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Item 8. Financial Statements and Supplementary Data

2026-08-27 compared with 2025-08-28 · 519 added, 515 removed, 1502 unchanged (41% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firms (PCAOB ID No.

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statement of Stockholders' Equity (Deficit)

Consolidated Statement of Stockholders' Equity

Consolidated Statements of Cash Flows

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We identified the ACL for U.S.

and Canada loans as a critical audit matter given the subjective nature and amount of judgment required in developing the estimate.

Performing audit procedures to evaluate the reasonableness

of the ACL required a high degree of auditor judgment, an increased extent of audit effort, credit specialists, and the need to involve more experienced audit professionals.

loans as a critical audit matter given the subjective nature and amount of judgment required in developing the estimate.

Performing audit procedures to evaluate the reasonableness of the

ACL required a high degree of auditor judgment, an increased extent of audit effort, credit specialists, and the need to involve more experienced audit professionals.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the allowance for credit losses included the following procedures, among others:

• We tested the design and effectiveness of controls over the ACL.

• We tested management’s process for estimating the ACL, which included involving our credit specialists to evaluate the appropriateness of the models and methodologies.

• We tested the design and effectiveness of controls over the ACL, including management’s controls over the changes to the methodology.

• We tested management’s process for estimating the ACL, which included involving our credit specialists to evaluate the appropriateness of the models and methodologies used including any changes to the models or methodologies.

• We evaluated the accuracy and completeness of the data used to estimate the allowance for credit losses.

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Commercial agreement assets 38,326 57,210

Deferred tax assets 1,467,036 13,929

Other assets 360,601 281,431

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Total operating expenses 3,844,105 3,311,685 2,938,846

Operating loss $ ( 87,273 ) $ ( 615,847 ) $ ( 1,200,862 )

Operating income (loss) $ 416,977 $ ( 87,273 ) $ ( 615,847 )

Other income, net 75,750 148,737 100,320

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Issuance of common stock upon exercise of stock options 2,826,973 — 22,922 — — 22,922

Issuance of common stock in acquisition — — 13,674 — — 13,674

Issuance of common stock, employee share purchase plan 578,222 — 10,217 — — 10,217

Forfeiture of common stock related to acquisition ( 258,905 ) — — — — —

Vesting of restricted stock units 10,801,619 — — — — —

Vesting of warrants for common stock — — 406,714 — — 406,714

Repurchases of common stock ( 12,437 ) — ( 109 ) — — ( 109 )

Stock-based compensation — — 471,021 — — 471,021

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Foreign currency translation adjustments — — — — ( 13,655 ) ( 13,655 )

Unrealized loss on securities available for sale — — — — ( 882 ) ( 882 )

Unrealized gain on cash flow hedges — — — — 751 751

Unrealized gain on securities available for sale — — — — 6,857 6,857

Gain on cash flow hedges — — — — 656 656

Net loss — — — ( 517,757 ) — ( 517,757 )

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Issuance of common stock, employee share purchase plan 397,246 — 13,589 — — 13,589

Issuance of common stock upon exercise of warrants 3,499,453 — — — — —

Repurchases of common stock ( 3,526,590 ) — ( 250,000 ) — — ( 250,000 )

Vesting of restricted stock units 9,209,768 — — — — —

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Unrealized gain on securities available for sale — — — — 3,297 3,297

Unrealized gain on cash flow hedges — — — — 656 656

Net loss — — — ( 517,757 ) — ( 517,757 )

Loss on cash flow hedges — — — — ( 2,826 ) ( 2,826 )

Net income — — — 52,186 — 52,186

Balance as of June 30, 2025 325,112,799 $ 3 $ 6,140,893 $ ( 3,056,818 ) $ ( 15,069 ) $ 3,069,009

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Issuance of common stock upon exercise of warrants — — — — — —

Repurchases of common stock ( 3,526,590 ) — ( 250,000 ) — — ( 250,000 )

Vesting of restricted stock units 6,675,668 — — — — —

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Foreign currency translation adjustments — — — — ( 24,862 ) ( 24,862 )

Unrealized gain on securities available for sale — — — — 3,297 3,297

Unrealized loss on cash flow hedges — — — — ( 2,826 ) ( 2,826 )

Unrealized loss on securities available for sale — — — — ( 1,884 ) ( 1,884 )

Gain on cash flow hedges — — — — 5,447 5,447

Net income — — — 1,929,793 — 1,929,793

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Net income (loss) $ 1,929,793 $ 52,186 $ ( 517,757 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Provision for losses 796,650 616,683 460,628

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Amortization of debt issuance costs 28,232 30,389 24,546

Amortization of discount on securities available for sale ( 44,031 ) ( 22,799 ) ( 36,060 )

Accrued interest on securities available for sale ( 35,421 ) ( 44,031 ) ( 22,799 )

Commercial agreement warrant expense 192,278 271,562 406,714

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Impairment of right of use assets — — 752

Deferred income tax expense (benefit) ( 1,455,217 ) 7,113 —

Other ( 36,100 ) 13,703 ( 25,331 )

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Accounts payable 1,827 41,801 12,417

Payable to third-party loan buyers 52,056 105,791 ( 17,531 )

Payable to third-party loan owners ( 12,142 ) 52,056 105,791

Accrued interest payable 5,166 2,386 11,138

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Principal repayments and other loan servicing activity 24,652,096 18,655,657 14,147,034

Acquisition, net of cash and restricted cash acquired — — ( 16,051 )

Additions to property, equipment and software ( 238,346 ) ( 192,189 ) ( 159,296 )

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Proceeds from exercise of common stock options and warrants and contributions to ESPP 158,930 60,692 33,125

Payments of tax withholding for stock-based compensation ( 303,811 ) ( 189,169 ) ( 73,845 )

Repurchases of common stock ( 250,000 ) — ( 109 )

Repurchase of common stock — ( 250,000 ) —

Taxes paid related to net share settlement of equity awards ( 325,217 ) ( 303,811 ) ( 189,169 )

Net cash provided by financing activities 2,009,688 751,425 913,149

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 10,615 ) ( 1,245 ) ( 2,683 )

Net increase (decrease) in cash, cash equivalents and restricted cash 461,024 35,455 ( 290,863 )

Net increase in cash, cash equivalents and restricted cash 676,620 461,024 35,455

Cash, cash equivalents and restricted cash, beginning of period 1,756,423 1,295,399 1,259,944

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Cash payments for interest expense $ 426,175 $ 404,377 $ 318,235

Cash paid for operating leases 16,575 16,037 16,354

Cash paid for income taxes 6,618 2,736 1,187

Cash paid for operating leases 22,120 16,575 16,037

Supplemental disclosures of non-cash investing and financing activities

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Right of use assets obtained in exchange for operating lease liabilities 12,973 6,238 —

Issuance of common stock in connection with settlement of contingent consideration liability — — 13,674

The accompanying notes are an integral part of these consolidated financial statements.

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Loans are directly originated or funded and issued by our originating bank partners.

Merchants partner with us to transform the consumer shopping experience and to acquire and convert consumers more effectively through our frictionless point-of-sale payment solutions.

Merchants partner with us to transform the consumer shopping experience and to acquire and convert consumers more effectively through our frictionless payment network.

Consumers get the flexibility to buy now and make simple regular payments for their purchases and merchants see increased average order value, repeat purchase rates, and an overall more satisfied consumer base.

Unlike legacy payment options and our competitors’ product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will owe — no hidden fees, no deferred interest, no penalties.

On June 26, 2025, the Company filed a certificate of conversion with the Secretary of State of the State of Delaware and filed articles of conversion and articles of incorporation with the Secretary of State of the State of Nevada, which as of July 1, 2025, effected a change in our jurisdiction of incorporation from Delaware to Nevada (the “Reincorporation”).

Summary of Significant Accounting Policies

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Our financial statements have been prepared on a consolidated basis.

Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and variable interest entities (“VIEs”), in which we have a controlling financial interest.

Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and VIEs, in which we have a controlling financial interest.

These include various business trust entities and limited partnerships established to enter into warehouse credit agreements with certain lenders for funding debt facilities and certain asset-backed securitization transactions.

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Within the consolidated financial statements and tables presented in the accompanying notes, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes.

Our VIE variable interests arise from contractual, ownership, or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets.

Prior period deferred tax amounts have been reclassified out of other assets to conform to the current period presentation as a separate line item on the consolidated balance sheets and consolidated statements of cash flows.

There was no effect on total assets.

Our VIE variable interests arise from contractual, ownership, or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets.

We consolidate a VIE when we are deemed to be the primary beneficiary.

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GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes.

Material estimates that are particularly susceptible to significant change relate to determination of the allowance for credit losses, capitalized internal-use software development costs, valuation allowance for deferred tax assets, loss on loan purchase commitment, discount on directly originated loans, the evaluation for impairment of intangible assets and goodwill, the fair value of available for sale debt securities

including retained interests in our securitization trusts and residual interest in structured transactions, the fair value of risk sharing arrangements, and stock-based compensation.

of risk sharing arrangements, and stock-based compensation.

We base our estimates on historical experience, current events, and other factors we believe to be reasonable under the circumstances.

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therefore, actual results could differ materially from those estimates.

Business Combination

We use the acquisition method of accounting for business combination transactions, and, accordingly, recognize the fair values of assets acquired and liabilities assumed in our consolidated financial statements.

Transaction costs related to the acquisition of the acquired company are expensed as incurred.

The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date.

The consolidated financial statements include the results of operations of any acquired company since the acquisition date.

Cash and Cash Equivalents

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Restricted cash consists primarily of:

(i) deposits restricted by standby letters of credit for office leases;

(ii) funds held in accounts as collateral for our originating bank partners;

(iii) servicing funds held in accounts contractually restricted by agreements with warehouse credit facilities, securitization trusts, and third-party loan owners;

and (iv) pledged cash collateral requirements for certain derivative agreements.

(i) servicing funds held in accounts contractually restricted by agreements with warehouse credit facilities, securitization trusts, and third-party loan owners;

and (ii) funds held in accounts as collateral for our originating bank partners;

and (iii) other collateral accounts.

Our ability to withdraw funds is restricted by contractual provisions under the applicable agreements.

Securities Available for Sale

We hold certain investments in marketable debt securities securitization notes receivable and certificates in unconsolidated securitization trusts, and residual interests in structured transactions which are accounted for under ASC Topic 320, “Investments - Debt Securities” (“ASC 320”).

We have classified these investments as available for sale, as defined within ASC 320.

We hold investments in marketable debt securities, securitization notes receivable and certificates in unconsolidated securitization trusts, and residual interests in structured transactions that are classified as available for sale.

These investments are held at fair value with changes in fair value recorded in unrealized gain (loss) on securities available for sale, net within other comprehensive income (loss) , excluding the portion relating to any credit loss.

As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis.

The portion of any decline in fair value which management identifies as a credit loss will be recognized as an allowance for credit losses through other income (expense), net.

To the extent management intends to sell or may be required to sell a security in an unrealized loss position, we 1) reverse any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and 2) write-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through other income (expense), net.

As of the end of each reporting period, we review each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis.

The portion of any decline in fair value identified as a credit loss will be recognized as an allowance for credit losses through other income (expense), net.

To the extent we intend to sell or may be required to sell a security in an unrealized loss position, we 1) reverse any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and 2) write-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through other income (expense), net.

Interest income for available for sale securities is recorded within other income (expense), net.

We also applied the interest accrual guidance in ASC Topic 325, “Investments - Other” (“ASC 325”) relating to beneficial interests for our investments in securitization notes receivable and certificates in unconsolidated securitization trusts and residual interests in structured transactions.

Accordingly, we recognize interest income each period based on the effective interest rate calculated using expected cash flows.

Changes in the timing of expected cash flows are

accounted for prospectively through an adjustment to interest income.

For our investments in securitization notes receivable and residual trust certificates and for our residual interests in structured transactions, we recognize interest income each period based on the effective interest rate calculated using expected cash flows.

Changes in the timing of expected cash flows are accounted for prospectively through an adjustment to interest income.

From time to time, depending on our expectation regarding timing of expected cash flows from the investments, we may elect to place certain investments on non-accrual status, where any interest payment received is recorded as a direct reduction of the investment under the cost recovery method.

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We either originate loans directly or purchase our loans from our originating bank partners pursuant to the terms outlined in the respective executed loan sale program agreements between us and our bank partners.

Loan receivables that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are classified as held for investment and are reported at amortized cost, which includes unpaid principal balances, any related premiums including fees paid to our originating bank partners and discounts due to loss on loan purchase commitment for bank partner loans with a fair value below the purchase price, discounts due to loss on directly originated loans with a fair value below loan par at origination, where applicable, adjusted for any charge-offs.

commitment for bank partner loans with a fair value below the purchase price on the loan purchase date, and discounts due to loss on directly originated loans with a fair value below loan par at origination, where applicable, adjusted for any charge-offs.

The amortized cost is adjusted for the allowance for credit losses within loans held for investment, net.

Loans Held for Sale

We sell certain loans to third-party loan buyers and securitization trusts.

At origination a loan is classified as held for sale when the loan is identified as for sale to a third-party loan buyer or to be sold to a securitization trust that is anticipated to be off-balance sheet.

We sell certain loans to third-party loan buyers and unconsolidated securitization trusts.

A loan is classified as held for sale when the loan is identified as for sale to a third-party loan buyer or to be sold to a securitization trust that is anticipated to be off-balance sheet.

Loans classified as held for sale are recorded at the lower of amortized cost or fair value.

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Transfers of Financial Assets

We account for loan sales in accordance with ASC 860, “Transfers and Servicing” (“ASC 860”) which states that a transfer of financial assets, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale if all of the following conditions are met:

We account for loan sales in accordance with ASC 860, “Transfers and Servicing” which states that a transfer of financial assets, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale if all of the following conditions are met:

The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors;

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Upon the sale of a loan to a third-party loan buyer or unconsolidated securitization trust in which we retain servicing rights, we may recognize a servicing asset or liability.

A servicing asset or liability arises when our contractual servicing fee with a counterparty differs from the adequate compensation rate that would be required by a third-party to service the same portfolio of assets, as defined by ASC 860.

A servicing asset or liability arises when our contractual servicing fee with a counterparty differs from the adequate compensation rate that would be required by a third party to service the same portfolio of assets.

Servicing assets and liabilities are measured and recorded at fair value and are presented as a component of other assets or accrued expenses and other liabilities, respectively.

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The recognition of a servicing liability results in a corresponding decrease to gain on sales of loans.

servicing rights are remeasured at fair value each period, with the subsequent adjustment recognized in servicing income .

In connection with the sale of a loan to a third-party loan buyer or unconsolidated securitization trust we may also recognize a recourse liability in accordance with ASC 460, “Guarantees” (“ASC 460”) as in certain circumstances we may become required to re-purchase loans from third-party investors due to breaches in representations and warranties.

The servicing rights are remeasured at fair value each period, with the subsequent adjustment recognized in servicing income .

In connection with the sale of a loan to a third-party loan buyer or unconsolidated securitization trust we may also recognize a recourse liability, as in certain circumstances we may become required to re-purchase loans from third-party investors due to breaches in representations and warranties.

The recognition of a recourse liability results in a corresponding decrease to gain on sales of loans.

The recourse liability is amortized over the loan term and remeasured each period based on the outstanding loan balance and changes in our expectation of future repurchase obligations.

The recourse liability is remeasured each period based on the outstanding loan balance and changes in our expectation of future repurchase obligations.

Subsequent remeasurement of the recourse liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss).

In addition, we may recognize a risk share asset or liability in accordance with ASC 860 in certain arrangements with a third-party loan buyer to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold.

The recognition of a risk share asset results in a corresponding increase to gain on sale of loans.

In addition, we may recognize a risk share asset or liability in certain arrangements with a third-party loan buyer to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold.

The recognition of a risk share asset results in a

corresponding increase to gain on sale of loans.

The recognition of a risk share liability results in a corresponding decrease to gain on sales of loans.

The risk share asset and liability are measured at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” and remeasured each period based on the changes in inputs and assumptions for our expectation of future obligations.

The risk share asset and liability are measured at fair value and remeasured each period based on the changes in inputs and assumptions for our expectation of future obligations.

Subsequent remeasurement of the risk share asset and liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss).

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Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, affiliate network partners and servicing fees due from third-party loan owners.

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, card-issuing partners, affiliate network partners and servicing fees due from third-party loan owners.

For each of these groups, we evaluate accounts receivable to determine management’s current estimate of expected credit losses based on historical experience and future expectations and record an allowance for credit losses.

Our allowance for credit losses with respect to accounts receivable was $ 18.8 million and $ 14.9 million as of June 30, 2025 and June 30, 2024, respectively.

Property, Equipment and Software, net

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Leasehold improvements are depreciated over the shorter of the improvement’s estimated useful life or the remaining lease term.

We capitalize costs to develop internally developed software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software or website will function and be used as intended.

project will be completed and the software or website will function and be used as intended.

Capitalized internal-use software costs primarily include salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to external consultants.

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Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred.

Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades.

Costs incurred for enhancements that are expected to result in additional functionality are capitalized and amortized over the estimated useful life of the upgrades.

Capitalized internally developed software costs are included in property, equipment and software, and amortization expense is included in technology and data analytics expense within the consolidated statements of operations and comprehensive income (loss).

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We review the carrying amounts of intangible assets for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.

We measure the

recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate.

We measure the recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate.

If we consider the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value.

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Lease expense for operating leases is recognized on a straight-line basis over the lease term.

We have elected the practical expedient allowing the combination of lease and non-lease components by class of underlying asset.

We have also elected the short-term lease exception and will not recognize right-of-use assets or lease liabilities for qualifying leases with a term of less than 12 months from lease commencement.

We have elected the short-term lease exception and will not recognize right-of-use assets or lease liabilities for qualifying leases with a term of less than 12 months from lease commencement.

Equity Securities Held at Cost

Equity securities held at cost which do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “measurement alternative”).

Gains and losses on the investment due to observable price changes in orderly transaction for an identical or similar investment of the same issuer or impairment, if any, are recognized in other (expense) income, net within our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition.

Funding Debt and Debt Issuance Costs

To finance loans we originate directly or that we purchase from our originating bank partners, we borrow from various lenders through collateralized funding arrangements, which include our warehouse and variable funding note credit facilities secured by pledged loans, and sale and repurchase agreements secured by pledging certain retained interests in our off-balance sheet securitizations.

Gains and losses on the investment due to observable price changes in orderly transactions for identical or similar investments of the same issuer or impairment, if any, are recognized in other income, net within our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition.

To support our impairment analysis, we may estimate the fair value of the equity securities held at cost using valuation methodologies based on significant unobservable inputs, including management estimates and assumptions, which represent Level 3 measurements.

To finance loans that we purchase from our originating bank partners or originate directly, we borrow from various lenders through collateralized funding arrangements, which include our warehouse and variable funding note credit facilities secured by pledged loans, and sale and repurchase agreements secured by pledging certain retained interests in our off-balance sheet securitizations.

These borrowings are carried at amortized cost.

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Where we consolidate the securitization trusts, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts within the consolidated balance sheets.

amortize note issuance costs, including banker fees, legal fees and other professional service fees, for consolidated securitization trusts on a straight-line basis over the expected life of the notes.

We defer and amortize note issuance costs, including banker fees, legal fees and other professional service fees, for consolidated securitization trusts on a straight-line basis over the expected life of the notes.

Interest payments and amortization of note issuance costs incurred is presented as funding costs within the consolidated statements of operations and comprehensive income (loss).

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Valuation allowances are provided when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence.

Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the applicable tax law.

realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the applicable tax law.

We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, and tax planning strategies.

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Fair Value of Assets and Liabilities

ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under U.S.

GAAP, and requires certain disclosures about fair value measurements.

We apply fair value accounting to assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

In general, fair values of financial instruments are based upon quoted market prices, where available.

If such quoted market prices are not available, fair value is based upon internally developed models that use, as inputs, observable market-based parameters to the greatest extent possible.

Additionally, ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

If such quoted market prices are not available, fair value is based upon internally developed models that use observable market-based inputs to the greatest extent possible.

Fair value measurements are classified within the following hierarchy based on the observability of the inputs used in the valuation methodology:

Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets.

A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available.

Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets;

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Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Level 3 assets and liabilities include financial instruments whose value is determined using

discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Revenue Recognition

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Sales and marketing costs also include salaries and personnel-related costs, costs of marketing and promotional activities, and certain losses on loan origination for loans originated by our wholly-owned subsidiaries.

A portion of these costs related to general marketing and promotional activities are considered advertising costs within the meaning of ASC Topic 720, “Other Expenses” (“ASC 720”), and are expensed as incurred.

A portion of these costs related to general marketing and promotional activities are considered advertising costs within the meaning of ASC Topic 720, “Other Expenses,” and are expensed as incurred.

Advertising costs totaled $ 40.8 million, $ 30.8 million and $ 19.2 million for the years ended June 30, 2026, 2025, and 2024, respectively.

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We do not employ derivatives for trading or speculative purposes.

We use a combination of interest rate cap agreements and interest rate swaps to manage interest costs and the risk associated with variable interest rates.

ASC Topic 815 “Derivatives and Hedging” (“ASC 815”) requires that

an entity recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value.

In accordance with ASC 815, we designate certain derivative instruments as cash flow hedges, while others are not designated as hedges.

Certain of our derivative agreements provide for netting arrangements for contracts that settle with the same counterparty, however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes.

We use a combination of interest rate cap agreements and interest rate swaps to manage interest costs and exposure to variable interest rates.

Derivative instruments are recognized as assets or liabilities at fair value.

We designate certain derivative instruments as cash flow hedges, while others are not designated as hedges.

Certain of our derivative agreements provide for netting arrangements with the same counterparty;

however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes.

As such, the fair values are presented gross within other assets and accrued expenses and other liabilities .

Offsetting collateral received by or paid to the counterparty is presented gross within accrued expenses and other liabilities or other assets, as applicable, within the consolidated balance sheet.

Offsetting collateral received from or paid to the counterparty is presented gross within accrued expenses and other liabilities or other assets, as applicable, within the consolidated balance sheet.

Cash flows associated with our derivative instruments are reported within cash flows from operating activities in the consolidated statements of cash flows.

Cash Flow Hedges

We have interest rate swaps designated as cash flow hedges in order to mitigate our exposure to changes in interest rates related to our funding activities.

Swaps that qualify as cash flow hedges are documented and designated as such when we enter into the contracts.

In accordance with our risk management policies, we structure our hedges with terms similar to that of the item being hedged.

At inception of the hedge accounting relationship and on a quarterly basis, we formally assess whether derivatives designated as cash flow hedges are highly effective in offsetting changes to the forecasted cash flows of the hedged items.

If the cash flow hedges are deemed to be highly effective, the gain or loss on the cash flow hedges are recorded within other comprehensive income (loss) (“OCI”) and reclassified into earnings when the hedged cash flows are recognized in funding costs within the consolidated statements of operations and comprehensive income (loss).

We designate certain interest rate swaps as cash flow hedges to mitigate our exposure to changes in interest rates related to our funding activities.

In accordance with our risk management policies, we structure our hedges with terms similar to those of the item being hedged.

At inception, we assess whether the hedges are highly effective in offsetting changes to the forecasted cash flows of the hedged items and formally document the hedge relationship.

We reassess hedge effectiveness on a quarterly basis.

flows are recognized in funding costs within the consolidated statements of operations and comprehensive income (loss).

The amount that is reclassified into earnings is presented within the consolidated statements of operations and comprehensive income (loss) within funding costs, the same line item in which the hedged transaction is recognized.

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We enter into these contracts to manage interest rate risk.

Any changes in the fair value of these financial instruments are reflected in other (expense) income, net, within the consolidated statements of operations and comprehensive income (loss).

Any changes in the fair value of these financial instruments are reflected in other income, net, within the consolidated statements of operations and comprehensive income (loss).

Refer to Note 11.

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Stock-Based Compensation

We account for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of U.S.

GAAP, which requires compensation cost for the grant date fair value of stock-based awards to be recognized over the requisite service period.

We recognize compensation cost for stock-based awards over the requisite service period based on the grant-date fair value of the award.

We have elected to estimate the expected forfeiture rate for service-based awards and only recognize expense for those stock-based awards expected to vest.

We estimate the forfeiture rate based on our historical experience with stock-based awards that are granted and forfeited prior to vesting.

We estimate the forfeiture rate based on our historical experience with stock-based awards that are forfeited prior to vesting.

The fair value of stock-based awards, granted or modified, is determined on the grant date (or the modification date, if applicable) at fair value, using appropriate valuation techniques.

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The fair value of each option on the date of grant is determined using the Black Scholes-Merton option pricing model using the single-option award approach.

We estimate volatility using a weighted average of our historical volatility and the historical volatility of selected

comparable publicly-traded companies due to the limited time period of historical market data for our common stock.

We estimate volatility using a weighted average of our historical volatility and the historical volatility of selected comparable publicly-traded companies due to the limited time period of historical market data for our common stock.

The risk-free interest rate is determined using a U.S.

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We use the simplified method to determine an estimate of the expected term of an employee stock option.

We account for stock-based awards to non-employees, including consultants, in accordance with ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), in which equity-classified awards are measured at the grant date fair value and recognized as expense in the period and manner as though we had paid cash in exchange for goods or services instead of granting a stock-based award.

Performance-Based Awards

Prior to the IPO, we granted RSUs that were subject to two vesting conditions:

a service-based vesting condition (i.e., employment over a period of time) and a performance-based vesting condition (i.e., a liquidity event in the form of either certain change in control transactions or an initial public offering).

The performance-based condition was met upon the IPO.

We record stock-based compensation expense for these awards on an accelerated attribution method over the requisite service period, which is generally four years .

The grant-date fair value of equity-classified stock-based awards to non-employees is recognized as expense in the period and manner as though we had paid cash in exchange for goods or services instead of granting a stock-based award.

Upon exercise or vesting of a stock-based award, the tax effect of the difference, if any, between the cumulative compensation cost recognized for financial statement purposes and the deduction for income tax purposes, will be recognized as an income tax expense or benefit in the consolidated statement of operations and comprehensive income (loss).

Performance-Based Awards

We record stock-based compensation expense for performance stock units (“PSUs”) based on the number of PSUs that are probable of vesting on a straight-line basis over the requisite service period, which is generally three years .

The fair value of each PSU is equal to the closing stock price on the date of grant.

Refer to Note 14.

Equity Incentive Plans for additional information on the PSUs.

Market-Based Awards

We have granted stock option awards with service-based, performance-based, and market-based vesting conditions.

We determined the grant date fair value of these awards by utilizing a Monte Carlo simulation model that incorporates the probability of achievement of the market-based conditions.

The Monte Carlo simulation also incorporates assumptions including expected stock price volatility, expected term, and risk-free interest rates.

We estimated the volatility of common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies in our industry group.

We estimated the expected term of the award based on various exercise scenarios.

The risk-free interest rate was determined using a U.S.

Treasury rate for the period that coincides with the expected term of the award.

The grant-date fair value of market-based equity awards is recorded as stock-based compensation expense on an accelerated attribution method over the requisite service period if the performance-based conditions are considered probable of being satisfied.

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We calculate net income or loss per share using the two-class method.

The two-class method requires income available to common stockholders for the period to be allocated between each class of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had

been distributed.

Our convertible senior notes represent participating securities, and net income will be allocated to these securities in any periods during which a portion of the earnings is required to be attributed to the notes.

We calculate basic net income (loss) per share attributable to common stockholders for Class A and Class B common stock by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding in each class for the period.

We calculate diluted net income per share attributable to common stockholders by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding in each class, after giving consideration to the dilutive effect of our stock options, restricted stock units, employee stock purchase plan shares, convertible debt and common stock warrants that are outstanding during the period.

We calculate diluted net income per share attributable to common stockholders by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding in each class, after giving consideration to the dilutive effect of our stock options, restricted and performance stock units, employee stock purchase plan shares, convertible debt and common stock warrants that are outstanding during the period.

In periods where we have generated a net loss, the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive.

Recently Adopted Accounting Standards

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”.

The new guidance modifies the existing annual and interim segment reporting disclosures.

The purpose of the update is to enable investors to better understand an entity’s overall performance and assess potential future cash flows, primarily through enhanced disclosure requirements on significant segment expenses.

The ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

The Company adopted the new standard effective June 30, 2025.

Refer to Note 19.

Segments and Geographical Information for the enhanced disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The new guidance is expected to increase transparency and usefulness of income tax disclosures through improvements to the rate reconciliation, income taxes paid, and other disclosure requirements.

The new guidance modifies the existing annual income tax reporting disclosures.

The purpose of the update is to increase transparency and usefulness of income tax disclosures primarily through improvements to the rate reconciliation and income taxes paid information.

The ASU is effective for fiscal years beginning after December 15, 2024 and should be applied on a prospective basis, although retrospective application is permitted.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

The Company adopted the new standard effective June 30, 2026 on a prospective basis.

The adoption of this standard did not have any impact on the Company’s financial condition, results of operations or cash flows.

Refer to Note 16.

Income Taxes for the enhanced disclosures.

Recent Accounting Pronouncements Not Yet Adopted

Reporting Comprehensive Income

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Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Debt with Conversion and Other Options

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Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update within our consolidated financial statements and disclosures.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, “ Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ”.

The new guidance introduces a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

The ASU is effective for fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods, and should be applied on a prospective basis.

Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, “ Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ”.

The new guidance primarily changes the software cost capitalization criteria and modifies the website development cost guidance.

The ASU is effective for fiscal years beginning after December 15, 2027 and interim periods within those annual reporting periods, and may be applied on a prospective, modified transition, or retrospective basis approach.

Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Derivatives and Hedging

In November 2025, the FASB issued ASU 2025-09, “ Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements ”.

The new guidance is primarily intended to enable entities to achieve and maintain hedge accounting for a broader group of highly effective economic hedges.

The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those annual reporting periods, and should be applied on a

prospective basis.

The amendments may also be applied to hedging relationships existing as of the date of adoption.

Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Interim Reporting

In December 2025, the FASB issued ASU 2025-11, “ Interim Reporting (Topic 270):

Narrow-Scope Improvements ”.

The new guidance primarily clarifies the required interim disclosure requirements.

The ASU is effective for fiscal years beginning after December 15, 2027 and interim periods within those annual reporting periods, and may be applied on either a prospective or retrospective basis.

Early adoption is permitted.

We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

The following table presents our revenue disaggregated by revenue source (in thousands):

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Merchant partners (or integrated merchants) are generally charged a fee based on gross merchandise volume (“GMV”) processed through the Affirm platform.

The fees vary depending on the individual arrangement between us and each merchant and on the terms of the product offering.

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

The fee is recognized at the point in time the merchant successfully confirms the transaction, which is when the terms of the executed merchant agreement are fulfilled.

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Our service comprises a single performance obligation to merchants to facilitate transactions with consumers.

From time to time, we offer merchants incentives to promote our platform to their customers, such as fee reductions or rebates.

From time to time, we offer merchants incentives to promote our platform to their customers, such as fee reductions, rebates, or other prepaid incentives.

These amounts are recorded as a reduction to merchant network revenue.

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We record the excess loss amounts as a sales and marketing expense.

A portion of merchant network revenue relates to affiliate network revenue, which is generated when a user makes a purchase on a merchant’s website after being directed from an advertisement on Affirm’s website or mobile application.

We earn a fixed placement fee and/or commission as a percentage of the associated sale.

Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the sale occurs.

For the years ended June 30, 2025, 2024, and 2023 affiliate network revenue was $ 123.4 million, $ 95.8 million, and $ 68.7 million, respectively.

For the years ended June 30, 2025, 2024, and 2023, there were no merchants that exceeded 10% of total revenue.

We earn a fixed placement fee and/or commission determined as a percentage of the value of the goods purchased by the consumer from merchants.

Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the merchant successfully confirms the transaction.

Affiliate network revenue was $ 138.0 million, $ 123.4 million, and $ 95.8 million for the years ended June 30, 2026, 2025, and 2024, respectively.

We reviewed merchant network revenue by merchant as a percentage of total revenue for the years ended June 30, 2026, 2025, and 2024.

There were no merchants that exceeded 10% of total revenue.

Card Network Revenue — Revenue from Contracts with Customers

We have agreements with card-issuing partners to facilitate the issuance of physical and one-time-use virtual cards to be used by consumers at checkout.

We have agreements with card-issuing partners to facilitate the issuance of physical and virtual cards to be used by consumers at checkout.

Prior to purchase, consumers can apply at Affirm.com or via the Affirm App and, upon approval, use a physical or virtual card to complete their purchase online or in-store.

Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full or pay later, by using a unique post-purchase feature that allows them to instantly apply for an installment loan for any eligible debit transaction.

Where applicable, our originating bank partner, or wholly-owned subsidiaries, then originates a loan to the consumer after the transaction is confirmed by the merchant.

Where applicable, after the merchant confirms the transaction, we or our originating bank partner originates a loan to the consumer.

The merchant is charged interchange fees for each successful card transaction, and a portion of this revenue is shared with us by our card-issuing partners.

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Similarly, for these arrangements with integrated merchants, the merchant is charged interchange fees for each successful card transaction and a portion of this revenue is shared with us.

From time to time, we offer certain integrated merchants promotional incentives to promote our platform to their customers, such as rebates of interchange fees incurred by the merchant.

From time to time, we offer certain integrated merchants incentives to promote our platform to their customers, such as rebates of interchange fees incurred by the merchant.

These amounts are recorded as a reduction of card network revenue.

Our contracts with our card-issuing partners are defined at the transaction level and do not extend beyond the service already provided.

The revenue collected from card-issuing partners for each transaction are determined as a percentage of the interchange fees charged on transactions facilitated on the payment processor network, and revenue is recognized at the point in time the transaction is completed successfully.

The revenue collected from card-issuing partners for each transaction is determined as a percentage of the interchange fees charged on transactions facilitated on the payment processor network, and revenue is recognized at the point in time the transaction is completed successfully.

The amounts collected are presented in revenue, net of associated transaction-related processing fees paid to our card-issuing partners.

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Contractual interest income on unpaid principal balance $ 1,796,789 1,423,439 1,043,019

$ 1,423,439 1,043,019 561,192

Amortization of discount on loans 332,829 254,964 204,654

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Interest receivable charged-off, net of recoveries ( 54,737 ) ( 49,016 ) ( 26,373 )

( 49,016 ) ( 26,373 ) ( 17,050 )

Total interest income $ 2,047,485 $ 1,608,221 $ 1,204,355

(1) Contractual interest income on unpaid principal balance, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 375.9 million and $ 369.7 million for the

same periods.

The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.

(2) Interest receivable charged-off, net of recoveries, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 25.8 million and $ 27.5 million for the same periods.

The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.

We accrue interest income using the effective interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan.

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Upon the resolution of a dispute with the consumer, the accrual of interest is resumed, and any interest that would have been earned during the disputed period is retroactively accrued.

As of June 30, 2025, 2024, and 2023, the balance of loans held for investment on non-accrual status was $ 6.2 million, $ 2.6 million, and $ 1.8 million, respectively.

The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements.

As of June 30, 2026, 2025, and 2024, the unpaid principal balance of loans held for investment on non-accrual status was $ 7.3 million, $ 6.2 million, and $ 2.6 million, respectively.

A loan is charged-off in the period if the loan becomes 120 days past due or meets other charge-off policy requirements.

Past due status is based on the contractual terms of the loans.

Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is charged-off.

Any previously accrued but uncollected interest receivable on these loans is also charged off.

Subsequent recoveries of previously charged-off interest receivable, if any, are recognized in interest income.

Gain on Sales of Loans

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Refer to Note 9.

Securitization and Variable Interest Entities for further discussion on transfers of loan receivables and Note 13.

Securitization and Variable Interest Entities for further discussion on transfers of loan receivables.

Refer to Note 11.

Derivative Financial Instruments and Note 12.

Fair Value of Financial Assets and Liabilities for further discussion of risk sharing arrangements.

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Discount due to loss on directly originated loans ( 35,214 ) ( 27,559 )

Fair value adjustment on loans acquired through business combination ( 1 ) ( 16 )

Total loans held for investment $ 9,560,742 $ 7,025,534

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We purchased loans from our originating bank partners in the amount of $ 40.2 billion, $ 30.0 billion, and $ 21.5 billion for the years ended June 30, 2026, 2025, and 2024, respectively.

We directly originated $ 6.3 billion, $ 4.5 billion, and $ 3.7 billion of loans for the June 30, 2025, 2024, and 2023, respectively.

Our portfolio consists of interest bearing and non-interest bearing consumer loans with original term lengths of up to sixty months originated in markets including the U.S., U.K., and Canada, with the majority of loans originated within the U.S.

We directly originated $ 9.5 billion, $ 6.3 billion, and $ 4.5 billion of loans for the years ended June 30, 2026, 2025, and 2024, respectively.

The following table details activity for the discount included in loans held for investment, for the periods indicated:

June 30, 2026 June 30, 2025 June 30, 2024

(in thousands)

Balance at the beginning of the period $ 102,684 $ 98,527 $ 96,576

Additions from loans purchased or originated, net of refunds 490,626 356,398 268,441

Amortization of discount ( 332,829 ) ( 254,964 ) ( 204,654 )

Unamortized discount released on loans sold ( 137,055 ) ( 97,044 ) ( 60,580 )

Impact of foreign currency translation ( 949 ) ( 233 ) ( 1,256 )

Balance at the end of the period $ 122,477 $ 102,684 $ 98,527

Our portfolio consists of interest bearing and non-interest bearing consumer loans with original term lengths of up to 60 months originated in markets including the U.S., U.K., and Canada, with the majority of loans originated within the U.S.

While we view our loan portfolio as a single product segment, unsecured consumer loans, we consider factors such as country of origin, loan product, origination channel, merchant and various borrower characteristics to predict future losses.

We closely monitor credit quality for our loan receivables to manage and evaluate our related exposure to credit risk.

Credit risk management begins with initial underwriting, where loan applications are assessed against the credit underwriting policy and procedures for our directly originated loans and originating bank partner loans, and continues through to full repayment of a loan.

To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal historical experience, including the consumer’s prior repayment history on our platform as well as other measures.

We combine these factors to establish a proprietary score as a credit quality indicator.

Our proprietary score (“ITACs”) is assigned to most loans facilitated through our technology platform, ranging from zero to 100 , with 100 representing the highest credit quality and therefore the lowest likelihood of loss.

The ITACs model analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to:

basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes.

When a consumer passes both fraud and credit policy checks, the application is assigned an ITACs score.

ITACs is also used for portfolio performance monitoring.

Our credit risk team closely tracks the distribution of ITACs at the portfolio level, as well as ITACs at the individual loan level to monitor for signs of a changing credit profile within the portfolio.

Repayment performance within each ITACs band is also monitored to support both the integrity of the risk scoring models and to measure possible changes in consumer behavior amongst various credit tiers.

The following tables present an analysis of the credit quality, by ITACs score, of the amortized cost basis excluding accrued interest receivable, by fiscal year of origination on loans held for investment and loans held for sale as of June 30, 2025 and June 30, 2024 (in thousands):

We closely monitor the performance of our loan receivables to manage and evaluate our exposure to credit risk.

Credit risk management begins with initial underwriting and continues through to full repayment of a loan.

To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models that leverage detailed information from external sources, such as credit bureaus where available, as well as the consumer’s prior repayment history on our platform.

We evaluate the credit quality of our loan receivable based on the aging status of the loan.

The following tables present an aging analysis of the amortized cost basis excluding accrued interest receivable, by fiscal year of origination, of loans held for investment by delinquency status as of June 30, 2026 and June 30, 2025 (in thousands):

June 30, 2026

Amortized Costs Basis by Fiscal Year of Origination

Amortized Cost Basis by Fiscal Year of Origination

2026 2025 2024 2023 2022 Prior Total

96+ $ 4,481,684 $ 257,280 $ 43,716 $ 3,328 $ 61 $ 10 $ 4,786,079

94 – 96 1,795,298 51,201 945 145 7 5 1,847,601

90 – 94 248,911 7,357 271 66 4 1 256,610

<90 52,163 950 2 25 2 1 53,143

Current – 3 calendar days past due $ 8,524,557 $ 401,908 $ 44,161 $ 7,050 $ 252 $ 27 $ 8,977,955

4 – 29 calendar days past due 235,777 14,459 616 70 3 — 250,925

30 – 59 calendar days past due 87,890 7,826 252 26 1 — 95,995

60 – 89 calendar days past due 69,564 7,817 211 28 1 — 77,621

90 – 119 calendar days past due (1)

54,785 8,670 330 72 20 10 63,887

Total amortized cost basis $ 8,972,573 $ 440,680 $ 45,570 $ 7,246 $ 277 $ 37 $ 9,466,383

(1) Includes $ 63.8 million of loan receivables as of June 30, 2026 that are 90 days or more past due, but are not on non-accrual status.

June 30, 2025

Amortized Costs Basis by Fiscal Year of Origination

Amortized Cost Basis by Fiscal Year of Origination

2025 2024 2023 2022 2021 Prior Total

96+ $ 3,438,135 $ 183,210 $ 10,026 $ 186 $ 10 $ 5 $ 3,631,572

94 – 96 1,509,125 29,227 463 8 2 4 1,538,829

90 – 94 287,499 3,575 263 3 1 1 291,342

<90 45,009 46 309 2 1 — 45,367

Current – 3 calendar days past due $ 6,268,050 $ 294,778 $ 50,958 $ 4,170 $ 133 $ 28 $ 6,618,117

4 – 29 calendar days past due 156,941 9,713 1,347 145 10 — 168,156

30 – 59 calendar days past due 62,250 4,367 288 35 4 — 66,944

60 – 89 calendar days past due 51,095 5,251 255 30 2 — 56,633

90 – 119 calendar days past due (1)

41,889 5,571 228 34 2 8 47,732

Total amortized cost basis $ 6,580,225 $ 319,680 $ 53,076 $ 4,414 $ 151 $ 36 $ 6,957,582

(1) This balance represents loan receivables without sufficient data available for use by the Affirm scoring methodology including new markets and certain developing products.

(1) Includes $ 47.6 million of loan receivables as of June 30, 2025 that are 90 days or more past due, but are not on non-accrual status.

The following table presents net charge-offs by fiscal year of origination as of year ended June 30, 2026 (in thousands):

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Current period net charge-offs ( 269,294 ) ( 350,066 ) ( 1,317 ) 5,669 2,530 869 ( 611,609 )

Loan receivables are defined as past due if either the principal or interest have not been received within four calendars days of when they are due in accordance with the agreed upon contractual terms.

The following table presents an aging analysis of the amortized cost basis excluding accrued interest receivable of loans held for investment by delinquency status (in thousands):

June 30, 2025 June 30, 2024

Non-delinquent loans $ 6,619,285 $ 5,331,462

4 – 29 calendar days past due 167,175 134,434

30 – 59 calendar days past due 66,831 55,021

60 – 89 calendar days past due 56,554 47,764

90 – 119 calendar days past due (1)

47,737 38,615

Total amortized cost basis $ 6,957,582 $ 5,607,296

(1) Includes $ 47.6 million and $ 38.6 million of loan receivables as of June 30, 2025 and June 30, 2024, respectively, that are 90 days or more past due, but are not on non-accrual status.

We maintain an allowance for credit losses at a level sufficient to absorb expected credit losses based on evaluating known and inherent risks in our loan portfolio.

The allowance for credit losses reflects our estimate of expected lifetime credit losses, which consider the remaining contractual term, historical credit losses, consumer payment trends, estimated recoveries, and future payment expectations as of each balance sheet date.

The allowance for credit losses reflects our estimate of expected lifetime credit losses as of the balance sheet date.

Our estimate considers the remaining contractual term of our loan portfolio, historical credit losses, consumer payment history and estimated recoveries.

We also consider current economic conditions and evolving consumer behavioral patterns.

Adjustments to the allowance for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented within our consolidated statements of operations and comprehensive income (loss).

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged off against the allowance for credit losses.

Loans are charged off in accordance with our charge-off policy, as the contractual principal becomes 120 days past due.

Loans are charged off in accordance with our charge-off policy, as the

contractual principal becomes 120 days past due.

Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses.

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We have a loan modification program for borrowers experiencing financial difficulty if certain eligibility criteria are met.

A loan is evaluated for modification program eligibility when a borrower self-reports financial hardship, either when a borrower contacts us directly or upon making contact with the borrower to determine eligibility when a loan payment is past due.

The objectives of the loan modification program are to offer borrowers assistance during times of financial stress, increase collections, and minimize losses.

A loan is evaluated for modification program eligibility when a borrower self-reports financial hardship, either upon a borrower contacting us directly or upon us making contact with the borrower when a loan payment is past due.

The objectives of the loan modification program are to offer borrowers assistance during times of financial stress and minimize losses.

We have two primary loan modification strategies:

payment deferrals and loan re-amortization.

A payment deferral provides the borrower relief by extending the due date for the next payment due.

A payment deferral provides the borrower relief by extending the due date for the next payment.

While a borrower may obtain more than one deferral, the total deferral period may not exceed three months .

A loan re-amortization provides the borrower relief by lowering monthly payments through extending the term length of the loan;

however, the total remaining term may not exceed twenty-four months .

In addition, the total interest due from the consumer

will not exceed the initial total interest due prior to modification, and a loan may not be re-amortized more than once.

A loan re-amortization provides the borrower relief by lowering monthly payments by extending the term length of the loan, capped at the lesser of twelve additional months or a total remaining term of twenty-four months .

In addition, the total interest due from the consumer will not exceed the initial total interest due prior to modification, and a loan may not be re-amortized more than once.

The following tables present the amortized cost basis of loans excluding accrued interest receivable that were modified for borrowers experiencing financial difficulty during the years ended June 30, 2026, 2025, and 2024 by type of modification (in thousands):

June 30, 2025 June 30, 2024 (1)

June 30, 2026 June 30, 2025 June 30, 2024 (1)

Payment deferral $ 23,803 $ 11,642 $ 34,641

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Our allowance estimate considers whether a loan has been modified, the delinquency status of the loan on the date of modification, and the increased likelihood that such loan may become delinquent or charge-off in the future.

The following table presents the delinquency status as of June 30, 2025 and June 30, 2024, by amortized cost basis excluding accrued interest receivable, of loan receivables that have been modified within the last 12 months where the borrower was experiencing financial difficulty at the time of modification (in thousands):

The following tables present the delinquency status as of June 30, 2026, 2025, and 2024, by amortized cost basis excluding accrued interest receivable, of loan receivables that have been modified within the last 12 months where the borrower was experiencing financial difficulty at the time of modification (in thousands):

June 30, 2026

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Total amortized cost basis $ 11,642 $ 225 $ 11,867

June 30, 2024 (1)

Payment Deferral Loan Re-amortization Total

Non-delinquent loans $ 19,189 $ 439 $ 19,628

4 – 29 calendar days past due 5,028 180 5,208

30 – 59 calendar days past due 2,382 124 2,506

60 – 89 calendar days past due 4,421 153 4,574

90 – 119 calendar days past due 3,621 161 3,782

Total amortized cost basis $ 34,641 $ 1,057 $ 35,698

(1) Amounts previously disclosed excluded modifications made to borrowers where the loan was less than 30 days delinquent at the time of modification.

With respect to modifications during the 12 months preceding June 30, 2025 and June 30, 2024, respectively, where the borrower was experiencing financial difficulty at the time of modification, the amortized cost basis of loans which have been charged off was $ 6.5 million and $ 13.3 million, respectively.

During the years ended June 30, 2025 and 2024, there were no acquisitions accounted for as business combinations and there was one acquisition accounted for during the same period in 2023.

Acquisitions completed during the year ended June 30, 2023

Butter Holdings Ltd

On February 1, 2023, we completed the closing of the transaction contemplated by a share purchase agreement entered into with certain sellers to acquire the entire issued share capital of Butter Holdings Ltd.

(“Butter”), a buy now, pay later company based in the United Kingdom.

The purchase price was comprised of (i) $ 14.9 million in cash, subject to adjustments in accordance with the purchase agreement, and (ii) $ 1.5 million settlement of subordinated secured notes.

The acquisition date fair value of the consideration transferred for Butter was approximately $ 16.3 million, which consisted of the following (in thousands):

Cash $ 14,863

Settlement of subordinated secured notes 1,475

Total acquisition date fair value of the consideration transferred $ 16,337

The acquisition was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”).

The acquired identifiable intangible assets have been recorded at their estimated fair values with the excess purchase price assigned to goodwill.

The goodwill was primarily attributed to future synergies from integration.

The goodwill is not expected to be deductible for income tax purposes.

The following table summarizes the allocation of the consideration paid of approximately $ 16.3 million to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Cash and cash equivalents $ 287

Loans held for investment, net 172

Accounts receivable, net 11

Intangible assets 9,243

Other assets 672

Total assets acquired 10,385

Accounts payable 568

Accrued expenses and other liabilities 2,923

Total liabilities assumed 3,491

Net assets acquired 6,894

Goodwill $ 9,443

Total purchase price $ 16,337

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

Fair Value Useful Life (in years)

Lending license $ 9,243 Indefinite

The fair value of the intangible asset was determined by applying the with-and-without method.

The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represents Level 3 measurements.

The transaction costs associated with the acquisition were approximately $ 1.8 million for the year ended June 30, 2023, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

With respect to modifications during the 12 months preceding June 30, 2026, 2025, and 2024, where the borrower was experiencing financial difficulty at the time of modification, the amortized cost basis of loans which have been charged off was $ 7.1 million, $ 6.5 million, and $ 13.3 million, respectively.

Balance Sheet Components

Accounts Receivable, net

Accounts receivable, net was $ 284.4 million and $ 426.2 million as of June 30, 2026 and June 30, 2025, respectively, which includes $ 88.0 million and $ 76.9 million of receivables from contracts with customers, respectively.

Accounts receivable are subject to an allowance for credit losses which was $ 22.7 million and $ 18.8 million as of June 30, 2026 and June 30, 2025, respectively.

Property, Equipment and Software, net

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(1) Adjustments to goodwill during the years ended June 30, 2026 and 2025 primarily pertained to foreign currency translation adjustments.

No impairment losses related to goodwill were recorded during the year ended June 30, 2025.

No impairment losses related to goodwill were recorded during the years ended June 30, 2026 and 2025.

During the year ended June 30, 2024, we recognized goodwill disposal losses of $ 1.0 million included in general and administrative expenses within the consolidated statements of operations and comprehensive income (loss).

For the year ended June 30, 2023, no impairment losses related to goodwill were recorded.

Intangible assets consisted of the following (in thousands):

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Assembled workforce 12,490 ( 12,490 ) — 0.0

Trademarks and domains, definite 1,450 ( 1,355 ) 95 0.6

Trademarks, licenses and domains, indefinite 12,416 — 12,416 Indefinite

Trademarks, licenses and domains 12,073 — 12,073 Indefinite

Other intangibles 350 — 350 Indefinite

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Assembled workforce 12,490 ( 12,490 ) — 0.0

Trademarks and domains, definite 1,450 ( 1,165 ) 285 1.0

Trademarks, licenses and domains, indefinite 11,628 — 11,628 Indefinite

Trademarks and domains 1,450 ( 1,355 ) 95 0.6

Trademarks, licenses and domains 12,416 — 12,416 Indefinite

Other intangibles 350 — 350 Indefinite

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No impairment losses related to intangible assets were recorded during the years ended June 30, 2026, 2025, and 2024.

The expected future amortization expense of these intangible assets as of June 30, 2025 is as follows, by fiscal year (in thousands):

2030 and thereafter —

Total amortization expense $ 169

Commercial Agreement Assets

In fiscal year 2022, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc.

We recognized an asset of $ 133.5 million associated with the portion of the warrants that were fully vested upon grant.

The asset was valued based on the fair value of the warrants and represents the probable future economic benefit to be realized over the expected benefit period of four years .

(“Amazon”) and recognized an asset of $ 133.5 million based on the grant date fair value of the warrants that were fully vested upon grant.

The asset is amortized over the expected benefit period, which was extended from four to nine years in November 2025 upon the execution of a commercial agreement that superseded the prior agreement.

For the years ended June 30, 2026, 2025, and 2024, we recognized amortization expense of $ 7.6 million, $ 20.7 million, and $ 32.9 million, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense.

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We recognized an asset of $ 270.6 million based on the grant-date fair value of the vested warrants.

We amortize the asset over the expected benefit period, which was extended from six to nine years during the fiscal year 2025 upon execution of a commercial agreement that superseded and replaced the previous commercial agreement.

The benefit period is reevaluated each reporting period.

W e recorded amortization expense related to the commercial agreement asset of $ 26.7 million, $ 35.9 million, and $ 35.8 million for the years ended June 30, 2025, 2024, and 2023, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense.

As of June 30, 2025, the accumulated amortization is $ 225.5 million and the remaining net asset value is $ 45.1 million, which will be recognized over the remaining useful life of 4.0 years.

We record amortization expense related to the commercial agreement asset in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense over the expected benefit period.

For the years ended June 30, 2026, 2025, and 2024, w e recorded amortization expense related to the commercial agreeme nt asset of $ 11.2 million, $ 26.7 million, and $ 35.9 million, respectively.

As of June 30, 2026, the accumulated amortization is $ 236.7 million and the remaining

net asset value is $ 33.9 million, which will be recognized over the remaining useful life of 3.0 years.

As of June 30, 2026, none of the warrants are outstanding.

Shopify is deemed to be a related party because they are a principal owner of more than ten percent of the Company’s voting interest.

Under the commercial agreement, certain of our platform services are made available to eligible Shopify merchants.

In the ordinary course of business, we incur fees in connection with transactions processed on the Shopify platform under the agreement.

Other assets consisted of the following (in thousands):

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Equity securities held at cost 40,396 40,277

Risk sharing assets 43,179 33,884

Prepaid payroll taxes for stock-based compensation 25,188 21,395

Operating lease right-of-use assets 19,124 21,863

Foreign deferred tax asset 13,929 21,206

Other receivables 3,771 18,263

Derivative instruments (1)

Fixed term deposit — 35,203

34,151 45,823

Prepaid merchant incentives 31,589 2,114

Operating lease right-of-use assets 22,978 19,124

Prepaid payroll taxes for stock-based compensation 6,862 25,188

Other assets 16,328 13,166

Total other assets (2)

$ 360,601 $ 281,431

(1) For the year ended June 30, 2025, to conform to the current period presentation, risk sharing assets are presented within derivative instruments.

There was no effect on total other assets.

(2) For the year ended June 30, 2025, on the consolidated balance sheets, we reclassified deferred tax assets out of other assets to a separate line item to conform with the current period presentation.

Accordingly, deferred tax assets are no longer presented in the table above.

Accrued Expenses and Other Liabilities

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Operating lease liability 29,187 31,943

Collateral held for derivative instruments 2,787 17,643

Other liabilities 51,562 52,516

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As of June 30, 2026, we have not considered such provisions in the determination of the lease term, as it is not reasonably certain these options will be exercised.

Leases have remaining terms that range from less than one year to seven years .

Leases have remaining terms that range from less than one year to eight years .

Several leases require us to obtain standby letters of credit, naming the lessor as a beneficiary.

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We are required to post collateral for the letters of credit in the form of cash or eligible securities.

As of June 30, 2025, the collateral totaled $ 4.5 million, which was in the form of securities that have been classified as securities available for sale at fair value in the consolidated balance sheets.

As of June 30, 2024, the collateral totaled $ 8.8 million, of which $ 2.0 million was in the form of cash that was classified as restricted cash, and $ 6.8 million was in the form of securities which was classified as securities available for sale at fair value within our consolidated balance sheets.

No impairment charge was incurred related to leases during the fiscal year ended June 30, 2025.

During the years ended June 30, 2024 and 2023, we subleased a portion of our leased office space in San Francisco, resulting in

an impairment charge of $ 0.8 million and $ 1.2 million, respectively, included in general and administrative expense within our consolidated statements of operations and comprehensive income (loss).

June 30, 2026 and 2025, the collateral totaled $ 3.6 million and $ 4.5 million, respectively, which was in the form of securities that have been classified as securities available for sale at fair value in the consolidated balance sheets.

No impairment charge was incurred related to leases during the fiscal years ended June 30, 2026 and 2025.

During the year ended June 30, 2024, we subleased a portion of our leased office space in San Francisco, resulting in an impairment charge of $ 0.8 million included in general and administrative expense within our consolidated statements of operations and comprehensive income (loss).

Operating lease expense is as follows (in thousands):

June 30, 2025 June 30, 2024 June 30, 2023

June 30, 2026 (2)

June 30, 2025 June 30, 2024

Operating lease expense (1)

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(1) Lease expenses for our short-term leases were immaterial for the years presented.

(2) During the year ended June 30, 2023, we incurred charges of $ 4.7 million, within restructuring and other, within our consolidated statements of operations and comprehensive income (loss), related to a reduction to our ROU lease assets which were attributed to certain leased space we were no longer utilizing for our business operations.

(2) Includes a $ 2.2 million gain recognized in general and administrative expense within our consolidated statements of operations and comprehensive income (loss) in connection with a modification of one of our office leases.

We have subleased a portion of our leased facilities.

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As of June 30, 2026, future minimum lease payments are as follows (in thousands):

2026 $ 16,575

Thereafter 12,174

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On December 20, 2023, the Court granted Affirm’s motion to dismiss the first amended complaint with leave to amend.

On January 19, 2024, plaintiffs filed their second amended complaint, which contains only the allegations from the first amended complaint relating to false and/or misleading statements about whether Affirm’s business model was vulnerable to interest rate changes.

On January 19, 2024, plaintiffs filed their second amended complaint, which contained only the allegations from the first amended complaint relating to false and/or misleading statements about whether Affirm’s business model was vulnerable to interest rate changes.

In light of the above, plaintiffs assert that Affirm violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and that Levchin and Linford violated Section 20(a) of the Exchange Act.

Plaintiffs seek class certification, unspecified compensatory and punitive damages, and costs and expenses.

Plaintiffs sought class certification, unspecified compensatory and punitive damages, and costs and expenses.

Affirm filed its motion to dismiss the second amended complaint on February 2, 2024.

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On September 23, 2024, plaintiffs filed a motion for leave to file a motion for reconsideration of the Court's Order granting Affirm's motion to dismiss.

On August 14, 2025, the Court resolved plaintiffs' motion in Affirm's favor and directed plaintiffs to file a third amended complaint or stand on their second amended complaint and submit a joint proposed form of judgment.

On August 14, 2025, the Court resolved plaintiffs' motion in Affirm's favor.

On September 30, 2025, the Court dismissed the action with prejudice.

On October 29, 2025, plaintiffs filed a notice of appeal to the U.S.

Court of Appeals for the Ninth Circuit.

Briefing on the appeal is complete and the parties are awaiting the scheduling of oral argument.

Levchin, et al.

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We have determined, based on current knowledge, that the aggregate amount or range of losses that are estimable with respect to our legal proceedings, including the matters described above, would not have a material adverse effect within our consolidated financial position, results of operations or cash flows.

Amounts accrued as of June 30, 2025 and June 30, 2024 were not material.

Amounts accrued as of June 30, 2026 were not material.

The ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty.

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We pay our cloud-computing web services provider monthly, and we may pay more than the minimum purchase commitment based on usage.

Debt outstanding as of June 30, 2025 includes amounts classified within our consolidated balance sheets as funding debt, notes issued by securitization trusts, and convertible senior notes.

Debt outstanding as of June 30, 2026 includes amounts classified within our consolidated balance sheets as funding debt, notes issued by securitization trusts, and convertible senior notes, net.

Secured debt includes borrowings from our warehouse facilities, variable funding notes, notes issued by securitization trusts and sale and repurchase agreements.

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Interest Rate (1)

Unused Commitment Fees Maturity by Fiscal Year Borrowing Capacity (2)

Unused Commitment Fees Maturity by Fiscal Year

Borrowing Capacity (2)

Debt Outstanding (3)

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Sales and repurchase agreements 6.90 % — 2029 - 2030

— 4,699 4,699

Notes issued by securitization trusts 4.85 % — 2030 - 2035

5,350,000 5,350,000 5,331,229

$ 14,011,895 $ 8,709,015 $ 8,664,477

Unsecured debt

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(1) The stated interest rate reflects the fixed or variable interest rate in effect for each of our contractual arrangements as of June 30, 2026, weighted by the outstanding principal balance as of that date.

The interest rate resets periodically for our variable rate debt, typically based on a reference rate such as Secured Overnight Financing Rate (“SOFR”) or Canadian Overnight Repo Rate Average (“CORRA”) plus a spread, or an alternative rate based on the cost funds for the lender.

The interest rate resets periodically for our variable rate debt, typically based on a reference rate such as Secured Overnight Financing Rate (“SOFR”), Canadian Overnight Repo Rate Average (“CORRA”) or Sterling Overnight Index Average (“SONIA”), or an alternative rate based on the cost of funds for the lender, plus any applicable spread.

(2) Represents total revolving commitment amount, inclusive of debt outstanding as of June 30, 2026.

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The carrying value of these pledged assets was $ 9.4 billion as of June 30, 2026.

(4) As of June 30, 2025, international facilities finance loan receivables originated in Canada.

(4) As of June 30, 2026, international facilities finance loan receivables originated in Canada and the U.K.

Maturity by Fiscal Year

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We may continue to pledge new receivables to allow us to borrow up to the commitment amount throughout the revolving period for each facility.

The length of the revolving period, the maximum amount we may borrow against pledged collateral balance during the revolving period, and the length of the amortization period prior to the maturity date varies across borrowing facilities depending negotiated terms.

Borrowings under these agreements are classified as funding debt within our consolidated balance sheets and proceeds from the borrowings can only be used for the purposes of funding loans.

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Notes Issued by Securitization Trusts

We issue asset-backed securities through securitization trusts using a combination of term, amortizing and revolving structures.

We issue asset-backed securities through securitization trusts using a combination of term, amortizing, revolving and variable funding structures.

Each trust may issue one or more classes of notes, which will be repaid through collections on the loans in accordance with the trust priority of payments.

For consolidated securitization trusts, asset-backed notes held by third-party investors are classified as notes issued by securitization trusts in the consolidated balance sheets.

Refer to Note 10 Securitization and Variable Interest Entities for additional information.

For consolidated securitization trusts, asset-backed notes held by third-party investors are classified as notes issued by securitization trusts within our consolidated balance sheets.

We defer and amortize debt issuance costs for consolidated securitization trusts on a straight-line basis over the expected life of the notes.

Refer to Note 9.

Securitization and Variable Interest Entities for additional information.

Revolving Credit Facility

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Proceeds of the borrowings under this facility will be used for general corporate purposes in the ordinary course of business.

This facility bears interest at a rate equal to, either (a) for SOFR borrowing, a SOFR rate determined by reference to the forward-looking term SOFR rate for the interest period, plus an applicable margin of 1.75 % per annum or (b) for alternative base rate borrowings, a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % per annum, (ii) the rate last quoted by the Wall Street Journal as the

This facility bears interest at a rate equal to, either (a) for SOFR borrowing, a SOFR rate determined by reference to the forward-looking term SOFR rate for the interest period, plus an applicable

margin of 1.50 % per annum or (b) for alternative base rate borrowings, a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % per annum, (ii) the rate last quoted by the Wall Street Journal as the U.S.

prime rate and (iii) the one-month forward-looking term SOFR rate plus 1.00 % per annum, in each case, plus an applicable margin of 0.50 % per annum.

The facility contains certain financial covenants which may result in an acceleration of the maturity if not maintained, and requires payment of a monthly unused commitment fee of 0.15 % per annum on the undrawn balance available.

On December 16, 2024, we entered into an amendment to our revolving credit facility in order to permit the incurrence of indebtedness pursuant to the 2029 Senior Convertible Notes.

As of June 30, 2026, we were in compliance with all applicable covenants in the agreements.

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Convertible Senior Notes

On December 20, 2024, we issued approximately $ 920.0 million in aggregate principal amount of 0.75 % convertible senior notes due 2029 (the “2029 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

The total net proceeds from this offering, after deducting debt issuance costs, were approximately $ 903.1 million.

The 2029 Notes represent senior unsecured obligations of the Company.

The 2029 Notes will bear interest at a fixed rate of 0.75 % per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2025.

The 2029 Notes mature on December 15, 2029, unless such Notes are earlier converted, redeemed or repurchased in accordance with their terms.

Each $1,000 of principal of the 2029 Notes will initially be convertible into 9.8992 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 101.02 per share, subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2029 Notes (the “2029 Indenture”).

Holders of the 2029 Notes may convert their 2029 Notes at their option at any time on or after September 15, 2029 until close of business on the second scheduled trading day immediately preceding the maturity date of December 15, 2029.

Further, holders of the 2029 Notes may convert all or any portion of their 2029 Notes at their option prior to the close of business on the business day immediately preceding September 15, 2029, only under the following circumstances:

1) during any calendar quarter commencing after the calendar quarter ending March 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2029 Notes) per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

As of June 30, 2026, we had outstanding:

(i) $ 221.3 million aggregate principal amount of 0.00 % convertible senior notes due November 15, 2026 (the “2026 Notes”) and (ii) $ 920.0 million aggregate principal amount of 0.75 % convertible senior notes due December 15, 2029 (the “2029 Notes”), in each case unless earlier converted, redeemed or repurchased in accordance with their terms.

No sinking fund is provided for either series.

The notes are convertible into shares of our Class A common stock under specified conditions.

In each case, the conversion rate is subject to adjustment upon the occurrence of certain events, and, upon conversion, we may settle the conversion obligation in cash, shares of our Class A common stock, or a combination of cash and shares, as discussed below.

Upon conversion, we will pay cash up to the aggregate principal amount of the notes and may settle the remainder, if any, in cash, shares of our common stock, or a combination of both, at our election.

The amount due upon conversion is based on a daily conversion value over a 40 trading day observation period.

The 2029 Notes bear interest at a fixed rate of 0.75 % per year, payable semiannually in arrears on June 15 and December 15 of each year.

Each $1,000 of principal of the 2029 Notes is initially convertible into 9.8992 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 101.02 per share.

The conversion rate is subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2029 Notes (the “2029 Indenture”).

Holders may convert their 2029 Notes, at their option:

• At any time on or after September 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date.

• Before that date, only if specified conditions are met, as follows:

1) if the last reported sale price of the Class A common stock is at least 130 % of the conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

2) during the five business day period following any five consecutive trading day period (the “2029 Notes measurement period”) in which the trading price (as defined in the 2029 Indenture) per $1,000 principal amount of the 2029 Notes is less than 98 % of the product of the last reported sale price of our Class A common stock and the conversion rate for each trading day in the 2029 Notes measurement period;

3) if we call any or all of the notes for redemption, at any time before the close of business on the trading day immediately preceding the redemption date;

4) upon the occurrence of certain specified corporate events.

Upon conversion of the 2029 Notes, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted.

If we satisfy our

conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2029 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period.

No sinking fund is provided for the 2029 Notes.

We may redeem for cash all or part of the 2029 Notes on or after December 20, 2027 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any.

If a fundamental change (as defined in the 2029 Indenture) occurs prior to the maturity date, holders of the 2029 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2029 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.

In addition, if specific corporate events occur prior to the maturity date of the 2029 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2029 Notes in connection with such corporate events.

On November 23, 2021, we issued $ 1,725 million in aggregate principal amount of 0 % convertible senior notes due 2026 (the “2026 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

The total net proceeds from this offering, after deducting debt issuance costs, were approximately $ 1,704 million.

The 2026 Notes represent senior unsecured obligations of the Company.

The 2026 Notes do not bear interest except in special circumstances described below, and the principal amount of the 2026 Notes does not accrete.

The 2026 Notes mature on November 15, 2026.

Each $1,000 of principal of the 2026 Notes will initially be convertible into 4.6371 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 215.65 per share, subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2026 Notes (the “2026 Indenture”).

Holders of the 2026 Notes may convert their 2026 Notes at their option at any time on or after August 15, 2026 until close of business on the second scheduled trading day immediately preceding the maturity date of November 15, 2026.

Further, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at their option prior to the close of business on the business day immediately preceding August 15, 2026, only under the following circumstances:

1) during any calendar quarter commencing after March 31, 2022 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

We may redeem all or part of the 2029 Notes for cash on or after December 20, 2027 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date we provide notice of redemption.

The redemption price equals 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any.

If a fundamental change (as defined in the 2029 Indenture) occurs prior to the maturity date, holders of the 2029 Notes may require us to repurchase all or a portion of their notes for cash equal to 100 % of the principal amount of the 2029 Notes, plus any accrued and unpaid interest.

In addition, certain corporate events may require us to increase the conversion rate for holders who elect to convert their 2029 Notes in connection with such events.

The 2026 Notes do not bear interest.

Each $1,000 of principal of the 2026 Notes is initially convertible into 4.6371 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 215.65 per share.

The conversion rate is subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2026 Notes (the “2026 Indenture”).

Holders may convert their 2026 Notes, at their option:

• At any time on or after August 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date.

• Before that date, only if specified conditions are met, as follows:

2) during the five business day period following any five consecutive trading day period (the “2026 Notes measurement period”) in which the trading price (as defined in the 2026 Indenture) per $1,000 principal amount of the 2026 Notes is less than 98 % of the product of the last reported sale price of our Class A common stock and the conversion rate for each trading day in the 2026 Notes measurement period;

3) if we call any or all of the notes for redemption, at any time before the close of business on the trading day immediately preceding the redemption date;

4) upon the occurrence of certain specified corporate events.

Upon conversion of the 2026 Notes, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted.

If we satisfy our conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2026 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period.

No sinking fund is provided for the 2026 Notes.

We may not redeem the notes prior to November 20, 2024.

We may redeem for cash all or part of the notes on or after November 20, 2024 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest, if any.

If a fundamental change (as defined in the 2026 Indenture) occurs prior to the maturity date, holders of the 2026 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.

In addition, if specific corporate events occur prior to the maturity date of the 2026 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2026 Notes in connection with such corporate events.

We may redeem all or part of the 2026 Notes for cash if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date we provide notice of redemption.

The redemption price equals 100 % of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any.

If a fundamental change (as defined in the 2026 Indenture) occurs prior to the maturity date, holders of the 2026 Notes may require us to repurchase all or a portion of their notes for cash equal to 100 % of the principal amount of the 2026 Notes, plus any accrued and unpaid interest.

In addition, certain corporate events may require us to increase the conversion rate for holders who elect to convert their 2026 Notes in connection with such events.

Repurchase of a Portion of the 2026 Notes

On December 6, 2023, the Board of Directors authorized the repurchase of up to $ 800 million in aggregate principal amount of the 2026 Notes through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“Rule 10b5-1”), or through a combination thereof, through December 31, 2024.

On December 13, 2024, the Board of Directors replaced the December 2023 authorization with an authorization to repurchase up to $ 960 million in aggregate principal amount of the 2026 Notes through December 31, 2024.

In connection with these authorizations, during the year ended June 30, 2025, we paid $ 1.0 billion in cash for the repurchase of $ 1.1 billion aggregate principal amount of our 2026 Notes.

The carrying amount of the extinguished 2026 Notes was approximately $ 1.1 billion resulting in a $ 82.4 million gain on early extinguishment of debt for the year ended June 30, 2025, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss).

We utilized a combination of cash on hand and the net proceeds from the issuance of the 2029 Notes for these repurchases.

During the year ended June 30, 2024, we paid $ 63.6 million in cash for the repurchase of $ 76.7 million aggregate principal amount of our 2026 Notes under the December 2023 authorization.

The carrying amount of the extinguished 2026 Notes was approximately $ 76.2 million resulting in a $ 12.6 million gain on early extinguishment of debt, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss).

During the year ended June 30, 2026, we paid $ 25.8 million in cash for the repurchase of $ 27.4 million aggregate principal amount of the 2026 Notes.

The carrying amount of the extinguished 2026 Notes was

approximately $ 27.3 million during the year ended June 30, 2026, resulting in a $ 1.5 million gain on early extinguishment of debt.

The repurchased 2026 Notes were received and canceled.

On May 18, 2025, the Board of Directors authorized the repurchase of up to $ 200.0 million in aggregate principal amount of the 2026 Notes.

Note repurchases under the May 2025 authorization may be made from time to time during the period commencing July 1, 2025 through December 31, 2025 through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1, or through a combination thereof.

Repurchases are subject to available liquidity, general market and economic conditions, alternate uses for the capital, and other factors, and there is no minimum principal amount of 2026 Notes that the Company is obligated to repurchase.

connection with this authorization, there were no repurchases of 2026 Notes during the year ended June 30, 2025.

As of June 30, 2025, $ 248.7 million in aggregate principal amount of the 2026 Notes remains outstanding.

The following table summarizes the interest expense recognized related to the convertible senior notes (in thousands):

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Consolidated VIEs

We consolidate VIEs when we are deemed to be the primary beneficiary.

For the primary beneficiary evaluation, we consider whether we have both the power to direct the activities that most significantly affect the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

We consider both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs.

We reevaluate whether we are the primary beneficiary of the VIEs on an ongoing basis.

Warehouse Credit Facilities

2 unchanged sentences

Debt for additional information.

We retain the residual interest in each warehouse credit facility which absorbs the variability of the VIEs.

The creditors of the VIEs have no recourse to the general credit of Affirm and the liabilities of the VIEs can only be settled by the respective VIEs’ assets.

however, as the servicer of the loans pledged to our funding facilities, we have the power to direct the activities that most significantly impact the VIEs' economic performance.

In addition, we retain significant economic exposure to the pledged loans and therefore, we are the primary beneficiary.

In addition to the retained residual interest, our continued involvement in the VIEs includes loan servicing responsibilities over the life of the underlying loans.

Securitizations

We finance the origination and purchase of loans though our asset-backed securitization program using a combination of amortizing, revolving and variable funding structures.

We finance the origination and purchase of loans through our asset-backed securitization program using a combination of term, amortizing, revolving and variable funding structures.

In connection with our program, we sponsor and establish trusts (deemed to be VIEs) which issue securities collateralized by the loans we sell to the trust.

3 unchanged sentences

Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs.

We consolidate securitization VIEs when we are deemed to be the primary beneficiary.

For these VIEs, it is determined that we have the power to direct the activities that most significantly affect the VIEs’ economic performance and the obligation to absorb losses or right to receive benefits that could potentially be significant to the VIEs.

Through our role as the servicer, we have the power to direct the activities that most significantly affect the VIEs’ economic performance.

In evaluating whether we have a variable interest that could potentially be significant to the VIE, we consider our retained interests.

For each securitization, the residual trust certificates represent the right to receive excess cash from the loan repayments each collection period after all fees and required distributions have been made to the note holders.

In addition to the retained

residual trust certificates, our continued involvement includes loan servicing responsibilities over the life of the underlying loans.

In assessing the primary beneficiary for both Warehouse Credit Facilities and Securitizations VIEs, through our role as the servicer, we have the power to direct the activities that most significantly affect the VIEs’ economic performance.

In addition, through the retained residual interests, we have economic exposure to the pledged loans that could potentially be significant to the VIEs.

We also earn a servicing fee which has a senior distribution priority in the payment waterfall.

The servicing fees earned from these arrangements are considered variable interests when we also hold significant retained interests in the VIEs and they would absorb losses or receive benefits that are more than an insignificant amount of the VIEs' expected performance.

In evaluating whether we are the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs.

We perform reassessments an ongoing basis to evaluate whether we are the primary beneficiary of the VIEs.

For each securitization, the residual trust certificates represent the right to receive excess cash on the loans each collection period after all fees and required distributions have been made to the note holders on the related payment date.

In addition to the retained residual trust certificates, our continued involvement includes loan servicing responsibilities over the life of the underlying loans.

We defer and amortize debt issuance costs for consolidated securitization trusts on a straight-line basis over the expected life of the notes.

Servicing fees are considered variable interests when we also hold significant retained interests in the VIEs that would absorb losses or receive benefits that are more than insignificant.

Therefore, we are the primary beneficiary.

Where we consolidate the VIEs, the loans held in the VIEs are included in loans held for investment within our consolidated balance sheets.

Outstanding borrowings from the Warehouse Credit Facilities VIEs and Variable Funding Note under the Securitizations VIE are recorded in funding debt within our consolidated balance sheets.

The notes sold to third-party investors by the Securitizations VIEs are recorded in notes issued by securitization trusts within the consolidated balance sheets.

The following tables present the aggregate carrying value of financial assets and liabilities from our involvement with consolidated VIEs (in thousands):

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Securitizations (1)

4,993,148 4,951,485 41,663

Total consolidated VIEs $ 6,661,329 $ 6,455,621 $ 205,707

(1) As of June 30, 2025, liabilities include a VFN of $ 103.9 million classified as funding debt and asset-backed securities of $ 4.8 billion classified as notes issued from securitization trusts.

(1) Liabilities include an outstanding balance of $ 354.9 million and $ 103.9 million on a VFN classified as funding debt as of June 30, 2026 and 2025, respectively, and asset-backed securities of $ 5.3 billion and $ 4.8 billion, respectively, classified as notes issued from securitization trusts.

Unconsolidated VIEs

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While we continue to be involved with the unconsolidated VIEs through our role as the servicer, we determined that we are not the primary beneficiary as of June 30, 2026.

Factors we considered for this determination are that we hold an insignificant variable interest or rights held by other variable interest holders convey power in the unconsolidated VIEs.

Factors we considered for this determination are that we hold an insignificant variable interest or that rights held by other variable interest holders convey power to direct the activities most significantly affecting the unconsolidated VIEs’ economic performance.

Securitization notes receivable and certificates in unconsolidated securitization trust s

1 unchanged sentence

These notes and certificates are considered variable interests that absorb a portion of the variability of the trusts.

principal and interest payments on these investments are dependent on the performance of the underlying loans held within each trust.

The principal and interest payments on these investments are dependent on the performance of the underlying loans held within each trust.

Residual interests in structured transactions

Under certain other forward flow arrangements with third-party loan buyers, we hold a beneficial interest representing our right to receive a portion of the residual cash flows from the underlying loans sold in connection with the transaction.

The loans are held in an off-balance sheet VIE that has been established by the third-party loan buyers.

Under certain forward flow arrangements with third-party loan buyers, we hold a beneficial interest representing our right to receive a portion of the residual cash flows from the underlying loans sold in connection with the transaction.

The loans are held in an unconsolidated VIE that has been established by the third-party loan buyers.

Risk sharing assets and liabilities

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Residual interests in structured transactions 5,582 2,284

Other 5,723 —

Total cash and cash equivalents and securities available for sale:

$ 1,242,423 $ 963,397

(1) As of June 30, 2025 and June 30, 2024, these securities include $ 75.4 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.

(1) As of June 30, 2026 and 2025, these securities include $ 101.3 million and $ 75.4 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.

(2) These securities include $ 5.6 million and $ 34.5 million as of June 30, 2026 and 2025, respectively, pledged as collateral in connection with sale and repurchase agreements as discussed within Note 8.

Securities Available for Sale, at Fair Value

The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of securities available for sale as of June 30, 2025 and June 30, 2024 were as follows (in thousands):

The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of securities available for sale as of June 30, 2026 and 2025 were as follows (in thousands):

June 30, 2026

4 unchanged sentences

223,276 7 ( 190 ) — 223,093

Agency bonds (1)

11,358 — ( 11 ) — 11,347

Municipal bonds 8,664 2 ( 11 ) — 8,655

5 unchanged sentences

Residual interests in structured transactions 4,946 636 — — 5,582

Other 5,000 723 — — 5,723

Total securities available for sale $ 1,004,737 $ 1,851 $ ( 1,762 ) $ ( 218 ) $ 1,004,608

6 unchanged sentences

Agency bonds (1)

11,358 — ( 11 ) — 11,347

Municipal bonds 6,057 19 6,076

4 unchanged sentences

76,279 173 ( 42 ) ( 941 ) 75,469

Residual interests in structured transactions 2,173 111 — — 2,284

Total securities available for sale $ 892,168 $ 1,467 $ ( 217 ) $ ( 941 ) $ 892,477

2 unchanged sentences

(3) Approximately $ 5.6 million and $ 34.5 million as of June 30, 2026 and 2025, respectively, of these securities have been pledged as collateral in connection with sale and repurchase agreements discussed within Note 8.

As of June 30, 2025 and June 30, 2024, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities.

A summary of securities available for sale with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time that individual securities have been in a continuous loss position as of June 30, 2025 and June 30, 2024, are as follows (in thousands):

As of June 30, 2026 and 2025, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities.

June 30, 2026

4 unchanged sentences

Commercial paper 160,424 ( 190 ) — — 160,424 ( 190 )

Agency bonds 11,347 ( 11 ) — — 11,347 ( 11 )

Municipal bonds 6,540 ( 11 ) — — 6,540 ( 11 )

Government bonds

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$ 338,059 $ ( 161 ) $ 16,978 $ ( 14 ) $ 355,037 $ ( 175 )

(1) The number of securities with unrealized losses for which an allowance for credit losses has not been recorded totaled 67 and 137 as of June 30, 2025 and June 30, 2024, respectively.

The length of time to contractual maturities of securities available for sale as of June 30, 2025 and June 30, 2024, were as follows (in thousands):

(1) The number of securities with unrealized losses for which an allowance for credit losses has not been recorded totaled 181 and 67 as of June 30, 2026 and 2025, respectively.

The length of time to contractual maturities of securities available for sale as of June 30, 2026 and 2025, were as follows (in thousands):

June 30, 2026

5 unchanged sentences

223,276 223,093 — — 223,276 223,093

Agency bonds (1)

11,358 11,347 — — 11,358 11,347

Municipal bonds 5,635 5,637 3,029 3,018 8,664 8,655

5 unchanged sentences

Residual interests in structured transactions — — 4,946 5,582 4,946 5,582

Other — — 5,000 5,723 5,000 5,723

Total securities available for sale $ 680,117 $ 679,777 $ 324,620 $ 324,831 $ 1,004,737 $ 1,004,608

7 unchanged sentences

Agency bonds (1)

11,358 11,347 — — 11,358 11,347

Municipal bonds 3,944 3,950 2,113 2,126 6,057 6,076

4 unchanged sentences

— — 76,279 75,469 76,279 75,469

Residual interests in structured transactions — — 2,173 2,284 2,173 2,284

Total securities available for sale $ 673,109 $ 673,543 $ 219,059 $ 218,934 $ 892,168 $ 892,477

(1) As of June 30, 2026 and 2025, Agency bonds, Commercial paper, and US government bonds included $ 32.0 million and $ 21.1 million, respectively, classified as cash and cash equivalents within the consolidated balance sheets.

(2) Based on weighted average life of expected cash flows as of June 30, 2025 and June 30, 2024.

Gross proceeds from matured or redeemed securities were $ 1.3 billion and $ 1.5 billion for the years ended June 30, 2025 and June 30, 2024, respectively.

For available for sale securities, realized gains and losses were immaterial for the for the years ended June 30, 2025 and June 30, 2024.

(2) Based on weighted average life of expected cash flows as of June 30, 2026 and 2025.

Gross proceeds from matured or redeemed securities were $ 1.0 billion, $ 1.3 billion, and $ 1.5 billion for the years ended June 30, 2026, 2025, and 2024, respectively.

For available for sale securities, realized gains and losses were immaterial for the years ended June 30, 2026, 2025, and 2024.

Equity Securities Held at Cost

Equity security investments without a readily determinable fair value held at cost were $ 40.4 million and $ 40.3 million as of June 30, 2026 and June 30, 2025, respectively, and are included in other assets within the consolidated balance sheets.

We recognized impairment of $ 4.6 million for the year ended June 30, 2025 within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with our equity security investments.

During the year ended June 30, 2024, we recognized an impairment of $ 14.1 million within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with one of our equity security investments.

We did not record any impairment during the year ended June 30, 2026.

We recognized an impairment of $ 4.6 million and $ 14.1 million for the years ended June 30, 2025 and 2024, respectively, within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with our equity security investments.

For the year ended June 30, 2026, there were no upward or downward adjustments due to observable changes in orderly transactions.

For the year ended June 30, 2025, we recognized an upward adjustment of $ 2.6 million within other income, net in the consolidated statement of operations and comprehensive income (loss).

For the year ended June 30, 2024, there were no upward or downward adjustments due to observable changes in orderly transactions.

The fair value of the investments was determined utilizing a methodology based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements.

Fixed Term Deposits

Our fixed term deposits matured as of June 30, 2025.

For the period ending June 30, 2024, fixed term deposits were $ 35.2 million.

Fixed term deposits consisted of interest-bearing deposits held at financial institutions with original maturities greater than three months but no more than twelve months.

These deposits were carried at cost, which approximated fair value, and were included in other assets within the consolidated balance sheets.

Derivative Financial Instruments

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Derivatives designated as cash flow hedges

Interest rate contracts - cash flow hedges $ 100,000 $ 86 $ — $ 150,000 $ 4 $ —

Interest rate contracts $ 1,000,000 $ 840 $ 4 $ 100,000 $ 86 $ —

Derivatives not designated as hedges

Interest rate contracts 626,978 3,009 61 405,074 2,558 15

Risk sharing assets/liabilities 8,561,709 43,179 90 4,188,544 33,884 918

Risk sharing arrangements 4,209,585 30,301 — 8,561,709 43,179 90

Total gross derivative assets/liabilities $ 5,836,564 $ 34,150 $ 65 $ 9,066,783 $ 45,823 $ 105

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

June 30, 2025 June 30, 2024 June 30, 2023

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

Year ended June 30,

2026 2025 2024

Balance at beginning of period $ ( 1,419 ) $ 1,407 $ 751

5 unchanged sentences

(1) The amounts reclassified into earnings are presented in the consolidated statements of income (loss) within funding costs.

(2) As of June 30, 2025, we estimated that $ 0.3 million of net derivative losses included in AOCI are expected to be reclassified into earnings within the next 12 months.

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

June 30, 2025 June 30, 2024 June 30, 2023

(2) As of June 30, 2026, we estimated that $ 1.5 million of net derivative gains included in AOCI are expected to be reclassified into earnings within the next 12 months.

The following table summarizes the recognized gains and losses related to the derivative instruments and indicates where within the consolidated statements of operations and comprehensive income (loss) such gain or loss is reported (in thousands):

Year ended June 30,

Location of gains (losses) where the effects of derivatives are recorded 2026 2025 2024

The effects of cash flow hedging

Funding costs 514 1,344 54

The effects of derivatives not designated in hedging relationships

Other income, net ( 4,319 ) 4,479 48,074

Interest rate contracts Funding costs ( 397 ) 514 1,344

The effects of derivatives not designated as hedging instruments

Interest rate contracts Other income, net 129 ( 4,319 ) 4,479

Risk sharing arrangements Gain on sales of loans 26,952 29,658 32,966

Refer to Note 2.

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Money market funds $ 237,815 $ — $ — $ 237,815

Agency Bonds — 3,493 — 3,493

Commercial paper — 25,979 — 25,979

11 unchanged sentences

Residual interests in structured transactions — — 5,582 5,582

Other 773 — 5,723 6,496

Servicing assets — — 821 821

2 unchanged sentences

Total assets $ 238,588 $ 928,794 $ 110,785 $ 1,278,167

Servicing liabilities $ — $ — $ 41 $ 41

Performance fee liability — — 2,459 2,459

Profit share liability — — 1,056 1,056

Risk sharing liability — — 90 90

Interest rate derivatives — 65 — 65

4 unchanged sentences

Money market funds $ 70,920 $ — $ — $ 70,920

Agency Bonds — 3,493 — 3,493

Commercial paper — 12,564 — 12,564

10 unchanged sentences

Securitization notes receivable and residual trust certificates — — 75,469 75,469

Residual interests in structured transactions — — 2,284 2,284

Servicing assets — — 906 906

11 unchanged sentences

Cash and Cash Equivalents and Securities Available for Sale

As of June 30, 2025, we held level 2 debt securities classified as cash and cash equivalents and securities available for sale.

As of June 30, 2026 and June 30, 2025, we held level 2 debt securities classified as cash and cash equivalents and securities available for sale.

Management obtains pricing from one or more third-party pricing services for the purpose of determining fair value.

1 unchanged sentence

When quoted prices are not available, other methods may be utilized including evaluated prices provided by third-party pricing services.

Derivative Instruments

Interest Rate Derivatives

As of June 30, 2026 and June 30, 2025, we used a combination of interest rate cap agreements and interest rate swaps to manage interest costs and the risks associated with variable interest rates.

These derivative instruments are classified as Level 2 within the fair value hierarchy, and the fair value is estimated by using third-party pricing

models, which contain certain assumptions based on readily observable market-based inputs.

These derivative instruments are classified as Level 2 within the fair value hierarchy, and the fair value is estimated by using third-party pricing models, which contain certain assumptions based on readily observable market-based inputs.

We validate the valuation output on a monthly basis.

Refer to Note 11.

Derivative Financial Instruments in the notes to the consolidated financial statements for further details on our derivative instruments.

Derivative Financial Instruments for further details on our derivative instruments.

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

3 unchanged sentences

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

• Adequate Compensation - The compensation rate is expressed as a percentage of the outstanding loan balance that a willing market participant would require for servicing loans with similar characteristics.

• Adequate Compensation - The compensation rate is expressed as an annualized percentage of the outstanding loan balance that a willing market participant would require for servicing loans with similar characteristics.

• Discount Rate - The rate used to discount estimated future cash flows to present value in determining fair value.

It reflects the rate of return market participants would require to compensate for time value of money plus a premium based on relative risk, liquidity and other market based factors.

• Default Rate - The estimated annualized rate of charge-offs affecting the projected unpaid principal balance and expected term of the loan portfolio.

• Loss Rate - The estimated lifetime rate of loan charge-offs as a percentage of the initial settled principal balance.

• Default Rate - The estimated annualized rate of charge-offs affecting the projected unpaid principal balance of the loan portfolio.

• Loss Rate - The estimated lifetime rate of loan charge-offs, net of recoveries, as a percentage of the initial settled principal balance.

• Prepayment Rate - The estimated annualized excess loan payment received in a given month as a percentage of the outstanding principal balance at the beginning of the month minus the scheduled principal payment.

8 unchanged sentences

As of June 30, 2026 and June 30, 2025, the aggregate fair value of the servicing assets was measured at $ 0.8 million and $ 0.9 million, respectively, and presented within other assets in the consolidated balance sheets.

As of June 30, 2025 and June 30, 2024, the aggregate fair value of the servicing liabilities was $ 0.04 million and $ 0.7 million, respectively, and presented within accrued expenses and other liabilities in the consolidated balance sheets.

The aggregate fair value of the servicing liabilities was immaterial as of June 30, 2026 and June 30, 2025.

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

16 unchanged sentences

Default Rate 10.48 % 18.44 % 13.89 %

Servicing liabilities Discount Rate 30.00 % 30.00 % 30.00 %

Servicing liabilities (2)

Discount Rate 30.00 % 30.00 % 30.00 %

Adequate Compensation 2.00 % 2.00 % 2.00 %

5 unchanged sentences

Default Rate 10.24 % 15.68 % 12.04 %

Servicing liabilities Discount Rate 30.00 % 30.00 % 30.00 %

Servicing liabilities (2)

Discount Rate 30.00 % 30.00 % 30.00 %

Adequate Compensation 2.00 % 2.00 % 2.00 %

1 unchanged sentence

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

(2) For certain servicing agreements, the contractual servicing fee equals the adequate compensation assumption, resulting in a fair value of zero.

These agreements are included in the sensitivity analysis to demonstrate the impact of changes in the adequate compensation rate.

For such agreements, if the adequate compensation rate is held constant, fluctuations in the default rate or the discount rate would not impact the valuation.

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

20 unchanged sentences

Discount Rate increase of 50% $ — $ ( 1 )

(1) For certain servicing agreements, the contractual servicing fee equals the adequate compensation assumption, resulting in a fair value of zero.

These agreements are included in the sensitivity analysis to demonstrate the impact of changes in the adequate compensation rate.

For such agreements, if the adequate compensation rate is held constant, fluctuations in the default rate or the discount rate would not impact the valuation.

Performance Fee Liability

15 unchanged sentences

Refund Rate 1.50 % 1.50 % 1.50 %

Default Rate (1)

0.87 % 4.65 % 3.07 %

Loss Rate 0.73 % 4.65 % 3.21 %

June 30, 2025

2 unchanged sentences

Refund Rate 1.50 % 1.50 % 1.50 %

Default Rate (1)

1.38 % 4.65 % 2.94 %

(1) The Default Rate is net of recoveries

Loss Rate 0.87 % 4.65 % 3.07 %

(1) Unobservable inputs were weighted by remaining principal balances.

Securitization Notes Receivable and Residual Trust Certificates

As of June 30, 2025, we held notes receivable and residual trust certificates with an aggregate fair value of $ 75.5 million in connection with unconsolidated securitizations.

As of June 30, 2026 and June 30, 2025 , we held notes receivable and residual trust certificates with an aggregate fair valu e of $ 68.4 million and $ 75.5 million, respectively, in con nection with unconsolidated securitizations.

The balances correspond to the 5 % economic risk retention we are required to maintain as the securitization sponsor.

9 unchanged sentences

Accrued interest 4,279 5,368

Reversal of (impairment on) securities available for sale ( 280 ) ( 211 )

Reversals of (additions to) allowance for expected credit losses 725 ( 280 )

Fair value at end of period $ 68,358 $ 75,469

4 unchanged sentences

Default Rate (1)

5.37 % 9.98 % 9.65 %

Prepayment Rate 20.17 % 26.52 % 25.48 %

3 unchanged sentences

Default Rate (1)

0.94 % 8.40 % 7.65 %

Prepayment Rate 21.46 % 24.85 % 23.14 %

(1) The cumulative loss relative to the outstanding balance as of June 30, 2026 and June 30, 2025

(2) Unobservable inputs were weighted by relative fair value

10 unchanged sentences

Prepayment Rate change of 50% $ ( 313 ) $ ( 259 )

Prepayment Rate decrease of 25% $ — $ 58

Prepayment Rate decrease of 50% $ — $ 116

Residual Interests in Structured Transactions

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

As of June 30, 2026 and June 30, 2025, we held residual interests in structured transactions with an aggregate fair value of $ 5.6 million and $ 2.3 million, respectively, in connection with certain forward flow loan sale transactions.

These assets are measured at fair value using a discounted cash flow model, and presented within securities available for sale at fair value in the consolidated balance sheets.

Changes in the fair value, except for credit impairments, are reflected in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

Changes in the fair value, except for credit impairments, are reflected in other comprehensive income in the consolidated statements of operations and comprehensive income (loss).

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

June 30, 2025

June 30, 2026 June 30, 2025

Fair value at beginning of period $ 2,284 $ —

Capital contribution 4,094 2,173

Cash distribution received ( 1,659 ) —

Accrued Interest 338 —

Subsequent changes in fair value 525 111

Fair value at the end of period 5,582 2,284

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

Significant unobservable inputs used for our Level 3 fair value measurement of the residual interests are the discount rate, default rate, and prepayment rate.

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

June 30, 2026

3 unchanged sentences

Prepayment Rate 45.61 % 45.61 % 45.61 %

June 30, 2025

Unobservable Input Minimum Maximum Weighted Average (1)

Discount Rate 20.00 % 20.00 % 20.00 %

Default Rate 8.88 % 8.88 % 8.88 %

Prepayment Rate 48.85 % 48.85 % 48.85 %

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

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

June 30, 2025

June 30, 2026 June 30, 2025

Discount Rate assumption:

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In connection with certain capital funding arrangements with third-party loan buyers, we have entered into risk sharing agreements where we may be required to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold.

Loan performance is evaluated at a cohort level based on the month loans were sold.

Loan performance is evaluated at a cohort level based on the month or quarter loans were sold.

We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in our consolidated statements of operations and comprehensive income (loss).

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Prepayment Rate decrease of 50% $ ( 3,382 ) $ ( 3,923 )

Prepayment Rate increase of 25% $ — $ 572

Prepayment Rate increase of 50% $ — $ 1,131

Loss Rate assumption:

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Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value

Loans held for sale $ 1 $ — $ 1 $ — $ 1

Loans held for investment, net $ 8,997,447 $ — $ — $ 9,814,199 $ 9,814,199

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Funding debt 3,333,248 — — 3,359,290 3,359,290

1,640,514 — — 1,640,765 1,640,765

Total liabilities $ 9,794,058 $ — $ 1,286,525 $ 8,700,708 $ 9,987,233

1 unchanged sentence

Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value

Loans held for sale (1)

$ 36 $ — $ 36 $ — $ 36

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

Other assets (1)

43,212 — 43,212 — 43,212

Total assets $ 6,628,606 $ — $ — $ 7,085,840 $ 7,085,840

3 unchanged sentences

Funding debt 1,622,808 — — 1,640,765 1,640,765

1,851,699 — — 1,851,685 1,851,685

Total liabilities $ 7,609,663 $ — $ 1,205,287 $ 6,509,745 $ 7,715,032

(1) Amortized cost approximates fair value for loans held for sale and other assets.

(1) As of June 30, 2026 , includes convertible senior notes due 2026 with a carrying amount and fair value of $ 221.1 million and $ 217.8 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 908.5 million and $ 1.1 billion, respectively.

As of June 30, 2025, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 247.9 million and $ 232.7 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 905.1 million and $ 972.6 million, respectively.

As of June 30, 2024, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 1.3 billion and $ 1.1 billion, respectively.

The estimated fair value of the convertible senior notes is determined based on a market approach, using the estimated or actual bids and offers of the notes in an over-the-counter market on the last business day of the period.

(3) As of June 30, 2025 and June 30, 2024, debt issuance costs in the amount of $ 17.7 million and $ 14.8 million was included within funding debt.

Stockholders’ Equity

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Common stock warrants are included as a component of additional paid in capital within the consolidated balance sheets.

In November 2021, we granted warrants to purchase 22,000,000 shares of common stock in connection with our commercial agreements with Amazon.

7,000,000 of the warrant shares have an exercise price of $ 0.01 per share and a term of 3.5 years.

A portion of these warrants were fully vested at the grant date and the remainder were fully vested as of December 31, 2024.

As of June 30, 2025, 3,500,000 of these warrants have been exercised.

In February 2025, the term for the remaining unexercised warrant shares were extended for an additional 4.0 years.

The remaining 15,000,000 warrant shares have an exercise price of $ 100 per share and a term of 7.5 years.

We valued the warrants at the grant date using the Black-Scholes-Merton option pricing model.

The remaining grant-date fair value of the warrants will be recognized within our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense as the warrants vest, based upon Amazon’s satisfaction of the vesting conditions.

During the years ended June 30, 2025, 2024, and 2023, a total of $ 292.3 million, $ 439.6 million, and $ 463.3 million, respectively, was recognized within sales and marketing expense which included $ 20.7 million, $ 32.9 million, and $ 41.4 million, respectively, in amortization expense of the commercial agreement asset, and $ 271.6 million, $ 406.7 million, and $ 421.9 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested.

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

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

In November 2025, in connection with the execution of an amended commercial agreement with Amazon, we modified the exercise price of the warrants vesting February 2026 and thereafter from $ 100 per share to $ 63.06 per share.

The fair value of the warrants was remeasured as of the modification date using the Black Scholes-Merton option pricing model with the following assumptions:

a dividend yield of zero ;

remaining years to maturity of 3.6 ;

volatility of 94 %;

and a risk-free rate of 3.63 %.

The remaining fair value of the warrants, including the $ 37.7 million incremental cost resulting from the modification, will be recognized within our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense as the warrants vest, based upon Amazon’s satisfaction of the vesting conditions.

During the years ended June 30, 2026, 2025, and 2024, we recognized $ 199.9 million, $ 292.3 million, and $ 439.6 million, respectively, within sales and marketing expense for the warrant shares that vested during the respective periods.

Refer to Note 5.

Balance Sheet Components for more information on the commercial agreement asset recognized in connection with the warrants and the related amortization.

The following table summarizes the warrants activity for the year ended June 30, 2026:

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (years)

Warrants outstanding, June 30, 2025 18,500,000 $ 81.08 3.90

Granted — — 0.00

Exercised ( 3,500,000 ) 0.01 0.00

Warrants outstanding, June 30, 2026 18,500,000 $ 68.75 2.90

Warrants exercisable, June 30, 2026 13,260,299 $ 71.00 2.90

There were no warrants granted during the years ended June 30, 2024 and 2023.

On June 30, 2025, the weighted-average grant date fair values for outstanding warrants and exercisable warrants were $ 86.76 and $ 94.59 , respectively.

Share Repurchases

In connection with the offering of the 2029 Notes, in December 2024, the Board of Directors authorized the repurchase of up to $ 350.0 million of common stock through open market purchases, privately negotiated transactions or through a combination thereof.

The authorization terminated on December 31, 2024 and did not obligate the Company to acquire any particular amount of its common stock.

Pursuant to this authorization, we utilized net proceeds from the offering, as well as cash on hand, to complete the repurchase of 3.5 million shares of Class A common stock from certain holders of the 2026 notes in privately negotiated transactions for an aggregate purchase price of approximately $ 250.0 million.

Refer to Note 9.

Debt in the notes to the consolidated financial statements for more information on the 2029 Notes.

We record share repurchases on the settlement date.

Repurchased shares are subsequently retired and returned to the status of authorized but unissued.

Our policy for share retirements is to deduct the par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.

There were no share repurchases during the year ended June 30, 2024.

There were no warrants granted, exercised, or cancelled during the year ended June 30, 2026.

As of June 30, 2026, unrecognized compensation expense related to the unvested warrants was approximately $ 429.4 million, which is expected to be recognized over a remaining weighted-average period of 2.4 years.

Equity Incentive Plans

2012 Stock Plan

Under our Amended and Restated 2012 Stock Plan (the “Plan”), we may grant incentive and nonqualified stock options, restricted stock, and restricted stock units (“RSUs”) to employees, officers, directors, and consultants.

Under our Amended and Restated 2012 Stock Plan (the “Plan”), we may grant incentive and nonqualified stock options, restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to employees, officers, directors, and consultants.

As of June 30, 2026, the maximum number of shares of common stock which may be issued under the Plan is 192,859,800 Class A shares and there were 69,408,730 shares of Class A common stock available for future grants under the Plan.

Stock Options

For stock options granted before our IPO in January 2021, the minimum expiration period is seven years after termination of employment or 10 years from the date of grant.

For stock options granted after our IPO, the minimum expiration period is three months after termination of employment or 10 years from the date of grant.

Stock options generally vest over a period of four years or with 25 % vesting on the 12 month anniversary of the vesting commencement date, and the remainder vesting on a pro-rata basis each month over the next three years .

For stock options granted before our IPO in January 2021, the minimum expiration period is seven years after termination of employment or ten years from the date of grant.

For stock options granted after our IPO, the minimum expiration period is three months after termination of employment or ten years from the date of grant.

Stock option awards generally vest over a period of four years , with some awards vesting 25 % on the twelve month anniversary of the vesting commencement date and the remaining 75 % vesting ratably over the next three years .

The following table summarizes our stock option activity for the year ended June 30, 2026:

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Balance as of June 30, 2025 12,955,978 $ 19.12 5.18

Granted 677,433 44.66

Exercised ( 3,048,939 ) 14.26

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

The weighted-average grant date fair value of options granted for the years ended June 30, 2025, 2024, and 2023, was $ 31.74 , $ 16.37 , and $ 10.92 , respectively.

There were no options granted for the year ended June 30, 2026 and the weighted-average grant date fair value of options granted for the years ended June 30, 2025 and 2024 was $ 31.74 and $ 16.37 , respectively.

The aggregate intrinsic value of options exercised was approximately $ 193.7 million, $ 234.5 million, and $ 79.0 million for the years ended June 30, 2026, 2025, and 2024, respectively.

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We used the simplified method to determine an estimate of the expected term of an employee share option.

June 30, 2025 June 30, 2024 June 30, 2023

Volatility 80 % 75 % 59 %

Risk-free interest rate 3.46 % - 4.35 %

4.21 % - 4.36 %

June 30, 2026 (1)

June 30, 2025 June 30, 2024

Volatility N/A 80 % 75 %

Risk-free interest rate N/A 3.46 % - 4.35 %

4.21 % - 4.36 %

Expected term (in years) 6.06 6.05 6.04

Expected dividend yield — — —

Expected term (in years) N/A 6.06 6.05

Expected dividend yield N/A — —

(1) No stock options were granted during the year ended June 30, 2026;

accordingly, fair value assumptions were not applicable.

As of June 30, 2026, unrecognized compensation expense related to unvested stock options was approximately $ 19.8 million, which is expected to be recognized over a remaining weighted-average period of 1.4 years.

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In November 2020, the Company ’ s Board of Directors approved a long-term, multi-year performance-based stock option grant providing Mr.

Levchin with the opportunity to earn the right to purchase up to 12,500,000 shares of the Company ’ s Class A common stock (the “Value Creation Award”).

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

Levchin’s continued service to the Company.

The Value Creation Award is divided into ten tranches, each of which Mr.

Levchin may earn by satisfying a performance condition within a five-year period following the IPO.

The performance condition for each tranche will be satisfied on the date the 90 average trading day volume weighted share price of the Company’s Class A common stock exceeds certain specified stock price hurdles, presented in the table below, which were determined based on a target percentage of share price appreciation from the IPO price.

Once earned as a result of satisfying the performance condition, the options will vest and become exercisable over a five-year period that commenced at the time of the IPO, subject to Mr.

Levchin’s continued service to the Company, in annual amounts equal to 15 %, 15 %, 20 %, 25 % and 25 %, respectively.

The per share exercise price of the Value Creation Award is $ 49.00 , the price to the public in the IPO.

Tranche Stock Price Hurdle Number of Options

1 $ 65.66 1,000,000

2 $ 82.32 1,000,000

3 $ 98.98 1,000,000

4 $ 115.64 1,000,000

5 $ 132.30 1,000,000

6 $ 148.47 1,000,000

7 $ 165.13 1,000,000

Levchin with the opportunity to earn the right to purchase up to 12,500,000 shares of the Company ’ s Class A common stock (the “Value Creation Award”).The Value Creation Award could only be earned upon achievement of specified stock price hurdles above the Company’s IPO price during a five-year performance period, subject to Mr.

Levchin’s continued service.

During the year ended June 30, 2026, the performance period ended and 8,500,000 unvested shares expired.

We recognized stock-based compensation on these awards based on the grant date fair value using an accelerated attribution method over the requisite service

period, and only if performance-based conditions were considered probable of being satisfied.

We incurred stock-based compensation expense of $ 11.8 million, $ 36.5 million, and $ 64.6 million during the years ended June 30, 2026, 2025, and 2024, respectively, associated with the Value Creation Award as a component of general and administrative expense within the consolidated statements of operations and comprehensive income (loss).

The following table summarizes our Value Creation Award activity for the year ended June 30, 2026:

Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)

Balance as of June 30, 2025

12,500,000 $ 49.00 5.29

Exercised ( 1,999,998 ) 49.00

Expired ( 8,500,000 ) 49.00

Balance as of June 30, 2026

2,000,002 49.00 4.54

Vested and exercisable, June 30, 2026

2,000,002 $ 49.00 4.54 $ 65,100

Total 12,500,000

We recognize stock-based compensation on these awards based on the grant date fair value using an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable of being satisfied.

During the years ended June 30, 2025, 2024, and 2023, we incurred stock-based compensation expense of $ 36.5 million, $ 64.6 million, and $ 94.6 million, respectively, associated with the Value Creation Award as a component of general and administrative expense within the consolidated statements of operations and comprehensive income (loss).

As of the beginning of the 12 month period ended June 30, 2025, 4,000,000 shares had vested based on conditions met in prior periods.

No additional shares vested during the year ended June 30, 2025.

As of June 30, 2025, none of these awards have been exercised.

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

As of June 30, 2026, there is no remaining unrecognized compensation expense related to the Value Creation Award.

The aggregate intrinsic value of Value Creation Award shares exercised was approximately $ 68.6 million for the year ended June 30, 2026.

No Value Creation Award shares were exercised for the years ended June 30, 2025 and 2024.

Restricted Stock Units

RSUs granted prior to the IPO were subject to two vesting conditions:

a service-based vesting condition (i.e., employment over a period of time) and a performance-based vesting condition (i.e., a liquidity event in the form of either a change of control or an initial public offering, each as defined in the Plan), both of which must be met in order to vest.

The performance-based condition was met upon the IPO.

We record stock-based compensation expense for those RSUs on an accelerated attribution method over the requisite service period, which is generally four years .

RSUs granted after IPO are subject to a service-based vesting condition.

RSUs are subject to a service-based vesting condition.

We record stock-based compensation expense for service-based RSUs on a straight-line basis over the requisite service period, which is generally one to four years .

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As of June 30, 2026, unrecognized compensation expense related to unvested RSUs was approximately $ 336.7 million, which is expected to be recognized over a remaining weighted-average period of 1.3 years.

Performance Stock Units

From time to time we grant PSUs to select executives and employees.

Vesting is contingent upon completion of a continuous three-year service period and the achievement of company financial performance goals, including target growth rates for revenue less transaction costs and adjusted operating income.

The number of shares that vest at the end of the performance period will range between 0 % and 200 % of the target shares based on actual performance against the applicable targets, which will be measured at the end of each fiscal year and averaged at the end of the three-year period.

We record stock-based compensation expense for the number of PSUs that are probable of vesting based on the estimated achievement of the performance conditions.

If the minimum conditions are not met, any recognized compensation cost will be reversed.

The expense is recognized on a straight-line basis over the three-year period.

The following table summarizes our PSU activity during the year ended June 30, 2026:

Number of Shares Weighted Average Grant Date Fair Value

Non-vested at Balance as of June 30, 2025

Granted 596,423 82.11

Non-vested at June 30, 2026

596,423 $ 82.11

As of June 30, 2026, unrecognized compensation expense related to unvested PSUs was approximately $ 61.3 million, which is expected to be recognized over a remaining weighted-average period of 2.0 years.

2020 Employee Stock Purchase Plan

On November 18, 2020, our Board of Directors adopted and approved the 2020 Employee Stock Purchase Plan (“ESPP”).

The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum effort towards the success of the Company and that of its affiliates.

We offer an Employee Stock Purchase Plan (“ESPP”) to our employees.

A total of 18.9 million shares of Class A common stock are reserved and available for issuance under the ESPP and 2.4 million shares have been issued as of June 30, 2026.

The ESPP provides for six-month offering periods beginning December 1 and June 1 of each year.

At the end of each offering period, shares of our Class A common stock are purchased on behalf of each ESPP participant at a price per share equal to 85 % of the lesser of (1) the fair market value of the Class A common stock on first day of the offering period (the grant date) or (2) the fair market value of the Class A common stock on the last day of the offering period (the purchase date).

At the end of each offering period, shares of our Class A common stock are purchased on behalf of each ESPP participant at a price per share equal to 85 % of the lesser of (1) the fair market value of the Class A common stock on the first day of the offering period (the grant date) or (2) the fair market value of the Class A common stock on the last day of the offering period (the purchase date).

We use the Black-Scholes-Merton option pricing model to measure the fair value of the purchase rights issued under the ESPP at the first day of the offering period, which represents the grant date.

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The February 2023 Plan was completed during fiscal 2024, and we do not expect future costs or payments related to the plan.

As of June 30, 2025, we had no outstanding liability related to previously accrued exit and disposal costs.

For the years ended June 30, 2024 and 2023, exit and disposal costs were $ 6.8 million and $ 35.9 million, respectively.

For the years ended June 30, 2026 and 2025, we had no outstanding liability related to previously accrued exit and disposal costs.

For the year ended June 30, 2024, exit and disposal costs were $ 6.8 million.

and foreign components of income (loss) before income taxes for the years ended June 30, 2026, 2025, and 2024 are as follows (in thousands):

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Foreign 4,776 7,186 ( 76 )

Total deferred expense 7,113 396 ( 5,067 )

Total deferred (benefit) expense ( 1,455,217 ) 7,113 396

Income tax (benefit) expense $ ( 1,437,067 ) $ 9,279 $ 2,230

The income tax benefit for the year ended June 30, 2026 was primarily attributable to a change in our assessment of the realizability of our domestic deferred tax assets.

The income tax expense for the year ended June 30, 2025 was primarily attributable to U.S.

federal and various foreign income taxes, while the income tax expense for the year ended June 30, 2024 was primarily attributable to various U.S state and foreign income taxes and the tax amortization of certain intangibles.

The income tax benefit for the year ended June 30, 2023 was primarily attributable to deferred taxes recognized by certain foreign subsidiaries and partially offset by various U.S.

state and other foreign income taxes.

The following is a reconciliation of the U.S.

statutory federal income tax rate to our effective tax rate for the years ended June 30, 2025, 2024, and 2023:

June 30, 2025 June 30, 2024 June 30, 2023

federal and foreign income taxes.

The income tax expense for the year ended June 30, 2024 was primarily attributable to various U.S.

state and foreign income taxes and the tax amortization of certain intangible assets.

The table below presents a reconciliation of the U.S.

statutory federal income tax rate to our effective tax rate subsequent to the adoption of ASU 2023-09 for the year ended June 30, 2026 (in thousands):

June 30, 2026

Amount Percent

statutory federal income tax rate $ 103,414 21.0 %

State and local income taxes, net of federal tax effect (1)

( 547,531 ) ( 111.2 ) %

Other foreign tax effects 6,875 1.4 %

Nontaxable or non-deductible items:

Stock-based compensation (2)

( 94,903 ) ( 19.3 ) %

Non-deductible compensation expense (3)

Other 1,350 0.3 %

Tax benefit related to tax credits (4)

( 21,021 ) ( 4.3 ) %

Change in unrecognized tax benefits 9,443 1.9 %

Change in valuation allowance ( 913,659 ) ( 185.5 ) %

Other adjustments 322 0.2 %

Income tax benefit and effective income tax rate ( 1,437,067 ) ( 291.7 ) %

(1) Includes the state tax effect of the valuation allowance release.

State and local taxes in California and New York made up the majority (greater than 50%) of the tax effect in this category.

(2) Primarily reflects excess tax benefits recognized upon the vesting or exercise of stock-based awards, partially offset by the tax effects of nondeductible stock-based compensation expense.

(3) Reflects the impact of applying Section 162(m), which prohibits deduction of certain excess employee compensation to certain “covered employees”.

(4) Primarily relates to research and development tax credits.

As previously disclosed for the years ended June 30, 2025 and 2024, prior to the adoption of ASU 2023-09, the following is a reconciliation of the U.S.

statutory federal income tax rate to our effective tax rate:

June 30, 2025 June 30, 2024

statutory federal income tax rate 21.0 % 21.0 %

State and local income taxes, net of federal tax benefit 6.8 % 8.9 %

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Tax benefit related to tax credits, net ( 67.5 ) % 4.3 %

Impact of change in fair value of contingent consideration — % — % 0.2 %

Change in unrecognized tax benefits 27.0 % ( 1.7 ) %

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Right-of-use lease assets ( 6,030 ) ( 5,021 )

Capitalized R&E including internally developed software ( 40,895 ) —

Other ( 1,522 ) ( 3,686 )

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Deferred tax assets (liabilities), net of valuation allowance $ 1,467,036 $ 11,842

We continue to recognize a full valuation allowance against our U.S.

federal and state and certain foreign net deferred tax assets.

The valuation allowance increased by $ 87.7 million during the year ended June 30, 2025.

We will release the domestic valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized.

During the fourth quarter of the year ended June 30, 2026, we concluded that sufficient positive evidence was available to support the determination that it is more likely than not that a significant portion of our domestic deferred tax assets will be realized.

Accordingly, we reduced the valuation allowance by $ 1.5 billion.

In reaching this conclusion, we evaluated all available positive and negative evidence and gave significant weight to objectively verifiable evidence, including our achievement of a cumulative U.S.

income position over the three-year period, measured using pretax book income adjusted for permanent book-to-tax differences, and our continued U.S.

profitability in recent periods.

We also considered anticipated future taxable income.

We continue to maintain a valuation allowance of $ 15.1 million against certain foreign net deferred tax assets and certain domestic capital loss deferred tax assets for which it is not more likely than not that the related tax benefits will be realized.

As of June 30, 2026, we had pretax U.S.

federal net operating loss ("NOL") carryforwards of approximately $ 3.2 billion, state NOL carryforwards of $ 4.9 billion, Canadian NOL carryforwards of $ 24.0 million, and U.K.

federal net operating loss ("NOL") carryforwards of approximately $ 3.2 billion, state NOL carryforwards of $ 4.6 billion, and U.K.

NOL carryforwards of $ 44.0 million.

If not utilized, certain U.S.

federal and state NOL carryforwards will begin to expire in 2029, whereas others have an unlimited carryforward period, and foreign NOL carryforwards will begin to expire in 2041, with others that have an unlimited carryforward period as well.

federal and state NOL carryforwards will begin to expire in 2027, whereas others, including foreign NOL carryforwards, have an unlimited carryforward period.

Additionally, as of June 30, 2026, we also had U.S.

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federal research and development tax credit carryforwards will begin to expire in 2041 while the state research and development tax credits may be carried forward indefinitely.

As of June 30, 2025, the Company also had other state tax credit carryforwards of $ 2.1 million, which will begin to expire in 2026 if not utilized.

Of the above NOL carryforwards, approximately $ 23.0 million pretax U.S.

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Any limitation may result in the expiration of all or a portion of the NOL carryforwards before utilization.

The Company accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”) .

For the year ended June 30, 2026, income taxes paid on a cash basis consisted of the following (in thousands):

June 30, 2026

Federal income taxes paid $ 910

State and local income taxes paid:

Pennsylvania 915

All other 1,387

Total state and local income taxes paid $ 3,330

Foreign income taxes paid:

Total foreign income taxes paid 2,378

Total income taxes paid, net $ 6,618

The Company accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes.

The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (in thousands):

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Ending balance $ 93,012 $ 79,248 $ 61,514

As of June 30, 2025, the Company had no unrecognized tax benefits related to uncertain tax positions that, if recognized, would impact the effective tax rate.

The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease within the next twelve months.

As of June 30, 2026, the Company had $ 93.0 million of unrecognized tax benefits related to uncertain tax positions that, if recognized, would reduce its income tax expense by $ 86.7 million.

Interest and penalties on unrecognized tax benefits are recorded as a component of tax expense.

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Restricted stock units 5,430,315 — 8,863,942 — — —

Stock options, including early exercise of options 8,950,174 — — — — —

Stock options 7,463,459 — 8,950,174 — — —

Value creation award vested shares 743,411 — 346,434 — — —

Performance stock units 24,381 — — — — —

Employee stock purchase plan shares 21,416 — 11,143 — — —

Common stock warrants 8,244 — — — — —

Weighted average shares of common stock - diluted 308,182,707 40,663,940 299,387,500 41,636,066 257,810,094 52,047,035

6 unchanged sentences

Restricted stock units 660,711 664,243 18,327,420

Stock options, including early exercise of options 905,835 16,794,697 18,505,138

Stock options 167,711 905,835 16,794,697

Employee stock purchase plan shares 142,124 157,615 216,846

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

Revenue by geography is based on the billing addresses of the borrower or the location of the merchant’s national headquarters.

Merchant and card network revenue by geography is based on the location of the entity fulfilling the service to the merchant partner or card-issuing partner, respectively.

Interest income by geography is based on the billing address of the borrower.

Gain (loss) on sales of loans and servicing income is based on the location of the entity selling or servicing the loan, respectively.

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

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Total $ 708,812 $ 591,761

Subsequent Events

Subsequent to June 30, 2025 through the date the consolidated financial statements were filed with the SEC, we paid $ 24.8 million in cash for the repurchase of $ 26.4 million aggregate principal amount of our 2026 Notes under the May 2025 authorization.

The carrying amount of the extinguished 2026 Notes was approximately $ 26.3 million resulting in a $ 1.5 million gain on early extinguishment of debt.

The repurchased 2026 Notes were received and canceled.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data