Affirm Holdings, Inc. 10-Q

Item 1. Financial Statements AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except shares and per share amounts) December 31, 2024 June 30, 2024 Assets Cash and cash equivalents $ 1,200,381 $ 1,013,106 Restricted cash 536,776 282,293 Securities available for sale at fair value 666,684 1,131,628 Loans held for sale — 36 Loans held for investment 6,796,167 5,670,056 Allowance for credit losses ( 363,831 ) ( 309,097 ) Loans held for investment, net 6,432,336 5,360,959 Accounts receivable, net 203,626 353,028 Property, equipment and software, net 506,334 427,686 Goodwill 521,699 533,439 Intangible assets 12,193 13,502 Commercial agreement assets 76,091 104,602 Other assets 324,957 299,340 Total assets $ 10,481,077 $ 9,519,619 Liabilities and stockholders’ equity Liabilities: Accounts payable $ 50,626 $ 41,019 Payable to third-party loan owners 157,245 159,643 Accrued interest payable 25,357 24,327 Accrued expenses and other liabilities 155,568 147,429 Convertible senior notes, net 1,151,048 1,341,430 Notes issued by securitization trusts 3,988,887 3,236,873 Funding debt 2,166,806 1,836,909 Total liabilities 7,695,537 6,787,630 Commitments and contingencies (Note 7) Stockholders’ equity: Class A common stock, par value $ 0.00001 per share: 3,030,000,000 shares authorized, 274,933,492 shares issued and outstanding as of December 31, 2024; 3,030,000,000 shares authorized, 267,305,456 shares issued and outstanding as of June 30, 2024 2 2 Class B common stock, par value $ 0.00001 per share: 140,000,000 shares authorized, 40,801,782 shares issued and outstanding as of December 31, 2024; 140,000,000 authorized, 43,747,575 shares issued and outstanding as of June 30, 2024 1 1 Additional paid in capital 5,961,956 5,862,555 Accumulated deficit ( 3,128,866 ) ( 3,109,004 ) Accumulated other comprehensive loss ( 47,553 ) ( 21,565 ) Total stockholders’ equity 2,785,540 2,731,989 Total liabilities and stockholders’ equity $ 10,481,077 $ 9,519,619 The accompanying notes are an integral part of these interim condensed consolidated financial statements. 5 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS, CONT. (Unaudited) (in thousands) The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the interim condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The liabilities in the table below include liabilities for which creditors do not have recourse to the general credit of the Company. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate upon consolidation. December 31, 2024 June 30, 2024 Assets of consolidated VIEs, included in total assets above Restricted cash $ 223,798 $ 145,829 Loans held for investment 6,628,228 5,461,660 Allowance for credit losses ( 294,202 ) ( 242,991 ) Loans held for investment, net 6,334,026 5,218,669 Accounts receivable, net 2,969 2,961 Other assets 6,349 10,676 Total assets of consolidated VIEs $ 6,567,142 $ 5,378,135 Liabilities of consolidated VIEs, included in total liabilities above Accounts payable $ 2,695 $ 2,830 Accrued interest payable 24,963 24,220 Accrued expenses and other liabilities 6,818 11,115 Notes issued by securitization trusts 3,988,887 3,236,873 Funding debt 2,115,772 1,794,984 Total liabilities of consolidated VIEs 6,139,135 5,070,022 Total net assets of consolidated VIEs $ 428,007 $ 308,113 The accompanying notes are an integral part of these interim condensed consolidated financial statements. 6 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (in thousands, except share and per share amounts) Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Revenue Merchant network revenue $ 244,895 $ 188,357 $ 429,234 $ 334,307 Card network revenue 58,142 39,269 105,622 72,745 Total network revenue 303,037 227,626 534,856 407,052 Interest income 409,367 288,346 786,431 551,025 Gain on sales of loans 125,287 52,702 188,900 86,987 Servicing income 28,690 22,436 54,674 42,593 Total revenue, net $ 866,381 $ 591,110 $ 1,564,861 $ 1,087,657 Operating expenses Loss on loan purchase commitment $ 70,278 $ 53,630 $ 124,515 $ 88,496 Provision for credit losses 152,980 120,880 312,804 220,576 Funding costs 107,762 84,617 211,907 158,548 Processing and servicing 115,960 90,203 211,106 165,874 Technology and data analytics 148,213 119,833 282,503 252,798 Sales and marketing 136,038 161,265 281,271 308,131 General and administrative 139,412 132,777 277,894 273,111 Restructuring and other 60 56 ( 195 ) 1,721 Total operating expenses $ 870,703 $ 763,261 $ 1,701,805 $ 1,469,255 Operating loss $ ( 4,322 ) $ ( 172,151 ) $ ( 136,944 ) $ ( 381,598 ) Other income, net 87,181 4,549 121,483 43,256 Income (loss) before income taxes $ 82,859 $ ( 167,602 ) $ ( 15,461 ) $ ( 338,342 ) Income tax expense (benefit) 2,499 ( 700 ) 4,401 343 Net income (loss) $ 80,360 $ ( 166,902 ) $ ( 19,862 ) $ ( 338,685 ) Other comprehensive income (loss) Foreign currency translation adjustments $ ( 35,469 ) $ 13,824 $ ( 27,123 ) $ 1,926 Unrealized gain (loss) on securities available for sale, net ( 2,873 ) 4,853 2,716 6,206 Gain (loss) on cash flow hedges ( 89 ) ( 614 ) ( 1,581 ) 149 Net other comprehensive income (loss) $ ( 38,431 ) $ 18,063 $ ( 25,988 ) $ 8,281 Comprehensive income (loss) $ 41,929 $ ( 148,839 ) $ ( 45,850 ) $ ( 330,404 ) Per share data: Net income (loss) per share attributable to common stockholders for Class A and Class B Basic $ 0.25 $ ( 0.54 ) $ ( 0.06 ) $ ( 1.11 ) Diluted $ 0.23 $ ( 0.54 ) $ ( 0.06 ) $ ( 1.11 ) Weighted average common shares outstanding Basic 322,282,334 307,571,602 320,258,445 305,705,637 Diluted 345,196,568 307,571,602 320,258,445 305,705,637 The accompanying notes are an integral part of these interim condensed consolidated financial statements. 7 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands, except share amounts) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders ’ Equity Shares (1) Amount Balance as of June 30, 2024 311,053,031 $ 3 $ 5,862,555 $ ( 3,109,004 ) $ ( 21,565 ) $ 2,731,989 Issuance of common stock upon exercise of stock options 432,277 — 3,596 — — 3,596 Vesting of restricted stock units 2,492,095 — — — — — Vesting of warrants for common stock — — 107,263 — — 107,263 Stock-based compensation — — 143,711 — — 143,711 Tax withholding on stock-based compensation — — ( 63,208 ) — — ( 63,208 ) Foreign currency translation adjustments — — — — 8,346 8,346 Unrealized gain on securities available for sale — — — — 5,589 5,589 Loss on cash flow hedges — — — — ( 1,492 ) ( 1,492 ) Net loss — — — ( 100,222 ) — ( 100,222 ) Balance as of September 30, 2024 313,977,403 $ 3 $ 6,053,917 $ ( 3,209,226 ) $ ( 9,122 ) $ 2,835,572 Issuance of common stock upon exercise of stock options 2,762,075 — 30,700 — — 30,700 Issuance of common stock, employee share purchase plan 204,650 — 5,092 — — 5,092 Repurchases of common stock ( 3,526,590 ) — ( 250,000 ) — — ( 250,000 ) Vesting of restricted stock units 2,317,736 — — — — — Vesting of warrants for common stock — — 86,776 — — 86,776 Stock-based compensation — — 130,806 — — 130,806 Tax withholding on stock-based compensation — — ( 95,335 ) — — ( 95,335 ) Foreign currency translation adjustments — — — — ( 35,469 ) ( 35,469 ) Unrealized loss on securities available for sale — — — — ( 2,873 ) ( 2,873 ) Loss on cash flow hedges — — — — ( 89 ) ( 89 ) Net income — — — 80,360 — 80,360 Balance as of December 31, 2024 315,735,274 $ 3 $ 5,961,956 $ ( 3,128,866 ) $ ( 47,553 ) $ 2,785,540 The accompanying notes are an integral part of these interim condensed consolidated financial statements. 8 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands, except share amounts) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders ’ Equity Shares (1) Amount Balance as of June 30, 2023 296,846,217 $ 3 $ 5,140,850 $ ( 2,591,247 ) $ ( 15,423 ) $ 2,534,183 Issuance of common stock upon exercise of stock options 495,350 — 3,625 — — 3,625 Vesting of restricted stock units 3,740,320 — — — — — Vesting of warrants for common stock — — 95,910 — — 95,910 Stock-based compensation — — 151,162 — — 151,162 Tax withholding on stock-based compensation — — ( 36,515 ) — — ( 36,515 ) Foreign currency translation adjustments — — — — ( 11,898 ) ( 11,898 ) Unrealized gain on securities available for sale — — — — 1,353 1,353 Gain on cash flow hedges — — — — 763 763 Net loss — — — ( 171,783 ) — ( 171,783 ) Balance as of September 30, 2023 301,081,887 $ 3 $ 5,355,032 $ ( 2,763,030 ) $ ( 25,205 ) $ 2,566,800 Issuance of common stock upon exercise of stock options 1,922,621 — 17,419 — — 17,419 Issuance of common stock, employee share purchase plan 333,847 — 4,137 — — 4,137 Vesting of restricted stock units 2,195,991 — — — — — Vesting of warrants for common stock — — 114,705 — — 114,705 Stock-based compensation — — 119,821 — — 119,821 Tax withholding on stock-based compensation — — ( 39,159 ) — — ( 39,159 ) Foreign currency translation adjustments — — — — 13,824 13,824 Unrealized gain on securities available for sale — — — — 4,853 4,853 Loss on cash flow hedges — — — — ( 614 ) ( 614 ) Net loss — — — ( 166,902 ) — ( 166,902 ) Balance as of December 31, 2023 305,534,346 $ 3 $ 5,571,955 $ ( 2,929,932 ) $ ( 7,142 ) $ 2,634,884 (1) The share amounts listed above combine Class A and Class B stock. The accompanying notes are an integral part of these interim condensed consolidated financial statements. 9 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended December 31, 2024 2023 Cash flows from operating activities Net loss $ ( 19,862 ) $ ( 338,685 ) Adjustments to reconcile net loss to net cash used in operating activities: Provision for losses 312,804 220,576 Amortization of premiums and discounts on loans ( 111,297 ) ( 87,979 ) Gain on sales of loans ( 188,900 ) ( 86,987 ) Gain on extinguishment of debt ( 82,418 ) — Changes in fair value of assets and liabilities 4,622 ( 4,912 ) Amortization of commercial agreement assets 28,511 43,114 Amortization of debt issuance costs 12,990 12,758 Amortization of discount on securities available for sale ( 26,618 ) ( 23,122 ) Commercial agreement warrant expense 194,039 210,615 Stock-based compensation 180,331 202,523 Depreciation and amortization 101,614 66,643 Other ( 2,151 ) 15,660 Change in operating assets and liabilities: Purchases and origination of loans held for sale ( 2,262,419 ) ( 2,244,895 ) Proceeds from the sale of loans held for sale 2,262,441 2,262,184 Accounts receivable, net 143,781 ( 116,487 ) Other assets ( 27,421 ) ( 41,669 ) Accounts payable 9,607 31,203 Payable to third-party loan buyers ( 2,398 ) 80,715 Accrued interest payable 1,894 8,963 Accrued expenses and other liabilities ( 20,266 ) ( 36,995 ) Net cash provided by operating activities 508,884 173,223 Cash flows from investing activities Purchases and origination of loans held for investment ( 15,051,906 ) ( 10,333,489 ) Proceeds from the sale of loans held for investment 5,264,335 2,976,941 Principal repayments and other loan servicing activity 8,661,493 6,536,313 Additions to property, equipment and software ( 88,057 ) ( 74,564 ) Purchases of securities available for sale ( 184,885 ) ( 193,322 ) Proceeds from maturities and repayments of securities available for sale 720,570 482,029 Other investing cash inflows 14,383 ( 34,669 ) Net cash used in investing activities ( 664,067 ) ( 640,761 ) Cash flows from financing activities Proceeds from the issuance of convertible notes 920,000 — Proceeds from the issuance of funding debt 7,893,354 6,439,713 Payment of debt issuance costs ( 23,070 ) ( 16,280 ) Principal repayments of funding debt ( 7,548,552 ) ( 6,291,324 ) Extinguishment of convertible debt ( 1,012,856 ) — Proceeds from issuance of notes and certificates by securitization trust 750,000 1,101,828 Principal repayments of notes issued by securitization trust — ( 528,279 ) Proceeds from exercise of common stock options and warrants and contributions to ESPP 39,388 25,167 Repurchase of common stock ( 250,000 ) — Payments of tax withholding for stock-based compensation ( 158,543 ) ( 75,674 ) Net cash provided by financing activities 609,721 655,151 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 12,780 ) 421 Net increase in cash, cash equivalents and restricted cash 441,758 188,034 Cash, cash equivalents and restricted cash, beginning of period 1,295,399 1,259,944 Cash, cash equivalents and restricted cash, end of period $ 1,737,157 $ 1,447,978 The accompanying notes are an integral part of these interim condensed consolidated financial statements. 10 Table of Contents AFFIRM HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT. (Unaudited) (in thousands) Six Months Ended December 31, 2024 2023 Reconciliation to amounts on consolidated balance sheets (as of period end) Cash and cash equivalents 1,200,381 1,036,719 Restricted cash 536,776 411,259 Total cash, cash equivalents and restricted cash $ 1,737,157 $ 1,447,978 Six Months Ended December 31, 2024 2023 Supplemental disclosures of cash flow information Cash payments for interest expense $ 201,129 $ 142,449 Cash paid for operating leases 8,322 8,251 Cash paid for income taxes 1,110 571 Supplemental disclosures of non-cash investing and financing activities Stock-based compensation included in capitalized internal-use software 94,186 68,460 Securities retained under unconsolidated securitization transactions 41,940 — The accompanying notes are an integral part of these interim condensed consolidated financial statements. 11 Table of Contents 1. Business Description Affirm Holdings, Inc. (“Affirm,” the “Company,” “we,” “us,” or “our”), headquartered in San Francisco, California, provides consumers with a simpler, more transparent, and flexible alternative to traditional payment options. Our mission is to deliver honest financial products that improve lives. Through our next-generation commerce platform, agreements with originating banks, and capital markets partners, we enable consumers to confidently pay for a purchase over time. When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model, and once approved, the consumer selects their preferred repayment option. 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. 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. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), disclosure requirements for interim financial information, and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended June 30, 2024. The balance sheet as of June 30, 2024 has been derived from the audited financial statements at that date. Management believes these interim condensed consolidated financial statements reflect all adjustments, including those of a normal and recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. Our interim condensed 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. 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. All intercompany accounts and transactions have been eliminated in consolidation. Our variable interest arises from contractual, ownership, or other monetary interests in the entity, which changes 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. We assess whether or not we are the primary beneficiary of a VIE on an ongoing basis. Use of Estimates The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the interim condensed 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 12 Table of Contents for sale debt securities including retained interests in our securitization trusts, the fair value of risk sharing arrangements, and stock-based compensation, including the fair value of warrants issued to nonemployees. We base our estimates on historical experience, current events, and other factors we believe to be reasonable under the circumstances. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results will be materially affected. These estimates are based on information available as of the date of the interim condensed consolidated financial statements; therefore, actual results could differ materially from those estimates. Significant Accounting Policies There were no material changes to our significant accounting policies as disclosed in Note 2. Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on August 28, 2024. Recent Accounting Pronouncements Not Yet Adopted Segment Reporting In November 2023, the FASB issued 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. We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures. Income Taxes In December 2023, the FASB issued 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 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 on our consolidated financial statements and disclosures. Reporting Comprehensive Income In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” . Subsequent to the issuance of ASU 2024-03, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The new guidance requires disclosure, in the notes to the financial statements, specified information about certain income statement costs and expenses for each interim and annual reporting period. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, and should be applied on a prospective basis, although retrospective application is permitted. 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. 13 Table of Contents Debt with Conversion and Other Options In November 2024, the FASB issued ASU 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” . The new guidance clarifies the requirements for determining whether certain settlements of convertible debt should be accounted for as an induced conversion. 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, although retrospective application is permitted. 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. 3. Revenue The following table presents our revenue disaggregated by revenue source (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Merchant network revenue $ 244,895 $ 188,357 $ 429,234 $ 334,307 Card network revenue 58,142 39,269 105,622 72,745 Interest income 409,367 288,346 786,431 551,025 Gain on sales of loans 125,287 52,702 188,900 86,987 Servicing income 28,690 22,436 54,674 42,593 Total revenue, net $ 866,381 $ 591,110 $ 1,564,861 $ 1,087,657 Merchant Network Revenue — Revenue from Contracts with Customers Merchant network revenue primarily consists of merchant fees. 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. 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. Our contracts with merchants are defined at the transaction level and do not extend beyond the service already provided (i.e., each transaction represents a separate contract). The fees collected from merchants for each transaction are determined as a percentage of the value of the goods purchased by the consumer from merchants and consider a number of factors including the end consumer’s credit risk and financing term. We do not have any capitalized contract costs, and do not carry any material contract balances. 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. These amounts are recorded as a reduction to merchant network revenue. We may originate certain loans via our wholly-owned subsidiaries, with zero or below market interest rates. In these instances, the par value of the loans originated is in excess of the fair market value of such loans, resulting in a loss on loan origination, which we record as a reduction to merchant network revenue. In certain cases, the losses incurred on loans originated for a merchant may exceed the total merchant network revenue earned on those loans. 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. 14 Table of Contents For the three and six months ended December 31, 2024 and 2023, there were no merchants that individually 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 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. The card is funded at the time a transaction is authorized using cash held by the card-issuing partner in a reserve fund. Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full, via their linked bank account, or pay later, by using a unique post-purchase feature that allows them to instantly convert any eligible transaction into an installment loan. 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. 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. Merchants may also elect to utilize our agreement with card-issuing partners as a means of integrating Affirm services. 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. 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 amounts collected are presented in revenue, net of associated transaction-related processing fees paid to our card-issuing partners. We have concluded that the revenue collected does not give rise to a future material right because the pricing of each transaction does not depend on the volume of prior successful transactions. We do not have any capitalized contract costs, and do not carry any material contract balances. Our service comprises a single performance obligation to the card-issuing partner to facilitate transactions with consumers. A portion of card network revenue relates to incentive payments from card network partners, which we are eligible to receive for reaching certain cumulative volume targets on program cards issued by our card-issuing partners. We earn incentive revenue as a percentage of each associated transaction and estimate the applicable percentage based on observed cumulative volume on program cards. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the transaction is completed successfully. Interest Income Interest income consisted of the following components (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Contractual interest income on unpaid principal balance $ 375,906 $ 248,083 $ 713,070 $ 474,374 Amortization of discount on loans 64,115 51,024 120,812 96,142 Amortization of premiums on loans ( 4,882 ) ( 4,183 ) ( 9,515 ) ( 8,163 ) Interest receivable charged-off, net of recoveries ( 25,772 ) ( 6,578 ) ( 37,936 ) ( 11,328 ) Total interest income $ 409,367 $ 288,346 $ 786,431 $ 551,025 15 Table of Contents 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. Interest income on a loan is accrued daily, based on the finance charge disclosed to the consumer, over the term of the loan based upon the principal outstanding. The accrual of interest on a loan is suspended if a formal dispute with the consumer involving either Affirm or the merchant of record is opened, or a loan is 120 days past due. 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 December 31, 2024 and June 30, 2024, the balance of loans held for investment on non-accrual status was $ 6.1 million and $ 2.6 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. 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. Gain on Sales of Loans We sell certain loans we originate or purchase from our originating bank partners directly to third-party investors or to securitizations. We recognize a gain or loss on sale of loans sold to third parties or to unconsolidated securitizations by calculating the difference between the proceeds received and the carrying value of the loan. This amount is adjusted for the initial recognition of any assets or liabilities incurred upon sale. These generally include a net servicing asset or liability in connection with our ongoing obligation to continue to service the loans and a liability in connection with our loan repurchase obligation for loans that do not meet certain contractual requirements and such information about the loan was unknown at the time of sale. Additionally, we recognize a risk sharing asset or liability in certain arrangements where payments are made or received based on the actual versus expected loan performance, as contractually agreed upon with the third party. Refer to Note 12. Fair Value of Financial Assets and Liabilities for further discussion of risk sharing arrangements. Servicing Income Servicing income includes contractual fees specified in our servicing agreements with third-party loan owners and unconsolidated securitizations that are earned from providing professional services to manage loan portfolios on their behalf. The servicing fee is calculated on a daily basis by multiplying a set fee percentage (as outlined in the executed agreements with third-party loan owners) by the outstanding loan principal balance. Servicing income also includes fair value adjustments for servicing assets and servicing liabilities. 16 Table of Contents 4. Loans Held for Investment and Allowance for Credit Losses Loans held for investment consisted of the following (in thousands): December 31, 2024 June 30, 2024 Unpaid principal balance $ 6,814,032 $ 5,697,965 Accrued interest receivable 76,096 62,796 Premiums on loans held for investment 9,472 7,822 Less: Discount due to loss on loan purchase commitment ( 74,099 ) ( 63,682 ) Less: Discount due to loss on directly originated loans ( 29,326 ) ( 34,829 ) Less: Fair value adjustment on loans acquired through business combination ( 8 ) ( 16 ) Total loans held for investment $ 6,796,167 $ 5,670,056 Loans held for investment includes loans originated through our originating bank partners and directly originated loans. The majority of the loans that are underwritten using our technology platform and originated by our originating bank partners are later purchased by us. We purchased loans from our originating bank partners in the amount of $ 8.1 billion and $ 14.5 billion during the three and six months ended December 31, 2024, respectively, and $ 5.9 billion and $ 10.5 billion during the three and six months ended December 31, 2023, respectively. We directly originated $ 1.7 billion and $ 3.0 billion of loans during the three and six months ended December 31, 2024, respectively, and $ 1.3 billion and $ 2.2 billion of loans during the three and six months ended December 31, 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. Given that our loan portfolio focuses on one product segment, unsecured consumer installment loans, we generally evaluate the entire portfolio as a single homogeneous loan portfolio to predict future losses, considering factors such as country of origin, loan product, origination channel, merchant and various borrower characteristics. 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. 17 Table of Contents 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 December 31, 2024 and June 30, 2024 (in thousands): December 31, 2024 Amortized Costs Basis by Fiscal Year of Origination 2025 2024 2023 2022 2021 Prior Total 96+ $ 3,468,048 $ 907,243 $ 85,925 $ 6,645 $ 203 $ 11 $ 4,468,075 94 – 96 1,381,171 366,485 5,615 475 7 5 1,753,758 90 – 94 329,415 59,203 891 289 4 1 389,803 <90 65,999 8,168 11 112 2 1 74,293 No score (1) 2,114 5,707 22,509 3,675 110 27 34,142 Total amortized cost basis $ 5,246,747 $ 1,346,806 $ 114,951 $ 11,196 $ 326 $ 45 $ 6,720,071 June 30, 2024 Amortized Costs Basis by Fiscal Year of Origination 2024 2023 2022 2021 2020 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 No score (1) 20,680 66,680 12,391 217 94 124 100,186 Total amortized cost basis $ 5,300,448 $ 282,738 $ 23,452 $ 416 $ 108 $ 134 $ 5,607,296 (1) This balance represents loan receivables without sufficient data available for use by the Affirm scoring methodology including new markets and certain developing products. The following table presents net charge-offs by fiscal year of origination as of December 31, 2024 (in thousands): December 31, 2024 Net Charge-offs by Fiscal Year of Origination 2025 2024 2023 2022 2021 Prior Total Current period charge-offs ( 14,524 ) ( 231,104 ) ( 17,470 ) ( 951 ) ( 171 ) ( 140 ) ( 264,360 ) Current period recoveries 199 7,829 6,300 2,289 466 137 17,220 Current period net charge-offs ( 14,325 ) ( 223,275 ) ( 11,170 ) 1,338 295 ( 3 ) ( 247,140 ) 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 and loans held for sale by delinquency status (in thousands): 18 Table of Contents December 31, 2024 June 30, 2024 Non-delinquent loans $ 6,361,896 $ 5,331,462 4 – 29 calendar days past due 175,272 134,434 30 – 59 calendar days past due 73,513 55,021 60 – 89 calendar days past due 56,471 47,764 90 – 119 calendar days past due (1) 52,919 38,615 Total amortized cost basis $ 6,720,071 $ 5,607,296 (1) Includes $ 52.7 million and $ 38.6 million of loan receivables as of December 31, 2024 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. 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 on our interim condensed 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. Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses. The following table details activity in the allowance for credit losses, including charge-offs, recoveries and provision for loan losses (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Balance at beginning of period $ 350,606 $ 232,068 $ 309,097 $ 204,531 Provision for loan losses 147,069 116,160 301,874 208,988 Charge-offs ( 142,912 ) ( 91,633 ) ( 264,360 ) ( 162,476 ) Recoveries of charged-off receivables 9,068 5,609 17,220 11,161 Balance at end of period $ 363,831 $ 262,204 $ 363,831 $ 262,204 Loan Modifications for Borrowers Experiencing Financial Difficulty 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. 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. 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. 19 Table of Contents The following tables present the amortized cost basis of loans excluding accrued interest receivable that were modified for borrowers experiencing financial difficulty during the three and six months ended December 31, 2024 and 2023, by type of modification (in thousands): Three Months Ended December 31, 2024 2023 (1) Payment deferral $ 10,189 $ 20,899 Loan re-amortization 170 663 Total $ 10,359 $ 21,561 % of total loan receivables outstanding 0.15 % 0.42 % Six Months Ended December 31, 2024 2023 (1) Payment deferral $ 16,096 $ 28,960 Loan re-amortization 274 1,132 Total $ 16,370 $ 30,092 % of total loan receivables outstanding 0.24 % 0.58 % (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 borrowers who received payment deferrals during the three and six months ended December 31, 2024 and 2023, the length of each deferral period was one month . With respect to borrowers who received a loan re-amortization during the three and six months ended December 31, 2024 and 2023, the payment amount was reduced by half and the term of the loan was extended between one month and twelve months . During the modification process, the loans are made current, and payment schedules for these loans are updated according to the modified terms. We closely monitor the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. We hold an allowance for credit losses for modified loans classified as held for investment. 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 tables present the delinquency status as of December 31, 2024 and 2023, 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): December 31, 2024 Payment Deferral Loan Re-amortization Total Non-delinquent loans $ 11,021 $ 217 $ 11,238 4 – 29 calendar days past due 3,085 67 3,152 30 – 59 calendar days past due 1,878 35 1,913 60 – 89 calendar days past due 1,632 32 1,664 90 – 119 calendar days past due 1,789 31 1,820 Total amortized cost basis $ 19,405 $ 382 $ 19,787 20 Table of Contents December 31, 2023 (1) Payment Deferral Loan Re-amortization Total Non-delinquent loans $ 17,879 $ 506 $ 18,385 4 – 29 calendar days past due 5,549 249 5,798 30 – 59 calendar days past due 2,775 158 2,933 60 – 89 calendar days past due 1,972 125 2,097 90 – 119 calendar days past due 1,639 112 1,751 Total amortized cost basis $ 29,814 $ 1,150 $ 30,964 (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 December 31, 2024 and 2023, 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 $ 17.1 million and $ 1.8 million, respectively. 5. Balance Sheet Components 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. 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 $ 17.8 million and $ 14.9 million as of December 31, 2024 and June 30, 2024, respectively. Property, Equipment and Software, net Property, equipment and software, net consisted of the following (in thousands): December 31, 2024 June 30, 2024 Internally developed software $ 804,651 $ 630,129 Leasehold improvements 21,085 21,023 Computer equipment 10,373 9,827 Furniture and equipment 9,001 8,913 Total property, equipment and software, at cost $ 845,111 $ 669,892 Less: Accumulated depreciation and amortization ( 338,777 ) ( 242,206 ) Total property, equipment and software, net $ 506,334 $ 427,686 Depreciation and amortization expense on property, equipment and software was $ 54.3 million and $ 100.4 million for the three and six months ended December 31, 2024, respectively, and $ 36.5 million and $ 62.5 million for the three and six months ended December 31, 2023, respectively. No impairment losses related to property, equipment and software were recorded during the three and six months ended December 31, 2024 and 2023. 21 Table of Contents Goodwill and Intangible Assets The changes in the carrying amount of goodwill during the six months ended December 31, 2024 were as follows (in thousands): Balance as of June 30, 2024 $ 533,439 Adjustments (1) ( 11,740 ) Balance as of December 31, 2024 $ 521,699 (1) Adjustments to goodwill during the six months ended December 31, 2024 primarily pertained to foreign currency translation adjustments. No impairment losses related to goodwill were recorded during the three and six months ended December 31, 2024. During the three and six months ended December 31, 2023, we recognized goodwill disposal losses of $ 1.0 million included in general and administrative expenses within the interim condensed consolidated statements of operations and comprehensive income (loss). Intangible assets consisted of the following (in thousands): December 31, 2024 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (in years) Merchant relationships $ 37,417 $ ( 37,417 ) $ — 0.0 Developed technology 39,167 ( 39,064 ) 103 0.1 Assembled workforce 12,490 ( 12,490 ) — 0.0 Trademarks and domains, definite 1,404 ( 1,223 ) 181 0.7 Trademarks, licenses and domains, indefinite 11,559 — 11,559 Indefinite Other intangibles 350 — 350 Indefinite Total intangible assets $ 102,387 $ ( 90,194 ) $ 12,193 June 30, 2024 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (in years) Merchant relationships $ 37,847 $ ( 36,741 ) $ 1,106 0.1 Developed technology 39,444 ( 39,311 ) 133 0.0 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 Other intangibles 350 — 350 Indefinite Total intangible assets $ 103,209 $ ( 89,707 ) $ 13,502 Amortization expense for intangible assets was $ 0.6 million and $ 1.2 million for t he three and six months ended December 31, 2024, respectively, and $ 2.9 million and $ 17.1 million for the three and six months ended 22 Table of Contents December 31, 2023, respectively . No impairment losses related to intangible assets were recorded during the three and six months ended December 31, 2024 and 2023. The expected future amortization expense of these intangible assets as of December 31, 2024 is as follows, by fiscal year (in thousands): 2025 (remaining six months) $ 120 2026 149 2027 15 2028 — 2029 and thereafter — Total amortization expense $ 284 Commercial Agreement Assets In November 2021, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). The warrants were granted in exchange for certain performance provisions and the benefit of acquiring new users. 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 . For the three and six months ended December 31, 2024, we recognized amortization expense of $ 5.2 million and $ 10.4 million, respectively, and $ 10.4 million and $ 20.9 million for the three and six months ended December 31, 2023, respectively, in our interim condensed consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. Refer to Note 13. Stockholders’ Equity for further discussion of the warrants. In July 2020, we recognized an asset in connection with a commercial agreement with Shopify Inc. (“Shopify”), in which we granted warrants in exchange for the opportunity to acquire new merchant partners. This asset represents the probable future economic benefit to be realized over the expected benefit period and is valued based on the fair value of the warrants on the grant date. We recognized an asset of $ 270.6 million associated with the fair value of the warrants, which were fully vested as of December 31, 2024. During fiscal year 2022, the expected benefit period was extended from four to six years upon the execution of the commercial agreement term. The benefit period is reevaluated each reporting period. For both the three and six months ended December 31, 2024 and December 31, 2023 , we recorded amortization expense related to the commercial agreement asset of $ 9.0 million and $ 18.1 million, in our interim condensed consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. 23 Table of Contents Other Assets Other assets consisted of the following (in thousands): December 31, 2024 June 30, 2024 Processing reserves $ 92,550 $ 55,754 Risk sharing asset 44,969 33,884 Equity securities, at cost 41,927 37,806 Prepaid expenses 33,381 28,799 Prepaid payroll taxes for stock-based compensation 23,219 21,395 Fixed term deposit 22,028 35,203 Foreign deferred tax asset 17,881 21,206 Operating lease right-of-use assets 17,472 21,863 Other receivables 13,164 18,263 Derivative instruments 7,676 17,207 Other assets 10,690 7,960 Total other assets $ 324,957 $ 299,340 Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): December 31, 2024 June 30, 2024 Accrued expenses $ 74,200 $ 59,613 Operating lease liability 32,033 39,493 Collateral held for derivative instruments 8,174 17,643 Other liabilities 41,161 30,680 Total accrued expenses and other liabilities $ 155,568 $ 147,429 6. Leases We lease facilities under operating leases with various expiration dates through 2030. We have the option to renew or extend our leases. Certain lease agreements include the option to terminate the lease with prior written notice ranging from nine months to one year . As of December 31, 2024, 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 six years . Several leases require us to obtain standby letters of credit, naming the lessor as a beneficiary. These letters of credit act as security for the faithful performance by us of all terms, covenants and conditions of the lease agreement. We are required to post collateral for the letters of credit in the form of cash or eligible securities. As of December 31, 2024, the collateral totaled $ 5.9 million, which was in the form of securities that have been classified as securities available for sale at fair value in the interim condensed 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 on our consolidated balance sheets. No impairment charge was incurred related to leases during the three and six months ended December 31, 2024. No impairment charge was incurred related to leases during the three months ended December 31, 2023. During the six months ended December 31, 2023, 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 on our interim condensed consolidated statements of operations and comprehensive income (loss). 24 Table of Contents Operating lease expense is as follows (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Operating lease expense (1) $ 2,865 $ 2,946 $ 5,718 $ 5,932 (1) Lease expenses for our short-term leases were immaterial for the periods presented. We have subleased a portion of our leased facilities. Sublease income totaled $ 1.2 million and $ 2.5 million during the three and six months ended December 31, 2024, respectively, and $ 1.2 million and $ 2.1 million during the three and six months ended December 31, 2023, respectively. Lease term and discount rate information are summarized as follows: December 31, 2024 Weighted average remaining lease term (in years) 2.9 Weighted average discount rate 5.1 % As of December 31, 2024, future minimum lease payments are as follows, by fiscal year (in thousands): 2025 (remaining six months) $ 8,399 2026 15,811 2027 3,046 2028 2,185 2029 2,240 Thereafter 3,273 Total lease payments 34,954 Less imputed interest ( 2,921 ) Present value of total lease liabilities $ 32,033 7. Commitments and Contingencies Loan Repurchase Obligations Under the normal terms of our whole loan sales to third-party investors, we may become obligated to repurchase loans from investors in certain instances where a breach in representations and warranties is identified. Generally, a breach in representations and warranties could occur where a loan has been identified as subject to verified or suspected fraud, or in cases where a loan was serviced or originated in violation of Affirm’s guidelines. We would only experience a loss if the contractual repurchase price of the loan exceeds the fair value on the repurchase date. As of December 31, 2024, the aggregate outstanding balance of loans held by third-party investors or unconsolidated VIEs was $ 6.9 billion, of which we have recorded a repurchase liability of $ 4.0 million within accrued expenses and other liabilities in our interim condensed consolidated balance sheets. Legal Proceedings From time to time, we are subject to legal proceedings and claims in the ordinary course of business. The results of such matters often cannot be predicted with certainty. In accordance with applicable accounting guidance, we establish an accrued liability for legal proceedings and claims when those matters present loss contingencies which are both probable and reasonably estimable. 25 Table of Contents Kusnier v. Affirm Holdings, Inc. On December 8, 2022, plaintiff Mark Kusnier filed a putative class action lawsuit against Affirm, Max Levchin, and Michael Linford in the U.S. District Court for the Northern District of California (the “Kusnier action”). On May 5, 2023, plaintiffs Kusnier and Chris Meinsen filed their first amended complaint alleging that the defendants (i) caused Affirm to make materially false and/or misleading statements and/or failed to disclose that Affirm’s BNPL service facilitated excessive consumer debt (including with respect to certain for-profit educational institutions), regulatory arbitrage, and data harvesting; (ii) made false and/or misleading statements about certain public regulatory actions; and (iii) made false and/or misleading statements about whether Affirm’s business model was vulnerable to interest rate changes. 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. 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. Affirm filed its motion to dismiss the second amended complaint on February 2, 2024. On August 26, 2024, the Court granted Affirm’s motion to dismiss with leave to amend. 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. Quiroga v. Levchin, et al. On March 29, 2023, plaintiff John Quiroga filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of California (the “Quiroga action”) against Affirm, as a nominal defendant, and certain of Affirm’s current officers and directors as defendants based on allegations substantially similar to those in the Kusnier action at the time of filing. The Quiroga complaint purports to assert claims on Affirm’s behalf for contribution under the federal securities laws, breaches of fiduciary duty, unjust enrichment, and waste of corporate assets, and seeks corporate reforms, unspecified damages and restitution, and fees and costs. On May 1, 2023, the action was stayed by agreement of the parties. The stay can be lifted at the request of either party or upon certain conditions relating to the resolution of the Kusnier action. Jeffries v. Levchin, et al. On May 24, 2023, plaintiff Sabrina Jeffries filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of California (the “Jeffries action”) against Affirm, as a nominal defendant, and certain of Affirm's current officers and directors as defendants based on allegations substantially similar to those in the Kusnier and Quiroga actions at the time of filing. The Jeffries complaint purports to assert claims on Affirm's behalf for breach of fiduciary duties, making false statements under federal securities law, unjust enrichment, waste of corporate assets, and aiding and abetting breach of fiduciary duties, and seeks unspecified damages, equitable relief, and fees and costs. On August 15, 2023, the action was stayed by agreement of the parties. The stay can be lifted at the request of either party or upon certain conditions relating to the resolution of the Kusnier action. Vallieres v. Levchin, et al. On September 14, 2023, plaintiff Michael Vallieres filed a shareholder derivative lawsuit in the U.S. District Court for the District of Delaware against Affirm, as a nominal defendant, and certain of Affirm’s current officers and directors as defendants based on allegations substantially similar to those in the Kusnier, Quiroga, and Jeffries actions at the time of filing. The Vallieres complaint purports to assert claims on Affirm's behalf for breach of fiduciary duties, gross management, abuse of control, unjust enrichment, and contribution, and seeks unspecified damages, equitable relief, and fees and costs. On November 30, 2023, the case was stayed by agreement of the parties. 26 Table of Contents 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 on our consolidated financial position, results of operations or cash flows. Amounts accrued as of December 31, 2024 were not material. The ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. 8. Debt Debt outstanding as of December 31, 2024 includes amounts classified on our consolidated balance sheets as funding debt, notes issued by securitization trusts, and convertible senior notes. Secured debt includes borrowings from our warehouse facilities, variable funding notes, notes issued by securitization trusts and sale and repurchase agreements, Unsecured debt includes outstanding convertible senior notes. Our unsecured revolving credit facility did not have any borrowings outstanding as of December 31, 2024. The following table summarizes the components and terms of our secured and unsecured debt as of December 31, 2024 (in thousands): Total Capital Capacity Interest Rate Spread (2) Unused Commitment Fees Maturity by Fiscal Year Pledged Collateral (3) Total Outstanding Min - Max Weighted Average Funding debt US warehouse facilities 4,731,418 1.65 % - 2.05 % 1.87 % 0.00 % - 0.75 % 2025 - 2027 1,976,582 1,696,273 International warehouse facilities (1) 598,718 1.25 % - 4.25 % 1.70 % 0.30 % - 0.45 % 2028 - 2030 453,846 372,147 Variable funding notes 350,000 1.50 % 0.30 % 2032 66,954 61,336 Sales and repurchase agreements 5.79 % - 6.66 % 2025 -2029 66,933 48,751 Notes issued by securitization trusts 4,000,000 4.62 % - 11.32 % 6.28 % 2028 - 2030 4,217,842 4,000,000 Convertible senior notes: 2026 Notes — % 2027 248,704 2029 Notes 0.75 % 2030 920,000 Revolving credit facility (4) 330,000 0.75 % - 1.75 % 0.20 % 2027 — Total, before unamortized debt issuance costs, premiums and discounts $ 7,347,212 Less: unamortized debt issuance costs, premiums and discounts (5) ( 40,471 ) Total $ 7,306,741 (1) As of December 31, 2024, international facilities finance the origination of loan receivables in Canada and are denominated in CAD. (2) Reference rates as of December 31, 2024 under our U.S. facilities bear interest at an annual benchmark rate of Secured Overnight Financing Rate (“SOFR”) or an alternative commercial paper rate plus an applicable spread. Reference rates as of December 31, 2024 under our international facilities bear interest at an annual benchmark rate of the Canadian Overnight Repo Rate Average (“CORRA”), Government of Canadian benchmark bond yields, or an alternative commercial paper rate plus an applicable spread. As debt arrangements are renewed, the reference rate and/or spread are subject to change. (3) As of December 31, 2024, represents the unpaid principal balance of loans, pledged as collateral for borrowings in our facilities, except for our sales and repurchase agreements which are collateralized by the retained securitization notes receivables and certificates. (4) 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 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 0.75 % per annum. (5) As of December 31, 2024, includes convertible senior notes debt issuance costs for the 2026 and 2029 Notes of $ 1.1 million and $ 16.5 million, respectively. 27 Table of Contents Funding Debt Warehouse Credit Facilities Through certain consolidated subsidiaries, which are typically trusts, we enter into secured borrowing arrangements with banks and other financial institutions. Through each of these subsidiaries we enter into a loan or credit and security agreement where we borrow against loans pledged as collateral. Financing terms, including the advance rate and financing spread, vary across these revolving facilities and generally depend on the types of collateral that may be pledged and respective concentration limits. The revolving period for each facility generally ends 4 - 12 months prior to the final maturity date, after which additional borrowings are not permitted. Advance rates range from 70 % to 86 % of the collateralized balance with respect to U.S. borrowing facilities and 67 % to 88 % of the collateralized balance with respect to facilities used to finance loans originated outside of the U.S., including Canada. Borrowings under these agreements are classified as funding debt within our interim condensed consolidated balance sheets and proceeds from the borrowings can only be used for the purposes of facilitating loan funding and origination. These borrowing facilities are bankruptcy-remote special-purpose vehicles in which creditors do not have recourse against the general credit of Affirm. Our funding debt agreements contain certain customary negative covenants and financial covenants including maintaining certain levels of minimum liquidity, maximum leverage, and minimum tangible net worth. As of December 31, 2024, we were in compliance with all applicable covenants in the agreements. Variable Funding Note On October 29, 2024, we entered into a syndicated revolving loan agreement through a securitization master trust which will be utilized to fund the purchase and origination of loans. In connection with the loan agreement, the master trust issued a variable funding note (“VFN”), where borrowings will be secured by loan collateral sold to the master trust. Throughout the reinvestment period of the VFN, the master trust will periodically issue asset-backed securitization notes, where securitization note proceeds will affect the level of utilization of the VFN. Outstanding borrowings under the VFN are classified as funding debt within our interim condensed consolidated balance sheets. Sale and Repurchase Agreements We entered into certain sale and repurchase agreements pursuant to our retained interests in our off-balance sheet securitizations where we have sold these securities to a counterparty with an obligation to repurchase at a future date and price. These repurchase agreements can have an initial term of either three months or a term equaling the contractual life of the securitization notes pledged. When applicable, we may enter into one or more repurchase date extensions, each for an additional three-month term or as mutually agreed upon with the counterparty at market interest rates on such extension date. We record the debt outstanding under our sale and repurchase agreements within our funding debt in the interim condensed consolidated balance sheets. Notes Issued by Securitization Trusts We issue asset-backed notes through securitization trusts using a combination of term, amortizing and revolving 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 interim condensed consolidated balance sheets. Refer to Note 9 Securitization and Variable Interest Entities for additional information. 28 Table of Contents Convertible Senior Notes 2029 Notes On December 20, 2024, we issued approximately $ 920 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 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 on 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; or 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 29 Table of Contents 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. 2026 Notes 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; or 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. 30 Table of Contents 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. 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 three and six months ended December 31, 2024, we paid $ 892.8 million and $ 1,012.9 million, respectively, in cash for the repurchase of $ 960.0 million and $ 1,100.5 million, respectively, aggregate principal amount of our 2026 Notes. The carrying amount of the extinguished 2026 Notes was approximately $ 955.6 million and $ 1,095.3 million resulting in a $ 62.8 million and $ 82.4 million gain on early extinguishment of debt for the three and six months ended December 31, 2024, respectively, which is reported as a component of other income, net within our interim consolidated statements of operations and comprehensive income (loss). The repurchased 2026 Notes were received and canceled. We utilized a combination of cash on hand and the net proceeds from the issuance of the 2029 Notes for these repurchases. There were no repurchases of 2026 Notes during the three and six month periods ended December 31, 2023, respectively. On November 5, 2024, the Board of Directors authorized the repurchase of up to $ 500 million in aggregate principal amount of the 2026 Notes. Note repurchases under the November 2024 authorization may be made from time to time during the period commencing January 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. As of December 31, 2024, $ 248.7 million in aggregate principal amount of the 2026 Notes remains outstanding. 31 Table of Contents The following table summarizes the interest expense recognized related to the convertible senior notes (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Amortization of debt issuance costs (1) 2026 Notes $ 658 $ 872 $ 1,427 $ 1,745 2029 Notes 110 — 110 — Total amortization of debt issuance costs $ 768 $ 872 $ 1,537 $ 1,745 Coupon interest expense (1) (2) 227 — 227 — Total interest expenses related to the convertible notes $ 995 $ 872 $ 1,764 $ 1,745 (1) Included in our interim condensed consolidated statement of operations and comprehensive income (loss) within other income, net. (2) The coupon interest expense is related to the 2029 Notes. As of December 31, 2024, the remaining life of the 2026 Notes and 2029 Notes is approximately 23 months and 59 months, respectively. Revolving Credit Facility On December 16, 2024, we entered into an amendment to our Revolving Credit Agreement in order to permit the incurrence of indebtedness pursuant to the 2029 Senior Convertible Notes. 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 0.20 % per annum on the undrawn balance available. As of December 31, 2024, we were in compliance with all applicable covenants in the agreements. The aggregate future maturities of our funding debt, notes issued by securitization trusts and convertible notes consists of the following (in thousands): Maturity Fiscal Year December 31, 2024 2025 $ 340,152 2026 809,118 2027 (1) 502,373 2028 1,445,282 2029 2,409,177 Thereafter (1) 1,841,110 Total $ 7,347,212 Deferred debt issuance costs ( 40,471 ) Total funding debt, net of deferred debt issuance costs $ 7,306,741 (1) As of December 31, 2024, includes convertible senior notes due 2026 and 2029 with a carrying amounts of $ 248.7 million and $ 920.0 million, respectively. 32 Table of Contents 9. Securitization and Variable Interest Entities Consolidated VIEs Warehouse Credit Facilities We established certain entities, deemed to be VIEs, to enter into warehouse credit facilities for the purpose of purchasing loans from our originating bank partners and funding directly originated loans. Refer to Note 8. Debt for additional information. 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. Securitizations We finance the origination and purchase of loans though our asset-backed securitization program using a combination of amortizing, revolving and variable funding structures. In connection with our program, we sponsor and establish trusts (deemed to be VIEs) which issue securities collateralized by the loans we sell to the trust. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. For these VIEs, the creditors have no recourse to the general credit of Affirm and the liabilities of the VIEs can only be settled by the respective VIEs’ assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. We consolidate securitization VIEs when we are deemed to be the primary beneficiary and therefore have the power to direct the activities that most significantly affect the VIEs’ economic performance and a variable interest that could potentially be significant to the VIE. 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. We also earn a servicing fee which has a senior distribution priority in the payment waterfall. 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. Management assesses whether we are the primary beneficiary of the VIEs on an ongoing basis. 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 in the interim condensed consolidated balance sheets. 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. 33 Table of Contents The following tables present the aggregate carrying value of financial assets and liabilities from our involvement with consolidated VIEs (in thousands): December 31, 2024 Assets Liabilities Net Assets Warehouse credit facilities $ 2,399,906 $ 2,078,553 $ 321,353 Securitizations (1) 4,167,236 4,060,582 106,654 Total consolidated VIEs $ 6,567,142 $ 6,139,135 $ 428,007 June 30, 2024 Assets Liabilities Net Assets Warehouse credit facilities $ 2,052,881 $ 1,823,794 $ 229,087 Securitizations 3,325,254 3,246,228 79,026 Total consolidated VIEs $ 5,378,135 $ 5,070,022 $ 308,113 (1) As of December 31, 2024, liabilities include $ 60.3 million of VFN classified as funding debt and $ 4.0 billion of asset-backed notes classified as notes issued from securitization trusts. Unconsolidated VIEs Our transactions with unconsolidated VIEs include securitization trusts where we did not retain significant economic exposure through our variable interests and therefore we determined that we are not the primary beneficiary as of December 31, 2024. The following information pertains to unconsolidated VIEs where we hold a variable interest but are not the primary beneficiary (in thousands): December 31, 2024 Assets Liabilities Net Assets Maximum Exposure to Losses Securitizations $ 1,300,463 $ 1,236,637 $ 63,826 $ 69,735 Total unconsolidated VIEs $ 1,300,463 $ 1,236,637 $ 63,826 $ 69,735 June 30, 2024 Assets Liabilities Net Assets Maximum Exposure to Losses Securitizations $ 967,256 $ 920,004 $ 47,252 $ 51,861 Total unconsolidated VIEs $ 967,256 $ 920,004 $ 47,252 $ 51,861 Maximum exposure to losses represents our ex posure through our continuing involvement as servicer and through our retained interests. For unconsolidated VIEs, this includes $ 69.1 million in retained notes and residual trust certificates disclosed within securities available for sale at fair value in our interim condensed consolidated balance sheets and $ 0.7 million related to our net servicing assets disclosed within our interim condensed consolidated balance sheets as of December 31, 2024. Additionally, we may experience a loss due to future repurchase obligations resulting from breaches in representations and warranties in our securitization and third-party sale agreements. This amount was not material as of December 31, 2024. 34 Table of Contents Retained Beneficial Interests in Unconsolidated VIEs The investors of the securitizations have no direct recourse to the assets of Affirm, and the timing and amount of beneficial interest payments is dependent on the performance of the underlying loan assets held within each trust. We have classified our retained beneficial interests in unconsolidated securitization trusts as “available for sale” and as such they are disclosed at fair value in our interim condensed consolidated balance sheets. Refer to Note 12. Fair Value of Financial Assets and Liabilities for additional information on the fair value sensitivity of the notes receivable and residual trust certificates. Additionally, as of December 31, 2024, we have pledged certain of our retained beneficial interests as collateral in a sale and repurchase agreement as described in Note 8. Debt . 10. Investments Marketable Securities Marketable securities include certain investments classified as cash and cash equivalents and securities available for sale, at fair value, and consist of the following as of each date presented within the interim condensed consolidated balance sheets (in thousands): December 31, 2024 June 30, 2024 Cash and cash equivalents: Money market funds $ 115,063 $ 63,389 Commercial paper — 57,964 Government bonds - US — 3,492 Securities available for sale: Certificates of deposit 17,347 34,473 Corporate bonds 204,294 242,660 Commercial paper 51,293 239,882 Agency bonds 13,319 15,159 Municipal bonds 5,195 3,953 Government bonds Non-US 3,156 5,275 US (1) 303,029 538,556 Securitization notes receivable and certificates (2) 69,051 51,670 Total marketable securities: $ 781,747 $ 1,256,473 (1) As of December 31, 2024 and June 30, 2024, these securities include $ 73.8 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements. (2) These securities include $ 66.9 million and $ 46.7 million as of December 31, 2024 and June 30, 2024, respectively, pledged as collateral in connection with sale and repurchase agreements as discussed within Note 8. Debt. 35 Table of Contents 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 December 31, 2024 and June 30, 2024 were as follows (in thousands): December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value Certificates of deposit $ 17,327 $ 20 $ — $ — $ 17,347 Corporate bonds 203,942 613 ( 261 ) — 204,294 Commercial paper 51,248 45 — — 51,293 Agency bonds 13,324 13 ( 18 ) — 13,319 Municipal bonds 5,184 11 — — 5,195 Government bonds Non-US 3,161 — ( 5 ) — 3,156 US (2) 302,799 517 ( 287 ) — 303,029 Securitization notes receivable and certificates (3) 70,273 70 ( 49 ) ( 1,243 ) 69,051 Total securities available for sale $ 667,258 $ 1,289 $ ( 620 ) $ ( 1,243 ) $ 666,684 June 30, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value Certificates of deposit $ 34,468 $ 9 $ ( 4 ) $ — $ 34,473 Corporate bonds 243,639 95 ( 1,074 ) — 242,660 Commercial paper (1) 298,005 7 ( 166 ) — 297,846 Agency bonds 15,283 — ( 124 ) — 15,159 Municipal bonds 3,943 10 — — 3,953 Government bonds Non-US 5,310 — ( 35 ) — 5,275 US (1) (2) 543,421 33 ( 1,406 ) — 542,048 Securitization notes receivable and certificates (3) 51,726 699 ( 91 ) ( 664 ) 51,670 Total securities available for sale $ 1,195,795 $ 853 $ ( 2,900 ) $ ( 664 ) $ 1,193,084 (1) A s of June 30, 2024, Commercial paper and US government bonds include $ 61.5 million classified as cash and cash equivalents within the interim condensed consolidated balance sheets. (2) As of December 31, 2024 and June 30, 2024, these securities include $ 73.8 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements. (3) Approximately $ 66.9 million and $ 46.7 million as of December 31, 2024 and June 30, 2024, respectively, of these securities have been pledged as collateral in connection with sale and repurchase agreements discussed within Note 8. Debt. As of December 31, 2024 and June 30, 2024, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities. 36 Table of Contents 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 December 31, 2024 and June 30, 2024, are as follows (in thousands): December 31, 2024 Less than or equal to 1 year Greater than 1 year Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds $ 15,319 $ ( 98 ) $ 44,094 $ ( 163 ) $ 59,413 $ ( 261 ) Agency bonds 4,881 ( 18 ) — — 4,881 ( 18 ) Government bonds Non-US 3,156 ( 5 ) — — 3,156 ( 5 ) US 36,301 ( 151 ) 49,344 ( 136 ) 85,645 ( 287 ) Total securities available for sale (1) $ 59,657 $ ( 272 ) $ 93,438 $ ( 299 ) $ 153,095 $ ( 571 ) June 30, 2024 Less than or equal to 1 year Greater than 1 year Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 9,647 $ ( 4 ) $ — $ — $ 9,647 $ ( 4 ) Corporate bonds 119,353 ( 252 ) 57,846 ( 822 ) 177,199 ( 1,074 ) Commercial paper 245,536 ( 166 ) 245,536 ( 166 ) Agency bonds 10,417 ( 41 ) 4,743 ( 83 ) 15,160 ( 124 ) Government bonds Non-US — — 5,275 ( 35 ) 5,275 ( 35 ) US 251,113 ( 185 ) 123,633 ( 1,221 ) 374,746 ( 1,406 ) Total securities available for sale (1) $ 636,066 $ ( 648 ) $ 191,497 $ ( 2,161 ) $ 827,563 $ ( 2,809 ) (1) The number of positions with unrealized losses for which an allowance for credit losses has not been recorded totaled 22 and 137 as of December 31, 2024 and June 30, 2024, respectively. 37 Table of Contents The length of time to contractual maturities of securities available for sale as of December 31, 2024 and June 30, 2024 were as follows (in thousands): December 31, 2024 Within 1 year Greater than 1 year, less than or equal to 5 years Total Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Certificates of deposit $ 17,327 $ 17,347 $ — $ — $ 17,327 $ 17,347 Corporate bonds 114,636 114,625 89,306 89,669 203,942 204,294 Commercial paper 51,248 51,293 — — 51,248 51,293 Agency bonds 8,425 8,438 4,899 4,881 13,324 13,319 Municipal bonds 674 679 4,510 4,516 5,184 5,195 Government bonds Non-US 3,161 3,156 — — 3,161 3,156 US 218,711 218,753 84,088 84,276 302,799 303,029 Securitization notes receivable and certificates (2) — — 70,273 69,051 70,273 69,051 Total securities available for sale $ 414,182 $ 414,291 $ 253,076 $ 252,393 $ 667,258 $ 666,684 June 30, 2024 Within 1 year Greater than 1 year, less than or equal to 5 years Total Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Certificates of deposit $ 34,468 $ 34,473 $ — $ — $ 34,468 $ 34,473 Corporate bonds 118,547 118,039 125,092 124,621 243,639 242,660 Commercial paper (1) 298,005 297,846 — — 298,005 297,846 Agency bonds 10,457 10,416 4,826 4,743 15,283 15,159 Municipal bonds — — 3,943 3,953 3,943 3,953 Government bonds Non-US 2,150 2,150 3,160 3,125 5,310 5,275 US (1) 465,338 464,298 78,083 77,750 543,421 542,048 Securitization notes receivable and certificates (2) — — 51,726 51,670 51,726 51,670 Total securities available for sale $ 928,965 $ 927,222 $ 266,830 $ 265,862 $ 1,195,795 $ 1,193,084 (1) A s of June 30, 2024, Commercial paper and US government bonds include $ 61.5 million classified as cash and cash equivalents within the interim condensed consolidated balance sheets. (2) Based on weighted average life of expected cash flows as of December 31, 2024 and June 30, 2024 . Gross proceeds from matured or redeemed securities were $ 403.1 million and $ 706.5 million for the three and six months ended December 31, 2024, respectively, and $ 344.2 million and $ 726.0 million for the three and six months ended December 31, 2023, respectively. For available for sale securities had realized gains of $ 0.3 million for both the three and six months ended December 31, 2024 and immaterial realized gains and losses for the three and six months ended December 31, 2023 . 38 Table of Contents Non-marketable Equity Securities Equity investments without a readily determinable fair value held at cost were $ 41.9 million and $ 37.8 million as of December 31, 2024 and June 30, 2024, respectively, and are included in other assets within the interim condensed consolidated balance sheets. We did no t record any impairment during the three months ended December 31, 2024. We recognized an impairment of $ 3.0 million for the six months ended December 31, 2024 within other income, net in the interim consolidated statements of operations and comprehensive income (loss) in connection with one of our non-marketable equity security investments. The fair value of the investment was determined utilizing a methodology based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements. During the three and six months ended December 31, 2023, we recognized an impairment of $ 14.1 million within other income, net in the interim consolidated statements of operations in connection with one of our non-marketable equity security investments. For the three and six months ended December 31, 2024, we recognized an upward adjustment of $ 2.4 million within other income, net in the interim consolidated statement of operations and comprehensive income (loss). For the three and six months ended December 31, 2023, there have been no upward or downward adjustments due to observable changes in orderly transactions. Fixed Term Deposits Fixed term deposits were $ 22.0 million and $ 35.2 million as of December 31, 2024 and June 30, 2024, respectively, consist of interest bearing deposits held at financial institutions with original maturities greater than three months but no more than twelve months. These deposits are carried at cost, which approximates fair value, and are included in other assets within the interim condensed consolidated balance sheets. 11. Derivative Financial Instruments The following table summarizes the total fair value, including interest accruals, and outstanding notional amounts of derivative instruments as of December 31, 2024 and June 30, 2024 (in thousands): December 31, 2024 June 30, 2024 Notional Amount Derivative Assets Derivative Liabilities Notional Amount Derivative Assets Derivative Liabilities Derivatives designated as cash flow hedges Interest rate contracts - cash flow hedges $ — $ — $ — $ 150,000 $ 4 $ — Derivatives not designated as hedges Interest rate contracts 572,441 7,676 186 854,589 17,203 38 Total gross derivative assets/liabilities $ 572,441 $ 7,676 $ 186 $ 1,004,589 $ 17,207 $ 38 39 Table of Contents The following table summarizes the impact of the cash flow hedges on Accumulated Other Comprehensive Income (“AOCI”) (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Balance at beginning of period ( 85 ) 1,514 1,407 751 Changes in fair value ( 5 ) ( 103 ) ( 1,273 ) 911 Amounts reclassified into earnings (1) ( 84 ) ( 511 ) ( 308 ) ( 762 ) Balance at end of period (2) $ ( 174 ) $ 900 $ ( 174 ) $ 900 (1) The amounts reclassified into earnings are presented in the interim consolidated statements of income within funding costs. (2) As of December 31, 2024 , we estimated that $ 0.2 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 impact of the derivative instruments on income and indicates where within the interim consolidated statements of operations and comprehensive income (loss) such impact is reported (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 The effects of cash flow hedging Funding costs 84 511 308 762 The effects of derivatives not designated in hedging relationships Other income, net 2,705 ( 5,708 ) ( 1,248 ) ( 1,729 ) 40 Table of Contents 12. Fair Value of Financial Assets and Liabilities Financial Assets and Liabilities Recorded at Fair Value The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and June 30, 2024 (in thousands): December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 115,063 $ — $ — $ 115,063 Commercial paper — — — — Securities, available for sale: Certificates of deposit — 17,347 — 17,347 Corporate bonds — 204,294 — 204,294 Commercial paper — 51,293 — 51,293 Agency bonds — 13,319 — 13,319 Municipal bonds — 5,195 — 5,195 Government bonds: Non-US — 3,156 — 3,156 US — 303,029 — 303,029 Securitization notes receivable and residual trust certificates — — 69,051 69,051 Servicing assets — — 806 806 Derivative instruments — 7,676 — 7,676 Risk sharing asset — — 44,969 44,969 Total assets $ 115,063 $ 605,309 $ 114,826 $ 835,198 Liabilities: Servicing liabilities $ — $ — $ 237 $ 237 Performance fee liability — — 1,773 1,773 Profit share liability — — 6,111 6,111 Risk sharing liability — — 1,498 1,498 Derivative instruments — 186 — 186 Total liabilities $ — $ 186 $ 9,619 $ 9,805 41 Table of Contents June 30, 2024 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 63,389 $ — $ — $ 63,389 Commercial paper — 57,964 — 57,964 Government bonds- US — 3,492 — 3,492 Securities, available for sale: Certificates of deposit — 34,473 — 34,473 Corporate bonds — 242,660 — 242,660 Commercial paper — 239,882 — 239,882 Agency bonds — 15,159 — 15,159 Municipal bonds — 3,953 — 3,953 Government bonds: Non-US — 5,275 — 5,275 US — 538,556 — 538,556 Securitization notes receivable and residual trust certificates — — 51,670 51,670 Servicing assets — — 574 574 Derivative instruments — 17,207 — 17,207 Risk sharing asset — — 33,884 33,884 Total assets $ 63,389 $ 1,158,621 $ 86,128 $ 1,308,138 Liabilities: Servicing liabilities $ — $ — $ 743 $ 743 Performance fee liability — — 1,503 1,503 Profit share liability — — 1,974 1,974 Risk sharing liability — — 918 918 Derivative Instruments — 38 — 38 Total liabilities $ — $ 38 $ 5,138 $ 5,176 As of December 31, 2024 and June 30, 2024, there were no transfers between levels. Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 2) Marketable Securities As of December 31, 2024, we held marketable 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. Whenever available, the fair value is based on quoted bid prices as of the end of the trading day. When quoted prices are not available, other methods may be utilized including evaluated prices provided by third-party pricing services. 42 Table of Contents Derivative Instruments As of December 31, 2024 and June 30, 2024, 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. We validate the valuation output on a monthly basis. Refer to Note 11. Derivative Financial Instruments in the notes to the interim condensed consolidated financial statements for further details on our derivative instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3) We evaluate our assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. Since our servicing assets and liabilities, performance fee liability, securitization notes and residual trust certificates, profit share liability, and risk sharing arrangements do not trade in an active market with readily observable prices, we use significant unobservable inputs to measure fair value and have classified as level 3 within the fair value hierarchy. This determination requires significant judgments to be made. Servicing Assets and Liabilities We sold loans with an unpaid principal balance of $ 4.6 billion and $ 7.4 billion for the three and six months ended December 31, 2024, respectively, $ 3.1 billion and $ 5.2 billion for the three and six months ended December 31, 2023, respectively, for which we retained servicing rights. As of December 31, 2024 and June 30, 2024, we serviced loans which we sold with a remaining unpaid principal balance of $ 6.9 billion and $ 5.1 billion, respectively. We use discounted cash flow models to arrive at an estimate of fair value. Significant assumptions used in the valuation of our servicing rights are as follows: Adequate Compensation We estimate adequate compensation as the rate a willing market participant would require for servicing loans with similar characteristics as those in the serviced portfolio. Discount Rate Estimated future payments to be received under servicing agreements are discounted as a part of determining the fair value of the servicing rights. For servicing rights on loans, the discount rate reflects the time value of money and a risk premium intended to reflect the amount of compensation market participants would require. Gross Default Rate We estimate the timing and probability of early loan payoffs, loan defaults and write-offs, thus affecting the projected unpaid principal balance and expected term of the loan, which are used to project future servicing revenue and expenses. We earned $ 28.7 million and $ 54.7 million of servicing income for the three and six months ended December 31, 2024, respectively, and $ 22.4 million and $ 42.6 million for the three and six months ended December 31, 2023, respectively. 43 Table of Contents As of December 31, 2024 and June 30, 2024, the aggregate fair value of the servicing assets was measured at $ 0.8 million and $ 0.6 million, respectively, and presented within other assets in the interim condensed consolidated balance sheets. As of December 31, 2024 and June 30, 2024, the aggregate fair value of the servicing liabilities was measured at $ 0.2 million and $ 0.7 million, respectively, and presented within accrued expenses and other liabilities in the interim condensed consolidated balance sheets. The following table summarizes the activity related to the aggregate fair value of our servicing assets (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 435 $ 569 $ 574 $ 880 Initial transfers of financial assets 230 — 230 — Subsequent changes in fair value 141 ( 204 ) 2 ( 515 ) Fair value at end of period $ 806 $ 365 $ 806 $ 365 The following table summarizes the activity related to the aggregate fair value of our servicing liabilities (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 438 $ 1,851 $ 743 $ 1,392 Initial transfers of financial liabilities — 1,702 — 3,091 Subsequent changes in fair value ( 201 ) ( 1,022 ) ( 506 ) ( 1,952 ) Fair value at end of period $ 237 $ 2,531 $ 237 $ 2,531 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of servicing assets and liabilities as of December 31, 2024 and June 30, 2024: December 31, 2024 Unobservable Input Minimum Maximum Weighted Average (3) Servicing assets Discount rate 30.00 % 30.00 % 30.00 % Adequate compensation (1) 2.00 % 2.00 % 2.00 % Gross default rate (2) 9.20 % 15.20 % 11.32 % Servicing liabilities Discount rate 30.00 % 30.00 % 30.00 % Adequate compensation (1) 2.00 % 2.00 % 2.00 % Gross default rate (2) 3.22 % 4.65 % 3.89 % 44 Table of Contents June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (3) Servicing assets Discount rate 30.00 % 30.00 % 30.00 % Adequate compensation (1) 2.00 % 2.00 % 2.00 % Gross default rate (2) 9.89 % 22.72 % 10.84 % Servicing liabilities Discount rate 30.00 % 30.00 % 30.00 % Adequate compensation (1) 2.00 % 2.00 % 2.00 % Gross default rate (2) 2.58 % 4.12 % 3.00 % (1) Estimated annual cost of servicing a loan as a percentage of unpaid principal balance. (2) Annualized estimated gross charge-offs as a percentage of unpaid principal balance. (3) 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 servicing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands): December 31, 2024 June 30, 2024 Servicing assets Gross default rate assumption: Gross default rate increase of 25% $ 1 $ 1 Gross default rate increase of 50% $ 2 $ 1 Adequate compensation assumption: Adequate compensation increase of 10% $ ( 1,367 ) $ ( 980 ) Adequate compensation increase of 20% $ ( 2,734 ) $ ( 1,961 ) Discount rate assumption: Discount rate increase of 25% $ ( 32 ) $ ( 23 ) Discount rate increase of 50% $ ( 62 ) $ ( 44 ) Servicing liabilities Gross default rate assumption: Gross default rate increase of 25% $ — $ ( 1 ) Gross default rate increase of 50% $ — $ ( 1 ) Adequate compensation assumption: Adequate compensation increase of 10% $ 3,820 $ 3,153 Adequate compensation increase of 20% $ 7,639 $ 6,305 Discount rate assumption: Discount rate increase of 25% $ ( 5 ) $ ( 19 ) Discount rate increase of 50% $ ( 9 ) $ ( 37 ) Performance Fee Liability In accordance with our agreements with our originating bank partners, we pay a fee for each loan that is fully repaid by the consumer, due at the end of the period in which the loan is fully repaid. We recognize a liability upon the purchase of a loan for the expected future payment of the performance fee. This liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the interim condensed consolidated balance sheets. Any changes in the fair value of the liability are reflected in other income, net , in the interim condensed consolidated statements of operations and comprehensive income (loss). 45 Table of Contents The following table summarizes the activity related to the fair value of the performance fee liability (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 1,541 $ 1,427 $ 1,503 $ 1,581 Purchases of loans 566 493 1,089 869 Settlements paid ( 501 ) ( 508 ) ( 978 ) ( 992 ) Subsequent changes in fair value 167 182 159 136 Fair value at end of period $ 1,773 $ 1,594 $ 1,773 $ 1,594 Significant unobservable inputs used for our Level 3 fair value measurement of the performance fee liability are the discount rate, refund rate, and default rate. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement. The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the performance fee liability as of December 31, 2024 and June 30, 2024: December 31, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 7.75 % 10.00 % 9.53 % Refund rate 1.50 % 1.50 % 1.50 % Default rate 1.18 % 4.65 % 3.02 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 8.50 % 10.00 % 9.81 % Refund rate 1.50 % 1.50 % 1.50 % Default rate 1.38 % 4.65 % 2.94 % (1) Unobservable inputs were weighted by remaining principal balances. Retained Beneficial Interests in Unconsolidated VIEs As of December 31, 2024, we held notes receivable and residual trust certificates with an aggregate fair value of $ 69.1 million in connection with unconsolidated securitizations. The balances correspond to the 5 % economic risk retention we are required to maintain as the securitization sponsor. 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 interim condensed consolidated balance sheets. Changes in the fair value, other than declines in fair value due to credit recognized as an allowance, are reflected in other comprehensive income in the interim condensed consolidated statements of operations and comprehensive income (loss). Declines in fair value due to credit are reflected in other income, net in the interim condensed consolidated statements of operations and comprehensive income (loss). 46 Table of Contents The following table summarizes the activity related to the fair value of the notes and residual trust certificates (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 38,926 $ 13,983 $ 51,670 $ 18,913 Additions 41,943 22,187 41,943 22,187 Cash received (due to payments) ( 12,036 ) ( 4,094 ) ( 26,419 ) ( 9,355 ) Change in unrealized gain (loss) ( 510 ) 80 ( 541 ) 265 Accrued interest 931 439 2,976 611 Reversal of (impairment on) securities available for sale ( 203 ) ( 184 ) ( 578 ) ( 210 ) Fair value at end of period $ 69,051 $ 32,411 $ 69,051 $ 32,411 Significant unobservable inputs used for our Level 3 fair value measurement of the notes and residual trust certificates are the discount rate, loss 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. The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the notes receivable and residual trust certificates as of December 31, 2024 and June 30, 2024 : December 31, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 4.73 % 30.29 % 6.84 % Loss rate 1.17 % 9.47 % 7.53 % Prepayment rate 13.58 % 23.00 % 20.94 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 5.73 % 41.41 % 8.93 % Loss rate 0.95 % 6.98 % 6.17 % Prepayment rate 12.40 % 27.70 % 23.33 % (1) Unobservable inputs were weighted by relative fair value 47 Table of Contents The following table summarizes the effect that adverse changes in estimates would have on the fair value of the notes receivable and residual trust certificates given hypothetical changes in significant unobservable inputs (in thousands): December 31, 2024 June 30, 2024 Discount rate assumption: Discount rate increase of 25% $ ( 723 ) $ ( 623 ) Discount rate increase of 50% $ ( 1,421 ) $ ( 1,223 ) Loss rate assumption: Loss rate increase of 25% $ ( 1,761 ) $ ( 705 ) Loss rate increase of 50% $ ( 2,665 ) $ ( 1,321 ) Prepayment rate assumption: Prepayment rate decrease of 25% $ 124 $ 58 Prepayment rate decrease of 50% $ 249 $ 116 Profit Share Liability On January 1, 2021, we entered into a commercial agreement with an enterprise partner, in which we are obligated to share in the profitability of transactions facilitated by our platform. Upon capture of a loan under this program, we record a liability associated with the estimated future profit to be shared over the life of the loan based on estimated program profitability levels. This liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the interim condensed consolidated balance sheets. The following table summarizes the activity related to the fair value of the profit share liability (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 2,015 $ 1,079 $ 1,974 $ 1,832 Facilitation of loans 4,238 1,160 5,465 2,088 Actual performance ( 3,271 ) ( 1,166 ) ( 6,299 ) 506 Subsequent changes in fair value 3,129 471 4,971 ( 2,882 ) Fair value at end of period $ 6,111 $ 1,544 $ 6,111 $ 1,544 Significant unobservable inputs used for our Level 3 fair value measurement of the profit share liability are the discount rate and estimated program profitability. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement. 48 Table of Contents The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of December 31, 2024 and June 30, 2024 : December 31, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 30.00 % 30.00 % 30.00 % Program profitability 0.97 % 2.02 % 1.94 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount rate 30.00 % 30.00 % 30.00 % Program profitability 0.32 % 1.01 % 0.96 % (1) Unobservable inputs were weighted by relative fair value. Risk Sharing Arrangements In connection with certain capital funding arrangements with third party loan buyers, we have entered into risk sharing agreements where we may be required to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold. Loan performance is evaluated at a cohort level based on the month loans were sold. As of December 31, 2024 and June 30, 2024, we have sold $ 6.8 billion and $ 4.2 billion, respectively, unpaid principal balance of loans under these risk sharing arrangements, of which our maximum exposure to losses is $ 85.1 million and $ 81.2 million, respectively. This amount includes our maximum potential loss with respect to risk sharing liabilities of $ 40.1 million and the fair value of risk sharing assets of $ 45.0 million, as of December 31, 2024. We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in our interim condensed consolidated statements of operations and comprehensive income (loss). For each counterparty, we have recognized a net asset or net liability based on the estimated fair value of future payments we expect to receive from or make to the counterparty. As of December 31, 2024 and June 30, 2024, we held assets related to these arrangements of $ 45.0 million and $ 33.9 million, respectively, and liabilities of $ 1.5 million and $ 0.9 million, respectively. As of December 31, 2024, we estimated the fair value of future settlements using a discounted cash flow model. Significant assumptions used in the valuation of our risk sharing assets and liabilities are as follows: Discount Rate We estimate future cash flows to be received or paid under the agreements are discounted as a part of determining the fair value of the risk sharing arrangements. The discount rate reflects the time value of money and a risk premium intended to reflect the amount of compensation market participants would require. Loss Rate We estimate the loss rate as the probability of loan defaults and write-offs, which are used to project future risk-sharing cash flows. 49 Table of Contents Prepayment Rate We estimate the annualized prepayment rate as the expected 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. The following table summarizes the activity related to the fair value of the risk sharing assets (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 45,330 $ 3,814 $ 33,884 $ — Initial transfers of financial assets 5,191 10,749 15,568 14,563 Cash settlements ( 5,824 ) — ( 5,824 ) — Subsequent changes in fair value 272 2,127 1,341 2,127 Fair value at end of period $ 44,969 $ 16,690 $ 44,969 $ 16,690 The following table summarizes the activity related to the fair value of the risk sharing liabilities (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Fair value at beginning of period $ 1,801 $ 471 $ 918 $ — Cash settlements ( 445 ) — ( 445 ) — Subsequent changes in fair value 142 41 1,025 512 Fair value at end of period $ 1,498 $ 512 $ 1,498 $ 512 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the risk sharing arrangements as of December 31, 2024: December 31, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Risk sharing assets Discount rate 20.00 % 20.00 % 20.00 % Loss rate 3.28 % 4.87 % 4.01 % Prepayment rate 20.81 % 27.21 % 24.73 % Risk sharing liabilities Discount rate 20.00 % 20.00 % 20.00 % Loss rate 3.39 % 5.17 % 4.37 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Risk sharing assets Discount rate 20.00 % 20.00 % 20.00 % Loss rate 3.00 % 4.69 % 3.66 % Prepayment rate 23.36 % 33.29 % 28.48 % Risk sharing liabilities Discount rate 20.00 % 20.00 % 20.00 % Loss rate 3.25 % 5.29 % 4.28 % (1) Unobservable inputs were weighted by principal balance of loans sold under each cohort. 50 Table of Contents The following table summarizes the effect that adverse changes in estimates would have on the fair value of the risk sharing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands): December 31, 2024 June 30, 2024 Risk sharing assets (1) Prepayment rate assumption: Prepayment rate increase of 25% $ 1,235 $ 572 Prepayment rate increase of 50% $ 2,364 $ 1,131 Loss rate assumption: Loss rate increase of 25% $ ( 11,331 ) $ ( 7,315 ) Loss rate increase of 50% $ ( 22,585 ) $ ( 14,528 ) Discount rate assumption: Discount rate increase of 25% $ ( 1,120 ) $ ( 1,211 ) Discount rate increase of 50% $ ( 2,156 ) $ ( 2,323 ) Risk sharing liabilities (1) Loss rate assumption: Loss rate increase of 25% $ 28,276 $ 22,333 Loss rate increase of 50% $ 40,334 $ 41,677 Discount rate assumption: Discount rate increase of 25% $ ( 7 ) $ ( 19 ) Discount rate increase of 50% $ ( 13 ) $ ( 37 ) Financial Assets and Liabilities Not Recorded at Fair Value The following table presents the fair value and our assessment of the classification of this measurement within the fair value hierarchy for financial assets and liabilities held at amortized cost as of December 31, 2024 and June 30, 2024 (in thousands): December 31, 2024 Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value Assets: Loans held for investment, net 6,432,336 — — 6,828,132 6,828,132 Other assets (1) 29,582 — 29,582 — 29,582 Total assets $ 6,461,918 $ — $ 29,582 $ 6,828,132 $ 6,857,714 Liabilities: Convertible senior notes, net (2) $ 1,151,048 $ — $ 1,116,902 $ — $ 1,116,902 Notes issued by securitization trusts 3,988,887 — — 4,014,587 4,014,587 Funding debt (3) 2,178,508 — — 2,178,655 2,178,655 Total liabilities $ 7,318,443 $ — $ 1,116,902 $ 6,193,242 $ 7,310,144 51 Table of Contents June 30, 2024 Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value Assets: Loans held for sale (1) $ 36 $ — $ 36 $ — $ 36 Loans held for investment, net 5,360,959 — — 5,616,973 5,616,973 Other assets (1) 43,212 — 43,212 — 43,212 Total assets $ 5,404,207 $ — $ 43,248 $ 5,616,973 $ 5,660,221 Liabilities: Convertible senior notes, net (2) $ 1,341,430 $ — $ 1,124,773 $ — $ 1,124,773 Notes issued by securitization trusts 3,236,873 — — 2,506,929 2,506,929 Funding debt (3) 1,851,699 — — 1,851,685 1,851,685 Total liabilities $ 6,430,002 $ — $ 1,124,773 $ 4,358,614 $ 5,483,387 (1) Amortized cost approximates fair value for loans held for sale and other assets. (2) As of December 31, 2024, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 247.6 million and $ 224.6 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 903.5 million and $ 892.3 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 December 31, 2024 and June 30, 2024, debt issuance costs in the amount of $ 11.7 million and $ 14.8 million, respectively, was included within funding debt. 13. Stockholders’ Equity Common Stock We had shares of common stock reserved for issuance as follows: December 31, 2024 June 30, 2024 Available outstanding under equity compensation plans 47,446,210 47,622,117 Available for future grant under equity compensation plans 51,199,581 43,492,755 Total 98,645,791 91,114,872 The common stock is not redeemable. We have two classes of common stock: Class A common stock and Class B common stock. Each holder of Class A common stock has the right to one vote per share of common stock. Each holder of Class B common stock has the right to 15 votes and can be converted at any time into one share of Class A common stock. Holders of Class A and Class B common stock are entitled to notice of any stockholders’ meeting in accordance with the bylaws of the corporation, and are entitled to vote upon such matters and in such manner as may be provided by law. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the common stock are entitled to receive, when and as declared by the Board of Directors, out of any assets of the corporation legally available therefore, such dividends as may be declared from time to time by the Board of Directors. Common Stock Warrants Common stock warrants are included as a component of additional paid in capital within the interim condensed consolidated balance sheets. 52 Table of Contents 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 have fully vested as of December 31, 2024. The remaining 15,000,000 warrant shares have an exercise price of $ 100 per share and a term of 7.5 years. We valued the warrants at the grant date using the Black-Scholes-Merton option pricing model. Refer to Note 5. Balance Sheet Components for more information on the asset and related amortization during the period. The remaining grant-date fair value of the warrants will be recognized within our interim condensed consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense as the warrants vest, based upon Amazon’s satisfaction of the vesting conditions. During the three and six months ended December 31, 2024, a total of $ 92.0 million and $ 204.4 million, respectively, was recognized within sales and marketing expense, which included $ 5.2 million and $ 10.4 million, respectively, in amortization expense of the commercial agreement asset and $ 86.8 million and $ 194.0 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested. During the three and six months ended December 31, 2023, a total of $ 125.1 million and $ 231.5 million, respectively, was recognized within sales and marketing expense, which included $ 10.4 million and $ 20.9 million, respectively, in amortization expense of the commercial agreement asset and $ 114.7 million and $ 210.6 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested. Share Repurchases In connection with the offering of the 2029 Notes, in December 2024, the Board of Directors authorized the repurchase of up to $ 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 the 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 8. Debt in the notes to the interim condensed consolidated financial statements for more information on the 2029 Notes. We record share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. Our policy for share retirements is to deduct the par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital. There were no share repurchases during the three or six month periods ended December 31, 2023. 14. Equity Incentive Plans 2012 Stock Plan Under our Amended and Restated 2012 Stock Plan (the “Plan”), we may grant incentive and nonqualified stock options, restricted stock, and restricted stock units (“RSUs”) to employees, officers, directors, and consultants. As of December 31, 2024, the maximum number of shares of common stock which may be issued under the Plan is 176,604,160 Class A shares. As of December 31, 2024 and June 30, 2024, there were 51,199,581 and 43,492,755 shares of Class A common stock, respectively, available for future grants under the Plan. Stock Options For stock options granted before our IPO in January 2021, the minimum expiration period is 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 . 53 Table of Contents The following table summarizes our stock option activity for the six months ended December 31, 2024: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balance as of June 30, 2024 16,794,697 $ 15.84 5.63 Granted 677,433 44.66 Exercised ( 3,211,902 ) 10.73 Balance as of December 31, 2024 14,260,228 18.36 5.48 Vested and exercisable, December 31, 2024 11,263,423 $ 15.29 4.68 $ 516,017 Vested and exercisable, and expected to vest thereafter (1) December 31, 2024 14,142,936 $ 18.16 5.45 $ 607,187 (1) Options expected to vest reflect the application of an estimated forfeiture rate. The weighted-average grant date fair value of options granted during the six months ended December 31, 2024 was $ 31.74 . As of December 31, 2024, unrecognized compensation expense related to unvested stock options was approximately $ 49.4 million, which is expected to be recognized over a remaining weighted-average period of 2.5 years. Value Creation Award In November 2020, the Company ’ s Board of Directors approved a long-term, multi-year performance-based stock option grant providing Mr. Levchin with the opportunity to earn the right to purchase up to 12,500,000 shares of the Company ’ s Class A common stock (the “Value Creation Award”). We recognize stock-based compensation on these awards based on the grant date fair value using an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable of being satisfied. We incurred stock-based compensation expense of $ 12.4 million and $ 24.7 million during the three and six months ended December 31, 2024, respectively, and $ 19.5 million and $ 39.1 million during the three and six months ended December 31, 2023, respectively, associated with the Value Creation Award as a component of general and administrative expense within the interim condensed consolidated statements of operations and comprehensive income (loss). As of December 31, 2024, unrecognized compensation expense related to the Value Creation Award was approximately $ 23.6 million, which is expected to be recognized over a remaining weighted-average period of 1.0 year. 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. 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 . 54 Table of Contents The following table summarizes our RSU activity during the six months ended December 31, 2024: Number of Shares Weighted Average Grant Date Fair Value Non-vested at June 30, 2024 18,327,420 $ 27.68 Granted 11,171,205 32.95 Vested ( 7,622,286 ) 30.09 Forfeited, expired or cancelled ( 1,190,357 ) 27.39 Non-vested at December 31, 2024 20,685,982 $ 29.65 As of December 31, 2024, unrecognized compensation expense related to unvested RSUs was approximately $ 573.8 million, which is expected to be recognized over a remaining weighted-average period of 1.8 years. 2020 Employee Stock Purchase Plan On November 18, 2020, our Board of Directors adopted and approved the 2020 Employee Stock Purchase Plan (“ESPP”). The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum effort towards the success of the Company and that of its affiliates. A total of 16.1 million shares of Class A common stock are reserved and available for issuance under the ESPP and 1.9 million shares have been issued as of December 31, 2024. 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). We use the Black-Scholes-Merton option pricing model to measure the fair value of the purchase rights issued under the ESPP at the first day of the offering period, which represents the grant date. We record stock-based compensation expense on a straight-line basis over each six-month offering period, the requisite service period of the award. Stock-Based Compensation Expense The following table presents the components and classification of stock-based compensation (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 General and administrative $ 57,719 $ 61,939 $ 120,524 $ 132,123 Technology and data analytics 23,677 22,567 49,648 57,703 Sales and marketing 4,482 4,305 9,677 9,770 Processing and servicing 220 1,353 482 2,927 Total stock-based compensation in operating expenses 86,098 90,164 180,331 202,523 Capitalized into property, equipment and software, net 44,708 29,657 94,186 68,460 Total stock-based compensation $ 130,806 $ 119,821 $ 274,517 $ 270,983 55 Table of Contents 15. Restructuring and other In February 2023, we committed to a restructuring plan (the “February 2023 Plan”) that included reducing our workforce and vacating a portion of our San Francisco office. The February 2023 Plan was completed during fiscal 2024, and we do not expect future costs or payments related to the plan. As of December 31, 2024, we had no outstanding liability related to previously accrued exit and disposal costs. For the three and six months ended December 31, 2023, exit and disposal costs were $ 0.1 million and $ 1.7 million, respectively. 16. Income Taxes The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and the tax effect of discrete items occurring during the quarter. Our quarterly provision and the estimate of the annual effective tax rate are subject to significant variation due to several factors, including variability in the pre-tax jurisdictional mix of earnings and the impact of discrete items. For the three and six months ended December 31, 2024, we recorded income tax expense (benefit) of $ 2.5 million and $ 4.4 million, respectively, which was primarily attributable to various U.S state and foreign income taxes. For the three and six months ended December 31, 2023, we recorded income tax expense (benefit) of $( 0.7 ) million and $ 0.3 million, respectively, which was primarily attributable to deferred taxes recognized by certain foreign subsidiaries, various U.S state and other foreign income taxes, and the tax amortization of certain intangibles. As of December 31, 2024, we continue to recognize a full valuation allowance against our U.S. federal and state and certain foreign net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred by us for the prior three fiscal years. The presence of a three-year cumulative loss limits the ability to consider other subjective evidence, such as our expectations of future taxable income and projections for growth. 56 Table of Contents 17. Net Income (Loss) per Share Attributable to Common Stockholders The following table presents basic and diluted net income (loss) per share attributable to common stockholders for Class A and Class B common stock (in thousands, except share and per share data): Three Months Ended December 31, Six Months Ended December 31, 2024 2024 Class A Class B Class A Class B Numerator: Net income (loss) attributable to common stockholders - basic $ 69,983 $ 10,377 $ ( 17,227 ) $ ( 2,635 ) Net income (loss) attributable to common stockholders - diluted $ 70,672 $ 9,688 $ ( 17,227 ) $ ( 2,635 ) Denominator: Weighted average shares of common stock - basic 280,666,562 41,615,772 277,776,478 42,481,967 Dilutive effect of stock equivalents: Restricted stock units 11,983,390 — — — Stock options, including early exercise of options 10,241,926 — — — Value creation award vested shares 473,889 — — — Common stock warrants 215,029 — — — Weighted average shares of common stock - diluted 303,580,796 41,615,772 277,776,478 42,481,967 Net income (loss) per share: Basic $ 0.25 $ 0.25 $ ( 0.06 ) $ ( 0.06 ) Diluted $ 0.23 $ 0.23 $ ( 0.06 ) $ ( 0.06 ) Three Months Ended December 31, Six Months Ended December 31, 2023 2023 Class A Class B Class A Class B Numerator: Net loss attributable to common stockholders - basic $ ( 135,588 ) $ ( 31,314 ) $ ( 273,697 ) $ ( 64,988 ) Net income (loss) attributable to common stockholders - diluted $ ( 135,588 ) $ ( 31,314 ) $ ( 273,697 ) $ ( 64,988 ) Denominator: Weighted average shares of common stock - basic 249,866,191 57,705,411 247,045,485 58,660,152 Weighted average shares of common stock - diluted 249,866,191 57,705,411 247,045,485 58,660,152 Net loss per share: Basic $ ( 0.54 ) $ ( 0.54 ) $ ( 1.11 ) $ ( 1.11 ) Diluted $ ( 0.54 ) $ ( 0.54 ) $ ( 1.11 ) $ ( 1.11 ) 57 Table of Contents The following common stock equivalents were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their inclusion would have been anti-dilutive: Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Common stock warrants 6,278,501 5,875,592 6,278,501 5,875,592 Restricted stock units 773,998 19,397,022 20,685,982 19,397,022 Stock options, including early exercise of options 906,767 17,173,007 14,260,228 17,173,007 Employee stock purchase plan shares 189,621 221,266 189,621 221,266 Value creation award — — 4,000,000 — Total 8,148,887 42,666,887 45,414,332 42,666,887 58 Table of Contents