What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-08-28 compared with 2024-08-28 · 168 added, 144 removed, 354 unchanged (47% of the section changed)

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We believe that by using modern technology, strong engineering talent, and a mission-driven approach, we can reinvent payments and commerce.

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

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

Our point-of-sale solutions allow consumers to pay for purchases in fixed amounts without deferred interest, late fees, or penalties.

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Consumers can use our app to apply for installment loans, and upon approval, they can use the Affirm Card digitally online or in-stores to complete a purchase.

Additionally, consumers can manage the pre and post purchase split of Affirm Card transactions into loan, manage payments, open a high-yield savings account, and access a personalized marketplace.

Additionally, consumers can manage the pre and post purchase split of Affirm Card transactions into a loan, manage payments, open a high-yield savings account, and access a personalized marketplace.

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

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Other income, net 148,737 100,320 211,617 48,417 48 % (111,297) (53) %

Loss before income taxes $ (515,527) $ (989,245) $ (724,831) $ 473,718 (48) % $ (264,414) 36 %

Income (loss) before income taxes $ 61,464 $ (515,527) $ (989,245) $ 576,991 112 % $ 473,718 (48) %

Income tax expense (benefit) 9,279 2,230 (3,900) 7,049 316 % 6,130 (157) %

Net loss $ (517,757) $ (985,345) $ (707,417) $ 467,588 (47) % $ (277,928) 39 %

Net income (loss) $ 52,186 $ (517,757) $ (985,345) $ 569,943 110 % $ 467,588 (47) %

Our Financial Model

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We have three main loan product offerings:

Pay-in-4, 0% annual percentage rate (“APR”) monthly installment loans and interest-bearing monthly installment loans.

Pay-in-4 is a short-term payment plan with four biweekly 0% APR installments.

Pay-in-X, 0% annual percentage rate (“APR”) monthly installment loans and interest-bearing monthly installment loans.

Pay-in-X primarily consists of short-term payment plans with one to four 0% APR installments.

From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction.

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

For the years ended June 30, 2024, 2023, and 2022, Pay-in-4 represented 15%, 19%, and 22%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 11%, 13%, and 21%, respectively.

For the years ended June 30, 2025, 2024, and 2023, Pay-in-X represented 14%, 15%, and 19%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 13%, 11%, and 13%, respectively.

From consumers, we earn interest income on the simple interest loans that we originate or purchase from our originating bank partners.

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For the years ended June 30, 2025, 2024, and 2023, interest bearing loans represented 72%, 74%, and 68% of total GMV facilitated through our platform, respectively.

In order to accelerate our ubiquity, we facilitate the issuance of virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm.

Similarly, we also facilitate the issuance of the Affirm Card, a debit card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App.

In order to accelerate our ubiquity, we facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm.

Similarly, we also facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App.

When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.

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A portion of these loans are funded and issued by our originating bank partners, which include Cross River Bank, an FDIC-insured New Jersey state-chartered bank, Celtic Bank, an FDIC-insured Utah state-chartered industrial bank, and Lead Bank, an FDIC-insured Missouri state-chartered bank.

These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and other laws.

Under this arrangement, we must comply with our originating bank partners' credit policies and underwriting procedures, and our originating bank partners maintain ultimate authority to decide whether to

originate a loan or not.

These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and

When an originating bank partner originates a loan, it funds the loan through its own funding sources and may subsequently offer and sell the loan to us.

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The originating bank partner also retains an interest in the loans purchased by us through a loan performance fee that is payable by us on the aggregate principal amount of a loan that is paid by a consumer.

Refer to Note 13.

Fair Value of Financial Assets and Liabilities of the accompanying notes to our consolidated financial statements for more information on the performance fee liability.

We are also able to originate loans directly under our lending, servicing, and brokering licenses in Canada and across several states in the U.S.

We are also able to originate loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., and across most states in the U.S.

through our consolidated subsidiaries.

We directly originated approximatel y $4.5 billion, or 17%, $3.7 billion, or 18%, and $3.3 billion, or 16% of loans for the years ended June 30, 2024, 2023 and 2022, respectively.

We act as the servicer on all loans that we originate directly or purchase from our originating bank partners and earn a servicing fee on loans we sell to our funding sources.

We directly originated approximate ly $6.3 billion, or 17%, $4.5 billion, or 17%, and $3.7 billion, or 18% of loans for the years ended June 30, 2025, 2024 and 2023, respectively.

We act as the servicer on all loans that we originate directly or purchase from our originating bank partners and earn a servicing fee on loans held by third parties, including bank partners prior to loan purchase and third-party loan buyers if subsequently sold as part of our funding strategy.

In the normal course of business, we do not sell the servicing rights on any of the loans.

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As we scale the number of transactions on our network and grow GMV, we maintain a variety of funding relationships in order to support our network.

Our diversified funding relationships include warehouse facilities, securitization trusts, forward flow arrangements, and partnerships with banks.

Our diversified funding relationships include warehouse facilities, securitization trusts, variable funding notes, forward flow arrangements, and partnerships with banks.

Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model.

As of June 30, 2024 and June 30, 2023, our equity capital as a percentage of our total platform portfolio has remained relatively unchanged at 5%.

As of June 30, 2025 and June 30, 2024, our equity capital as a percentage of our total platform portfolio was 4% and 5%, respectively.

The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.

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These shifts impact GMV, revenue, our financial results, and our key operating metric performance for that period.

Differences in loan product mix result in varying loan durations, APR, and mix of 0% APR and interest-bearing financings.

Differences in loan product mix result in varying loan terms, APRs, and payment frequencies.

Product and economic terms of commercial agreements vary among our merchants, which may impact our results.

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Merchant mix shifts are driven in part by the products offered by the merchant, the economic terms negotiated with the merchant, merchant-side activity relating to the marketing of their products, whether or not the merchant is fully integrated within our network, and general economic conditions affecting consumer demand.

Our revenue as a percentage of GMV in any given period varies across products.

Our revenue as a percentage of GMV in any

given period varies across products.

As such, as we continue to expand our network to include more merchants and product offerings, revenue as a percentage of GMV may vary.

Additionally, our commercial agreements with our platform partners, along with the growing repeat usage of our Pay-in-4 and Affirm Card offerings, are driving an increase in low AOV transactions.

As a result, while we expect that transactions per active consumer may increase, revenue as a percentage of GMV may decline in the medium term to the extent that a greater portion of our GMV comes from Pay-in-4, Affirm Card and other low-AOV offerings.

Additionally, our commercial agreements with our platform partners, the expansion of our consumer eligibility criteria, along with the growing repeat usage of our Affirm Card offerings, are driving an increase in low AOV transactions.

We experience seasonal fluctuations in our business as a result of consumer spending patterns, including Affirm Card, which we expect to mimic the seasonality of our general business in the near term.

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We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations.

Starting in fiscal 2023, the macroeconomic environment began to present a number of challenges to our business.

In response to continued inflationary pressure, the U.S.

Federal Reserve rapidly raised the federal funds interest rate from March 2022 through July 2023, and there is no certainty as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods.

Simultaneously, economic uncertainty and the prospect of economic recession has impacted consumer spending.

Since 2022, the U.S.

Federal Reserve has maintained an elevated federal funds interest rate.

Despite the Federal Reserve’s decision to begin to decrease the federal funds interest rate in September 2024, uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods.

Simultaneously, economic uncertainty and unpredictability, including the prospect of economic recession and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact consumer spending.

These challenges have affected, and may continue to affect, our business and results of operations in the following ways:

• Shifts in consumer demand:

Since fiscal 2023, we have experienced varying levels of consumer demand across different categories of merchandise.

While there was an increase in overall consumer demand in fiscal 2024, we continued to experience decreased demand for certain discretionary items, which has impacted GMV growth in those categories.

Continued economic uncertainty, inflationary pressures, and a higher interest rate environment may further negatively impact consumer demand in future periods.

Over the past two fiscal years, we have experienced varying levels of consumer demand across different categories of merchandise.

This is due to economic uncertainty and unpredictability, recessionary concerns, inflationary pressures and elevated interest rates.

If macroeconomic conditions deteriorate in future periods, consumer demand may be negatively impacted.

• Increased borrowing costs:

Our borrowing costs have remained elevated due to the interest rate environment, resulting in sustained higher transaction costs.

Should the interest rate environment remain elevated, we may continue to experience higher transaction costs.

The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs.

However, the overall interest rate environment remains elevated compared to historical levels, and there is continued uncertainty as to whether and to what extent the Federal Reserve may decrease the federal funds rate further in the future.

As a result, we may continue to experience higher transaction costs.

• Volatile capital markets:

During fiscal 2024, capital markets have shown improvement against recent periods, which has been evidenced by substantial additions across our funding channels due to our strong loan performance.

However, despite these improvements, uncertainties remain in the macroeconomic environment, especially with regard to persistent inflation and the potential for increased unemployment rates.

Since fiscal 2024, capital markets have shown improvement against recent periods, which has been evidenced by substantial additions across our funding channels due to our strong loan performance.

However, despite these improvements, uncertainties remain in the macroeconomic environment, especially with regard to inflation, the prospect of recession, the magnitude, duration and impact of tariffs on global trade, and the potential for increased unemployment.

To address these uncertainties, we leverage our diverse funding channels and counterparties, which contribute to our resilience across various macroeconomic conditions and economic cycles.

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For example, we offer loan modifications to borrowers experiencing financial difficulty to provide greater flexibility for consumers to repay their obligations, through payment deferrals or loan re-amortizations.

A payment deferral extends the next payment due date, and while a consumer may receive more than one deferral, the total deferral period may not exceed three months.

A payment deferral extends the next payment due date, and while a consumer may receive

more than one deferral, the total deferral period may not exceed three months.

A loan re-amortization lowers the monthly payments by extending the term, which may not exceed twenty-four months.

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As disclosed in Note 4.

Loans Held for Investment and Allowance for Credit Losses of the accompanying notes to our consolidated financial statements during the year ended June 30, 2024, we expanded the eligibility of our loan

modification programs, which resulted in a modest benefit to delinquency rates for loans held for investment as of June 30, 2024.

As we continue to evaluate the effectiveness of these programs, we may modify, expand, or contract the usage of these programs, which may impact our delinquency rates in future periods.

As of June 30, 2024, taking into account the loan modifications discussed above, our 30-day delinquency rates for monthly installment loans were comparable to our delinquency rates as of June 30, 2023.

However, our allowance rates for loan losses as of June 30, 2024 increased over our allowance rates as of June 30, 2023 due primarily to adjustments in our credit criteria in light of increasing interest income generated by our loans.

In future fiscal quarters, on a comparative basis, delinquency rates may vary with seasonal trends as well as due to other actions, including underwriting and profitability optimizations and the level of loan modifications implemented in the current or preceding fiscal quarters.

Loans Held for Investment and Allowance for Credit Losses in the notes to the consolidated financial statements, in fiscal 2024, we expanded the eligibility of our loan modification programs, which resulted in a modest benefit to delinquency rates for loans held for investment during that period.

The volume of loan modifications during the fiscal year ended June 30, 2025 decreased compared to the fiscal year ended June 30, 2024.

Loans modified during the fiscal years ended June 30, 2025 and 2024, represent 0.17% and 0.64%, respectively, of the outstanding principal balance of loans held on our balance sheet.

Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification.

An unknown percentage of loans which have been modified and are current as of June 30, 2025 may become delinquent or charge off in the future.

We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.

Regulatory Developments

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In addition, we are supervised by the CFPB, which enables it, among other things, to conduct comprehensive and rigorous examinations to assess our compliance with consumer financial protection laws, which in turn could result in matters requiring attention, enforcement investigations and actions, regulatory fines and mandated changes to our business products, policies and procedures.

On May 22, 2024, the CFPB issued the Truth in Lending Interpretive Rule, effective July 30, 2024, that extended to Buy Now, Pay Later (BNPL) providers certain dispute and refund requirements applicable to credit card providers.

The Interpretive Rule is an interpretation of existing law, thereby applying to past operations.

The Interpretive Rule may result in operational and compliance challenges and new litigation risks and scrutiny by federal and state regulators.

Income Tax Developments

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law, which included certain modifications to U.S.

The Company is currently evaluating the future impact of these provisions of the Act on our Consolidated Financial Statements.

Additionally, if our recent trend of pretax earnings continues, we may have sufficient positive evidence to conclude that a significant portion of our valuation allowance is no longer needed.

The timing and amount of any valuation allowance release is subject to change based on multiple factors, including our profitability and the extent to which we believe we can sustain it over time.

The release of any portion of the valuation allowance would result in the recognition of certain deferred tax assets with a potential corresponding decrease to income tax expense for the period in which the release is recorded, which would represent a non-cash benefit.

Key Operating Metrics

We focus on several key operating metrics to measure the performance of our business and help determine our strategic direction.

In addition to revenue, net loss, and other results under U.S.

In addition to revenue, net income (loss), and other results under U.S.

GAAP, the following tables set forth key operating metrics we use to evaluate our business.

Year ended June 30,

2024 2023 2022

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

(in billions)

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however, it is an indicator of the success of our merchants and the strength of our platform.

For the year ended June 30, 2024, GMV was $26.6 billion, an increase of approximately 32% from $20.2 billion for the year ended June 30, 2023, and an increase of approximately 72% from $15.5 billion for the year ended June 30, 2022.

Overall, the increase in GMV was driven by an increase in volume at our top five merchants and platform partners as well as overall increases in our active merchant base, active consumers and average transactions per consumer.

The increase in GMV for the year ended June 30, 2024 also reflected increased consumer demand at our largest merchant partners by GMV and increased consumer demand in our travel and ticketing, electronics and general merchandise categories.

For the years ended June 30, 2024, 2023, and 2022, our top five merchants and platform partners represented approximately 47%, 42%, and 32%, respectively, of total GMV.

For the year ended June 30, 2025, GMV was $36.7 billion, which represented an increase of approximately 38% from $26.6 billion for the year ended June 30, 2024, and an increase of approximately 81% from $20.2 billion

for the year ended June 30, 2023.

GMV attributable to Amazon represented 21% of total GMV.

For both the years ended June 30, 2023 and 2022, GMV attributable to Amazon represented less than 20% of total GMV.

Overall, the increase in GMV was driven by growth in several key areas including our top five merchants and platform partners, our direct to consumer products, including Affirm Card, and overall increases in our active merchant base, active consumers and average transactions per consumer.

During the year ended June 30, 2025, GMV growth was diversified across categories and loan products, primarily driven by our general merchandise and electronics categories as well as our 0% APR installment loans.

For the year ended June 30, 2025, GMV from 0% APR installment loans was $4.7 billion which represented an increase of approximately 63% from $2.9 billion for the year ended June 30, 2024.

The top five merchants and platform partners as of June 30, 2025 and 2024 represented approximately 47% of total GMV.

The top five merchants and platform partners as of June 30, 2023 represented approximated 42% of total GMV.

For the years ended June 30, 2025, 2024, and 2023, GMV attributable to Amazon represented 22%, 21% and less than 20%, respectively, of total GMV.

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

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Active consumers are the primary measure of the size of our network.

We define an active consumer as a consumer who engages in at least one transaction on our platform during the 12 months prior to the measurement date.

We define an active consumer as a consumer who completes at least one transaction on our platform during the 12 months prior to the measurement date.

As of June 30, 2025, we had approximately 23.0 million active consumers, which represented an increase of 23% compared to approximately 18.7 million as of June 30, 2024, and 40% compared to approximately 16.5 million as of June 30, 2023.

The increase was primarily due to a high retention rate of existing consumers and the acquisition of new consumers through an expanding active merchant base, Affirm Card and platform partnerships.

The increase was primarily due to a high retention rate of existing consumers, as well as continued adoption of the Affirm Card, and the acquisition of new consumers through an expansion in active merchants and platform partnerships.

Transactions per Active Consumer

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The increase was primarily due to platform growth, a higher frequency of repeat users driven by consumer engagement, and growth of Affirm Card active consumers.

As of June 30, 2024, Affirm Card represented approximately 8% of the total number of transactions compared to approximately 2% as of June 30, 2023.

As of June 30, 2025, Affirm Card represented approximately 10% of the total number of transactions compared to approximately 8% and 2% as of June 30, 2024 and 2023, respectively.

Results of Operations

The following tables set forth selected consolidated statements of operations and comprehensive loss data for each of the periods presented:

The following tables set forth selected consolidated statements of operations and comprehensive income (loss) data for each of the periods presented:

Year ended June 30, 2025 vs 2024 2024 vs 2023

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General and administrative 545,053 525,291 586,398 19,762 4 % (61,107) (10) %

Restructuring and other 6,768 35,870 — (29,102) (81) % 35,870 NM *

Restructuring and other (184) 6,768 35,870 (6,952) (103) % (29,102) (81) %

Total operating expenses 3,311,685 2,938,846 2,788,847 372,839 13 % 149,999 5 %

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Other income, net 148,737 100,320 211,617 48,417 48 % (111,297) (53) %

Loss before income taxes $ (515,527) $ (989,245) $ (724,831) $ 473,718 (48) % $ (264,414) 36 %

Income (loss) before income taxes $ 61,464 $ (515,527) $ (989,245) $ 576,991 112 % $ 473,718 (48) %

Income tax expense (benefit) 9,279 2,230 (3,900) 7,049 316 % 6,130 (157) %

Net loss $ (517,757) $ (985,345) $ (707,417) $ 467,588 (47) % $ (277,928) 39 %

* Not meaningful

Net income (loss) $ 52,186 $ (517,757) $ (985,345) $ 569,943 110 % $ 467,588 (47) %

(1) Upon purchase of a loan from our originating bank partners at a price above the fair market value of the loan or upon the origination of a loan with a par value in excess of the fair market value of the loan, a discount is included in the amortized cost basis of the loan.

For loans held for investment, this discount is amortized over the life of the loan into interest income.

When a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans.

For loans held for sale, when a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans.

However, the cumulative value of the loss on loan purchase commitment or loss on origination, the interest income recognized over time from the amortization of discount while retained, and the release of discount into gain on sales of loans, together net to zero over the life of the loan.

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

Year ended June 30,

2024 2023 2022

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

(in thousands)

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(2) Amounts include stock-based compensation as follows:

Year ended June 30,

2024 2023 2022

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

(in thousands)

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GMV increased from $26.6 billion as of June 30, 2024 to $36.7 billion as of June 30, 2025.

The increase in GMV is a result of continued growth at our top five merchants and platform partners representing approximately 47% and 42% as of June 30, 2024 and 2023, respectively, as well as growth in our active merchant base and active consumers, reaching approximately 303 thousand and 18.7 million, respectively, as of June 30, 2024, up from approximately 254 thousand and 16.5 million, respectively, as of June 30, 2023.

Additionally, the average transactions per active consumer increased from 3.9 as of June 30, 2023 to 4.9 as of June 30, 2024.

The increase in consumers and average transactions per active consumer is partially offset by a decrease in AOVs.

GMV from the top five merchants and platform partners as of June 30, 2025, increased 38% compared to the same period in 2024.

Our active merchant base and the number of active consumers also grew, reaching approximately 377 thousand and 23.0 million, respectively, as of June 30, 2025, up from approximately 303 thousand and 18.7 million, respectively, as of June 30, 2024.

With respect to the frequency and mix of transactions, the transactions per active consumer increased from 4.9 as of June 30, 2024 to 5.8 as of June 30, 2025.

The increase is partially offset by a decrease in AOV.

For the year ended June 30, 2025 AOV was $273, down from $292 for the same period in fiscal 2024.

The decrease in AOV is due to the diversification of our merchant base and our initiative to drive repeat usage of our platform beyond one-time high AOV purchases.

The decrease in AOV is driven by the diversification of our merchant base, with accelerated growth in some of our largest interest-bearing merchant programs, and our ongoing initiative to drive repeat usage of our platform beyond one-time high AOV purchases.

Card Network Revenue

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As such, the increase is primarily driven by $11.9 billion of GMV processed through our issuer processors, an increase of 45% for the year ended June 30, 2025, as compared to the same period in 2024.

driven by increased card activity through Affirm Card and our single use virtual debit cards, as well as growth in existing and new merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services, which grew from approximately 1,300 merchants as of June 30, 2023 to 1,900 merchants as of June 30, 2024.

This was driven by increased card activity through Affirm Card and our one-time-use virtual debit cards, as well as growth in

existing and new merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services.

Card network revenue is also impacted by the mix of merchants as different merchants can have different interchange rates depending on their industry or size, among other factors.

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As a result, interest income from interest-bearing loans increased $380.4 million, or 36%, compared to the same period in 2024.

This increase was partially due to an increase in the volume of interest bearing loans originated, which increased to 74% of total GMV for the year ended June 30, 2024, compared to 68% of total GMV in the same period in 2023, in addition to recent pricing initiatives, including the increase of the maximum APR and merchant-subsidized low APR loans replacing previously non-interest bearing loans.

Gain on Sale of Loans

Gain on sales of loans for the year ended June 30, 2025 increased by $184.5 million, or 94%, compared to the same period in 2024.

The increase was driven by an increase in loan sale volume to third-party loan buyers.

We sold loans with an unpaid principal balance of $10.2 billion for the year ended June 30, 2024, compared to $7.5 billion for the year ended June 30, 2023.

The increase is driven by higher loan sale volume to third-party loan buyers and favorable transaction economics which are impacted by the composition of our loan portfolio sold and other market factors.

We sold loans with an unpaid principal balance of $15.8 billion for the year ended June 30, 2025, compared to $10.2 billion for the year ended June 30, 2024, an increase of 54%.

Servicing Income

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The average unpaid principal balance of loans owned by third-party loan owners increased from $4.9 billion during the year ended June 30, 2024 to $6.6 billion during the year ended June 30, 2025, an increase of 36%.

The increase was partially offset by fair value adjustments related to servicing assets and liabilities, resulting in a $2.5 million lower gain during the year ended June 30, 2024, compared to the same period in 2023.

Loss on Loan Purchase Commitment

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In these instances, we may be required to purchase the loan for a price in excess of the fair market value of such loans, which results in a loss.

These losses are recognized as loss on loan purchase commitment in our consolidated statements of operations and comprehensive loss.

These losses are recognized as loss on loan purchase commitment in our consolidated statements of operations and comprehensive income (loss).

These costs are incurred on a per loan basis.

Loss on loan purchase commitment for the year ended June 30, 2024 increased by $40.1 million, or 29%, compared to the same period in 2023, primarily due to an increase in total loans purchased.

During the year ended June 30, 2024, we purchased $21.5 billion of loans from our originating bank partners, compared to $16.2 billion in the same period in 2023, representing an increase of 33%.Additionally, discount rate assumption used to calculate the fair market value of loans increased during the period, which contributed to higher losses on loan purchase commitments.

Loss on loan purchase commitment for the year ended June 30, 2025 increased by $61.9 million, or 34%, compared to the same period in 2024, primarily due to an increase in total volume of loans purchased.

During the year ended June 30, 2025, we purchased $30.0 billion of loans from our originating bank partners, compared to $21.5 billion in the same period in 2024, representing an increase of 40%.

Additionally, 0% APR installment loans represented $4.4 billion of the total loans purchased during the year ended June 30, 2025, an increase of 65% compared to the same period in 2024.

Provision for Credit Losses

Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses on our consolidated balance sheet, which represents management’s estimate of future losses.

Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses within our consolidated balance sheet, which represents management’s estimate of future losses.

In the event that our loans outperform expectation and/or we reduce our expectation of credit losses in future periods, we may release reserves and thereby reduce the allowance for credit losses, yielding income in the provision for credit losses.

The provision is determined based on our estimate of expected future losses on loans originated during the period and held for investment on our balance sheet, changes in our estimate of future losses on loans outstanding as of the end of the period and the net charge-offs incurred in the period.

Provision for credit losses increased by $128.8 million, or 39%, for the year ended June 30, 2024 compared to the same period in 2023, driven by growth in the volume of loans held for investment.

Loans held for investment as of June 30, 2024 was $5.7 billion, an increase of $1.3 billion, or 29% as compared to the same period in 2023.

Provision for credit losses increased by $156.1 million, or 34%, for the year ended June 30, 2025 compared to the same period in 2024, primarily driven by growth in the volume of loans held for investment.

For the year ended June 30, 2025, the average balance of loans held for investment was $6.5 billion, an increase of $1.4 billion, or 28%, as compared to the same period in 2024.

The allowance for credit losses as a percentage of loans held for investment increased from 5.5% as of June 30, 2024 to 5.6% as of June 30, 2025.

The increase in the allowance rate from June 30, 2023 is primarily driven by an increase in loans held on our balance sheet as well as adjustments in our credit criteria in light of increasing interest income generated by our loans and changes in the loan mix.

The increase in the allowance rate year over year is primarily driven by an increase in loans held on our balance sheet as well as a change in the loan mix when compared to June 30, 2024, in line with expected credit performance.

Funding Costs

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Funding costs for the year ended June 30, 2025 increased by $81.2 million or 24%, compared to the same period in 2024.

The increase was primarily due to higher benchmark interest rates and an increase of funding debt and notes issued by securitization trusts during the year ended June 30, 2024.

The increase was primarily due to an increase of funding debt and notes issued by securitization trusts during the year ended June 30, 2025.

The average total of funding debt from warehouses and securitizations for the year ended June 30, 2025 was $5.9 billion compared to $4.5 billion during the same period in 2024, an increase of $1.4 billion, or 30%.

The increase was also attributable to a larger volume of on-balance sheet loans being retained during the period.

The average on-balance sheet loan balance was $5.1 billion for the year ended June 30, 2024, respectively, an increase of 49% compared to$3.4 billion during the same periods in 2023, respectively.

The average on-balance sheet loan balance was $6.5 billion for the year ended June 30, 2025, respectively, an increase of 28% compared to $5.1 billion during the same period in 2024.

Processing and Servicing

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Processing and servicing expense for the year ended June 30, 2025 increased by $114.6 million, or 33%, compared to the same period in 2024.

This increase was primarily driven by an increase in payment processing fees of $55.4 million, or 41%, related to increased payment volume for the year ended June 30, 2024.

Additionally, our platform fees increased by $37.5 million, or 91%, for the year ended June 30, 2024 due to an increase in our volume with a large enterprise partner.

This increase was primarily driven by an increase in payment processing fees of $69.5 million, or 36%, related to an increase of $8.6 billion, or 36%, in payment volume for the year ended June 30, 2025, compared to the same period in 2024.

During the year ended June 30, 2025, our platform fees increased by $29.3 million, or 37%, due to an increase in volume with a large enterprise partner.

Additionally, our customer service and collection fee costs increased by $22.5 million, or 47%, compared to the same period in 2024.

This is driven by growth in our overall loan portfolio, including both loans held for investment and loans serviced for third parties, due to the increase in the number of consumer transactions.

The number of consumer transactions

increased by 47% during the year ended June 30, 2025, from continued growth at our merchants and platform partners.

The increase was partially offset by a $8.9 million, or 60%, decrease in personnel-related costs, for the year ended June 30, 2025, compared to the same period in 2024, as a result of our reduction in force and cost management plans.

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Technology and data analytics expense consists primarily of the salaries, stock-based compensation, and personnel-related costs of our engineering, product, and credit and analytics employees, as well as the amortization of internally-developed software and technology intangible assets, and our infrastructure and hosting costs.

Technology and data analytics expense for the year ended June 30, 2024 decreased by $114.0 million or 19%, compared to the same period in 2023.

The decrease is primarily driven by a decrease of $138.1 million, or 39%, in stock-based compensation and payroll and personnel-related costs for the year ended June 30, 2024, compared to the same period in 2023, due to higher capitalized compensation costs related to internally-developed software and a reduction in force.

Additionally, data infrastructure and hosting costs decreased by $26.0 million, or 23%, for the year ended June 30, 2024 compared to the same period in 2023, due to cost optimization initiatives as a result of improved contractual terms with several key vendors.

The decrease is partially offset by amortization of internally-developed software which increased by $44.0 million, or 40%, for the year ended June 30, 2024 compared to the same period in 2023, as a result of an increase in the number of capitalized projects.

Capitalized projects grew by 36% from approximately 660 projects as of June 30, 2023 to 890 projects as of June 30, 2024.

Technology and data analytics expense for the year ended June 30, 2025 increased by $87.9 million or 18%, compared to the same period in 2024.

The increase is primarily driven by amortization of internally-developed software which increased by $64.3 million, or 42%, for the year ended June 30, 2025, compared to the same period in 2024, as a result of an increase in the number of capitalized projects.

Capitalized projects in service grew by 78% from approximately 830 projects as of June 30, 2024 to 1,470 projects as of June 30, 2025.

Data infrastructure and hosting costs increased by $24.6 million, or 29%, for the year ended June 30, 2025, compared to the same period in 2024, due to a 47% increase in consumer transactions as a result of continued growth at our merchants and platform partners.

Sales and Marketing

Sales and marketing costs consist of the expense related to warrants and other share-based payments granted to our enterprise partners, salaries and personnel-related costs, costs of marketing and promotional activities.

Sales and marketing expense for the year ended June 30, 2025 decreased by $141.6 million or 25%, compared to the same period in 2024.

The decrease was primarily driven by a decrease of $26.0 million, or 37%, in payroll and personnel-related costs during the year ended June 30, 2024 compared to the same period in 2023, as a result of our reduction in force and cost management plans.

Amazon warrant expense decreased by $23.7 million, or 5%, during the year ended June 30, 2024 compared to the same period in 2023, primarily due to the renewal of the commercial partnership agreement in February 2024, which extended the amortization period of the commercial agreement asset, as well as a decrease in the number of new users to the Amazon program during the year ended June 30, 2024, which is the basis for a portion of the warrant expense.

Additionally, amortization of intangible assets decreased by $8.1 million, or 46%, for the year ended June 30, 2024 compared to the same period in 2023, as a result of one-time acceleration of amortization of Returnly’s intangibles assets related to the wind down of our returns management platform during fiscal 2023.

The decrease was primarily driven by a $135.2 million, or 33%, decrease in Amazon warrant expense during the year ended June 30, 2025, compared to the same period in 2024, primarily due to a portion of the warrants becoming fully vested as of December 2024.

Additionally, amortization expense related to the Amazon commercial agreement decreased by $12.2 million, or 37%, during the year ended June 30, 2025, compared to the same period in 2024, primarily due to the renewal of the commercial partnership agreement in February 2024, which extended the amortization period of the commercial agreement asset.

General and Administrative

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General and administrative expenses also include costs related to fees paid for professional services, including legal, tax and accounting services, allocated overhead, and certain discretionary expenses incurred from operating our technology platform.

General and administrative expense for the year ended June 30, 2024 decreased by $61.1 million or 10%, compared to the same period in 2023.

The decrease was primarily due to a $28.5 million, or 6%, decrease in payroll

and personnel-related costs compared to the same period in 2023, as a result of our reduction in force and cost management plans.

Additionally, insurance expense decreased by $7.9 million, or 42%, driven by a rate reduction during policy contract renewals for the year ended June 30, 2024 compared to the same period in 2023.

Software subscription and license costs decreased by $5.3 million, or 14%, during the year ended June 30, 2024 and development service costs decreased by $4.2 million, or 45%, during the year ended June 30, 2024 compared to the same period in 2023, primarily as a result of efficiency improvements, contract renegotiations, and discontinuance of certain software and subscriptions.

Restructuring and Other

Restructuring and other for the year ended June 30, 2024 decreased by $29.1 million compared to the same period in 2023.

The restructuring and other expenses during the year ended June 30, 2024 included employee severance and related costs as a result of certain exit and disposal activities.

The restructuring and other expenses during the year ended June 30, 2023 primarily related to the restructuring plan we committed to in February 2023, which is complete.

We do not expect future costs or payments related to the plan.

General and administrative expense for the year ended June 30, 2025 increased by $19.8 million or 4%, compared to the same period in 2024.

The increase is primarily due to increases in employee benefit expenses, professional services, and software and subscriptions.

Other Income, net

Other income, net includes interest earned on our money market funds included in cash and cash equivalents and restricted cash, interest earned on securities available for sale, impairment or other adjustments to the cost basis of non-marketable equity securities held as cost, gains and losses on derivative agreements not designated within a hedging relationship, amortization of convertible debt issuance cost as well as gains (losses) on extinguishment, revolving credit facility issuance costs, fair value adjustments related to contingent liabilities, and other income or expense arising from activities that are unrelated to our primary business.

Other income, net decreased by $111.3 million, or 53%, during the year ended June 30, 2024, compared to the same period in 2023, primarily driven by a decrease in income related to our convertible note repurchases.

We repurchased a portion of our 2026 convertible notes with a principal balance of $76.7 million and $299.1 million as of June 30, 2024 and 2023, respectively, resulting in a gain on repurchase of our convertible debt of $12.6 million and $89.8 million, respectively, a decrease of $77.2 million year-over-year.

Additionally, income from derivative instruments not designated in a hedge accounting relationship decreased by $43.6 million year-over-year primarily driven by a decrease in the notional balance of the derivative instruments and less volatility in interest rates.

Other income, net includes interest earned on our money market funds included in cash and cash equivalents and restricted cash, interest earned on securities available for sale, impairment or other adjustments to the cost basis of equity securities held as cost, gains and losses on derivative agreements not designated within a hedging relationship, amortization of convertible debt issuance cost as well as gains (losses) on extinguishment, revolving credit facility issuance costs, fair value adjustments related to contingent liabilities, and other income or expense arising from activities that are unrelated to our primary business.

Other income, net increased by $48.4 million, or 48%, during the year ended June 30, 2025, compared to the same period in 2024, primarily driven by a $82.4 million gain on the early extinguishment of convertible debt compared to a gain of $12.6 million during the same period in 2024.

Additionally, we recognized a gain of $7.7

million on the change in fair value of liabilities, primarily related to our profit sharing liability, during the year ended June 30, 2025, compared to a gain of $3.1 million for the same period in 2024.

The increase is partially offset by a loss of $4.3 million related to the fair value of our derivative instruments not designated as hedges, compared to a gain of $4.5 million during the same period in 2024.

Additionally, the increase is partially offset by a decrease due to a one-time gain of $7.5 million in other non-operating income, during the year ended June 30, 2024, related to the wind-down of the Returnly business and our partnership with a third-party return provider.

Income Tax Expense (Benefit)

The income tax expense / (benefit) for the year ended June 30, 2024 of $2.2 million changed from $(3.9) million for the same period in 2023, an overall increase to income tax expense (or decrease to income tax benefit) of $6.1 million, or 157%.

This increase to income tax expense (decrease of income tax benefit) was primarily attributable to the increase in pretax book income in certain foreign jurisdictions for the year ended June 30, 2024 and its related income tax effects, whereas the income tax benefit recognized for the year ended June 30, 2023 was primarily attributable to the income tax effects of pretax book losses for that period in the same foreign jurisdictions.

The income tax expense/(benefit) for the year ended June 30, 2025 of $9.3 million changed from $2.2 million for the same period in 2024, an overall increase to income tax expense of $7.0 million, or 316%.

This increase to income tax expense was primarily attributable to the increase in pretax book income in certain foreign jurisdictions for the year ended June 30, 2025 and its related income tax effects when compared with the same period in 2024.

Liquidity and Capital Resources

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Cash, cash equivalent and investments in debt securities $ 2,225,880 $ 2,144,734

(1) Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions and short-term highly liquid marketable securities, including money market funds, government bonds, and other corporate securities purchased with an original maturity of three months or less.

(2) Securities available for sale at fair value primarily consist of certificates of deposits, corporate bonds, commercial paper, and government bonds.

(1) Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions and short-term highly liquid marketable securities, including money market funds, agency bonds, commercial paper, and government bonds purchased with an original maturity of three months or less.

(2) Securities available for sale at fair value primarily consist of certificates of deposits, corporate bonds, municipal bonds, commercial paper, agency bonds, and government bonds.

Short-term securities have maturities less than or equal to one year, and long-term securities range from greater than one year to less than five years.

Funding debt as of June 30, 2024 primarily includes our warehouse credit facilities and sale and repurchase agreements.

Debt as of June 30, 2025 primarily includes funding debt, notes issued by securitization trusts, convertible senior notes and our revolving credit facilities.

A detailed description of each of our borrowing arrangements is included in Note 9.

Debt in the notes to the consolidated financial statements.

The following table summarizes our funding debt facilities as of June 30, 2024.

The following table summarizes the future maturities of our warehouse credit facilities, variable funding notes, sale and repurchase agreements, and notes issued by securitizations trusts as of June 30, 2025.

Maturity Fiscal Year Borrowing Capacity Principal Outstanding

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Total $ 11,657,692 $ 6,490,514

Our warehouse credit facilities allow us to borrow up to an aggregate of $5.0 billion, mature between 2025 and 2027 and subject to covenant compliance, generally permit borrowings from to 4 - 12 months prior to the final maturity date.

Warehouse Credit Facilities

Our warehouse credit facilities allow us to borrow up to an aggregate of $4.9 billion, and mature between 2026 and 2032.

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

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

As of June 30, 2025, we have drawn an aggregate of $1.1 billion on our warehouse credit facilities.

As of June 30, 2025, we were in compliance with all applicable covenants in the agreements.

International

We use various credit facilities to finance the origination of loan receivables in Canada.

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As of June 30, 2025, the aggregate commitment amount of these facilities was $607.7 million on a revolving basis, of which $391.0 million was drawn.

As we continue to expand in new geographies, we intend to add the necessary funding capacity to support our growth objectives.

Variable Funding Note

We have entered into a syndicated revolving loan agreement through a securitization master trust which is utilized to fund the purchase and origination of loans.

In connection with the loan agreement, the master trust issued a variable funding note (“VFN”), where borrowings will be secured by loan collateral sold to the master trust.

Our VFN allows us to borrow up to an aggregate of $1.4 billion and matures in 2032.

As of June 30, 2025, we have drawn an aggregate of $107.4 million on our VFN and have an aggregate of $1.2 billion available.

As of June 30,

2025, we were in compliance with all applicable covenants in the agreements.

Sale and Repurchase Agreements

We entered into various sale and repurchase agreements pursuant to our retained interests in our off-balance sheet securitizations where we have sold these securities to a counterparty with an obligation to repurchase at a future date and price.

These agreements have an initial term of three months and subject to mutual agreement by Affirm and the counterparty, we may enter into one or more repurchase date extensions, each for an additional three month term at market interest rates on such extension date.

We had $34.5 million and $11.0 million in debt outstanding under our sale and repurchase agreements disclosed within funding debt on the consolidated balance sheets as of June 30, 2024 and June 30, 2023, respectively.

Other Funding Sources

These repurchase agreements have a term equaling the contractual life of the securitization notes pledged.

We had $31.2 million in debt outstanding under our sale and repurchase agreements disclosed within funding debt in the consolidated balance sheets as of June 30, 2025.

Securitizations

In connection with asset-backed securitizations, we sponsor and establish trusts (deemed to be VIEs) to ultimately purchase loans facilitated by our platform.

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.

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.

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 consolidated balance sheets.

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

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

Refer to Note 10.

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Revolving Credit Facility

On June 26, 2024, we entered into an amendment to our revolving credit agreement under the terms of which the aggregate commitment was increased to $330.0 million and the final maturity date was extended three years to June 26, 2027.

Our revolving credit facility has an aggregate commitment amount of $330.0 million, with a final maturity date of June 26, 2027.

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

As of June 30, 2025, there are no borrowings outstanding under the facility.

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Debt in the notes to the consolidated financial statements for further details on our revolving credit facility.

Convertible Senior Notes

Our convertible senior notes have an aggregate principal balance of $1.2 billion, and bear no interest, in the case of the 2026 Notes, and 0.75% per year, in the case of the 2029 Notes, which is payable semiannually.

The 2026 Notes mature on November 15, 2026, and the 2029 Notes mature on December 15, 2029, in each case unless earlier converted, redeemed, or repurchased in accordance with their terms.

Refer to Note 9.

Debt in the notes to the consolidated financial statements for further details.

Other Funding Sources

Forward Flow Loan Sale Arrangements

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Forward flow arrangements are generally fixed term in nature, with term lengths ranging between one to three years, during which we periodically sell loans to each counterparty based on the terms of our negotiated agreement.

As part of our capital strategy, we seek to partner with counterparties that can provide long-term, stable funding to support the ongoing growth and diversification of our loan portfolio.

Cash Flow Analysis

The following table provides a summary of cash flow data during the periods indicated:

Year ended June 30,

June 30, 2025 June 30, 2024

(in thousands)

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Operating Activities

Our largest sources of operating cash are fees charged to merchant partners on transactions processed through our platform and interest income from consumers’ loans.

Our primary uses of cash from operating activities are for general and administrative, technology and data analytics, funding costs, processing and servicing, and sales and marketing expenses.

Net cash provided by operating activities was $793.9 million for the year ended June 30, 2025.

Net loss of $517.8 million was adjusted for the add back of net non-cash items increasing operating cash flows by $1.0 billion, offset by a net decrease in operating cash flows from net changes in our operating assets and liabilities of $63.0 million.

Net profit of $52.2 million was adjusted for the add back of non-cash items and other adjustments by $791.5 million, and changing operating assets net of operating liabilities resulting in a net decrease in operating cash flows of $49.8 million.

The non-cash item adjustments are primarily attributable to $616.7 million provision for credit losses, $271.6 million commercial agreement warrant expense, $321.4 million stock-based compensation expense, and $225.1 million depreciation and amortization expense, which were partially offset by $381.6 million gain on sale of loans, and $233.8 million amortization of premiums and discounts on loans.

The net decrease in cash from changes in operating assets and liabilities was primarily driven by an increase of accounts receivable of $167.8 million, a decrease in accrued expenses and other liabilities of $55.2 million, which was partially offset by an increase in payable to third party loans owners of $105.8 million.

In addition, cash used for the purchase and origination of loans held for sale was $4.2 billion, which was offset by cash proceeds generated from the sale of loans held for sale of $4.2 billion.

The net decrease in cash from changes in operating assets and liabilities of $49.8 million was primarily driven by an increase in accounts receivable of $85.0 million and a decrease in accrued expenses and other liabilities of $48.9 million partially offset by an increase in accounts payable of $41.8 million and an increase in payable to third-party loan owners of $52.1 million.

Net cash provided by operating activities was $450.1 million for the year ended June 30, 2024.

Net loss of $985.3 million was adjusted for the add back of net non-cash items increasing operating cash flows by $967.4 million, and a net increase in operating cash flows from net changes in our operating assets and liabilities of $30.1 million.

Net loss of $517.8 million was adjusted for the add back of net non-cash items by $1.0 billion, offset by a net decrease in operating cash flows from net changes in our operating assets and liabilities of $63.0 million.

The non-cash item adjustments are primarily attributable to $460.6 million provision for credit losses, $406.7 million commercial agreement warrant expense, $344.5 million stock-based compensation expense, and $169.0 million depreciation and amortization expense, which were partially offset by $197.2 million gain on sale of loans and $187.7 million amortization of premiums and discounts on loans.

The net increase in cash from changes in operating assets and liabilities was primarily driven by cash proceeds generated from the sale of loans held for sale of $6.2 billion which was offset by cash used for the purchase and origination of loans held for sale of $6.0 billion, an increase of accounts receivable of $67.7 million, a decrease in accrued expenses and other liabilities of $38.2 million, and a decrease in payable to third party loans owners of $17.5 million.

In addition, cash used for the purchase and origination of loans held for sale was $4.2 billion, which was offset by cash proceeds generated from the sale of loans held for sale of $4.2 billion.

Investing Activities

Net cash used in investing activities was $1.1 billion for the year ended June 30, 2025, which consisted of outflows related to $32.5 billion of purchases and origination of loans held for investment, including originated and purchased loans of $6.1 billion and $26.4 billion, respectively, during the period, $823.9 million of purchases of securities available for sale, and $192.2 million of property, equipment and software additions.

Inflows related to $18.7 billion of principal repayments of loans, $12.6 billion of proceeds from sale of loans held for investment, and $1.2 billion of proceeds from maturities of securities available for sale.

Net cash used in investing activities was $1.3 billion for the year ended June 30, 2024, which consisted of outflows related to $21.5 billion of purchases and origination of loans held for investment, including originated and purchased loans of $4.3 billion and $17.2 billion, respectively, during the period, $1.0 billion of purchases of securities available for sale, and $159.3 million of property, equipment and software additions.

Inflows related to $14.1 billion of principal repayments of loans, $6.1 billion of proceeds from sale of loans held for investment, and $1.1 billion of proceeds from maturities of securities available for sale.

Net cash used in investing activities was $1.7 billion for the year ended June 30, 2023, which consisted of outflows related to $13.6 billion of purchases and origination of loans held for investment, including originated and purchased loans of $3.6 billion and $10.0 billion, respectively, during the period, $1.1 billion of purchases of securities available for sale, and $120.8 million of our investment in purchases of property, equipment and software.

Inflows related to $10.0 billion of principal repayments of loans, $1.6 billion of proceeds from sale of loans, and $1.5 billion of proceeds from maturities and repayments of securities available for sale.

Financing Activities

Net cash provided by financing activities was $0.9 billion for the year ended June 30, 2024, primarily consisted of net cash inflows of $1.1 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts as well as net cash inflows of $59.2 million related to borrowing and repayment of funding debt.

Net cash provided by financing activities was $751.4 million for the year ended June 30, 2025, primarily consisted of net cash inflows of $1.6 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts, as well as cash inflows of $903.4 million from the issuance of the 2029 Notes, net of debt issuance costs.

This was partially offset by cash outflows of $1.0 billion related to the repurchase and extinguishment of a portion of our 2026 Notes, $250.0 million related to repurchase of common stock shares in connection with the issuance of the 2029 Notes, $262.6 million related to borrowing and repayment of funding debt, and cash outflows of $303.8 million related to taxes paid on vested RSUs.

Net cash provided by financing activities was $913.1 million for the year ended June 30, 2024, primarily consisted of net cash inflows of $1.1 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts as well as net cash inflows of $59.2 million related to borrowing and repayment of funding debt.

This was partially offset by net cash outflows of $189.2 million related to taxes paid on vested RSUs.

Net cash provided by financing activities was $1.3 billion for the year ended June 30, 2023, primarily consisted of net cash inflows of $0.5 billion from the new issuance and repayment of notes and residual trust certificates issued by securitization trusts, and by net cash inflows of $1.1 billion related to borrowing and repayment of funding debt.

This was partially offset by net cash outflows of $206.6 million related to the extinguishment of a portion of our 2026 Notes.

Contractual Obligations

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(2) Purchase obligations amounts primarily include minimum purchase commitments for cloud computing web services entered into in the ordinary course of business.

(3) The 2026 Notes have an aggregated principal balance of $1.3 billion and do not bear interest.

The 2026 Notes mature on November 15, 2026.

(3) The 2026 and 2029 Notes have a net balance of $247.9 million and $905.1 million, respectively.

The 2026 Notes do not bear interest and 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.

The 2026 and 2029 Notes mature on November 15, 2026 and December 15, 2029, respectively.

The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in activities that are not reflected on our consolidated balance sheets, generally referred to as off-balance sheet arrangements.

These activities involve transactions with unconsolidated VIEs, including our sponsored securitization transactions, which we contractually service.

For off-balance sheet loan sales where servicing is the only form of continuing involvement, we could experience a loss if we were required to repurchase a loan due to a breach in representations and warranties associated with our loan sale or servicing contracts.

For unconsolidated securitization transactions where Affirm is the sponsor and risk retention holder, Affirm could experience a loss of up to 5% of both the senior notes and residual trust certificates.

In the ordinary course of business, we engage in activities that are not reflected within our consolidated balance sheets, generally referred to as off-balance sheet arrangements.

These activities involve transactions with unconsolidated VIEs, including securitization and forward flow transactions.

Across these transactions, ongoing involvement typically includes contractual loan servicing arrangements and loan repurchase obligations in connection with breaches in ordinary course of business representations and warranties.

We have entered into unconsolidated securitization transactions where Affirm is the sponsor and risk retention holder, Affirm could experience a loss of up to 5% of both the senior notes and residual trust certificates.

In the unlikely event principal payments on the loans backing any off-balance sheet securitization are insufficient to pay holders of senior notes and residual trust certificates, including any retained interests held by Affirm, then any amounts we contributed to the securitization reserve accounts may be depleted.

Securitization and Variable Interest Entities of the accompanying notes to our consolidated financial statements for more information.

Under certain other forward flow loan sale 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.

In addition to risk sharing arrangements, we may hold beneficial interests in certain off-balance sheet VIEs that have been established by third-party loan buyers in connection with structured transactions.

These beneficial interests represent our right to receive a portion of the residual cash flows from the underlying loans sold in connection with these transactions.

Risk sharing arrangements and beneficial interests are considered variable interests in the unconsolidated VIEs holding the loan assets transferred, as their value is exposed to the performance of those loans.

For off-balance sheet VIEs where we hold variable interest, we have determined that our exposure to transaction economics is insignificant relative to the expected losses or residual returns.

As of June 30, 2025, the aggregate outstanding balance of loans held by third-party investors and off-balance sheet securitizations was $7.8 billion.

Refer to Note 10.

Securitization and Variable Interest Entities and Note 13.

Fair Value of Financial Assets and Liabilities of the accompanying notes to our consolidated financial statements for more information.

Critical Accounting Policies and Estimates

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In these instances, we may be required to purchase the loan for a price in excess of the fair market value of such loans, which results in a loss.

These losses are recognized as loss on loan purchase commitment in our consolidated statements of operations and comprehensive loss.

These losses are recognized as loss on loan purchase commitment in our consolidated statements of operations and comprehensive income (loss).

Similarly, we may originate certain loans via our wholly-owned subsidiaries, with zero or below market interest rates.

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We immediately recognize an allowance for expected credit losses upon origination of a loan.

Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented on our consolidated statements of operations and comprehensive loss.

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

We have made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis