Affirm Holdings, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA AFFIRM HOLDINGS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firms (PCAOB ID No. 34 ) 82 Consolidated Balance Sheets 84 Consolidated Statements of Operations and Comprehensive Income (Loss) 86 Consolidated Statement of Stockholders' Equity (Deficit) 87 Consolidated Statements of Cash Flows 89 Notes to Consolidated Financial Statements 91 81 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Affirm Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Affirm Holdings, Inc. and subsidiaries (the "Company") as of June 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 28, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses — Refer to Notes 2 and 4 to the financial statements Critical Audit Matter Description The allowance for credit losses (ACL) is a material estimate of the Company. In estimating the ACL, management utilizes a migration analysis of delinquent and current loan receivables. The analysis focuses on the pertinent factors underlying the quality of the loan portfolio. These factors, include historical performance, the age of the receivable balance, customer credit-worthiness, changes in the size and composition of the loan portfolio, delinquency levels, and actual credit loss experience. We identified the ACL for U.S. and Canada loans as a critical audit matter given the subjective nature and amount of judgment required in developing the estimate. Performing audit procedures to evaluate the reasonableness 82 Table of Contents of the ACL required a high degree of auditor judgment, an increased extent of audit effort, credit specialists, and the need to involve more experienced audit professionals. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the allowance for credit losses included the following procedures, among others: • We tested the design and effectiveness of controls over the ACL. • We tested management’s process for estimating the ACL, which included involving our credit specialists to evaluate the appropriateness of the models and methodologies. • We evaluated the accuracy and completeness of the data used to estimate the allowance for credit losses. /s/ Deloitte & Touche LLP San Francisco, California August 28, 2025 We have served as the Company's auditor since 2020. 83 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except shares and per share amounts) June 30, 2025 June 30, 2024 Assets Cash and cash equivalents $ 1,354,455 $ 1,013,106 Restricted cash 401,968 282,293 Securities available for sale at fair value 871,425 1,131,628 Loans held for sale — 36 Loans held for investment 7,025,534 5,670,056 Allowance for credit losses ( 396,929 ) ( 309,097 ) Loans held for investment, net 6,628,606 5,360,959 Accounts receivable, net 426,177 353,028 Property, equipment and software, net 572,637 427,686 Goodwill 534,156 533,439 Intangible assets 12,935 13,502 Commercial agreement assets 57,210 104,602 Other assets 295,360 299,340 Total assets $ 11,154,929 $ 9,519,619 Liabilities and stockholders’ equity Liabilities: Accounts payable $ 82,820 $ 41,019 Payable to third-party loan owners 211,700 159,643 Accrued interest payable 24,465 24,327 Accrued expenses and other liabilities 157,272 147,429 Convertible senior notes, net 1,153,000 1,341,430 Notes issued by securitization trusts 4,833,855 3,236,873 Funding debt 1,622,808 1,836,909 Total liabilities 8,085,919 6,787,630 Commitments and contingencies (Note 8) Stockholders’ equity: Class A common stock, par value $ 0.00001 per share: 3,030,000,000 shares authorized, 284,378,565 shares issued and outstanding as of June 30, 2025; 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, 40,734,234 shares issued and outstanding as of June 30, 2025; 140,000,000 authorized, 43,747,575 shares issued and outstanding as of June 30, 2024 1 1 Additional paid in capital 6,140,893 5,862,555 Accumulated deficit ( 3,056,818 ) ( 3,109,004 ) Accumulated other comprehensive loss ( 15,069 ) ( 21,565 ) Total stockholders’ equity 3,069,009 2,731,989 Total liabilities and stockholders’ equity $ 11,154,929 $ 9,519,619 The accompanying notes are an integral part of these consolidated financial statements. 84 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS, CONT. (in thousands, except shares and per share amounts) The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the 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. June 30, 2025 June 30, 2024 Assets of consolidated VIEs, included in total assets above Restricted cash $ 192,638 $ 145,829 Loans held for investment 6,828,758 5,461,660 Allowance for credit losses ( 365,656 ) ( 242,991 ) Loans held for investment, net 6,463,101 5,218,669 Accounts receivable, net 3,032 2,961 Other assets 2,558 10,676 Total assets of consolidated VIEs $ 6,661,329 $ 5,378,135 Liabilities of consolidated VIEs, included in total liabilities above Accounts payable $ 2,833 $ 2,830 Accrued interest payable 23,998 24,220 Accrued expenses and other liabilities 2,797 11,115 Notes issued by securitization trusts 4,833,855 3,236,873 Funding debt 1,592,139 1,794,984 Total liabilities of consolidated VIEs 6,455,621 5,070,022 Total net assets of consolidated VIEs $ 205,707 $ 308,113 The accompanying notes are an integral part of these consolidated financial statements. 85 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except share and per share amounts) June 30, 2025 June 30, 2024 June 30, 2023 Revenue Merchant network revenue $ 882,658 $ 674,607 $ 507,600 Card network revenue 231,308 151,401 119,338 Total network revenue 1,113,966 826,008 626,938 Interest income 1,608,221 1,204,355 685,217 Gain on sales of loans 381,622 197,153 188,341 Servicing income 120,602 95,483 87,489 Total revenue, net $ 3,224,412 $ 2,322,999 $ 1,587,985 Operating expenses Loss on loan purchase commitment $ 242,264 $ 180,395 $ 140,265 Provision for credit losses 616,683 460,628 331,860 Funding costs 425,451 344,253 183,013 Processing and servicing 457,849 343,249 257,343 Technology and data analytics 589,723 501,857 615,818 Sales and marketing 434,847 576,405 638,280 General and administrative 545,053 525,291 586,398 Restructuring and other ( 184 ) 6,768 35,870 Total operating expenses 3,311,685 2,938,846 2,788,847 Operating loss $ ( 87,273 ) $ ( 615,847 ) $ ( 1,200,862 ) Other income, net 148,737 100,320 211,617 Income (loss) before income taxes $ 61,464 $ ( 515,527 ) $ ( 989,245 ) Income tax expense (benefit) 9,279 2,230 ( 3,900 ) Net income (loss) $ 52,186 $ ( 517,757 ) $ ( 985,345 ) Other comprehensive income (loss) Foreign currency translation adjustments $ 6,025 $ ( 13,655 ) $ ( 8,143 ) Unrealized gain (loss) on securities available for sale, net 3,297 6,857 ( 882 ) Gain (loss) on cash flow hedges ( 2,826 ) 656 751 Net other comprehensive income (loss) 6,496 ( 6,142 ) ( 8,274 ) Comprehensive income (loss) $ 58,682 $ ( 523,899 ) $ ( 993,619 ) Per share data: Net income (loss) per share attributable to common stockholders for Class A and Class B Basic $ 0.16 $ ( 1.67 ) $ ( 3.34 ) Diluted $ 0.15 $ ( 1.67 ) $ ( 3.34 ) Weighted average common shares outstanding Basic 322,851,873 309,857,129 295,343,466 Diluted 341,023,566 309,857,129 295,343,466 The accompanying notes are an integral part of these consolidated financial statements. 86 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (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, 2022 287,365,373 $ 3 $ 4,231,303 $ ( 1,605,902 ) $ ( 7,149 ) $ 2,618,255 Issuance of common stock upon exercise of stock options 947,792 — 4,593 — — 4,593 Issuance of common stock in acquisition — — 13,674 — — 13,674 Issuance of common stock, employee share purchase plan 954,475 — 11,482 — — 11,482 Forfeiture of common stock related to acquisition ( 258,905 ) — — — — — Vesting of restricted stock units 7,849,919 — — — — — Vesting of warrants for common stock — — 421,934 — — 421,934 Repurchases of common stock ( 12,437 ) — ( 109 ) — — ( 109 ) Stock-based compensation — — 531,817 — — 531,817 Tax withholding on stock-based compensation — — ( 73,844 ) — — ( 73,844 ) Foreign currency translation adjustments — — — — ( 8,143 ) ( 8,143 ) Unrealized loss on securities available for sale — — — — ( 882 ) ( 882 ) Unrealized gain on cash flow hedges — — — — 751 751 Net loss — — — ( 985,345 ) — ( 985,345 ) 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 2,826,973 — 22,922 — — 22,922 Issuance of common stock, employee share purchase plan 578,222 — 10,217 — — 10,217 Vesting of restricted stock units 10,801,619 — — — — — Vesting of warrants for common stock — — 406,714 — — 406,714 Stock-based compensation — — 471,021 — — 471,021 Tax withholding on stock-based compensation — — ( 189,169 ) — — ( 189,169 ) Foreign currency translation adjustments — — — — ( 13,655 ) ( 13,655 ) Unrealized gain on securities available for sale — — — — 6,857 6,857 Unrealized gain on cash flow hedges — — — — 656 656 Net loss — — — ( 517,757 ) — ( 517,757 ) Balance as of June 30, 2024 311,053,031 $ 3 $ 5,862,555 $ ( 3,109,004 ) $ ( 21,565 ) $ 2,731,989 The accompanying notes are an integral part of these consolidated financial statements. 87 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY, CONT. (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 4,479,891 — 47,104 — — 47,104 Issuance of common stock, employee share purchase plan 397,246 — 13,589 — — 13,589 Issuance of common stock upon exercise of warrants 3,499,453 — — — — — Repurchases of common stock ( 3,526,590 ) — ( 250,000 ) — — ( 250,000 ) Vesting of restricted stock units 9,209,768 — — — — — Vesting of warrants for common stock — — 271,562 — — 271,562 Stock-based compensation — — 499,894 — — 499,894 Tax withholding on stock-based compensation — — ( 303,811 ) — — ( 303,811 ) Foreign currency translation adjustments — — — — 6,025 6,025 Unrealized gain on securities available for sale — — — — 3,297 3,297 Unrealized loss on cash flow hedges — — — — ( 2,826 ) ( 2,826 ) Net income — — — 52,186 — 52,186 Balance as of June 30, 2025 325,112,799 $ 3 $ 6,140,893 $ ( 3,056,818 ) $ ( 15,069 ) $ 3,069,009 (1) The share amounts listed above combine Class A and Class B stock. The accompanying notes are an integral part of these consolidated financial statements. 88 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) June 30, 2025 June 30, 2024 June 30, 2023 Cash flows from operating activities Net income (loss) $ 52,186 $ ( 517,757 ) $ ( 985,345 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Provision for losses 616,683 460,628 331,860 Amortization of premiums and discounts on loans ( 233,799 ) ( 187,709 ) ( 141,075 ) Gain on sales of loans ( 381,622 ) ( 197,153 ) ( 188,341 ) Gain on extinguishment of debt ( 82,418 ) ( 12,638 ) ( 89,841 ) Changes in fair value of assets and liabilities 7,146 ( 2,776 ) ( 15,883 ) Amortization of commercial agreement assets 47,392 73,070 85,524 Amortization of debt issuance costs 30,389 24,546 20,535 Amortization of discount on securities available for sale ( 44,031 ) ( 22,799 ) ( 36,060 ) Commercial agreement warrant expense 271,562 406,714 421,934 Stock-based compensation 321,433 344,511 451,709 Depreciation and amortization 225,076 169,044 134,634 Impairment of right of use assets — 752 1,244 Other 13,703 ( 25,331 ) ( 8,825 ) Change in operating assets and liabilities: Purchases and origination of loans held for sale ( 3,389,953 ) ( 4,212,299 ) ( 6,009,361 ) Proceeds from the sale of loans held for sale 3,389,990 4,211,687 6,174,447 Accounts receivable, net ( 84,952 ) ( 167,757 ) ( 67,690 ) Other assets ( 12,175 ) 31,228 ( 14,466 ) Accounts payable 41,801 12,417 ( 5,038 ) Payable to third-party loan buyers 52,056 105,791 ( 17,531 ) Accrued interest payable 2,386 11,138 7,915 Accrued expenses and other liabilities ( 48,943 ) ( 55,169 ) ( 38,165 ) Net cash provided by operating activities 793,909 450,138 12,181 Cash flows from investing activities Purchases and origination of loans held for investment ( 32,545,595 ) ( 21,488,547 ) ( 13,586,251 ) Proceeds from the sale of loans held for investment 12,572,254 6,058,799 1,582,501 Principal repayments and other loan servicing activity 18,655,657 14,147,034 10,028,452 Acquisition, net of cash and restricted cash acquired — — ( 16,051 ) Additions to property, equipment and software ( 192,189 ) ( 159,296 ) ( 120,775 ) Purchases of securities available for sale ( 823,886 ) ( 986,071 ) ( 1,082,147 ) Proceeds from maturities and repayments of securities available for sale 1,215,777 1,136,937 1,537,495 Other investing inflows 99,917 995 4,706 Other investing outflows ( 65,000 ) ( 35,000 ) ( 1,000 ) Net cash used in investing activities ( 1,083,064 ) ( 1,325,149 ) ( 1,653,070 ) Cash flows from financing activities Proceeds from the issuance of convertible notes 920,000 — — Proceeds from the issuance of funding debt 21,174,242 12,639,444 6,894,971 Proceeds from issuance of notes and certificates by securitization trust 2,500,000 2,350,000 1,150,000 Principal repayments of funding debt ( 21,387,609 ) ( 12,552,937 ) ( 5,801,531 ) Principal repayments of notes issued by securitization trust ( 900,000 ) ( 1,276,451 ) ( 606,299 ) Payment of debt issuance costs ( 49,233 ) ( 27,302 ) ( 22,443 ) Extinguishment of convertible debt ( 1,012,856 ) ( 63,561 ) ( 206,567 ) Proceeds from exercise of common stock options and warrants and contributions to ESPP 60,692 33,125 15,768 Payments of tax withholding for stock-based compensation ( 303,811 ) ( 189,169 ) ( 73,845 ) Repurchases of common stock ( 250,000 ) — ( 109 ) Net cash provided by financing activities 751,425 913,149 1,349,945 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1,245 ) ( 2,683 ) 81 Net increase (decrease) in cash, cash equivalents and restricted cash 461,024 35,455 ( 290,863 ) Cash, cash equivalents and restricted cash, beginning of period 1,295,399 1,259,944 1,550,807 Cash, cash equivalents and restricted cash, end of period $ 1,756,423 $ 1,295,399 $ 1,259,944 The accompanying notes are an integral part of these consolidated financial statements. 89 Table of Contents AFFIRM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT. (in thousands) June 30, 2025 June 30, 2024 June 30, 2023 Reconciliation to amounts on consolidated balance sheets (as of period end) Cash and cash equivalents 1,354,455 1,013,106 892,027 Restricted cash 401,968 282,293 367,917 Total cash, cash equivalents and restricted cash $ 1,756,423 $ 1,295,399 $ 1,259,944 June 30, 2025 June 30, 2024 June 30, 2023 Supplemental disclosures of cash flow information Cash payments for interest expense $ 404,377 $ 318,235 $ 163,191 Cash paid for operating leases 16,575 16,037 16,354 Cash paid for income taxes 2,736 1,187 808 Supplemental disclosures of non-cash investing and financing activities Stock-based compensation included in capitalized internal-use software $ 178,461 $ 126,510 $ 80,108 Securities retained under unconsolidated securitization transactions 84,718 58,507 — Right of use assets obtained in exchange for operating lease liabilities 6,238 — 494 Issuance of common stock in connection with settlement of contingent consideration liability — — 13,674 The accompanying notes are an integral part of these consolidated financial statements. 90 Table of Contents AFFIRM HOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. On June 26, 2025, the Company filed a certificate of conversion with the Secretary of State of the State of Delaware and filed articles of conversion and articles of incorporation with the Secretary of State of the State of Nevada, which as of July 1, 2025, effected a change in our jurisdiction of incorporation from Delaware to Nevada (the “Reincorporation”). 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying 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”). Our financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and variable interest entities (“VIEs”), in which we have a controlling financial interest. 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. Within the consolidated financial statements and tables presented in the accompanying notes, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Our VIE variable interests arise from contractual, ownership, or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets. 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 consolidated financial statements in conformity with U.S. GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for credit losses, capitalized internal-use software development costs, valuation allowance for deferred tax assets, loss on loan purchase commitment, discount on directly originated loans, the evaluation for impairment of intangible assets and goodwill, the fair value of available for sale debt securities 91 Table of Contents including retained interests in our securitization trusts and residual interest in structured transactions, the fair value of risk sharing arrangements, and stock-based compensation. We base our estimates on historical experience, current events, and other factors we believe to be reasonable under the circumstances. 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 consolidated financial statements; therefore, actual results could differ materially from those estimates. Business Combination We use the acquisition method of accounting for business combination transactions, and, accordingly, recognize the fair values of assets acquired and liabilities assumed in our consolidated financial statements. Transaction costs related to the acquisition of the acquired company are expensed as incurred. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date. Cash and Cash Equivalents 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 and agency securities, and other corporate securities purchased with an original maturity of three months or less. Restricted Cash Restricted cash consists primarily of: (i) deposits restricted by standby letters of credit for office leases; (ii) funds held in accounts as collateral for our originating bank partners; (iii) servicing funds held in accounts contractually restricted by agreements with warehouse credit facilities, securitization trusts, and third-party loan owners; and (iv) pledged cash collateral requirements for certain derivative agreements. Our ability to withdraw funds is restricted by contractual provisions under the applicable agreements. Securities Available for Sale We hold certain investments in marketable debt securities securitization notes receivable and certificates in unconsolidated securitization trusts, and residual interests in structured transactions which are accounted for under ASC Topic 320, “Investments - Debt Securities” (“ASC 320”). We have classified these investments as available for sale, as defined within ASC 320. These investments are held at fair value with changes in fair value recorded in unrealized gain (loss) on securities available for sale, net within other comprehensive income (loss) , excluding the portion relating to any credit loss. As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline in fair value which management identifies as a credit loss will be recognized as an allowance for credit losses through other income (expense), net. To the extent management intends to sell or may be required to sell a security in an unrealized loss position, we 1) reverse any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and 2) write-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through other income (expense), net. Interest income for available for sale securities is recorded within other income (expense), net. We also applied the interest accrual guidance in ASC Topic 325, “Investments - Other” (“ASC 325”) relating to beneficial interests for our investments in securitization notes receivable and certificates in unconsolidated securitization trusts and residual interests in structured transactions. Accordingly, we recognize interest income each period based on the effective interest rate calculated using expected cash flows. Changes in the timing of expected cash flows are 92 Table of Contents accounted for prospectively through an adjustment to interest income. From time to time, depending on our expectation regarding timing of expected cash flows from the investments, we may elect to place certain investments on non-accrual status, where any interest payment received is recorded as a direct reduction of the investment under the cost recovery method. Available for sale securities initially purchased with less than 90 days until maturity with quoted transaction prices in an active market are classified as cash and cash equivalents. Loans Held for Investment We either originate loans directly or purchase our loans from our originating bank partners pursuant to the terms outlined in the respective executed loan sale program agreements between us and our bank partners. Loan receivables that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are classified as held for investment and are reported at amortized cost, which includes unpaid principal balances, any related premiums including fees paid to our originating bank partners and discounts due to loss on loan purchase commitment for bank partner loans with a fair value below the purchase price, discounts due to loss on directly originated loans with a fair value below loan par at origination, where applicable, adjusted for any charge-offs. The amortized cost is adjusted for the allowance for credit losses within loans held for investment, net. Loans Held for Sale We sell certain loans to third-party loan buyers and securitization trusts. At origination a loan is classified as held for sale when the loan is identified as for sale to a third-party loan buyer or to be sold to a securitization trust that is anticipated to be off-balance sheet. Loans classified as held for sale are recorded at the lower of amortized cost or fair value. A loan that is initially designated as held for sale or held for investment may be reclassified when our intent for that loan changes. When a loan held for investment is reclassified to held for sale and reported at fair value, any allowance for the credit loss related to that loan is released and any fair value adjustment to record the loan at the lower of amortized cost or fair value is recorded. Our loans designated as held for sale are generally sold within one to three days of the balance sheet date. Fair value adjustments were not material for loans designated as held for sale as of June 30, 2025 and June 30, 2024. Transfers of Financial Assets We account for loan sales in accordance with ASC 860, “Transfers and Servicing” (“ASC 860”) which states that a transfer of financial assets, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale if all of the following conditions are met: a. The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors; b. The transferee or beneficial interest holders have the right to pledge or exchange the transferred financial assets; and c. The transferor does not maintain effective control of the transferred assets. When the requirements for sale accounting are met, we record the gain or loss on the sale of a loan at the sale date in an amount equal to the proceeds received less the carrying value of the loan, adjusted for initial recognition of assets obtained and liabilities incurred at the date of sale. Upon the sale of a loan to a third-party loan buyer or unconsolidated securitization trust in which we retain servicing rights, we may recognize a servicing asset or liability. A servicing asset or liability arises when our contractual servicing fee with a counterparty differs from the adequate compensation rate that would be required by a third-party to service the same portfolio of assets, as defined by ASC 860. Servicing assets and liabilities are measured and recorded at fair value and are presented as a component of other assets or accrued expenses and other liabilities, respectively. The recognition of a servicing asset results in a corresponding increase to gain on sales of loans. The recognition of a servicing liability results in a corresponding decrease to gain on sales of loans. The 93 Table of Contents servicing rights are remeasured at fair value each period, with the subsequent adjustment recognized in servicing income . In connection with the sale of a loan to a third-party loan buyer or unconsolidated securitization trust we may also recognize a recourse liability in accordance with ASC 460, “Guarantees” (“ASC 460”) as in certain circumstances we may become required to re-purchase loans from third-party investors due to breaches in representations and warranties. The recognition of a recourse liability results in a corresponding decrease to gain on sales of loans. The recourse liability is amortized over the loan term and remeasured each period based on the outstanding loan balance and changes in our expectation of future repurchase obligations. Subsequent remeasurement of the recourse liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss). In addition, we may recognize a risk share asset or liability in accordance with ASC 860 in certain arrangements with a third-party loan buyer to make a payment to the loan buyer or are entitled to receive a payment from the loan buyer, depending on the actual versus expected loan performance as contractually agreed to with the counterparty, and subject to a cap based on a percentage of the principal balance of loans sold. The recognition of a risk share asset results in a corresponding increase to gain on sale of loans. The recognition of a risk share liability results in a corresponding decrease to gain on sales of loans. The risk share asset and liability are measured at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” and remeasured each period based on the changes in inputs and assumptions for our expectation of future obligations. Subsequent remeasurement of the risk share asset and liability is recognized in gain on sale of loans within the consolidated statement of operations and comprehensive income (loss). Allowance for Credit Losses on Loans Held for Investment The allowance for credit losses on loans held for investment is determined based on management’s current estimate of expected credit losses over the remaining contractual term, historical credit losses, consumer payment trends, estimates of recoveries, and future expectations on individual loans as of each balance sheet date. We immediately recognize an allowance for expected credit losses upon the 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 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. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is reversed. In estimating the allowance for credit losses, management utilizes a migration analysis of delinquent and current loan receivables. Migration analysis is a technique used to estimate the likelihood that a loan receivable will progress through various stages of delinquency and to charge-off. The analysis focuses on the pertinent factors underlying the quality of the loan portfolio. These factors include historical performance, the age of the receivable balance, seasonality, customer credit-worthiness, changes in the size and composition of the loan portfolio, delinquency levels, bankruptcy filings and actual credit loss experience. We also take into consideration certain qualitative factors where we adjust our quantitative baseline using our best judgment to consider the inherent uncertainty regarding future economic conditions and consumer loan performance. For example, the Company considers the impact of current economic factors at the reporting date that did not exist over the period from which historical experience was used. As of June 30, 2025, we have considered the impact of Federal Reserve monetary policy, labor market trends, tariffs and inflation. When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged 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 or meets other charge-off policy requirements. Subsequent recoveries of the unpaid principal balance, if any, are credited to the allowance for credit losses. Refer to Note 4. Loans Held for Investment and Allowance for Credit Losses for more information. 94 Table of Contents 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 $ 18.8 million and $ 14.9 million as of June 30, 2025 and June 30, 2024, respectively. Property, Equipment and Software, net Property, equipment and software consist of computer and office equipment, capitalized internal-use developed software and website development costs and leasehold improvements. Property, equipment and software is stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful lives of the assets, which range from three to seven years . Leasehold improvements are depreciated over the shorter of the improvement’s estimated useful life or the remaining lease term. We capitalize costs to develop internally developed software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software or website will function and be used as intended. Capitalized internal-use software costs primarily include salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to external consultants. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which range from three to five years . Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades. Capitalized internally developed software costs are included in property, equipment and software, and amortization expense is included in technology and data analytics expense within the consolidated statements of operations and comprehensive income (loss). Property, equipment and software is tested for impairment when there is an indication that the carrying value of the asset group it belongs to may not be recoverable. This would occur if the undiscounted cash flows estimated to be generated by an asset group are less than its carrying value. When an asset group is determined not to be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset group over its respective fair value and recorded in the period the determination is made. Goodwill and Intangible Assets We recognize the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date as goodwill. Goodwill is not amortized but is reviewed for impairment annually and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value. Identifiable intangible assets include developed technology, merchant relationships, assembled workforce, and trade names resulting from acquisitions, including asset acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis. Acquired intangible assets are presented net of accumulated amortization within the consolidated balance sheets. We review the carrying amounts of intangible assets for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. We measure the 95 Table of Contents recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization. Leases We determine whether an arrangement is a lease for accounting purposes at contract inception. For operating leases, we record a right-of-use asset (“ROU”) within other assets in our consolidated balance sheets, which represents our right to use an underlying asset for the lease term. A corresponding lease liability, which represents our obligation to make lease payments arising from the lease, is recorded in accrued expenses and other liabilities in our consolidated balance sheets. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To discount the lease payments, we use an incremental borrowing rate derived from a corporate yield curve corresponding with the lease term using information available on the commencement date. We have the option to renew or extend our leases. We include these periods in the lease term when a decision has been made to exercise the option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. We have elected the practical expedient allowing the combination of lease and non-lease components by class of underlying asset. We have also elected the short-term lease exception and will not recognize right-of-use assets or lease liabilities for qualifying leases with a term of less than 12 months from lease commencement. Equity Securities Held at Cost Equity securities held at cost which do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “measurement alternative”). Gains and losses on the investment due to observable price changes in orderly transaction for an identical or similar investment of the same issuer or impairment, if any, are recognized in other (expense) income, net within our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition. Funding Debt and Debt Issuance Costs To finance loans we originate directly or that we purchase from our originating bank partners, we borrow from various lenders through collateralized funding arrangements, which include our warehouse and variable funding note credit facilities secured by pledged loans, and sale and repurchase agreements secured by pledging certain retained interests in our off-balance sheet securitizations. These borrowings are carried at amortized cost. Costs incurred in connection with borrowings, such as banker fees, commitment fees and legal fees, are classified as deferred debt issuance costs. We defer these costs and amortize them on a straight-line basis over the expected term of the debt. Interest payments and amortization of debt issuance costs incurred on funding debt is presented as funding costs within the consolidated statements of operations and comprehensive income (loss). Unamortized debt issuance costs are presented as a reduction of the associated debt. Notes Issued by Securitization Trusts In connection with our asset-backed securitization program, we sponsor and establish trusts (deemed to be VIEs) to ultimately purchase loans facilitated by our platform. Where we consolidate the securitization trusts, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts within the consolidated balance sheets. We defer and 96 Table of Contents amortize note issuance costs, including banker fees, legal fees and other professional service fees, for consolidated securitization trusts on a straight-line basis over the expected life of the notes. Interest payments and amortization of note issuance costs incurred is presented as funding costs within the consolidated statements of operations and comprehensive income (loss). Unamortized note issuance costs are presented as a reduction of the associated notes. Income Taxes Income taxes are accounted for using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as an income tax expense (benefit) in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex federal, state, and foreign tax laws and regulations, and positions taken in our tax returns may be subject to challenge by the taxing authorities upon examination. In accordance with applicable accounting guidance, uncertain tax positions are recognized in the financial statements only when it is more likely than not that the positions will be sustained upon examination by the tax authorities, assuming full knowledge of the position and all relevant facts. Interest and penalties, if any, on income tax uncertainties are classified within income tax expense in the income statement. Fair Value of Assets and Liabilities ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that use, as inputs, observable market-based parameters to the greatest extent possible. Additionally, ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels: • Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. • Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means. • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using 97 Table of Contents discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Revenue Recognition Our revenue consists of five components: merchant network revenue, card network revenue, interest income, gain on sale of loans and servicing income. Refer to Note 3. Revenue for additional information. Loss on Loan Purchase Commitment We purchase certain loans from our originating bank partners that are processed through our platform that our originating bank partner puts back to us. Under the terms of the agreements with our originating bank partners, we are generally required to pay the principal amount plus accrued interest for such loans and fees. In certain instances, our originating bank partners may originate loans with zero or below market interest rates that we are required to purchase. 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 within our consolidated statements of operations and comprehensive income (loss). These costs are incurred on a per loan basis. Due to the nature of this arrangement with our originating bank partners, we recognize a net liability for this commitment when the merchant confirms the transaction. This liability is recorded at fair value, which is determined by the difference between the estimated fair value of the loan and the anticipated purchase price. Upon purchase, the liability is included in the amortized cost basis of the purchased loan as a discount, which is amortized into interest income over the life of the loan. Platform Partners We have agreements with third-party platform partners through which we obtain access to certain merchant relationships and utilize them as a means of integrating Affirm services. As we maintain separate agreements with platform partners and merchants, the existence of a platform partner does not typically impact our Principal vs. Agent assessment in relation to the Merchant, where we have concluded that we are the Principal to the merchant customer in providing the facilitation of credit services. We make payments to platform partners for each eligible transaction processed through the platform integration. Payments made to platform partners are recorded in processing and servicing expense as incurred within our consolidated statements of operations and comprehensive income (loss). Sales and Marketing Costs Sales and marketing costs include the expense related to warrants and other share-based payments granted to our enterprise partners. Refer to Note 6. Balance Sheet Components for more information on these arrangements. Sales and marketing costs also include salaries and personnel-related costs, costs of marketing and promotional activities, and certain losses on loan origination for loans originated by our wholly-owned subsidiaries. A portion of these costs related to general marketing and promotional activities are considered advertising costs within the meaning of ASC Topic 720, “Other Expenses” (“ASC 720”), and are expensed as incurred. Advertising costs totaled $ 30.8 million, $ 19.2 million and $ 22.6 million for the years ended June 30, 2025, 2024, and 2023, respectively. Derivative Instruments We use derivative financial instruments (“derivatives”) to manage exposure to variable interest rates. Our primary objective in holding derivatives is to reduce the volatility in cash flows associated with our funding activities arising from changes in interest rates. We do not employ derivatives for trading or speculative purposes. We use a combination of interest rate cap agreements and interest rate swaps to manage interest costs and the risk associated with variable interest rates. ASC Topic 815 “Derivatives and Hedging” (“ASC 815”) requires that 98 Table of Contents an entity recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value. In accordance with ASC 815, we designate certain derivative instruments as cash flow hedges, while others are not designated as hedges. Certain of our derivative agreements provide for netting arrangements for contracts that settle with the same counterparty, however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes. As such, the fair values are presented gross within other assets and accrued expenses and other liabilities . Offsetting collateral received by or paid to the counterparty is presented gross within accrued expenses and other liabilities or other assets, as applicable, within the consolidated balance sheet. Cash flows associated with our derivative instruments are reported within cash flows from operating activities in the consolidated statements of cash flows. Cash Flow Hedges We have interest rate swaps designated as cash flow hedges in order to mitigate our exposure to changes in interest rates related to our funding activities. Swaps that qualify as cash flow hedges are documented and designated as such when we enter into the contracts. In accordance with our risk management policies, we structure our hedges with terms similar to that of the item being hedged. At inception of the hedge accounting relationship and on a quarterly basis, we formally assess whether derivatives designated as cash flow hedges are highly effective in offsetting changes to the forecasted cash flows of the hedged items. If the cash flow hedges are deemed to be highly effective, the gain or loss on the cash flow hedges are recorded within other comprehensive income (loss) (“OCI”) and reclassified into earnings when the hedged cash flows are recognized in funding costs within the consolidated statements of operations and comprehensive income (loss). The amount that is reclassified into earnings is presented within the consolidated statements of operations and comprehensive income (loss) within funding costs, the same line item in which the hedged transaction is recognized. Derivatives Not Designated as Hedges We have interest rate caps and interest rate swaps that are not designated as hedging instruments. We enter into these contracts to manage interest rate risk. Any changes in the fair value of these financial instruments are reflected in other (expense) income, net, within the consolidated statements of operations and comprehensive income (loss). Refer to Note 12. Derivative Financial Instruments for additional information on our derivative assets and liabilities. Stock-Based Compensation We account for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of U.S. GAAP, which requires compensation cost for the grant date fair value of stock-based awards to be recognized over the requisite service period. We have elected to estimate the expected forfeiture rate for service-based awards and only recognize expense for those stock-based awards expected to vest. We estimate the forfeiture rate based on our historical experience with stock-based awards that are granted and forfeited prior to vesting. The fair value of stock-based awards, granted or modified, is determined on the grant date (or the modification date, if applicable) at fair value, using appropriate valuation techniques. Service-Based Awards We record stock-based compensation expense for service-based stock options and restricted stock units (“RSUs”) on a straight-line basis over the requisite service period, which is generally one to four years . The fair value of each RSU is equal to the closing stock price on the date of grant. The fair value of each option on the date of grant is determined using the Black Scholes-Merton option pricing model using the single-option award approach. We estimate volatility using a weighted average of our historical volatility and the historical volatility of selected 99 Table of Contents comparable publicly-traded companies due to the limited time period of historical market data for our common stock. The risk-free interest rate is determined using a U.S. Treasury rate for the period that coincides with the expected term of the award. We use the simplified method to determine an estimate of the expected term of an employee stock option. We account for stock-based awards to non-employees, including consultants, in accordance with ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), in which equity-classified awards are measured at the grant date fair value and recognized as expense in the period and manner as though we had paid cash in exchange for goods or services instead of granting a stock-based award. Performance-Based Awards Prior to the IPO, we granted RSUs that were subject to two vesting conditions: a service-based vesting condition (i.e., employment over a period of time) and a performance-based vesting condition (i.e., a liquidity event in the form of either certain change in control transactions or an initial public offering). The performance-based condition was met upon the IPO. We record stock-based compensation expense for these awards on an accelerated attribution method over the requisite service period, which is generally four years . Upon exercise or vesting of a stock-based award, the tax effect of the difference, if any, between the cumulative compensation cost recognized for financial statement purposes and the deduction for income tax purposes, will be recognized as an income tax expense or benefit in the consolidated statement of operations and comprehensive income (loss). Market-Based Awards We have granted stock option awards with service-based, performance-based, and market-based vesting conditions. We determined the grant date fair value of these awards by utilizing a Monte Carlo simulation model that incorporates the probability of achievement of the market-based conditions. The Monte Carlo simulation also incorporates assumptions including expected stock price volatility, expected term, and risk-free interest rates. We estimated the volatility of common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies in our industry group. We estimated the expected term of the award based on various exercise scenarios. The risk-free interest rate was determined using a U.S. Treasury rate for the period that coincides with the expected term of the award. The grant-date fair value of market-based equity awards is recorded as stock-based compensation expense on an accelerated attribution method over the requisite service period if the performance-based conditions are considered probable of being satisfied. Foreign Currency We have wholly-owned foreign subsidiaries that use the local currency of their respective country as their functional currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Revenue, expenses, and gains or losses of these subsidiaries are translated into U.S. dollars using average exchange rates for each period. Gains and losses resulting from these translations are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as other income (expense), net, in our consolidated statements of operations and comprehensive income (loss). Basic and Diluted Net Income (Loss) per Common Share We calculate net income or loss per share using the two-class method. The two-class method requires income available to common stockholders for the period to be allocated between each class of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had 100 Table of Contents been distributed. Our convertible senior notes represent participating securities, and net income will be allocated to these securities in any periods during which a portion of the earnings is required to be attributed to the notes. We calculate basic net income (loss) per share attributable to common stockholders for Class A and Class B common stock by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding in each class for the period. We calculate diluted net income per share attributable to common stockholders by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding in each class, after giving consideration to the dilutive effect of our stock options, restricted stock units, employee stock purchase plan shares, convertible debt and common stock warrants that are outstanding during the period. In periods where we have generated a net loss, the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive. Recently Adopted Accounting Standards Segment Reporting In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The new guidance modifies the existing annual and interim segment reporting disclosures. The purpose of the update is to enable investors to better understand an entity’s overall performance and assess potential future cash flows, primarily through enhanced disclosure requirements on significant segment expenses. The ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company adopted the new standard effective June 30, 2025. Refer to Note 19. Segments and Geographical Information for the enhanced disclosures. Recent Accounting Pronouncements Not Yet Adopted 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 within 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 within our consolidated financial statements and disclosures. 101 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 within our consolidated financial statements and disclosures. 3. Revenue The following table presents our revenue disaggregated by revenue source (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Merchant network revenue $ 882,658 674,607 507,600 Card network revenue 231,308 151,401 119,338 Interest income 1,608,221 1,204,355 685,217 Gain on sales of loans 381,622 197,153 188,341 Servicing income 120,602 95,483 87,489 Total revenue, net $ 3,224,412 $ 2,322,999 $ 1,587,985 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. For the years ended June 30, 2025, 2024, and 2023 affiliate network revenue was $ 123.4 million, $ 95.8 million, and $ 68.7 million, respectively. 102 Table of Contents For the years ended June 30, 2025, 2024, and 2023, there were no merchants that exceeded 10% of total revenue. Card Network Revenue — Revenue from Contracts with Customers We have agreements with card-issuing partners to facilitate the issuance of physical and one-time-use virtual cards to be used by consumers at checkout. Prior to purchase, consumers can apply at Affirm.com or via the Affirm App and, upon approval, use a physical or virtual card to complete their purchase online or in-store. Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full or pay later, by using a unique post-purchase feature that allows them to instantly apply for an installment loan for any eligible debit transaction. Where applicable, our originating bank partner, or wholly-owned subsidiaries, then originates a loan to the consumer after the transaction is confirmed by the merchant. 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): June 30, 2025 June 30, 2024 June 30, 2023 Contractual interest income on unpaid principal balance (1) $ 1,423,439 1,043,019 561,192 Amortization of discount on loans 254,964 204,654 158,703 Amortization of premiums on loans ( 21,165 ) ( 16,945 ) ( 17,628 ) Interest receivable charged-off, net of recoveries (2) ( 49,016 ) ( 26,373 ) ( 17,050 ) Total interest income $ 1,608,221 $ 1,204,355 $ 685,217 (1) Contractual interest income on unpaid principal balance, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 375.9 million and $ 369.7 million for the 103 Table of Contents same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements. (2) Interest receivable charged-off, net of recoveries, for the year ended June 30, 2025, includes a reduction of $ 10.9 million and $ 15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $ 25.8 million and $ 27.5 million for the same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements. We accrue interest income using the effective interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan. 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 June 30, 2025, 2024, and 2023, the balance of loans held for investment on non-accrual status was $ 6.2 million, $ 2.6 million, and $ 1.8 million, respectively. The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements. 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 10. Securitization and Variable Interest Entities for further discussion on transfers of loan receivables and Note 13. 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. 104 Table of Contents 4. Loans Held for Investment and Allowance for Credit Losses Loans held for investment consisted of the following (in thousands): June 30, 2025 June 30, 2024 Unpaid principal balance $ 7,050,447 $ 5,697,965 Accrued interest receivable 67,953 62,796 Premiums on loans held for investment 9,818 7,822 Less: Discount due to loss on loan purchase commitment ( 75,124 ) ( 63,682 ) Less: Discount due to loss on directly originated loans ( 27,559 ) ( 34,829 ) Less: Fair value adjustment on loans acquired through business combination ( 1 ) ( 16 ) Total loans held for investment $ 7,025,534 $ 5,670,056 Loans held for investment includes loans originated through our originating bank partners and directly originated loans. 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 $ 30.0 billion, $ 21.5 billion, and $ 16.2 billion for the years ended June 30, 2025, 2024, and 2023, respectively. We directly originated $ 6.3 billion, $ 4.5 billion, and $ 3.7 billion of loans for the June 30, 2025, 2024, and 2023, respectively. Our portfolio consists of interest bearing and non-interest bearing consumer loans with original term lengths of up to sixty months originated in markets including the U.S., U.K., and Canada, with the majority of loans originated within the U.S. While we view our loan portfolio as a single product segment, unsecured consumer loans, we consider factors such as country of origin, loan product, origination channel, merchant and various borrower characteristics to predict future losses. We closely monitor credit quality for our loan receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting, where loan applications are assessed against the credit underwriting policy and procedures for our directly originated loans and originating bank partner loans, and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal historical experience, including the consumer’s prior repayment history on our platform as well as other measures. We combine these factors to establish a proprietary score as a credit quality indicator. Our proprietary score (“ITACs”) is assigned to most loans facilitated through our technology platform, ranging from zero to 100 , with 100 representing the highest credit quality and therefore the lowest likelihood of loss. The ITACs model analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to: basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes. When a consumer passes both fraud and credit policy checks, the application is assigned an ITACs score. ITACs is also used for portfolio performance monitoring. Our credit risk team closely tracks the distribution of ITACs at the portfolio level, as well as ITACs at the individual loan level to monitor for signs of a changing credit profile within the portfolio. Repayment performance within each ITACs band is also monitored to support both the integrity of the risk scoring models and to measure possible changes in consumer behavior amongst various credit tiers. 105 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 June 30, 2025 and June 30, 2024 (in thousands): June 30, 2025 Amortized Costs Basis by Fiscal Year of Origination 2025 2024 2023 2022 2021 Prior Total 96+ $ 4,481,684 $ 257,280 $ 43,716 $ 3,328 $ 61 $ 10 $ 4,786,079 94 – 96 1,795,298 51,201 945 145 7 5 1,847,601 90 – 94 248,911 7,357 271 66 4 1 256,610 <90 52,163 950 2 25 2 1 53,143 No score (1) 2,169 2,892 8,142 850 77 19 14,149 Total amortized cost basis $ 6,580,225 $ 319,680 $ 53,076 $ 4,414 $ 151 $ 36 $ 6,957,582 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 year ended June 30, 2025 (in thousands): June 30, 2025 Net Charge-offs by Fiscal Year of Origination 2025 2024 2023 2022 2021 Prior Total Current period charge-offs ( 205,624 ) ( 324,013 ) ( 20,444 ) ( 1,576 ) ( 237 ) ( 178 ) ( 552,072 ) Current period recoveries 7,832 23,229 13,051 5,644 1,140 384 51,280 Current period net charge-offs $ ( 197,792 ) $ ( 300,784 ) $ ( 7,393 ) $ 4,068 $ 903 $ 206 $ ( 500,792 ) 106 Table of Contents Loan receivables are defined as past due if either the principal or interest have not been received within four calendars days of when they are due in accordance with the agreed upon contractual terms. The following table presents an aging analysis of the amortized cost basis excluding accrued interest receivable of loans held for investment by delinquency status (in thousands): June 30, 2025 June 30, 2024 Non-delinquent loans $ 6,619,285 $ 5,331,462 4 – 29 calendar days past due 167,175 134,434 30 – 59 calendar days past due 66,831 55,021 60 – 89 calendar days past due 56,554 47,764 90 – 119 calendar days past due (1) 47,737 38,615 Total amortized cost basis $ 6,957,582 $ 5,607,296 (1) Includes $ 47.6 million and $ 38.6 million of loan receivables as of June 30, 2025 and June 30, 2024, respectively, that are 90 days or more past due, but are not on non-accrual status. We maintain an allowance for credit losses at a level sufficient to absorb expected credit losses based on evaluating known and inherent risks in our loan portfolio. The allowance for credit losses reflects our estimate of expected lifetime credit losses, which consider the remaining contractual term, historical credit losses, consumer payment trends, estimated recoveries, and future payment expectations as of each balance sheet date. Adjustments to the allowance for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented within our consolidated statements of operations and comprehensive income (loss). When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged off against the allowance for credit losses. Loans are charged off in accordance with our charge-off policy, as the contractual principal becomes 120 days past due. 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): June 30, 2025 June 30, 2024 June 30, 2023 Balance at beginning of period $ 309,097 $ 204,531 $ 155,392 Provision for credit losses 588,624 439,581 318,188 Charge-offs ( 552,072 ) ( 365,711 ) ( 300,058 ) Recoveries of charged-off receivables 51,280 30,696 31,009 Balance at end of period $ 396,929 $ 309,097 $ 204,531 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 107 Table of Contents will not exceed the initial total interest due prior to modification, and a loan may not be re-amortized more than once. The following tables present the amortized cost basis of loans excluding accrued interest receivable that were modified for borrowers experiencing financial difficulty during the years ended June 30, 2025 and 2024, by type of modification (in thousands): June 30, 2025 June 30, 2024 (1) Payment deferral $ 11,642 $ 34,641 Loan re-amortization 225 1,057 Total $ 11,867 $ 35,698 % of total loan receivables outstanding 0.17 % 0.64 % (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 years ended June 30, 2025 and 2024, the length of each deferral period was one month . With respect to borrowers who received a loan re-amortization during the years ended June 30, 2025 and 2024, 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 table presents the delinquency status as of June 30, 2025 and June 30, 2024, by amortized cost basis excluding accrued interest receivable, of loan receivables that have been modified within the last 12 months where the borrower was experiencing financial difficulty at the time of modification (in thousands): June 30, 2025 Payment Deferral Loan Re-amortization Total Non-delinquent loans $ 7,240 $ 142 $ 7,382 4 – 29 calendar days past due 1,721 43 1,764 30 – 59 calendar days past due 959 17 976 60 – 89 calendar days past due 867 12 879 90 – 119 calendar days past due 855 11 866 Total amortized cost basis $ 11,642 $ 225 $ 11,867 108 Table of Contents June 30, 2024 (1) Payment Deferral Loan Re-amortization Total Non-delinquent loans $ 19,189 $ 439 $ 19,628 4 – 29 calendar days past due 5,028 180 5,208 30 – 59 calendar days past due 2,382 124 2,506 60 – 89 calendar days past due 4,421 153 4,574 90 – 119 calendar days past due 3,621 161 3,782 Total amortized cost basis $ 34,641 $ 1,057 $ 35,698 (1) Amounts previously disclosed excluded modifications made to borrowers where the loan was less than 30 days delinquent at the time of modification With respect to modifications during the 12 months preceding June 30, 2025 and June 30, 2024, respectively, where the borrower was experiencing financial difficulty at the time of modification, the amortized cost basis of loans which have been charged off was $ 6.5 million and $ 13.3 million, respectively. 5. Acquisitions During the years ended June 30, 2025 and 2024, there were no acquisitions accounted for as business combinations and there was one acquisition accounted for during the same period in 2023. Acquisitions completed during the year ended June 30, 2023 Butter Holdings Ltd On February 1, 2023, we completed the closing of the transaction contemplated by a share purchase agreement entered into with certain sellers to acquire the entire issued share capital of Butter Holdings Ltd. (“Butter”), a buy now, pay later company based in the United Kingdom. The purchase price was comprised of (i) $ 14.9 million in cash, subject to adjustments in accordance with the purchase agreement, and (ii) $ 1.5 million settlement of subordinated secured notes. The acquisition date fair value of the consideration transferred for Butter was approximately $ 16.3 million, which consisted of the following (in thousands): Cash $ 14,863 Settlement of subordinated secured notes 1,475 Total acquisition date fair value of the consideration transferred $ 16,337 The acquisition was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). The acquired identifiable intangible assets have been recorded at their estimated fair values with the excess purchase price assigned to goodwill. The goodwill was primarily attributed to future synergies from integration. The goodwill is not expected to be deductible for income tax purposes. The following table summarizes the allocation of the consideration paid of approximately $ 16.3 million to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): 109 Table of Contents Cash and cash equivalents $ 287 Loans held for investment, net 172 Accounts receivable, net 11 Intangible assets 9,243 Other assets 672 Total assets acquired 10,385 Accounts payable 568 Accrued expenses and other liabilities 2,923 Total liabilities assumed 3,491 Net assets acquired 6,894 Goodwill $ 9,443 Total purchase price $ 16,337 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands): Fair Value Useful Life (in years) Lending license $ 9,243 Indefinite The fair value of the intangible asset was determined by applying the with-and-without method. The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represents Level 3 measurements. The transaction costs associated with the acquisition were approximately $ 1.8 million for the year ended June 30, 2023, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss). 6. Balance Sheet Components Property, Equipment and Software, net Property, equipment and software, net consisted of the following (in thousands): June 30, 2025 June 30, 2024 Internally developed software $ 987,399 $ 630,129 Leasehold improvements 21,990 21,023 Computer equipment 9,555 9,827 Furniture and equipment 9,007 8,913 Total property, equipment and software, at cost $ 1,027,952 $ 669,892 Less: Accumulated depreciation and amortization ( 455,315 ) ( 242,206 ) Total property, equipment and software, net $ 572,637 $ 427,686 Depreciation and amortization expense on property, equipment and software was $ 223.7 million, $ 148.2 million and $ 82.1 million for the years ended June 30, 2025, 2024, and 2023, respectively. 110 Table of Contents No impairment losses related to property, equipment and software were recorded during the years ended June 30, 2025, 2024, and 2023. Goodwill and Intangible Assets The changes in the carrying amount of goodwill during the years ended June 30, 2025 and 2024 were as follows (in thousands): Balance as of June 30, 2023 $ 542,571 Adjustments (1) ( 9,131 ) Balance as of June 30, 2024 $ 533,439 Adjustments (1) 717 Balance as of June 30, 2025 $ 534,156 (1) Adjustments to goodwill during the years ended June 30, 2025 and 2024 primarily pertained to foreign currency translation adjustments. No impairment losses related to goodwill were recorded during the year ended June 30, 2025. During the year ended June 30, 2024, we recognized goodwill disposal losses of $ 1.0 million included in general and administrative expenses within the consolidated statements of operations and comprehensive income (loss). For the year ended June 30, 2023, no impairment losses related to goodwill were recorded. Intangible assets consisted of the following (in thousands): June 30, 2025 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (in years) Merchant relationships $ 37,845 $ ( 37,845 ) $ — 0.0 Developed technology 39,443 ( 39,369 ) 74 1.3 Assembled workforce 12,490 ( 12,490 ) — 0.0 Trademarks and domains, definite 1,450 ( 1,355 ) 95 0.6 Trademarks, licenses and domains, indefinite 12,416 — 12,416 Indefinite Other intangibles 350 — 350 Indefinite Total intangible assets $ 103,994 $ ( 91,059 ) $ 12,935 111 Table of Contents 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 $ 1.3 million, $ 20.8 million and $ 52.5 million for the years ended June 30, 2025, 2024 and 2023, respectively. No impairment losses related to intangible assets were recorded during the years ended June 30, 2025, 2024, and 2023. The expected future amortization expense of these intangible assets as of June 30, 2025 is as follows, by fiscal year (in thousands): 2026 $ 154 2027 15 2028 — 2029 — 2030 and thereafter — Total amortization expense $ 169 Commercial Agreement Assets In fiscal year 2022, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). 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 years ended June 30, 2025, 2024, and 2023, we recognized amortization expense of $ 20.7 million, $ 32.9 million, and $ 41.4 million, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. As of June 30, 2025, the accumulated amortization is $ 121.3 million and the remaining net asset value is $ 12.2 million, which will be recognized over the remaining useful life of 0.6 years. Refer to Note 14. Stockholders’ Equity for further discussion of the warrants. In fiscal year 2021, we granted warrants in exchange for the opportunity to acquire new merchant partners through a commercial agreement with Shopify Inc. (“Shopify”). We recognized an asset of $ 270.6 million based on the grant-date fair value of the vested warrants. We amortize the asset over the expected benefit period, which was extended from six to nine years during the fiscal year 2025 upon execution of a commercial agreement that superseded and replaced the previous commercial agreement. The benefit period is reevaluated each reporting period. W e recorded amortization expense related to the commercial agreement asset of $ 26.7 million, $ 35.9 million, and $ 35.8 million for the years ended June 30, 2025, 2024, and 2023, respectively, in our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense. As of June 30, 2025, the accumulated amortization is $ 225.5 million and the remaining net asset value is $ 45.1 million, which will be recognized over the remaining useful life of 4.0 years. 112 Table of Contents Other Assets Other assets consisted of the following (in thousands): June 30, 2025 June 30, 2024 Processing reserves $ 90,826 $ 55,754 Prepaid expenses 47,027 28,799 Equity securities held at cost 40,277 37,806 Risk sharing assets 43,179 33,884 Prepaid payroll taxes for stock-based compensation 25,188 21,395 Operating lease right-of-use assets 19,124 21,863 Foreign deferred tax asset 13,929 21,206 Other receivables 3,771 18,263 Derivative instruments 2,644 17,207 Fixed term deposit — 35,203 Other assets 9,395 7,960 Total other assets $ 295,360 $ 299,340 Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): June 30, 2025 June 30, 2024 Accrued expenses $ 72,813 $ 59,613 Operating lease liability 31,943 39,493 Collateral held for derivative instruments 2,787 17,643 Other liabilities 49,729 30,680 Total accrued expenses and other liabilities $ 157,272 $ 147,429 7. Leases We lease office space under operating leases with various expiration dates through 2032. 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 June 30, 2025, we have not considered such provisions in the determination of the lease term, as it is not reasonably certain these options will be exercised. Leases have remaining terms that range from less than one year to seven years . 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 June 30, 2025, the collateral totaled $ 4.5 million, which was in the form of securities that have been classified as securities available for sale at fair value in the consolidated balance sheets. As of June 30, 2024, the collateral totaled $ 8.8 million, of which $ 2.0 million was in the form of cash that was classified as restricted cash, and $ 6.8 million was in the form of securities which was classified as securities available for sale at fair value within our consolidated balance sheets. No impairment charge was incurred related to leases during the fiscal year ended June 30, 2025. During the years ended June 30, 2024 and 2023, we subleased a portion of our leased office space in San Francisco, resulting in 113 Table of Contents an impairment charge of $ 0.8 million and $ 1.2 million, respectively, included in general and administrative expense within our consolidated statements of operations and comprehensive income (loss). Operating lease expense is as follows (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Operating lease expense (1) (2) $ 11,949 $ 11,549 $ 18,954 (1) Lease expenses for our short-term leases were immaterial for the years presented. (2) During the year ended June 30, 2023, we incurred charges of $ 4.7 million, within restructuring and other, within our consolidated statements of operations and comprehensive income (loss), related to a reduction to our ROU lease assets which were attributed to certain leased space we were no longer utilizing for our business operations. We have subleased a portion of our leased facilities. Sublease income totaled $ 3.8 million, $ 4.6 million, and $ 3.4 million during the years ended June 30, 2025, 2024, and 2023 , respectively . Lease term and discount rate information are summarized as follows: June 30, 2025 Weighted average remaining lease term (in years) 4.2 Weighted average discount rate 5.7 % As of June 30, 2025, future minimum lease payments are as follows (in thousands): 2026 $ 16,575 2027 4,443 2028 3,563 2029 3,618 2030 3,749 Thereafter 4,432 Total lease payments 36,380 Less imputed interest ( 4,437 ) Present value of total lease liabilities $ 31,943 8. 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 June 30, 2025, the aggregate outstanding balance of loans held by third-party investors or 114 Table of Contents unconsolidated VIEs was $ 7.8 billion, of which we have recorded a repurchase liability of $ 8.7 million within accrued expenses and other liabilities in our 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. 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. On August 14, 2025, the Court resolved plaintiffs' motion in Affirm's favor and directed plaintiffs to file a third amended complaint or stand on their second amended complaint and submit a joint proposed form of judgment. 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. 115 Table of Contents 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. We have determined, based on current knowledge, that the aggregate amount or range of losses that are estimable with respect to our legal proceedings, including the matters described above, would not have a material adverse effect within our consolidated financial position, results of operations or cash flows. Amounts accrued as of June 30, 2025 and June 30, 2024 were not material. The ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. Purchase Commitments We entered into non-cancelable purchase obligations with our third-party cloud computing web services provider, which included annual purchase commitments for the period from March 2023 through February 2030 with an aggregate committed spend of $ 650.0 million during such period. For the years ended June 30, 2025 and 2024, we had remaining purchase commitments of $ 535.4 million and $ 575.9 million, respectively, primarily related to cloud and hosting services. If we fail to meet any of the purchase commitments, we will be required to pay the difference. We pay our cloud-computing web services provider monthly, and we may pay more than the minimum purchase commitment based on usage. 9. Debt Debt outstanding as of June 30, 2025 includes amounts classified within our consolidated balance sheets as funding debt, notes issued by securitization trusts, and convertible senior notes. 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 and any borrowings on our unsecured revolving credit facility. 116 Table of Contents The following table summarizes the components and terms of our secured and unsecured debt as of June 30, 2025 (in thousands): Interest Rate (1) Unused Commitment Fees Maturity by Fiscal Year Borrowing Capacity (2) Debt Outstanding (3) Debt Outstanding net of unamortized premiums and discount Secured debt Funding debt US warehouse facilities 6.14 % 0.20 % - 0.50 % 2026 - 2032 4,850,000 1,110,832 1,097,559 International warehouse facilities (4) 4.69 % 0.30 % - 0.45 % 2028 - 2030 607,692 391,025 390,139 Variable funding notes 5.82 % 0.30 % 2032 1,350,000 107,427 103,879 Sales and repurchase agreements 5.13 % — 2028 -2029 — 31,231 31,231 Notes issued by securitization trusts 5.75 % — 2029 - 2034 4,850,000 4,850,000 4,833,855 $ 11,657,692 $ 6,490,514 $ 6,456,663 Unsecured debt Convertible senior notes: 2026 Notes —% — 2027 — 248,704 247,880 2029 Notes 0.75 % — 2030 — 920,000 905,120 Revolving credit facility —% 0.20 % 2027 330,000 — — $ 330,000 $ 1,168,704 $ 1,153,000 Total $ 11,987,692 $ 7,659,218 $ 7,609,663 (1) The stated interest rate reflects the fixed or variable interest rate in effect for each of our contractual arrangements as of June 30, 2025, weighted by the outstanding principal balance as of that date. The interest rate resets periodically for our variable rate debt, typically based on a reference rate such as Secured Overnight Financing Rate (“SOFR”) or Canadian Overnight Repo Rate Average (“CORRA”) plus a spread, or an alternative rate based on the cost funds for the lender. (2) Represents total revolving commitment amount, inclusive of debt outstanding as of June 30, 2025. (3) Certain loans are pledged as collateral for borrowings in our secured debt facilities, except for our sales and repurchase agreements which are collateralized by securitization notes receivable and certificates retained by the Company and classified as securities available for sale at fair value. The carrying value of these pledged assets was $ 7.0 billion as of June 30, 2025. (4) As of June 30, 2025, international facilities finance loan receivables originated in Canada. Maturity by Fiscal Year The aggregate future maturities of our funding debt, notes issued by securitization trusts and convertible notes consists of the following (in thousands): June 30, 2025 2026 $ 183,181 2027 598,502 2028 592,214 2029 2,383,583 2030 1,812,562 Thereafter 2,089,176 Total $ 7,659,218 Deferred debt issuance costs ( 49,555 ) Total funding debt, net of deferred debt issuance costs $ 7,609,663 117 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. We may continue to pledge new receivables to allow us to borrow up to the commitment amount throughout the revolving period for each facility. The length of the revolving period, the maximum amount we may borrow against pledged collateral balance during the revolving period, and the length of the amortization period prior to the maturity date varies across borrowing facilities depending negotiated terms. Borrowings under these agreements are classified as funding debt within our consolidated balance sheets and proceeds from the borrowings can only be used for the purposes of funding loans. 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 June 30, 2025, we were in compliance with all applicable covenants in the agreements. Variable Funding Note We entered into a syndicated revolving loan agreement through a securitization master trust which funds loans. In connection with the loan agreement, the master trust issued a variable funding note (“VFN”), where borrowings are secured by loan collateral sold to the master trust. Throughout the reinvestment period of the VFN, the master trust periodically issues asset-backed securities, where securitization note proceeds affects the level of utilization of the VFN. Outstanding borrowings under the VFN are classified as funding debt within our 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 have a term equaling the contractual life of the securitization notes pledged. We record the debt outstanding under our sale and repurchase agreements within our funding debt in the consolidated balance sheets. Notes Issued by Securitization Trusts We issue asset-backed securities 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 consolidated balance sheets. Refer to Note 10 Securitization and Variable Interest Entities for additional information. Revolving Credit Facility We have a Revolving Credit Agreement with a syndicate of banks for a $ 330.0 million unsecured revolving credit facility. Proceeds of the borrowings under this facility will be used for general corporate purposes in the ordinary course of business. This facility bears interest at a rate equal to, either (a) for SOFR borrowing, a SOFR rate determined by reference to the forward-looking term SOFR rate for the interest period, plus an applicable margin of 1.75 % per annum or (b) for alternative base rate borrowings, a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % per annum, (ii) the rate last quoted by the Wall Street Journal as the 118 Table of Contents 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. 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. On December 16, 2024, we entered into an amendment to our revolving credit facility in order to permit the incurrence of indebtedness pursuant to the 2029 Senior Convertible Notes. As of June 30, 2025, we were in compliance with all applicable covenants in the agreements. There were no borrowings outstanding under the facility as of June 30, 2025. Convertible Senior Notes 2029 Notes On December 20, 2024, we issued approximately $ 920.0 million in aggregate principal amount of 0.75 % convertible senior notes due 2029 (the “2029 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The total net proceeds from this offering, after deducting debt issuance costs, were approximately $ 903.1 million. The 2029 Notes represent senior unsecured obligations of the Company. The 2029 Notes will bear interest at a fixed rate of 0.75 % per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2025. The 2029 Notes mature on December 15, 2029, unless such Notes are earlier converted, redeemed or repurchased in accordance with their terms. Each $1,000 of principal of the 2029 Notes will initially be convertible into 9.8992 shares of our common stock, which is equivalent to an initial conversion price of approximately $ 101.02 per share, subject to adjustment upon the occurrence of certain specified events set forth in the indenture governing the 2029 Notes (the “2029 Indenture”). Holders of the 2029 Notes may convert their 2029 Notes at their option at any time on or after September 15, 2029 until close of business on the second scheduled trading day immediately preceding the maturity date of December 15, 2029. Further, holders of the 2029 Notes may convert all or any portion of their 2029 Notes at their option prior to the close of business on the business day immediately preceding September 15, 2029, only under the following circumstances: 1) during any calendar quarter commencing after the calendar quarter ending March 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; 2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2029 Notes) per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; 3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; 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 119 Table of Contents conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2029 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period. No sinking fund is provided for the 2029 Notes. We may redeem for cash all or part of the 2029 Notes on or after December 20, 2027 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any. If a fundamental change (as defined in the 2029 Indenture) occurs prior to the maturity date, holders of the 2029 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2029 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, if specific corporate events occur prior to the maturity date of the 2029 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2029 Notes in connection with such corporate events. 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. 120 Table of Contents Upon conversion of the 2026 Notes, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted. If we satisfy our conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value (as set forth in the “2026 Indenture”) calculated on a proportionate basis for each trading day in a 40 trading day observation period. No sinking fund is provided for the 2026 Notes. We may not redeem the notes prior to November 20, 2024. We may redeem for cash all or part of the notes on or after November 20, 2024 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest, if any. If a fundamental change (as defined in the 2026 Indenture) occurs prior to the maturity date, holders of the 2026 Notes may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100 % of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, if specific corporate events occur prior to the maturity date of the 2026 Notes, we will be required to increase the conversion rate for holders who elect to convert their 2026 Notes in connection with such corporate events. Repurchase of a Portion of the 2026 Notes On December 6, 2023, the Board of Directors authorized the repurchase of up to $ 800 million in aggregate principal amount of the 2026 Notes through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“Rule 10b5-1”), or through a combination thereof, through December 31, 2024. On December 13, 2024, the Board of Directors replaced the December 2023 authorization with an authorization to repurchase up to $ 960 million in aggregate principal amount of the 2026 Notes through December 31, 2024. In connection with these authorizations, during the year ended June 30, 2025, we paid $ 1.0 billion in cash for the repurchase of $ 1.1 billion aggregate principal amount of our 2026 Notes. The carrying amount of the extinguished 2026 Notes was approximately $ 1.1 billion resulting in a $ 82.4 million gain on early extinguishment of debt for the year ended June 30, 2025, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss). We utilized a combination of cash on hand and the net proceeds from the issuance of the 2029 Notes for these repurchases. During the year ended June 30, 2024, we paid $ 63.6 million in cash for the repurchase of $ 76.7 million aggregate principal amount of our 2026 Notes under the December 2023 authorization. The carrying amount of the extinguished 2026 Notes was approximately $ 76.2 million resulting in a $ 12.6 million gain on early extinguishment of debt, which is reported as a component of other income, net within our consolidated statements of operations and comprehensive income (loss). The repurchased 2026 Notes were received and canceled. On May 18, 2025, the Board of Directors authorized the repurchase of up to $ 200.0 million in aggregate principal amount of the 2026 Notes. Note repurchases under the May 2025 authorization may be made from time to time during the period commencing July 1, 2025 through December 31, 2025 through open market purchases, privately negotiated purchases, purchase plans under Rule 10b5-1, or through a combination thereof. Repurchases are subject to available liquidity, general market and economic conditions, alternate uses for the capital, and other factors, and there is no minimum principal amount of 2026 Notes that the Company is obligated to repurchase. In 121 Table of Contents connection with this authorization, there were no repurchases of 2026 Notes during the year ended June 30, 2025. As of June 30, 2025, $ 248.7 million in aggregate principal amount of the 2026 Notes remains outstanding. The following table summarizes the interest expense recognized related to the convertible senior notes (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Amortization of debt issuance costs 2026 Notes 1,724 3,400 3,900 2029 Notes 1,764 — — Total amortization of debt issuance costs 3,488 3,400 3,900 Coupon interest expense (1) (2) $ 3,656 $ — $ — Total interest expenses related to the convertible notes $ 7,144 $ 3,400 $ 3,900 (1) Included in our consolidated statement of operations and comprehensive income (loss) within other income, net. (2) The coupon interest expense is related to the 2029 Notes. 10. 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 9. 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. For these VIEs, it is determined that we have the power to direct the activities that most significantly affect the VIEs’ economic performance and the obligation to absorb losses or right to receive benefits that could potentially be significant to the VIEs. Through our role as the servicer, we have the power to direct the activities that most significantly affect the VIEs’ economic performance. In evaluating whether we have a variable interest that could potentially be significant to the VIE, we consider our retained interests. We also earn a servicing fee which has a senior distribution priority in the payment waterfall. The servicing fees earned from these arrangements are considered variable interests when we also hold significant retained interests in the VIEs and they would absorb losses or receive benefits that are more than an insignificant amount of the VIEs' expected performance. 122 Table of Contents In evaluating whether we are the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs. We perform reassessments an ongoing basis to evaluate whether we are the primary beneficiary of the VIEs. 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 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. The following tables present the aggregate carrying value of financial assets and liabilities from our involvement with consolidated VIEs (in thousands): June 30, 2025 Assets Liabilities Net Assets Warehouse credit facilities $ 1,668,181 $ 1,504,136 $ 164,044 Securitizations (1) 4,993,148 4,951,485 41,663 Total consolidated VIEs $ 6,661,329 $ 6,455,621 $ 205,707 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 June 30, 2025, liabilities include a VFN of $ 103.9 million classified as funding debt and asset-backed securities of $ 4.8 billion classified as notes issued from securitization trusts. Unconsolidated VIEs We are involved with various unconsolidated VIEs, established for the purposes of securitization and forward flow arrangements. We retain economic exposure as variable interests in these unconsolidated VIEs, which consist of securitization notes receivable and certificates in unconsolidated trusts, residual interests in structured transactions, and risk sharing assets and liabilities. While we continue to be involved with the unconsolidated VIEs through our role as the servicer, we determined that we are not the primary beneficiary as of June 30, 2025. Factors we considered for this determination are that we hold an insignificant variable interest or rights held by other variable interest holders convey power in the unconsolidated VIEs. Securitization notes receivable and certificates in unconsolidated securitization trust s We have investments in certain unconsolidated securitization trusts in the form of notes and certificates. These notes and certificates are considered variable interests that absorb a portion of the variability of the trusts. The 123 Table of Contents principal and interest payments on these investments are dependent on the performance of the underlying loans held within each trust. Residual interests in structured transactions Under certain other forward flow arrangements with third-party loan buyers, we hold a beneficial interest representing our right to receive a portion of the residual cash flows from the underlying loans sold in connection with the transaction. The loans are held in an off-balance sheet VIE that has been established by the third-party loan buyers. Risk sharing assets and liabilities Under certain other forward flow 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. The following information pertains to unconsolidated VIEs where we hold a variable interest but are not the primary beneficiary (in thousands): June 30, 2025 June 30, 2024 Carrying Amount Maximum Exposure to Losses (4) Carrying Amount Maximum Exposure to Losses (4) Securitization notes receivable and certificates in unconsolidated securitization trusts [1] $ 75,469 $ 76,943 $ 51,670 $ 51,861 Residual interests in structured transactions [1] 2,284 15,644 — — Risk sharing assets [2] 43,179 66,590 33,884 61,183 Risk sharing liabilities [3] ( 90 ) 24,467 ( 918 ) 47,335 Total unconsolidated VIEs $ 120,842 $ 183,644 $ 84,636 $ 160,379 (1) Presented within Securities available for sale at fair value (2) Presented within Other assets (3) Presented within Accrued expenses and other liabilities (4) Maximum exposure to losses represents our exposure through our continuing involvement as servicer, through our retained interests, and legal or contractual obligation. 124 Table of Contents 11. Investments Cash and Cash Equivalents and Securities Available for Sale Cash and cash equivalents and securities available for sale, at fair value, consist of the following as of each date presented within the consolidated balance sheets (in thousands): June 30, 2025 June 30, 2024 Cash and cash equivalents: Money market funds $ 70,920 $ 63,389 Agency bonds 3,493 — Commercial paper 12,564 57,964 Government bonds - US 4,995 3,492 Securities, available for sale: Certificates of deposit 39,008 34,473 Corporate bonds 264,199 242,660 Commercial paper 126,761 239,882 Agency bonds 7,854 15,159 Municipal bonds 6,076 3,953 Government bonds Non-US 5,340 5,275 US (1) 344,434 538,556 Securitization notes receivable and certificates (2) 75,469 51,670 Residual interests in structured transactions 2,284 — Total cash and cash equivalents and securities available for sale: $ 963,397 $ 1,256,473 (1) As of June 30, 2025 and June 30, 2024, these securities include $ 75.4 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements. (2) These securities include $ 34.5 million and $ 46.7 million as of June 30, 2025 and 2024, respectively, pledged as collateral in connection with sale and repurchase agreements as discussed within Note 9. Debt. 125 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 June 30, 2025 and June 30, 2024 were as follows (in thousands): June 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value Certificates of deposit $ 38,990 $ 18 $ — $ — $ 39,008 Corporate bonds 263,495 759 ( 55 ) — 264,199 Commercial paper (1) 139,336 7 ( 18 ) — 139,325 Agency bonds (1) 11,358 — ( 11 ) — 11,347 Municipal bonds 6,057 19 — — 6,076 Government bonds Non-US 5,331 9 — — 5,340 US (2) 349,149 371 ( 91 ) — 349,429 Securitization notes receivable and certificates (3) 76,279 173 ( 42 ) ( 941 ) 75,469 Residual interests in structured transactions 2,173 111 — — 2,284 Total securities available for sale $ 892,168 $ 1,467 $ ( 217 ) $ ( 941 ) $ 892,477 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) As of June 30, 2025 and 2024, Agency bonds, Commercial Paper, and US government bonds included $ 21.1 million and $ 61.5 million, respectively, classified as cash and cash equivalents within the consolidated balance sheets. (2) As of June 30, 2025 and 2024, these securities include $ 75.4 million and $ 54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements. (3) Approximately $ 34.5 million and $ 46.7 million as of June 30, 2025 and 2024, respectively, of these securities have been pledged as collateral in connection with sale and repurchase agreements discussed within Note 9. Debt. 126 Table of Contents As of June 30, 2025 and June 30, 2024, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities. A summary of securities available for sale with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time that individual securities have been in a continuous loss position as of June 30, 2025 and June 30, 2024, are as follows (in thousands): June 30, 2025 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 $ 7,711 $ — $ — $ — $ 7,711 $ — Corporate bonds 42,842 ( 41 ) 16,978 ( 14 ) 59,820 ( 55 ) Commercial paper 83,701 ( 18 ) — — 83,701 ( 18 ) Agency bonds 11,347 ( 11 ) — — 11,347 ( 11 ) Government bonds Non-US 3,163 — — — 3,163 — US 189,295 ( 91 ) — — 189,295 ( 91 ) Total securities available for sale (1) $ 338,059 $ ( 161 ) $ 16,978 $ ( 14 ) $ 355,037 $ ( 175 ) 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 securities with unrealized losses for which an allowance for credit losses has not been recorded totaled 67 and 137 as of June 30, 2025 and June 30, 2024, respectively. 127 Table of Contents The length of time to contractual maturities of securities available for sale as of June 30, 2025 and June 30, 2024, were as follows (in thousands): June 30, 2025 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 $ 38,990 $ 39,008 $ — $ — $ 38,990 $ 39,008 Corporate bonds 149,435 149,675 114,060 114,524 263,495 264,199 Commercial paper (1) 139,336 139,325 — — 139,336 139,325 Agency bonds (1) 11,358 11,347 — — 11,358 11,347 Municipal bonds 3,944 3,950 2,113 2,126 6,057 6,076 Government bonds Non-US 3,162 3,162 2,169 2,178 5,331 5,340 US (1) 326,884 327,076 22,265 22,353 349,149 349,429 Securitization notes receivable and certificates (2) — — 76,279 75,469 76,279 75,469 Residual interests in structured transactions — — 2,173 2,284 2,173 2,284 Total securities available for sale $ 673,109 $ 673,543 $ 219,059 $ 218,934 $ 892,168 $ 892,477 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) As of June 30, 2025 and 2024, Agency bonds, Commercial paper, and US government bonds included $ 21.1 million and $ 61.5 million, respectively, classified as cash and cash equivalents within the consolidated balance sheets. (2) Based on weighted average life of expected cash flows as of June 30, 2025 and June 30, 2024. Gross proceeds from matured or redeemed securities were $ 1.3 billion and $ 1.5 billion for the years ended June 30, 2025 and June 30, 2024, respectively. For available for sale securities, realized gains and losses were immaterial for the for the years ended June 30, 2025 and June 30, 2024. 128 Table of Contents Equity Securities Held at Cost Equity security investments without a readily determinable fair value held at cost were $ 40.3 million and $ 37.8 million as of June 30, 2025 and June 30, 2024, respectively, and are included in other assets within the consolidated balance sheets. We recognized impairment of $ 4.6 million for the year ended June 30, 2025 within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with our equity security investments. During the year ended June 30, 2024, we recognized an impairment of $ 14.1 million within other income, net in the consolidated statements of operations and comprehensive income (loss) in connection with one of our equity security investments. For the year ended June 30, 2025, we recognized an upward adjustment of $ 2.6 million within other income, net in the consolidated statement of operations and comprehensive income (loss). For the year ended June 30, 2024, there were no upward or downward adjustments due to observable changes in orderly transactions. The fair value of the investments was determined utilizing a methodology based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements. Fixed Term Deposits Our fixed term deposits matured as of June 30, 2025. For the period ending June 30, 2024, fixed term deposits were $ 35.2 million. Fixed term deposits consisted of interest-bearing deposits held at financial institutions with original maturities greater than three months but no more than twelve months. These deposits were carried at cost, which approximated fair value, and were included in other assets within the consolidated balance sheets. 12. Derivative Financial Instruments The following table summarizes the total fair value, including interest accruals, and outstanding notional amounts of derivative instruments as of June 30, 2025 and June 30, 2024 (in thousands): June 30, 2025 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 $ 100,000 $ 86 $ — $ 150,000 $ 4 $ — Derivatives not designated as hedges Interest rate contracts 405,074 2,558 15 854,589 17,203 38 Risk sharing assets/liabilities 8,561,709 43,179 90 4,188,544 33,884 918 Total gross derivative assets/liabilities $ 9,066,783 $ 45,823 $ 105 $ 5,193,133 $ 51,091 $ 956 129 Table of Contents The following table summarizes the impact of the cash flow hedges on Accumulated Other Comprehensive Income (“AOCI”) (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Balance at beginning of period $ 1,407 $ 751 $ — Changes in fair value ( 2,312 ) 2,000 805 Amounts reclassified into earnings (1) ( 514 ) ( 1,344 ) ( 54 ) Balance at end of period (2) $ ( 1,419 ) $ 1,407 $ 751 (1) The amounts reclassified into earnings are presented in the consolidated statements of income (loss) within funding costs. (2) As of June 30, 2025, we estimated that $ 0.3 million of net derivative losses included in AOCI are expected to be reclassified into earnings within the next 12 months. The following table summarizes the impact of the derivative instruments on income and indicates where within the consolidated statements of operations and comprehensive income (loss) such impact is reported (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Location of gains (losses) where the effects of derivatives are recorded The effects of cash flow hedging Funding costs 514 1,344 54 The effects of derivatives not designated in hedging relationships Other income, net ( 4,319 ) 4,479 48,074 Refer to Note 2. Summary of Significant Accounting Policies and Note 13. Fair Value of Financial Assets and Liabilities for additional information on our derivative instruments. 130 13. 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 June 30, 2025 and June 30, 2024 (in thousands): June 30, 2025 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 70,920 $ — $ — $ 70,920 Agency Bonds — 3,493 — 3,493 Commercial paper — 12,564 — 12,564 Government bonds- US — 4,995 — 4,995 Securities, available for sale: Certificates of deposit — 39,008 — 39,008 Corporate bonds — 264,199 — 264,199 Commercial paper — 126,761 — 126,761 Agency bonds — 7,854 — 7,854 Municipal bonds — 6,076 — 6,076 Government bonds: Non-US — 5,340 — 5,340 US — 344,434 — 344,434 Securitization notes receivable and residual trust certificates — — 75,469 75,469 Residual interests in structured transactions — — 2,284 2,284 Servicing assets — — 906 906 Interest rate derivatives — 2,644 — 2,644 Risk sharing asset — — 43,179 43,179 Total assets $ 70,920 $ 817,368 $ 121,838 $ 1,010,126 Liabilities: Servicing liabilities $ — $ — $ 41 $ 41 Performance fee liability — — 1,870 1,870 Profit share liability — — 9,323 9,323 Risk sharing liability — — 90 90 Interest rate derivatives — 15 — 15 Total liabilities $ — $ 15 $ 11,324 $ 11,339 131 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 Interest rate derivatives — 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 Interest rate derivatives — 38 — 38 Total liabilities $ — $ 38 $ 5,138 $ 5,176 As of June 30, 2025 and June 30, 2024, there were no transfers between levels. Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 2) Cash and Cash Equivalents and Securities Available for Sale As of June 30, 2025, we held level 2 debt securities classified as cash and cash equivalents and securities available for sale. 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. Derivative Instruments As of June 30, 2025 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 132 models, which contain certain assumptions based on readily observable market-based inputs. We validate the valuation output on a monthly basis. Refer to Note 12. Derivative Financial Instruments in the notes to the 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, residual interests in structured transactions, 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. The following significant unobservable inputs, as applicable, were used in the fair value measurement of the Company’s Level 3 assets and liabilities: • Adequate Compensation - The compensation rate is expressed as a percentage of the outstanding loan balance that a willing market participant would require for servicing loans with similar characteristics. • Discount Rate - The rate used to discount estimated future cash flows to present value in determining fair value. It reflects the rate of return market participants would require to compensate for time value of money plus a premium based on relative risk, liquidity and other market based factors. • Default Rate - The estimated annualized rate of charge-offs affecting the projected unpaid principal balance and expected term of the loan portfolio. • Loss Rate - The estimated lifetime rate of loan charge-offs as a percentage of the initial settled principal balance. • Prepayment Rate - The estimated annualized excess loan payment received in a given month as a percentage of the outstanding principal balance at the beginning of the month minus the scheduled principal payment. • Refund Rate - The rate of refunded transactions as a percentage of the outstanding loan balance over the remaining life of the loan portfolio. • Program Profitability - The estimated future profit to be shared with enterprise partners as a percentage of total loans outstanding, based on the terms of the respective commercial agreements. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement. Servicing Assets and Liabilities We sold loans with an unpaid principal balance of $ 15.8 billion, $ 10.2 billion, and $ 7.5 billion for the years ended June 30, 2025, 2024, and 2023, respectively, for which we retained servicing rights. As of June 30, 2025 and June 30, 2024, we serviced loans which we sold with a remaining unpaid principal balance of $ 7.8 billion and $ 5.1 billion, respectively. We earned $ 120.6 million, $ 95.5 million, and $ 87.5 million of servicing income for the years ended June 30, 2025, 2024, and 2023, respectively. We use discounted cash flow models to arrive at an estimate of fair value. As of June 30, 2025 and June 30, 2024, the aggregate fair value of the servicing assets was measured at $ 0.9 million and $ 0.6 million, respectively, and presented within other assets in the consolidated balance sheets. As of June 30, 2025 and June 30, 2024, the aggregate fair value of the servicing liabilities was $ 0.04 million and $ 0.7 million, respectively, and presented within accrued expenses and other liabilities in the consolidated balance sheets. 133 The following table summarizes the activity related to the aggregate fair value of our servicing assets (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 574 $ 880 Initial transfers of financial assets 484 — Subsequent changes in fair value ( 152 ) ( 306 ) Fair value at end of period $ 906 $ 574 The following table summarizes the activity related to the aggregate fair value of our servicing liabilities (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 743 $ 1,392 Initial transfers of financial liabilities — 5,485 Subsequent changes in fair value ( 702 ) ( 6,134 ) Fair value at end of period $ 41 $ 743 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 June 30, 2025 and June 30, 2024: June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (1) Servicing assets Discount Rate 30.00 % 30.00 % 30.00 % Adequate Compensation 2.00 % 2.00 % 2.00 % Default Rate 10.24 % 15.68 % 12.04 % Servicing liabilities Discount Rate 30.00 % 30.00 % 30.00 % Adequate Compensation 2.00 % 2.00 % 2.00 % Default Rate 3.71 % 7.89 % 5.26 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Servicing assets Discount Rate 30.00 % 30.00 % 30.00 % Adequate Compensation 2.00 % 2.00 % 2.00 % Default Rate 9.89 % 22.72 % 10.84 % Servicing liabilities Discount Rate 30.00 % 30.00 % 30.00 % Adequate Compensation 2.00 % 2.00 % 2.00 % Default Rate 2.58 % 4.12 % 3.00 % (1) Unobservable inputs were weighted by relative fair value 134 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): June 30, 2025 June 30, 2024 Servicing assets Default Rate assumption: Default Rate increase of 25% $ 1 $ 1 Default Rate increase of 50% $ 2 $ 1 Adequate Compensation assumption: Adequate Compensation increase of 10% $ ( 1,439 ) $ ( 980 ) Adequate Compensation increase of 20% $ ( 2,879 ) $ ( 1,961 ) Discount Rate assumption: Discount Rate increase of 25% $ ( 35 ) $ ( 23 ) Discount Rate increase of 50% $ ( 66 ) $ ( 44 ) Servicing liabilities Default Rate assumption: Default Rate increase of 25% $ — $ ( 1 ) Default Rate increase of 50% $ — $ ( 1 ) Adequate Compensation assumption: Adequate Compensation increase of 10% $ 4,593 $ 3,153 Adequate Compensation increase of 20% $ 9,186 $ 6,305 Discount Rate assumption: Discount Rate increase of 25% $ ( 1 ) $ ( 19 ) Discount Rate increase of 50% $ ( 1 ) $ ( 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 consolidated balance sheets. Any changes in the fair value of the liability are reflected in other income, net, in the consolidated statements of operations and comprehensive income (loss). The following table summarizes the activity related to the fair value of the performance fee liability (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 1,503 $ 1,581 Purchases of loans 2,367 1,775 Settlements paid ( 2,111 ) ( 1,969 ) Subsequent changes in fair value 111 116 Fair value at end of period $ 1,870 $ 1,503 135 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 June 30, 2025 and June 30, 2024: June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (2) Discount Rate 7.25 % 10.00 % 9.23 % Refund Rate 1.50 % 1.50 % 1.50 % Default Rate (1) 0.87 % 4.65 % 3.07 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (2) Discount Rate 8.50 % 10.00 % 9.81 % Refund Rate 1.50 % 1.50 % 1.50 % Default Rate (1) 1.38 % 4.65 % 2.94 % (1) The Default Rate is net of recoveries (2) Unobservable inputs were weighted by remaining principal balances Securitization Notes Receivable and Residual Trust Certificates As of June 30, 2025, we held notes receivable and residual trust certificates with an aggregate fair value of $ 75.5 million in connection with unconsolidated securitizations. 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 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 (loss) i n the consolidated statements of operations and comprehensive income (loss). Declines in fair value due to credit are reflected in other income, net in the consolidated statements of operations and comprehensive income (loss). The following table summarizes the activity related to the fair value of the notes receivable and residual trust certificates (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 51,670 $ 18,913 Additions 84,718 58,508 Cash received (due to payments) ( 65,560 ) ( 28,738 ) Change in unrealized gain (loss) ( 447 ) 1,083 Accrued interest 5,368 2,115 Reversal of (impairment on) securities available for sale ( 280 ) ( 211 ) Fair value at end of period $ 75,469 $ 51,670 136 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of t he notes receivable and residual trust certificates as o f June 30, 2025 and June 30, 2024: June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (1) Discount Rate 2.86 % 30.29 % 6.89 % Default Rate 0.94 % 8.40 % 7.65 % Prepayment Rate 21.46 % 24.85 % 23.14 % June 30, 2024 Unobservable Input Minimum Maximum Weighted Average (1) Discount Rate 5.73 % 41.41 % 8.93 % Default Rate 0.95 % 6.98 % 6.17 % Prepayment Rate 12.40 % 27.70 % 23.33 % (1) Unobservable inputs were weighted by relative fair value The following table summarizes the effect that adverse changes in estimates would have on the fair value of the notes receivable and residual trust certificates given hypothetical changes in significant unobservable inputs (in thousands): June 30, 2025 June 30, 2024 Discount Rate assumption: Discount Rate increase of 25% $ ( 727 ) $ ( 623 ) Discount Rate increase of 50% $ ( 1,427 ) $ ( 1,223 ) Default Rate assumption: Default Rate increase of 25% $ ( 2,688 ) $ ( 705 ) Default Rate increase of 50% $ ( 3,698 ) $ ( 1,321 ) Prepayment Rate assumption: Prepayment Rate change of 25% $ ( 130 ) $ — Prepayment Rate change of 50% $ ( 259 ) $ — Prepayment Rate decrease of 25% $ — $ 58 Prepayment Rate decrease of 50% $ — $ 116 Residual Interests in Structured Transactions As of June 30, 2025, we held residual interests in structured transactions with an aggregate fair value of $ 2.3 million in connection with certain forward flow loan sale transactions. These assets are measured at fair value using a discounted cash flow model, and presented within securities available for sale at fair value in the consolidated balance sheets. Changes in the fair value, except for credit impairments, are reflected in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss). 137 The following table summarizes the activity related to the fair value of the assets (in thousands): June 30, 2025 Fair value at beginning of period $ — Capital contribution 2,173 Subsequent changes in fair value 111 Fair value at the end of period 2,284 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the residual interests in structured transactions as of June 30, 2025. June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (1) Discount Rate 20.00 % 20.00 % 20.00 % Default Rate 8.88 % 8.88 % 8.88 % Prepayment Rate 48.85 % 48.85 % 48.85 % (1) Unobservable inputs were weighted by relative fair value The following table summarizes the effect that adverse changes in estimates would have on the fair value of the residual interests in structured transactions given hypothetical changes in significant unobservable inputs (in thousands): June 30, 2025 Discount Rate assumption: Discount Rate increase of 20% $ ( 181 ) Discount Rate increase of 40% $ ( 343 ) Default Rate assumption: Default Rate increase of 20% $ ( 28 ) Default Rate increase of 40% $ ( 50 ) Prepayment Rate assumption: Prepayment Rate increase of 20% $ ( 35 ) Prepayment Rate increase of 40% $ ( 64 ) Profit Share Liability We have commercial agreements with certain enterprise partners, in which we are obligated to share in the profitability of transactions facilitated by our platform. Upon capture of a loan under these programs, we record a liability associated with the estimated future profit to be shared over the life of the loan based on estimated profitability levels of each program. The liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the consolidated balance sheets. 138 The following table summarizes the activity related to the fair value of the profit share liability (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 1,974 $ 1,832 Facilitation of loans 12,967 3,326 Actual performance ( 13,649 ) ( 5,363 ) Subsequent changes in fair value 8,031 2,179 Fair value at end of period $ 9,323 $ 1,974 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 June 30, 2025 and June 30, 2024: June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (1) Discount Rate 30.00 % 30.00 % 30.00 % Program Profitability 0.23 % 3.28 % 2.86 % 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. We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in our consolidated statements of operations and comprehensive income (loss). 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 June 30, 2025, we estimated the fair value of future settlements using a discounted cash flow model. The following table summarizes the activity related to the fair value of the risk sharing assets (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 33,884 $ — Initial transfers of financial assets 27,658 41,669 Cash settlements ( 21,134 ) — Subsequent changes in fair value 2,771 ( 7,785 ) Fair value at end of period $ 43,179 $ 33,884 139 The following table summarizes the activity related to the fair value of the risk sharing liabilities (in thousands): June 30, 2025 June 30, 2024 Fair value at beginning of period $ 918 $ — Cash settlements ( 1,599 ) — Subsequent changes in fair value 771 918 Fair value at end of period $ 90 $ 918 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 June 30, 2025 and June 30, 2024: June 30, 2025 Unobservable Input Minimum Maximum Weighted Average (1) Risk sharing assets Discount Rate 20.00 % 20.00 % 20.00 % Loss Rate 3.32 % 4.91 % 4.13 % Prepayment Rate 19.84 % 22.89 % 21.34 % Risk sharing liabilities Discount Rate 20.00 % 20.00 % 20.00 % Loss Rate 3.47 % 5.35 % 4.42 % 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 140 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): June 30, 2025 June 30, 2024 Risk sharing assets Prepayment Rate assumption: Prepayment Rate decrease of 25% $ ( 1,896 ) $ — Prepayment Rate decrease of 50% $ ( 3,923 ) $ — Prepayment Rate increase of 25% $ — $ 572 Prepayment Rate increase of 50% $ — $ 1,131 Loss Rate assumption: Loss Rate increase of 25% $ ( 15,150 ) $ ( 7,315 ) Loss Rate increase of 50% $ ( 30,277 ) $ ( 14,528 ) Discount Rate assumption: Discount Rate increase of 25% $ ( 903 ) $ ( 1,211 ) Discount Rate increase of 50% $ ( 1,745 ) $ ( 2,323 ) Risk sharing liabilities Loss Rate assumption: Loss Rate increase of 25% $ 16,946 $ 22,333 Loss Rate increase of 50% $ 24,676 $ 41,677 Discount Rate assumption: Discount Rate increase of 25% $ — $ ( 19 ) Discount Rate increase of 50% $ — $ ( 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 June 30, 2025 and June 30, 2024 (in thousands): June 30, 2025 Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value Assets: Loans held for investment, net $ 6,628,606 $ — $ — $ 7,085,840 $ 7,085,840 Total assets $ 6,628,606 $ — $ — $ 7,085,840 $ 7,085,840 Liabilities: Convertible senior notes, net (2) 1,153,000 — 1,205,287 — 1,205,287 Notes issued by securitization trusts 4,833,855 — — 4,868,980 4,868,980 Funding debt (3) 1,640,514 — — 1,640,765 1,640,765 Total liabilities $ 7,627,369 $ — $ 1,205,287 $ 6,509,745 $ 7,715,032 141 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 June 30, 2025 , includes convertible senior notes due 2026 with a carrying amount and fair value of $ 247.9 million and $ 232.7 million, respectively, and convertible senior notes due 2029 with a carrying amount and fair value of $ 905.1 million and $ 972.6 million, respectively. As of June 30, 2024, includes convertible senior notes due 2026 with a carrying amount and fair value of $ 1.3 billion and $ 1.1 billion, respectively. The estimated fair value of the convertible senior notes is determined based on a market approach, using the estimated or actual bids and offers of the notes in an over-the-counter market on the last business day of the period. (3) As of June 30, 2025 and June 30, 2024, debt issuance costs in the amount of $ 17.7 million and $ 14.8 million was included within funding debt. 14. Stockholders’ Equity Common Stock We had shares of common stock reserved for issuance as follows: June 30, 2025 June 30, 2024 Available outstanding under equity compensation plans 39,122,013 47,622,117 Available for future grant under equity compensation plans 53,851,610 43,492,755 Total 92,973,623 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 consolidated balance sheets. 142 In November 2021, we granted warrants to purchase 22,000,000 shares of common stock in connection with our commercial agreements with Amazon. 7,000,000 of the warrant shares have an exercise price of $ 0.01 per share and a term of 3.5 years. A portion of these warrants were fully vested at the grant date and the remainder were fully vested as of December 31, 2024. As of June 30, 2025, 3,500,000 of these warrants have been exercised. In February 2025, the term for the remaining unexercised warrant shares were extended for an additional 4.0 years. The remaining 15,000,000 warrant shares have an exercise price of $ 100 per share and a term of 7.5 years. We valued the warrants at the grant date using the Black-Scholes-Merton option pricing model. The remaining grant-date fair value of the warrants will be recognized within our consolidated statements of operations and comprehensive income (loss) as a component of sales and marketing expense as the warrants vest, based upon Amazon’s satisfaction of the vesting conditions. During the years ended June 30, 2025, 2024, and 2023, a total of $ 292.3 million, $ 439.6 million, and $ 463.3 million, respectively, was recognized within sales and marketing expense which included $ 20.7 million, $ 32.9 million, and $ 41.4 million, respectively, in amortization expense of the commercial agreement asset, and $ 271.6 million, $ 406.7 million, and $ 421.9 million, respectively, in expense based upon the grant-date fair value of the warrant shares that vested. As of June 30, 2025, unrecognized compensation expense related to the unvested warrants was approximately $ 586.2 million, which is expected to be recognized over a remaining weighted-average period of 3.4 years. The following table summarizes the warrants activity during the year ended June 30, 2025: Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Life (years) Warrants outstanding, June 30, 2024 22,000,000 $ 68.19 3.60 Granted — — 0.00 Exercised ( 3,500,000 ) 0.01 0.00 Canceled — — 0.00 Warrants outstanding, June 30, 2025 18,500,000 $ 81.08 3.90 Warrants exercisable, June 30, 2025 10,771,754 $ 67.51 3.90 There were no warrants granted during the years ended June 30, 2024 and 2023. On June 30, 2025, the weighted-average grant date fair values for outstanding warrants and exercisable warrants were $ 86.76 and $ 94.59 , respectively. Share Repurchases In connection with the offering of the 2029 Notes, in December 2024, the Board of Directors authorized the repurchase of up to $ 350.0 million of common stock through open market purchases, privately negotiated transactions or through a combination thereof. The authorization terminated on December 31, 2024 and did not obligate the Company to acquire any particular amount of its common stock. Pursuant to this authorization, we utilized net proceeds from the offering, as well as cash on hand, to complete the repurchase of 3.5 million shares of Class A common stock from certain holders of the 2026 notes in privately negotiated transactions for an aggregate purchase price of approximately $ 250.0 million. Refer to Note 9. Debt in the notes to the consolidated financial statements for more information on the 2029 Notes. We record share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. Our policy for share retirements is to deduct the par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital. There were no share repurchases during the year ended June 30, 2024. 143 15. 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 June 30, 2025, the maximum number of shares of common stock which may be issued under the Plan is 176,604,160 Class A shares and there were 53,851,610 shares of Class A common stock available for future grants under the Plan. Stock Options For stock options granted before our IPO in January 2021, the minimum expiration period is seven years after termination of employment or 10 years from the date of grant. For stock options granted after our IPO, the minimum expiration period is three months after termination of employment or 10 years from the date of grant. Stock options generally vest over a period of four years or with 25 % vesting on the 12 month anniversary of the vesting commencement date, and the remainder vesting on a pro-rata basis each month over the next three years . The following table summarizes our stock option activity for the year ended June 30, 2025: 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 ( 4,484,133 ) 10.56 Forfeited, expired or canceled ( 32,019 ) 34.21 Balance as of June 30, 2025 12,955,978 19.12 5.18 Vested and exercisable, June 30, 2025 10,615,703 $ 16.81 4.51 $ 557,041 Vested and exercisable, and expected to vest thereafter (1) June 30, 2025 12,914,059 $ 19.06 5.16 $ 648,399 (1) Options expected to vest reflect the application of an estimated forfeiture rate. The weighted-average grant date fair value of options granted for the years ended June 30, 2025, 2024, and 2023, was $ 31.74 , $ 16.37 , and $ 10.92 , respectively. The aggregate intrinsic value of options exercised was approximately $ 234.5 million, $ 79.0 million, and $ 12.6 million for the years ended June 30, 2025, 2024, and 2023, respectively. The total fair value of stock options vested during the years ended June 30, 2025, 2024, and 2023 was $ 26.8 million, $ 24.3 million, and $ 39.5 million, respectively. 144 The fair value of each option on the date of grant is determined using the Black Scholes-Merton option pricing model using the single-option award approach with the weighted-average assumptions set forth in the table below. Volatility is based on historical volatility rates obtained from certain public companies that operate in the same or related business as us since there is a limited period of historical market data for our common stock. The risk-free interest rate is determined using a U.S. Treasury rate for the period that coincides with the expected term set forth. We used the simplified method to determine an estimate of the expected term of an employee share option. June 30, 2025 June 30, 2024 June 30, 2023 Volatility 80 % 75 % 59 % Risk-free interest rate 3.46 % - 4.35 % 4.21 % - 4.36 % 2.88 % - 3.87 % Expected term (in years) 6.06 6.05 6.04 Expected dividend yield — — — As of June 30, 2025, unrecognized compensation expense related to unvested stock options was approximately $ 39.4 million, which is expected to be recognized over a remaining weighted-average period of 2.2 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”). As discussed below, the Value Creation Award will only be earned, if at all, in the event the price of our Class A common stock attains stock price hurdles that are significantly in excess of the Company's IPO price per share, over a period of five years , subject to Mr. Levchin’s continued service to the Company. The Value Creation Award is divided into ten tranches, each of which Mr. Levchin may earn by satisfying a performance condition within a five-year period following the IPO. The performance condition for each tranche will be satisfied on the date the 90 average trading day volume weighted share price of the Company’s Class A common stock exceeds certain specified stock price hurdles, presented in the table below, which were determined based on a target percentage of share price appreciation from the IPO price. Once earned as a result of satisfying the performance condition, the options will vest and become exercisable over a five-year period that commenced at the time of the IPO, subject to Mr. Levchin’s continued service to the Company, in annual amounts equal to 15 %, 15 %, 20 %, 25 % and 25 %, respectively. The per share exercise price of the Value Creation Award is $ 49.00 , the price to the public in the IPO. 145 Tranche Stock Price Hurdle Number of Options 1 $ 65.66 1,000,000 2 $ 82.32 1,000,000 3 $ 98.98 1,000,000 4 $ 115.64 1,000,000 5 $ 132.30 1,000,000 6 $ 148.47 1,000,000 7 $ 165.13 1,000,000 8 $ 181.79 1,000,000 9 $ 247.94 2,250,000 10 $ 371.91 2,250,000 Total 12,500,000 We recognize stock-based compensation on these awards based on the grant date fair value using an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable of being satisfied. During the years ended June 30, 2025, 2024, and 2023, we incurred stock-based compensation expense of $ 36.5 million, $ 64.6 million, and $ 94.6 million, respectively, associated with the Value Creation Award as a component of general and administrative expense within the consolidated statements of operations and comprehensive income (loss). As of the beginning of the 12 month period ended June 30, 2025, 4,000,000 shares had vested based on conditions met in prior periods. No additional shares vested during the year ended June 30, 2025. As of June 30, 2025, none of these awards have been exercised. As of June 30, 2025, unrecognized compensation expense related to the Value Creation Award was approximately $ 11.8 million, which is expected to be recognized over a remaining weighted-average period of 0.5 years. 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 . The following table summarizes our RSU activity during the year ended June 30, 2025: Number of Shares Weighted Average Grant Date Fair Value Non-vested at June 30, 2024 18,327,420 $ 27.68 Granted 12,038,819 34.59 Vested ( 14,517,850 ) 30.18 Forfeited, expired or canceled ( 2,182,354 ) 28.48 Non-vested at June 30, 2025 13,666,035 $ 30.98 146 As of June 30, 2025, unrecognized compensation expense related to unvested RSUs was approximately $ 394.1 million, which is expected to be recognized over a remaining weighted-average period of 1.5 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 16.0 million shares of Class A common stock are reserved and available for issuance under the ESPP and 2.1 million shares have been issued as of June 30, 2025. 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): June 30, 2025 June 30, 2024 June 30, 2023 General and administrative $ 216,323 $ 228,334 $ 239,923 Technology and data analytics 87,707 96,596 181,396 Sales and marketing 16,535 16,374 25,914 Processing and servicing 868 3,207 4,476 Total stock-based compensation in operating expenses 321,433 344,511 451,709 Capitalized into property, equipment and software, net 178,461 126,510 80,108 Total stock-based compensation $ 499,894 $ 471,021 $ 531,817 16. 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 June 30, 2025, we had no outstanding liability related to previously accrued exit and disposal costs. For the years ended June 30, 2024 and 2023, exit and disposal costs were $ 6.8 million and $ 35.9 million, respectively. 147 Table of Contents 17. Income Taxes The U.S. and foreign components of income (loss) before income taxes for the years ended June 30, 2025, 2024, and 2023 are as follows (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 U.S. $ 42,949 $ ( 518,093 ) $ ( 974,074 ) Foreign 18,515 2,566 ( 15,171 ) Total income (loss) before income taxes $ 61,464 $ ( 515,527 ) $ ( 989,245 ) Income tax expense (benefit) for the years ended June 30, 2025, 2024, and 2023 is summarized as follows (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Current Federal $ 1,565 $ — $ — State 176 1,442 759 Foreign 425 392 408 Total current expense $ 2,166 $ 1,834 $ 1,167 Deferred Federal $ 139 $ 139 $ 137 State ( 212 ) 333 249 Foreign 7,186 ( 76 ) ( 5,453 ) Total deferred expense 7,113 396 ( 5,067 ) Income tax (benefit) expense $ 9,279 $ 2,230 $ ( 3,900 ) The income tax expense for the year ended June 30, 2025 was primarily attributable to U.S. federal and various foreign income taxes, while the income tax expense for the year ended June 30, 2024 was primarily attributable to various U.S state and foreign income taxes and the tax amortization of certain intangibles. The income tax benefit for the year ended June 30, 2023 was primarily attributable to deferred taxes recognized by certain foreign subsidiaries and partially offset by various U.S. state and other foreign income taxes. The following is a reconciliation of the U.S. statutory federal income tax rate to our effective tax rate for the years ended June 30, 2025, 2024, and 2023: June 30, 2025 June 30, 2024 June 30, 2023 U.S. statutory federal income tax rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal tax benefit 6.8 % 8.9 % 7.7 % Foreign rate differential 1.7 % ( 0.1 ) % 0.1 % California state tax law change 26.3 % — % — % Stock-based compensation ( 228.9 ) % ( 5.1 ) % ( 14.9 ) % Non-deductible compensation expense 70.0 % ( 5.6 ) % ( 2.2 ) % Tax benefit related to tax credits, net ( 67.5 ) % 4.3 % 0.9 % Impact of change in fair value of contingent consideration — % — % 0.2 % Change in unrecognized tax benefits 27.0 % ( 1.7 ) % ( 0.4 ) % Change in tax status of a foreign subsidiary 14.6 % — % — % Other 0.8 % — % ( 0.1 ) % Change in valuation allowance 143.0 % ( 22.1 ) % ( 11.9 ) % Effective income tax rate 14.8 % ( 0.4 ) % 0.4 % 148 Table of Contents Significant components of deferred tax assets and liabilities are as follows (in thousands): June 30, 2025 June 30, 2024 Net operating loss carryforwards $ 1,034,551 $ 1,071,737 Allowance for credit losses 116,570 97,400 Stock-based compensation 16,789 23,182 Stock warrants 142,143 100,369 Operating lease liabilities 8,386 11,457 Capitalized R&E including internally developed software 62,325 6,977 Tax credit carryforwards 108,026 88,190 Other 11,685 22,216 Total deferred tax assets $ 1,500,475 $ 1,421,528 Right-of-use lease assets ( 5,021 ) ( 6,330 ) Other ( 3,686 ) ( 3,921 ) Total deferred tax liabilities $ ( 8,707 ) $ ( 10,251 ) Valuation allowance ( 1,479,926 ) ( 1,392,205 ) Deferred tax assets (liabilities), net of valuation allowance $ 11,842 $ 19,072 We continue to recognize a full valuation allowance against our U.S. federal and state and certain foreign net deferred tax assets. The valuation allowance increased by $ 87.7 million during the year ended June 30, 2025. We will release the domestic valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized. As of June 30, 2025, we had pretax U.S. federal net operating loss ("NOL") carryforwards of approximately $ 3.2 billion, state NOL carryforwards of $ 4.9 billion, Canadian NOL carryforwards of $ 24.0 million, and U.K. NOL carryforwards of $ 27.6 million. If not utilized, certain U.S. federal and state NOL carryforwards will begin to expire in 2029, whereas others have an unlimited carryforward period, and foreign NOL carryforwards will begin to expire in 2041, with others that have an unlimited carryforward period as well. Additionally, as of June 30, 2025, we also had U.S. federal and state research and development tax credit carryforwards of $ 129.6 million and $ 64.0 million, respectively. The U.S. federal research and development tax credit carryforwards will begin to expire in 2041 while the state research and development tax credits may be carried forward indefinitely. As of June 30, 2025, the Company also had other state tax credit carryforwards of $ 2.1 million, which will begin to expire in 2026 if not utilized. Of the above NOL carryforwards, approximately $ 25.5 million pretax U.S. federal NOL carryforwards and $ 34.8 million state NOL carryforwards are from domestic acquisitions, which may be subject to an annual utilization limitation under Internal Revenue Code Section 382. The future utilization of all domestic NOL and tax credit carryforwards may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383 and similar state provisions, due to ownership changes that may have occurred previously or that could occur in the future. Any limitation may result in the expiration of all or a portion of the NOL carryforwards before utilization. 149 Table of Contents The Company accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”) . The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 Beginning balance $ 61,514 $ 51,850 $ 47,867 Gross increase for tax positions related to the current year 18,543 8,931 5,828 Gross increase for tax positions related to prior years — 733 — Gross decrease for tax positions related to prior years ( 809 ) — ( 1,845 ) Ending balance $ 79,248 $ 61,514 $ 51,850 As of June 30, 2025, the Company had no unrecognized tax benefits related to uncertain tax positions that, if recognized, would impact the effective tax rate. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease within the next twelve months. Interest and penalties on unrecognized tax benefits are recorded as a component of tax expense. During the years ended June 30, 2025, 2024, and 2023, we did not recognize accrued interest and penalties related to unrecognized tax benefits. We file U.S. federal and state income tax returns as well as various foreign income tax returns with varying statutes of limitation. With respect to the Company’s major tax filings, all tax years remain open to examination due to the carryover of unused net operating losses. 150 Table of Contents 18. 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): June 30, 2025 June 30, 2024 June 30, 2023 Class A Class B Class A Class B Class A Class B Numerator: Net income (loss) attributable to common stockholders - basic $ 45,456 $ 6,730 $ ( 430,789 ) $ ( 86,968 ) $ ( 785,080 ) $ ( 200,265 ) Net income (loss) attributable to common stockholders - diluted $ 45,815 $ 6,371 $ ( 430,789 ) $ ( 86,968 ) $ ( 785,080 ) $ ( 200,265 ) Denominator: Weighted average shares of common stock - basic 281,215,807 41,636,066 257,810,094 52,047,035 235,316,821 60,026,645 Dilutive effect of stock equivalents: Restricted stock units 8,863,942 — — — — — Stock options, including early exercise of options 8,950,174 — — — — — Value creation award vested shares 346,434 — — — — — Employee stock purchase plan shares 11,143 — — — — — Weighted average shares of common stock - diluted 299,387,500 41,636,066 257,810,094 52,047,035 235,316,821 60,026,645 Net income (loss) per share: Basic $ 0.16 $ 0.16 $ ( 1.67 ) $ ( 1.67 ) $ ( 3.34 ) $ ( 3.34 ) Diluted $ 0.15 $ 0.15 $ ( 1.67 ) $ ( 1.67 ) $ ( 3.34 ) $ ( 3.34 ) 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: June 30, 2025 June 30, 2024 June 30, 2023 Common stock warrants 7,302,216 5,700,587 5,859,226 Restricted stock units 664,243 18,327,420 21,653,196 Stock options, including early exercise of options 905,835 16,794,697 18,505,138 Employee stock purchase plan shares 157,615 216,846 485,465 Total 9,029,909 41,039,550 46,503,025 19. Segments and Geographical Information The Company is managed on a consolidated basis as a single operating and reportable segment. This reflects the way in which our Chief Operating Decision Maker (“CODM”), the Chief Executive Officer of Affirm Holdings, Inc., regularly reviews internally reported financial information. Net income is the primary measure of segment profit and loss reviewed by the CODM. Net income is used in the budget and forecast process, to assess business performance, and to make decisions on strategy and resource allocation. The CODM is regularly provided with the consolidated expenses presented within the consolidated statement of operations and comprehensive income (loss). Refer to the consolidated statement of operations and comprehensive income (loss) for further information related to our revenues, expenses, and net income. 151 Table of Contents Refer to the consolidated statement of cash flows for further information related to significant noncash items including depreciation and amortization expense. The CODM does not review segment assets at a different level than the amounts presented within the consolidated balance sheets. Revenue Revenue by geography is based on the billing addresses of the borrower or the location of the merchant’s national headquarters. Refer to 3. Revenue for further information on the types of products and services the Company derives its revenues from. The following table sets forth revenue by geographic area (in thousands): June 30, 2025 June 30, 2024 June 30, 2023 United States $ 3,105,121 $ 2,225,605 $ 1,540,044 Canada 119,009 97,394 47,423 Other 282 — 518 Total $ 3,224,412 $ 2,322,999 $ 1,587,985 Long-Lived Assets The following table summarizes our long-lived assets, which consists of property, equipment and software, net and operating lease right-of-use assets, by geographic area (in thousands): June 30, 2025 June 30, 2024 United States $ 590,044 $ 447,287 Canada 1,104 1,811 Other 614 451 Total $ 591,761 $ 449,549 20. Subsequent Events Subsequent to June 30, 2025 through the date the consolidated financial statements were filed with the SEC, we paid $ 24.8 million in cash for the repurchase of $ 26.4 million aggregate principal amount of our 2026 Notes under the May 2025 authorization. The carrying amount of the extinguished 2026 Notes was approximately $ 26.3 million resulting in a $ 1.5 million gain on early extinguishment of debt. The repurchased 2026 Notes were received and canceled. 152 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.