: In addition to the risks of various taxing jurisdictions stated above, the Organisation for Economic Co-operation and Development (“OECD”) continues to put forth various initiatives, including a framework to implement a global minimum corporate tax of 15% for certain multinational enterprises with global revenues and profits above certain thresholds (referred to as “Pillar Two”).
−Removed: While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two.
−Removed: As of June 30, 2025, based on the countries in which we do business that have enacted legislation, we do not currently expect Pillar Two to have a material impact on our financial statements.
−Removed: However, this may change as other countries enact similar legislation and further guidance is released.
+Added: In addition to the risks of various taxing jurisdictions stated above, the Organisation for Economic Co-operation and Development (“OECD”) has developed various initiatives, including a framework to implement a global minimum corporate tax of 15% for certain large multinational enterprise groups ( “MNEs”) , commonly referred to as “Pillar Two.” Certain jurisdictions in which we operate have enacted, and others may enact, legislation implementing Pillar Two, including qualified do mestic minimum top-up taxes .
+Added: On January 5, 2026, the OECD released administrative guidance containing the Side-by-Side (“SbS”) package, which includes certain safe harbors for MNEs headquartered in jurisdictions with eligible tax regimes, and the United States has been listed in the OECD Central Record as a jurisdiction with a Qualified SbS Regime for fiscal years commencing on or after January 1, 2026.
+Added: As of June 30, 2026 , we do not currently expect Pillar Two to have a material impact on our financial statements;
+Added: however, the ultimate impact will depend on future legislation, administrative guidance, interpretation, our operating results, jurisdictional income mix, tax attributes, and other facts.
As a result of these risks, we may not be successful in managing our existing international operations, and our future international expansion efforts also may not be successful.
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Our future success is aided by our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our organization, in particular, a highly experienced sales force, data scientists, and engineers.
−Removed: Competition for these types of highly skilled employees is extremely intense, particularly in the San Francisco Bay Area.
+Added: Competition for these types of highly skilled employees is extremely intense, particularly in the San
+Added: Francisco Bay Area.
Trained and experienced personnel are in high demand and may be in short supply.
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If we are unable to maintain and build our highly experienced sales force, or are unable to continue to attract experienced engineering and technology personnel, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.
−Removed: We maintain a remote working environment.
−Removed: Over time such remote operations may decrease the cohesiveness of our teams and our ability to maintain our culture, both of which contribute to our success.
−Removed: Additionally, a remote working environment may impede our ability to undertake new business projects, foster a creative environment, hire new team members, and retain existing team members.
−Removed: Such effects may adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
−Removed: Furthermore, we have at times undertaken workforce reductions to better align our operations with our strategic priorities.
−Removed: For example, to manage operating expenses in response to current macroeconomic conditions and ongoing business prioritization efforts, we took certain cost-saving measures, including a reduction of our workforce, in February 2023.
−Removed: There can be no assurance that these actions will not adversely affect employee morale, our culture, our ability to attract and retain employees and our ability to grow in accordance with our overall strategy.
−Removed: If we are not able to maintain our culture, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.
−Removed: We have a history of operating losses and may not achieve sustained profitability.
−Removed: We incurred net income of approximately $52.2 million for the fiscal year ended June 30, 2025 and net losses of approximately $517.8 million and $985.3 million for the fiscal years ended June 30, 2024 and 2023 respectively.
−Removed: As of June 30, 2025 and June 30, 2024, our accumulated deficit was approximately $3.1 billion for both years.
+Added: We may not achieve sustained profitability if we are unable to generate sufficient revenue to support the costs of operating and growing our business.
+Added: Although we have achieved GAAP profitability in recent periods, we have incurred net losses in the past.
+Added: As of June 30, 2026 and June 30, 2025, our accumulated deficit was approximately $1.1 billion and $3.1 billion, respectively.
Our operating expenses may increase in the future as we seek to continue to grow our business, attract consumers, merchants, funding sources, and additional originating bank partners, and further enhance and develop our products and platform.
As we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate.
−Removed: Additionally, we may not realize the operating efficiencies we expect to achieve as a result of our acquisitions.
−Removed: These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.
−Removed: In August 2025, we announced that we achieved GAAP operating income profitability in the fourth quarter of fiscal 2025.
−Removed: Our ability to operate our business profitably on a GAAP operating income basis is subject to many risks and uncertainties, including the potential for incurring operating expense increases and/or other charges and expenses not reflected in that forecast.
−Removed: If we do not operate the business while maintaining GAAP operating income profitability, our reputation may be harmed and the market price of our Class A common stock could be materially and adversely impacted.
+Added: These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses, which could result in net losses.
+Added: Our ability to continue to operate our business profitably on a GAAP basis is subject to many risks and uncertainties, including the potential for incurring operating expense increases and/or other charges and expenses not reflected in our forecasts.
+Added: If we do not operate the business while maintaining GAAP profitability, our reputation may be harmed and the market price of our Class A common stock could be materially and adversely impacted.
Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
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We experience seasonal fluctuations in our business as a result of consumer spending and savings patterns.
−Removed: Historically, our GMV has been the strongest during the second quarter of our fiscal year due to increases in retail commerce during the holiday season.
−Removed: Despite these higher GMV levels, in fiscal 2025, 2024 and 2023, we generated less in period revenue as a percentage of GMV during our second fiscal quarter due to the comparatively higher proportion of interest bearing loans originated in the latter half of the period, which typically results in lower merchant network revenue, which is recognized in period, and higher levels of interest income, which is recognized over a longer time horizon.
−Removed: In addition, historically, our loan delinquencies are at their lowest during our fiscal third and fourth quarter, as consumer savings benefit from tax refunds.
−Removed: We expect these seasonal patterns to continue in future periods, and any adverse events that occur during our second fiscal quarter could have a disproportionate effect on our financial results for the fiscal year.
+Added: Our GMV tends to be highest during our second and fourth fiscal quarters due to increases in retail commerce during the holiday season and promotional activity.
+Added: During quarters with higher GMV, we have tended to generate less in - period revenue as a percentage of GMV because a portio n of the interest income for loans originated during the quarter is recognized over future periods .
+Added: In addition, historically, our loan delinquencies tend to be at their lowest during our fiscal third and fourth quarter, as consumer savings benefit from tax refunds.
+Added: We expect these seasonal patterns to continue in future periods, and any adverse events that occur during our second or fourth fiscal quarters could have a disproportionate effect on our financial results for the fiscal year.
Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects.
−Removed: Negative publicity about us or our industry, including the transparency, fairness, responsible lending, user experience, quality, and reliability of our platform or point-of-sale lending platforms in general, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, originating bank partners, service providers, or others in our industry, the experience of consumers and investors with our platform or services or point-of-sale lending platforms in general, or use of loan proceeds by consumers that have obtained loans facilitated through our platform or other point-of-sale lending platforms for illegal purposes, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our platform, which could harm our reputation and cause disruptions to our platform.
+Added: Negative publicity about us or our industry, including the transparency, fairness, responsible lending, user experience, quality, and reliability of our platform or pay later products in general, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, originating bank partners, service providers, or others in our industry, the experience of consumers and investors with our platform or services or pay later products in general, or use of loan proceeds by consumers that have obtained loans facilitated through our platform or other pay later products for illegal purposes, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our platform, which could harm our reputation and cause disruptions to our platform.
Any such reputational harm could further affect the behavior of consumers, including their willingness to obtain loans facilitated through our platform or to make payments on their loans.
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In the ordinary course of business, we have been named as a defendant in various legal actions, including arbitrations and other litigation.
−Removed: In addition, we are currently a defendant in a putative securities class action, Kusnier v.
−Removed: Affirm Holdings, Inc., et al., and three related derivative actions, Quiroga v.
+Added: In addition, plaintiffs have appealed the dismissal of a putative securities class action, Kusnier v.
+Added: Affirm Holdings, Inc., et al.
+Added: We are also a defendant in three related derivative actions, Quiroga v.
Levchin, et al., Jeffries v.
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For more information, refer to Note 7 .
−Removed: Commitments and
−Removed: Contingencies of the accompanying notes to our consolidated financial statements.
+Added: Commitments and Contingencies of the accompanying notes to our consolidated financial statements.
On July 1, 2025, we reincorporated from the State of Delaware to the State of Nevada (the “Nevada Reincorporation”).
−Removed: It is possible that our decision to pursue the Nevada Reincorporation could result in additional litigation, which, regardless of merit, could cause us to incur additional expense and divert management attention from operating the business.
+Added: Although no actions have been brought against us to date as a result of the Nevada Reincorporation, i t is possible that our decision to pursue the Nevada Reincorporation could result in additional litigation, which, regardless of merit, could cause us to incur additional expense and divert management attention from operating the business.
Further, if a court determines that any such litigation has merit, we may be required to pay substantial monetary damages or attorneys’ fees.
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Our involvement in any such matter also could cause harm to our reputation and divert management attention from the operation of our business, even if the matters are ultimately determined in our favor.
−Removed: Moreover, any settlement, or any consent order or adverse judgment, in connection with any formal or informal proceeding or investigation by a government agency, may prompt litigation or additional investigations or proceedings as other litigants or other government agencies begin independent reviews of the same or similar activities.
+Added: Moreover, any settlement, or any consent order
+Added: or adverse judgment, in connection with any formal or informal proceeding or investigation by a government agency, may prompt litigation or additional investigations or proceedings as other litigants or other government agencies begin independent reviews of the same or similar activities.
+Added: State regulatory agencies and attorneys general have increased their examination and enforcement focus on BNPL products and providers, particularly as the CFPB has signaled reduced prioritization of BNPL enforcement at the federal level.
+Added: In December 2025, a coalition of seven state attorneys general initiated coordinated inquiries into BNPL providers' business practices and compliance with consumer protection laws.
+Added: We hold state lending, servicing, and money transmission licenses in numerous jurisdictions and are subject to periodic examination by each licensing authority.
+Added: An increase in the frequency, scope, or intensity of state examinations and investigations could result in findings requiring remediation, fines, consent orders, or restrictions on our product offerings in affected states.
+Added: Examination findings or enforcement actions by one state regulator or attorney general may prompt similar inquiries or proceedings by other states, compounding the financial, operational, and reputational impact.
In addition, a number of participants in the consumer finance industry have been the subject of putative class action lawsuits;
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This estimate is highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies.
−Removed: Management has processes in place to monitor these judgments and assumptions, including review by our credit committee and our asset-liability committee, but these processes may not ensure that our judgments and assumptions
+Added: Management has processes in place to monitor these judgments and assumptions, including review by our credit committee, but these processes may not ensure that our judgments and assumptions are correct.
The method for calculating the best estimate of expected credit losses takes into account our historical experience, adjusted for current conditions, and our judgment concerning the probable effects of relevant observable data, trends, and market factors.
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It is possible that we will experience credit losses that are different from our current estimates.
−Removed: If our estimates and assumptions prove incorrect and our allowance for credit losses is insufficient, we may incur net charge-offs in excess of our reserves, or we could be required to increase our provision for credit losses, either of which would adversely affect our results of operations.
+Added: If our estimates and assumptions prove incorrect and our allowance for credit losses is insufficient, we may incur net charge-offs in excess of our allowance, or we could be required to increase our provision for credit losses, either of which would adversely affect our results of operations.
Increases in market interest rates have had and could continue to have an adverse effect on our business.
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While the U.S.
−Removed: Federal Reserve lowered the federal funds interest rate in the second half of 2024, as of August 2025, the federal funds interest rate remains elevated compared to March 2022 rates, and the timing of additional interest rate cuts, if any, is uncertain.
+Added: Federal Reserve lowered the federal funds interest rate in the second half of 2024 and again in the second half of 2025 , as of August 2026, the federal
+Added: funds interest rate remains elevated compared to March 2022 rates.
Elevated interest rates have had, and may continue to have, an adverse impact on the spending levels of consumers and their ability and willingness to borrow money.
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Weak economic conditions or a significant deterioration in economic conditions, including the current inflationary environment, the possibility of a recession, and uncertainty relating to the magnitude, duration and impact of tariffs on global trade, reduce the amount of disposable income consumers have, which in turn reduces consumer spending and the willingness of qualified consumers to take out loans.
−Removed: Such conditions are also likely to
−Removed: affect the ability and willingness of consumers to pay amounts owed under the loans facilitated through our platform, each of which would have an adverse effect on our business, results of operations, financial condition, and future prospects.
−Removed: The generation of new loans facilitated through our platform, and the transaction fees and other fee income due to us associated with such loans, depends upon sales of products and services by our commercial partners.
+Added: Such conditions are also likely to affect the ability and willingness of consumers to pay amounts owed under the loans facilitated through our platform, each of which would have an adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: The generation of new loans facilitated through our platform, and the revenue we generate from such loans, depends upon sales of products and services by our commercial partners.
Our commercial partners’ sales may decrease or fail to increase as a result of factors outside of their control, such as the macroeconomic conditions referenced above, or business conditions affecting a particular commercial partner, industry vertical, or region.
Weak economic conditions also could extend the length of our commercial partners’ sales cycles and cause consumers to delay making (or not make) purchases of our commercial partners’ products and services.
−Removed: The decline of sales by our commercial partners for any reason will generally result in lower credit sales and, therefore, lower loan volume and associated fee income for us.
+Added: The decline of sales by our commercial partners for any reason will generally result in lower credit sales and, therefore, lower loan volume and associated revenue for us.
In addition, if a commercial partner closes some or all of its locations, ceases its e-commerce operations, or becomes subject to a voluntary or involuntary bankruptcy proceeding (or if there is a perception that it may become subject to a bankruptcy proceeding), consumers may have less incentive to pay their outstanding balances on loans facilitated through our platform, which could result in higher charge-off rates than anticipated.
Moreover, if the financial condition of a commercial partner deteriorates significantly or a commercial partner becomes subject to a bankruptcy proceeding, we may not be able to recover amounts due to us from the commercial partner.
−Removed: We are subject to both natural and man-made events that may unexpectedly disrupt our operations and adversely impact our business.
−Removed: Our systems and operations are vulnerable to damage or interruption from earthquakes, wildfires, floods, heatwaves, hurricanes, tornadoes, severe winter weather and other natural disasters (including those caused by climate change), power losses, telecommunications failures, strikes, health pandemics, such as the COVID-19 pandemic, and similar events.
−Removed: For example, a significant natural disaster in the San Francisco Bay Area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, wildfire, heatwave, flood, hurricane, tornado or severe winter storm, could have a material adverse effect on our business, results of operations, financial condition, and future prospects, and our insurance coverage may be insufficient to compensate us for losses that may occur.
−Removed: In addition, strikes, wars, terrorism, and other geopolitical unrest could cause disruptions in our business and lead to interruptions, delays, or loss of critical data.
−Removed: If a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees' ability to work remotely, our business and results of operations could be adversely affected.
−Removed: We may not have sufficient protection or recovery plans in certain circumstances, such as a significant natural disaster, and our business interruption insurance may be insufficient to compensate us for losses that may occur.
Borrowers may not view or treat their loans as having the same significance as other obligations, and the loans facilitated through our platform are not secured, guaranteed, or insured and involve a high degree of financial risk.
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Personal loans facilitated through our platform are not secured by any collateral, not guaranteed or insured by any third party, and not backed by any governmental authority in any way.
−Removed: Therefore, if we purchase the loans from our originating bank partners after they are originated, we are limited in our ability to collect on these loans if a consumer is unwilling or unable to repay them.
+Added: Therefore, if we hold the loans for investment on our balance sheet, we are limited in our ability to collect on these loans if a consumer is unwilling or unable to repay them.
A consumer’s ability to repay their loans can be negatively impacted by increases in their payment obligations to other lenders under mortgage, credit card, and other loans resulting from increases in base lending rates or structured increases in payment obligations.
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As such, our originating bank partners could decide to originate fewer loans through our platform.
−Removed: An increase in defaults precipitated by these risks and uncertainties could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
−Removed: While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of the loans facilitated through our platform.
+Added: increase in defaults precipitated by these risks and uncertainties could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: While we take precautions to prevent consumer identity fraud, we have observed fraudulent activity on our platform and additional identity fraud may occur in the future, which may adversely affect the performance of the loans facilitated through our platform.
There is risk of fraudulent activity associated with our platform, originating bank partners, card issuing banks, consumers, and third parties handling consumer information.
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We also could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
−Removed: Increased scrutiny from regulators, investors and other stakeholders regarding our sustainability responsibilities, strategy and related disclosures could result in additional costs or risks and adversely impact our reputation, employee retention, and willingness of consumers and merchants to do business with us.
−Removed: Regulators, investor advocacy groups, certain institutional investors, investment funds, stockholders, consumers and other market participants have focused increasingly on the “sustainability” practices of companies, and companies are facing increasing and evolving scrutiny from customers, regulators, investors, employees, and other stakeholders, as well as from the media (including social media), related to their sustainability practices and disclosure.
−Removed: These parties have placed increased importance on the implications of the social cost of their investments.
−Removed: We may incur additional costs and require additional resources as we prepare for enhanced climate disclosure requirements from regulators, such as California, and as we otherwise evolve our sustainability strategy, practices and related disclosures.
−Removed: If our sustainability strategy, practices and related disclosures, including the impact of our business on climate change, do not meet (or are viewed as not meeting) regulator, investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively impacted, and we may face negative impacts from consumers who do not support our sustainability strategy, practices and disclosure.
Additional Risks Related to Our Reliance on Third Parties
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We depend on our commercial partners, which generally accept most major credit cards and other forms of payment (which may include pay-over-time solutions offered by our competitors), to present our platform as a payment option and to integrate our platform into their website or in their store, such as by prominently featuring our platform on their websites or in their stores and not just as an option at website checkout.
−Removed: We may not have any recourse against commercial partners if they do not prominently present our platform as a payment option or if they more prominently present solutions offered by our competitors.
+Added: We may not have any
+Added: recourse against commercial partners if they do not prominently present our platform as a payment option or if they more prominently present solutions offered by our competitors.
In addition, as we add new commercial partners, it could take a significant amount of time for these commercial partners, particularly larger platforms such as Apple Pay, to fully integrate our platform and for these commercial partners’ consumers to accept our pay-over-time solution.
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Further, we may incur significant costs to resolve any such disruptions in service, which could adversely affect our business.
−Removed: For example, certain installment loans are originated by our originating bank partners and then disbursed to merchants via one-time-use virtual cards facilitated through our partnership with an issuer processor.
−Removed: This issuer processor issues one-time-use virtual cards through an issuing bank partner, which allow loans facilitated through our platform to be processed over the card network.
+Added: For example, certain installment loans are originated by our originating bank partners and then disbursed to merchants via virtual cards facilitated through our partnership with an issuer processor.
+Added: This issuer processor issues
+Added: virtual cards through an issuing bank partner, which allow loans facilitated through our platform to be processed over the card network.
Such loans facilitated through our platform can be used at merchants where we are not integrated at checkout, allowing consumers to complete purchases with virtual cards just as they would with a standard credit or debit card.
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Any real or perceived errors, failures, bugs, or defects in the software may not be found until our consumers use our platform and could result in outages or degraded quality of service on our platform that could adversely impact our business (including through causing us not to meet contractually required service levels), as well as negative publicity, loss of or delay in market acceptance of our products and services, and harm to our brand or weakening of our competitive position.
−Removed: In such an event, we may be required, or may choose, to expend significant additional resources in order to correct the problem.
−Removed: For example, in the second half of fiscal year 2025, we reallocated significant resources to prioritize system stability and reduce outages, which may delay certain strategic objectives, including the launch of products or services and our launch in certain international jurisdictions, and adversely affect our business, results of operations, financial condition, and future prospects.
+Added: In such an event, we may be required, or may choose, to expend
+Added: significant additional resources in order to correct the problem.
+Added: For example, in the second half of fiscal year 2025, we reallocated significant resources to prioritize system stability and reduce outages, resulting in delays to certain product launches and other strategic objectives.
+Added: Similar reallocations of resources in the future could adversely affect our business, results of operations, financial condition, and future prospects.
Any significant disruption in, or errors in, service on our platform or relating to vendors, including events beyond our control, could prevent us from processing transactions on our platform or posting payments and have a material and adverse effect on our business, results of operations, financial condition, and future prospects.
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We also may experience increased costs and difficulties in replacing that vendor and replacement services may not be available on commercially reasonable terms, on a timely basis, or at all.
−Removed: Any interruptions or delays in our platform availability, whether as a result of a failure to perform on the part of a vendor, any damage to one of our vendor’s systems or facilities, the termination of any of our third-party vendor agreement, software failures, our or our vendor’s error, natural disasters, terrorism, other man-made problems, security breaches, whether accidental or willful, or other factors, could harm our relationships with our merchants and consumers and also harm our reputation.
−Removed: In addition, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that it may incur.
+Added: Any interruptions or delays in our platform availability, whether as a result of a failure to perform on the part of a vendor, any damage to one of our vendor’s systems or facilities, the termination of any of our third-party vendor agreements, software failures, our or our vendor’s error, natural disasters, terrorism, other man-made problems, security breaches, whether accidental or willful, or other factors, could harm our relationships with our merchants and consumers and also harm our reputation.
+Added: In addition, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.
Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient capacity to recover all data and services in the event of an outage.
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Moreover, our contractual arrangements may be breached or may otherwise not effectively prevent disclosure of, or control access to, our confidential or otherwise proprietary information or provide an adequate remedy in the event of an unauthorized disclosure.
−Removed: The measures we have put in place may not prevent misappropriation, infringement, or other violation of our intellectual property or other proprietary rights or information and any resulting loss of competitive advantage, and we may be required to litigate to protect our intellectual property or other proprietary rights or information from misappropriation, infringement, or other violation by others, which is expensive, could cause a diversion of resources, and may not be successful, even when our rights have been infringed, misappropriated, or otherwise violated.
+Added: The measures we have put in place may not prevent misappropriation, infringement, or other violation of our intellectual property or other proprietary rights or information and any resulting loss of competitive advantage, and we may be required to litigate to protect our intellectual property or other proprietary rights or information from misappropriation, infringement, or other violation by others, which is expensive, could cause a diversion of resources, and may not be successful, even when
+Added: our rights have been infringed, misappropriated, or otherwise violated.
Our efforts to enforce our intellectual property and other proprietary rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property and other proprietary rights, and if such defenses, counterclaims, or countersuits are successful, it could diminish or we could otherwise lose valuable intellectual property and other proprietary rights.
−Removed: Additionally, the laws of some foreign countries may not be as protective of
−Removed: intellectual property and other proprietary rights as those in the United States, and the mechanisms for enforcement of intellectual property and other proprietary rights may be inadequate.
+Added: Additionally, the laws of some foreign countries may not be as protective of intellectual property and other proprietary rights as those in the United States, and the mechanisms for enforcement of intellectual property and other proprietary rights may be inadequate.
Furthermore, third parties may challenge, invalidate, or circumvent our intellectual property and proprietary rights, including through administrative processes or litigation.
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federal consumer protection requirements .”
−Removed: In addition, the U.S., Canadian, U.K.
−Removed: and other international governments, states, and provinces may pass new laws, or may amend existing laws, to further regulate the consumer finance industry or loans of the type provided through our platform, or to reduce the finance charges or other fees that may be imposed with respect to consumer loans.
+Added: In addition, the U.S., Canadian, U.K., Australia and other international governments, states, and provinces may pass new laws, or may amend existing laws, to further regulate the consumer finance industry or loans of the type provided through our platform, or to reduce the finance charges or other fees that may be imposed with respect to consumer loans.
This could make the provision and collection of consumer loans more difficult or costly, which may negatively impact our business.
While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance is given that our compliance policies and procedures will be effective.
−Removed: Failure to comply with these laws and with regulatory requirements applicable to our business could subject us to damages, revocation
−Removed: of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business.
+Added: Failure to comply with these laws and with regulatory requirements applicable to our business could subject us to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business.
Our business is subject to extensive regulation, supervision, examination, and oversight in a variety of areas, all of which are subject to change and uncertain interpretation.
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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.
−Removed: In addition, we are now supervised by the CFPB.
−Removed: 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.
−Removed: 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.
+Added: The CFPB, through its 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.
For further discussion on the CFPB's enforcement authority, see “ Business — Regulatory Environment — U.S.
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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 of certain states.
+Added: We have applied to establish Affirm Bank as an industrial loan company to be chartered in the State of Nevada, and there can be no assurance that our application will be approved, or that we will realize the expected benefits of obtaining a bank charter and federal deposit insurance.
+Added: In January 2026, we submitted applications to the Nevada Financial Institutions Division and the FDIC to establish Affirm Bank, a proposed industrial loan company chartered in the State of Nevada.
+Added: The application process is subject to extensive regulatory review, including evaluation of our business plan, the proposed Bank’s capital adequacy, management qualifications, the proposed Bank’s compliance infrastructure, and Community Reinvestment Act commitments.
+Added: Our application has attracted opposition from industry and advocacy groups, and may be subject to public comment periods, supplemental information requests, or extended review timelines.
+Added: There can be no assurance that the FDIC or the Nevada Financial Institutions Division will approve our application, or that any approval will not be subject to conditions that are more burdensome than anticipated, including heightened capital requirements, leverage ratio minimums, activity restrictions, or ongoing supervisory commitments.
+Added: Even if our application is approved, the expected benefits of operating an industrial loan company, including reduced reliance on third-party originating bank partners, lower funding costs, and greater control over our product offerings, may not be realized in the manner or to the extent we anticipate.
+Added: Establishing Affirm Bank will require significant investment in compliance, risk management, and operational infrastructure, and may divert management attention and resources from other business priorities.
+Added: As an FDIC-insured institution, Affirm Bank would be subject to comprehensive federal and state banking regulations, including capital adequacy requirements, examination and enforcement authority, restrictions on transactions with affiliates, and consumer protection and fair lending obligations.
+Added: Failure by Affirm Bank to comply with any such requirements could result in supervisory actions, fines, restrictions on activities, or loss of deposit insurance or revocation of the proposed Bank’s charter.
If we were found to be operating without having obtained necessary international, state or local licenses, or if loans made by us under our lending licenses are found to violate applicable state or provincial interest rate limits or other provisions of applicable state or provincial lending and other laws, it could adversely affect our business, results of operations, financial condition, and future prospects.
The application of some consumer financial licensing laws to our platform and the related activities it performs is unclear.
−Removed: In addition, licensing requirements may evolve over time, including, in particular, recent trends toward increased licensing requirements and regulation of parties engaged in loan solicitation and other regulated activities.
+Added: In addition, licensing requirements may evolve over time, including, in particular, recent trends
+Added: toward increased licensing requirements and regulation of parties engaged in loan solicitation and other regulated activities.
If determined to be applicable to us, some licensing restrictions and limitations may prevent certain Affirm products being offered entirely.
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For example, from time to time, regulatory agencies for our bank partners may re-evaluate the information we are required to collect from consumers in order to facilitate loans through our platform.
−Removed: Any change in the nature or amount of personal information that we are required to collect from consumers may cause some consumers to choose not to complete their purchases — or purchase less frequently — with us, which
−Removed: may adversely impact our conversion rates, and, as a result, adversely impact our revenue, GMV, and other of our key operating metrics.
+Added: Any change in the nature or amount of personal information that we are required to collect from consumers may cause some consumers to choose not to complete their purchases — or purchase less frequently — with us, which may adversely impact our conversion rates, and, as a result, adversely impact our revenue, GMV, and other of our key operating metrics.
These requirements may constrain the operations of our originating bank partners, and the adoption of new laws and changes to, or repeal of, existing laws may have a further impact on our business.
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If any regulatory agency’s assessment of the quality of our originating bank partners’ assets, operations, lending practices, investment practices, or other aspects of their business changes, it may reduce our originating bank partners’ earnings, capital ratios, and share price in such a way that affects our business.
−Removed: Our use of vendors and our other ongoing third-party business relationships are subject to increasing regulatory requirements and attention.
+Added: Our use of vendors and our other ongoing third-party business relationships expose us to risks that may adversely impact our business.
We regularly use vendors and subcontractors as part of our business.
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We have in the past, and may in the future, receive complaints or notifications from third parties alleging that we have violated applicable privacy and data protection laws and regulations.
−Removed: Non-compliance could result in proceedings against us by governmental
−Removed: entities, consumers, data subjects, or others.
+Added: Non-compliance could result in proceedings against us by governmental entities, consumers, data subjects, or others.
We may also experience difficulty retaining or obtaining new consumers in these jurisdictions due to the legal requirements, compliance cost, potential risk exposure, and uncertainty for these entities, and we may experience significantly increased liability with respect to these consumers pursuant to the terms set forth in our engagements with them.
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We have an obligation to comply with anti-money laundering and anti-terrorism financing laws, and failure to comply with this obligation could have significant adverse consequences for us.
−Removed: If our controls designed to enable us to comply with all applicable anti-money laundering and anti-terrorism financing laws and regulations are ineffective in ensuring compliance with all such laws and regulations, our failure to comply with these laws and regulations could result in a breach and termination of our agreements with our originating bank partners or criticism by international or state governmental agencies, which would have a material adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: If our controls designed to enable us to comply with all applicable anti-money laundering and anti-terrorism financing laws and regulations are ineffective in ensuring compliance with all such laws and regulations, our failure to comply with these laws and regulations could result in a breach and termination of our agreements
+Added: with our originating bank partners or criticism by international or state governmental agencies, which would have a material adverse effect on our business, results of operations, financial condition, and future prospects.
If we fail to comply with applicable requirements for our high-yield savings account product, our consumers’ deposits may not qualify for FDIC insurance and they may withdraw their funds, which could adversely affect our brand, business, results of operations, financial condition, and future prospects.
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Because the holders of our Class B common stock collectively hold significantly more than a majority of the combined voting power of our capital stock, such holders, acting together, control all matters submitted to our stockholders for approval.
−Removed: As a result, for the foreseeable future, holders of our Class B common stock will continue to have significant influence over the management and affairs of our company and over the outcome of all matters submitted to our stockholders for approval, including the election of directors and significant corporate transactions, such as a merger, consolidation or sale of substantially all of our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock.
+Added: As a result, for the foreseeable future, holders of our Class B common stock will continue
+Added: to have significant influence over the management and affairs of our company and over the outcome of all matters submitted to our stockholders for approval, including the election of directors and significant corporate transactions, such as a merger, consolidation or sale of substantially all of our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock.
In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock.
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adverse economic conditions resulting in decreased consumer demand;
−Removed: the growth and development of key commercial partner relationships, including our relationship with Amazon and Apple Pay;
+Added: the growth and development of key commercial partner relationships, including our relationships with Amazon, Shopify and Apple Pay, among others;
material cybersecurity incidents;
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Certain of our stockholders have rights, subject to some conditions, to require us to file registration statements covering their shares that we may file for ourselves or our stockholders.
−Removed: In addition, as of June 30, 2025, we had stock options and restricted stock units outstanding that, if fully exercised or settled, would result in the issuance of an aggregate of 39,122,013 shares of our Class A common stock.
+Added: In addition, as of June 30, 2026, we had stock options and restricted stock units outstanding that, if fully exercised or settled, would result in the issuance of an aggregate of 19,595,080 shares o f our Class A common stock.
All of the shares of our Class A common stock issuable upon the exercise of stock options and settlement of restricted stock units, and the shares reserved for future issuance under our equity incentive plans, are registered for public resale under the Securities Act.
Any registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the market price of our Class A common stock to decline or be volatile.
+Added: In addition, short selling activity in our Class A common stock may amplify stock price volatility.
+Added: Short sellers may publish negative reports or commentary about our business, financial condition, or regulatory compliance in order to drive down our stock price, and such reports can be disseminated rapidly through social media and financial news outlets before we are able to investigate or respond.
+Added: Significant short interest may also contribute to rapid, unpredictable price movements, including short squeezes, that do not reflect the underlying fundamentals of our business.
+Added: The publication of short-seller reports could trigger securities class action litigation, derivative suits, or regulatory inquiries regardless of the accuracy of the underlying claims, and responding to such matters can be costly and divert management attention.
These broad market and industry factors may decrease the market price of our Class A common stock, regardless of our actual operating performance.
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We are subject to securities litigation, as described further in Note 7.
−Removed: “Commitments and Contingencies” of the accompanying notes to our audited condensed consolidated financial statements and incorporated by reference in Part I, Item 3 — Legal Proceedings.
+Added: Commitments and Contingencies of the accompanying notes to our audited consolidated financial statements and incorporated by reference in Part I, Item 3 — Legal Proceedings.
This litigation, and any other securities class actions that may be brought against us, could result in substantial costs and a diversion of our management’s attention and resources.
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Any Class A common stock or securities convertible into shares of our Class A common stock that we issue from time to time, including in connection with a financing, acquisition, investment or under any equity incentive plans or otherwise that we may adopt in the future, will dilute your percentage ownership.
−Removed: In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our Class A common stock or securities convertible into shares of our Class A common stock or
−Removed: offering debt or other securities.
+Added: In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our Class A common stock or securities convertible into shares of our Class A common stock or offering debt or other securities.
We could also issue shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities in connection with acquisitions or other strategic transactions.
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As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their stockholdings in us.
−Removed: Nevada law and certain provisions of our articles of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, thereby adversely affecting the market price of our common stock.
−Removed: Our status as a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes (the “NRS”) may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of two years after the person becomes an interested stockholder, even if a change of control would be beneficial to our stockholders.
−Removed: In addition, our articles of incorporation and bylaws contain provisions that may make the acquisition of our company more difficult, including the following:
−Removed: • our dual class common stock structure, which provides holders of our Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding common stock;
−Removed: • our board of directors is classified into three classes of directors with staggered three-year terms and directors may only able to be removed from office for cause;
−Removed: • certain amendments to our articles of incorporation require the approval of 66 2/3% of the then-outstanding voting power of our capital stock;
−Removed: • our bylaws provide that the affirmative vote of 66 2∕3% of the then-outstanding voting power of our capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our bylaws;
−Removed: • our stockholders may only take action at a meeting of stockholders and not by written consent;
−Removed: • vacancies on our board of directors may be filled only by our board of directors and not by stockholders;
−Removed: • no provision in our articles of incorporation or bylaws provides for cumulative voting, which limits the ability of minority stockholders to elect director candidates;
−Removed: • only our chairman of the board of directors, our chief executive officer, or a majority of the board of directors are authorized to call a special meeting of stockholders;
−Removed: • our bylaws provide that certain litigation against us can only be brought in Nevada;
−Removed: • nothing in our articles of incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our Class A common stock;
−Removed: • our articles of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock;
−Removed: • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;
−Removed: • the number of director nominees a stockholder may nominate is limited to the number of directors to be elected at the annual meeting of stockholders.
−Removed: These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company.
−Removed: These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Our bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
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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.
−Removed: Our business may not continue to generate cash flow
−Removed: from operations in the future sufficient to service our debt and make necessary capital expenditures.
+Added: 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.
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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.
−Removed: 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.
+Added: 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
+Added: 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.
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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.