Affirm Holdings, Inc. [AFRM] Filings

10-Q 1 afrm-20240930.htm 10-Q afrm-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39888

Affirm Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware									84-2224323
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

650 California Street
San Francisco, California									94108
(Address of principal executive offices)									(Zip Code)

(415) 960-1518

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.00001 per share

AFRM

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2024, the number of shares of the registrant’s Class A common stock outstanding was 271,918,122 and the number of shares of the registrant’s Class B common stock outstanding was 42,137,975.

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TABLE OF CONTENTS


						Page
Cover						1
Table of Contents						2
Part I - Financial Information						5
Item 1. Financial Statements						5
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)						5
CONDENSED CONSOLIDATED BALANCE SHEETS, CONT. (Unaudited)						6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)						7
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)						8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)						9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT. (Unaudited)						10
1. Business Description						11
2. Summary of Significant Accounting Policies						11
3. Revenue						12
4. Loans Held for Investment and Allowance for Credit Losses						15
5. Balance Sheet Components						20
6. Leases						23
7. Commitments and Contingencies						24
8. Debt						25
9. Securitization and Variable Interest Entities						29
10. Investments						31
11. Derivative Financial Instruments						36
12. Fair Value of Financial Assets and Liabilities						37
13. Stockholders’ Equity						48
14. Equity Incentive Plans						48
15. Restructuring						51
16. Income Taxes						51
17. Net Loss per Share Attributable to Common Stockholders						52
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						53
Item 3. Quantitative and Qualitative Disclosures About Market Risk						70
Item 4. Controls and Procedures						72
Part II - Other Information						73
Item 1. Legal Proceedings						73
Item 1A. Risk Factors						73
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						73
Item 3. Defaults Upon Senior Securities						73
Item 4. Mine Safety Disclosures						73
Item 5. Other Information						73
Item 6. Exhibits						75
Signatures						76

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”), as well as information included in oral statements or other written statements made or to be made by us, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management regarding future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our expectations regarding our future revenue, expenses, and other operating results and key operating metrics;

•our ability to attract new merchant partners and commerce platforms and grow our relationships with existing merchant partners and commerce platforms;

•our ability to compete successfully in a highly competitive and evolving industry;

•our ability to attract new consumers and retain and grow our relationships with our existing consumers;

•our expectations regarding the development, innovation, introduction of, and demand for, our products;

•our ability to successfully maintain our relationship with existing originating bank partners and card issuing bank partners and engage additional originating bank partners and card issuing bank partners;

•our ability to maintain, renew or replace our existing funding arrangements and build and grow new funding relationships;

•the impact of any of our funding sources becoming unwilling or unable to provide funding to us on terms acceptable to us, or at all;

•our ability to effectively price and score credit risk using our proprietary risk model;

•the performance of loans facilitated and originated through our platform;

•the future growth rate of our revenue and related key operating metrics;

•our ability to achieve sustained profitability in the future;

•our ability, and the ability of our originating bank and other partners, to comply, and remain in compliance with, laws and regulations that currently apply or become applicable to our business or the businesses of such partners;

•our ability to protect our confidential, proprietary, or sensitive information;

•past and future acquisitions, investments, and other strategic investments;

•our ability to maintain, protect, and enhance our brand and intellectual property;

•litigation, investigations, regulatory inquiries, and proceedings;

•developments in our regulatory environment;

•the impact of macroeconomic conditions on our business, including the impacts of inflation, an elevated interest rate environment and corresponding elevated negotiated interest rate spreads, ongoing recessionary concerns, and the potential impact of those macroeconomic conditions on the stability of the financial institutions with whom we do business; and

•the size and growth rates of the markets in which we compete.

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Forward-looking statements, including statements such as “we believe” and similar statements, are based on our management’s current beliefs, opinions and assumptions and on information currently available as of the date of this Report. Such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Form 10-Q and in our most recently filed Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the “Annual Report”). Other sections of this Form 10-Q may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive, heavily regulated and rapidly changing environment. New risks emerge from time to time, and it is not possible for our management to predict all risks that we may face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause our actual results to differ from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this Report, we cannot guarantee future results, levels of activity, performance, achievements, events, outcomes, timing of results or circumstances. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Report or to conform these statements to actual results or to changes in our expectations. You should read this Form 10-Q and the documents that we have filed as exhibits to this Report with the understanding that our actual future results, levels of activity, performance, outcomes, achievements and timing of results or outcomes may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (investors.affirm.com), our filings with the Securities and Exchange Commission (“SEC”), webcasts, press releases, conference calls, and social media. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our Company to review the information that we make available on our website. The contents of our website are not incorporated into this filing. We have included our investor relations website address only as an inactive textual reference for convenience and do not intend it to be an active link to our website.

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Part I - Financial Information

Item 1. Financial Statements

AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except shares and per share amounts)


	September 30, 2024		June 30, 2024
Assets
Cash and cash equivalents	$	1,046,160	$	1,013,106
Restricted cash	338,462		282,293
Securities available for sale at fair value	1,073,685		1,131,628
Loans held for sale	—		36
Loans held for investment	6,310,834		5,670,056
Allowance for credit losses	(350,606)		(309,097)
Loans held for investment, net	5,960,228		5,360,959
Accounts receivable, net	308,394		353,028
Property, equipment and software, net	473,019		427,686
Goodwill	536,745		533,439
Intangible assets	13,459		13,502
Commercial agreement assets	90,346		104,602
Other assets	298,661		299,340
Total assets	$	10,139,159	$	9,519,619
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	57,561	$	41,019
Payable to third-party loan owners	152,035		159,643
Accrued interest payable	24,484		24,327
Accrued expenses and other liabilities	137,464		147,429
Convertible senior notes, net	1,202,519		1,341,430
Notes issued by securitization trusts	3,985,484		3,236,873
Funding debt	1,744,040		1,836,909
Total liabilities	7,303,587		6,787,630
Commitments and contingencies (Note 7)
Stockholders’ equity:
Class A common stock, par value $0.00001 per share: 3,030,000,000 shares authorized, 271,833,469 shares issued and outstanding as of September 30, 2024; 3,030,000,000 shares authorized, 267,305,456 shares issued and outstanding as of June 30, 2024	2		2
Class B common stock, par value $0.00001 per share: 140,000,000 shares authorized, 42,143,934 shares issued and outstanding as of September 30, 2024; 140,000,000 authorized, 43,747,575 shares issued and outstanding as of June 30, 2024	1		1
Additional paid in capital	6,053,917		5,862,555
Accumulated deficit	(3,209,226)		(3,109,004)
Accumulated other comprehensive loss	(9,122)		(21,565)
Total stockholders’ equity	2,835,572		2,731,989
Total liabilities and stockholders’ equity	$	10,139,159	$	9,519,619

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

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AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS, CONT.

(Unaudited)

(in thousands)

The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the interim condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The liabilities in the table below include liabilities for which creditors do not have recourse to the general credit of the Company. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate upon consolidation.


	September 30, 2024		June 30, 2024
Assets of consolidated VIEs, included in total assets above
Restricted cash	$	210,254	$	145,829
Loans held for investment	6,134,943		5,461,660
Allowance for credit losses	(286,670)		(242,991)
Loans held for investment, net	5,848,273		5,218,669
Accounts receivable, net	2,962		2,961
Other assets	4,855		10,676
Total assets of consolidated VIEs	$	6,066,344	$	5,378,135
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable	$	2,864	$	2,830
Accrued interest payable	24,313		24,220
Accrued expenses and other liabilities	4,918		11,115
Notes issued by securitization trusts	3,985,484		3,236,873
Funding debt	1,717,243		1,794,984
Total liabilities of consolidated VIEs	5,734,822		5,070,022
Total net assets of consolidated VIEs	$	331,522	$	308,113

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

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AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended September 30,
		2024		2023
Revenue
Merchant network revenue		$	184,339	$	145,950
Card network revenue		47,480		33,476
Total network revenue		231,819		179,426
Interest income		377,064		262,679
Gain on sales of loans		63,613		34,285
Servicing income		25,983		20,157
Total revenue, net		698,479		496,547
Operating expenses
Loss on loan purchase commitment		54,237		34,866
Provision for credit losses		159,824		99,696
Funding costs		104,145		73,931
Processing and servicing		95,146		75,671
Technology and data analytics		134,290		132,965
Sales and marketing		145,233		146,866
General and administrative		138,482		140,334
Restructuring and other		(255)		1,665
Total operating expenses		831,102		705,994
Operating loss		$	(132,623)	$	(209,447)
Other income, net		34,303		38,707
Loss before income taxes		$	(98,320)	$	(170,740)
Income tax expense		1,902		1,043
Net loss		$	(100,222)	$	(171,783)
Other comprehensive income (loss)
Foreign currency translation adjustments		$	8,346	$	(11,898)
Unrealized gain on securities available for sale, net		5,589		1,353
Gain (loss) on cash flow hedges		(1,492)		763
Net other comprehensive income (loss)		12,443		(9,782)
Comprehensive loss		$	(87,779)	$	(181,565)
Per share data:
Net loss per share attributable to common stockholders for Class A and Class B
Basic		$	(0.31)	$	(0.57)
Diluted		$	(0.31)	$	(0.57)
Weighted average common shares outstanding
Basic		318,234,555		303,839,670
Diluted		318,234,555		303,839,670

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

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AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share amounts)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares (1)	Amount
Balance as of June 30, 2024	311,053,031	$	3	$	5,862,555	$	(3,109,004)	$	(21,565)	$	2,731,989
Issuance of common stock upon exercise of stock options	432,277	—		3,596		—		—		3,596
Vesting of restricted stock units	2,492,095	—		—		—		—		—
Vesting of warrants for common stock	—	—		107,263		—		—		107,263
Stock-based compensation	—	—		143,711		—		—		143,711
Tax withholding on stock-based compensation	—	—		(63,208)		—		—		(63,208)
Foreign currency translation adjustments	—	—		—		—		8,346		8,346
Unrealized loss on securities available for sale	—	—		—		—		5,589		5,589
Loss on cash flow hedges	—	—		—		—		(1,492)		(1,492)
Net loss	—	—		—		(100,222)		—		(100,222)
Balance as of September 30, 2024	313,977,403	$	3	$	6,053,917	$	(3,209,226)	$	(9,122)	$	2,835,572


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares (1)	Amount
Balance as of June 30, 2023	296,846,217	$	3	$	5,140,850	$	(2,591,247)	$	(15,423)	$	2,534,183
Issuance of common stock upon exercise of stock options	495,350	—		3,625		—		—		3,625
Vesting of restricted stock units	3,740,320	—		—		—		—		—
Vesting of warrants for common stock	—	—		95,910		—		—		95,910
Stock-based compensation	—	—		151,162		—		—		151,162
Tax withholding on stock-based compensation	—	—		(36,515)		—		—		(36,515)
Foreign currency translation adjustments	—	—		—		—		(11,898)		(11,898)
Unrealized gain on securities available for sale	—	—		—		—		1,353		1,353
Gain on cash flow hedges	—	—		—		—		763		763
Net loss	—	—		—		(171,783)		—		(171,783)
Balance as of September 30, 2023	301,081,887	$	3	$	5,355,032	$	(2,763,030)	$	(25,205)	$	2,566,800

(1)The share amounts listed above combine Class A and Class B stock.

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

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AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Three Months Ended September 30,
	2024		2023
Cash flows from operating activities
Net loss	$	(100,222)	$	(171,783)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for losses	159,824		99,696
Amortization of premiums and discounts on loans	(52,064)		(41,138)
Gain on sales of loans	(63,613)		(34,285)
Gain on extinguishment of debt	(19,624)		—
Changes in fair value of assets and liabilities	1,668		(4,110)
Amortization of commercial agreement assets	14,256		21,557
Amortization of debt issuance costs	6,083		5,534
Amortization of discount on securities available for sale	(15,797)		(12,120)
Commercial agreement warrant expense	107,263		95,910
Stock-based compensation	94,233		112,359
Depreciation and amortization	46,720		40,131
Impairment of right of use assets	—		752
Other	(2,209)		(4,730)
Change in operating assets and liabilities:
Purchases and origination of loans held for sale	(1,219,022)		(1,222,224)
Proceeds from the sale of loans held for sale	1,219,061		1,228,110
Accounts receivable, net	41,117		(42,208)
Other assets	(6,833)		(12,566)
Accounts payable	16,543		(1,257)
Payable to third-party loan buyers	(7,608)		55,646
Accrued interest payable	846		6,264
Accrued expenses and other liabilities	(23,755)		(20,636)
Net cash provided by operating activities	196,867		98,902
Cash flows from investing activities
Purchases and origination of loans held for investment	(6,388,350)		(4,229,667)
Proceeds from the sale of loans held for investment	1,630,671		899,238
Principal repayments and other loan servicing activity	4,132,682		3,184,851
Additions to property, equipment and software	(44,152)		(35,817)
Purchases of securities available for sale	(136,727)		(96,813)
Proceeds from maturities and repayments of securities available for sale	215,680		262,293
Other investing cash inflows	15,197		56
Net cash used in investing activities	(574,999)		(15,859)
Cash flows from financing activities
Proceeds from funding debt	3,188,998		2,896,251
Payment of debt issuance costs	(4,321)		(10,490)
Principal repayments of funding debt	(3,289,384)		(2,938,674)
Extinguishment of convertible debt	(120,056)		—
Proceeds from issuance of notes and certificates by securitization trust	750,000		750,000
Principal repayments of notes issued by securitization trust	—		(515,377)
Proceeds from exercise of common stock options and warrants and contributions to ESPP	3,596		3,611

Payments of tax withholding for stock-based compensation	(63,208)		(36,515)
Net cash provided by financing activities	465,625		148,806
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,730		(3,301)
Net increase in cash, cash equivalents and restricted cash	89,223		228,548
Cash, cash equivalents and restricted cash, beginning of period	1,295,399		1,259,944
Cash, cash equivalents and restricted cash, end of period	$	1,384,622	$	1,488,492

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

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AFFIRM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT.

(Unaudited)

(in thousands)


	Three Months Ended September 30,
	2024		2023
Reconciliation to amounts on consolidated balance sheets (as of period end)
Cash and cash equivalents	1,046,160		1,079,261
Restricted cash	338,462		409,231
Total cash, cash equivalents and restricted cash	$	1,384,622	$	1,488,492


	Three Months Ended September 30,
	2024		2023
Supplemental disclosures of cash flow information
Cash payments for interest expense	$	99,506	$	64,868
Cash paid for operating leases	4,159		4,104
Cash paid for income taxes	454		312
Supplemental disclosures of non-cash investing and financing activities
Stock-based compensation included in capitalized internal-use software	49,478		38,803

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

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1. Business Description

Affirm Holdings, Inc. (“Affirm,” the “Company,” “we,” “us,” or “our”), headquartered in San Francisco, California, provides consumers with a simpler, more transparent, and flexible alternative to traditional payment options. Our mission is to deliver honest financial products that improve lives. Through our next-generation commerce platform, agreements with originating banks, and capital markets partners, we enable consumers to confidently pay for a purchase over time. When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model, and once approved, the consumer selects their preferred repayment option. Loans are directly originated or funded and issued by our originating bank partners.

Merchants partner with us to transform the consumer shopping experience and to acquire and convert consumers more effectively through our frictionless point-of-sale payment solutions. Consumers get the flexibility to buy now and make simple regular payments for their purchases and merchants see increased average order value, repeat purchase rates, and an overall more satisfied consumer base. Unlike legacy payment options and our competitors’ product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will owe — no hidden fees, no deferred interest, no penalties.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), disclosure requirements for interim financial information, and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended June 30, 2024. The balance sheet as of June 30, 2024 has been derived from the audited financial statements at that date. Management believes these interim condensed consolidated financial statements reflect all adjustments, including those of a normal and recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period.

Our interim condensed financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and variable interest entities (“VIEs”), in which we have a controlling financial interest. These include various business trust entities and limited partnerships established to enter into warehouse credit agreements with certain lenders for funding debt facilities and certain asset-backed securitization transactions. All intercompany accounts and transactions have been eliminated in consolidation.

Our variable interest arises from contractual, ownership, or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets. We consolidate a VIE when we are deemed to be the primary beneficiary. We assess whether or not we are the primary beneficiary of a VIE on an ongoing basis.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the interim condensed consolidated financial statements and the accompanying notes. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for credit losses, capitalized internal-use software development costs, valuation allowance for deferred tax assets, loss on loan purchase commitment, discount on self-originated loans, the evaluation for impairment of intangible assets and goodwill, the fair value of available for sale

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debt securities including retained interests in our securitization trusts, the fair value of risk sharing arrangements, and stock-based compensation, including the fair value of warrants issued to nonemployees. We base our estimates on historical experience, current events, and other factors we believe to be reasonable under the circumstances. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results will be materially affected.

These estimates are based on information available as of the date of the interim condensed consolidated financial statements; therefore, actual results could differ materially from those estimates.

Significant Accounting Policies

There were no material changes to our significant accounting policies as disclosed in Note 2. Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on August 28, 2024.

Recent Accounting Pronouncements Not Yet Adopted

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The new guidance modifies the existing annual and interim segment reporting disclosures. The purpose of the update is to enable investors to better understand an entity’s overall performance and assess potential future cash flows, primarily through enhanced disclosure requirements on significant segment expenses. The ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The new guidance is expected to increase transparency and usefulness of income tax disclosures through improvements to the rate reconciliation, income taxes paid, and other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2024 and should be applied on a prospective basis, although retrospective application is permitted. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We are in the process of evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

3. Revenue

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


	Three Months Ended September 30,
		2024		2023
Merchant network revenue		$	184,339	$	145,950
Card network revenue		47,480		33,476
Interest income		377,064		262,679
Gain on sales of loans		63,613		34,285
Servicing income		25,983		20,157
Total revenue, net		$	698,479	$	496,547

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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 three months ended September 30, 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 virtual cards to be used by consumers at checkout. Prior to purchase, consumers can apply at Affirm.com or via the Affirm app and, upon approval, use a physical or virtual card to complete their purchase online or in-store. The card is funded at the time a transaction is authorized using cash held by the card-issuing partner in a reserve fund. Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full, via their linked bank account, or pay later, by using a unique post-purchase feature that allows them to instantly convert any eligible transaction into an installment loan. Where applicable, our originating bank partner, or wholly-owned subsidiaries, then originates a loan to the consumer after the transaction is confirmed by the merchant. The merchant is charged interchange fees for each successful card transaction, and a portion of this revenue is shared with us by our card-issuing partners.

Merchants may also elect to utilize our agreement with card-issuing partners as a means of integrating Affirm services. Similarly, for these arrangements with integrated merchants, the merchant is charged interchange fees for each successful card transaction and a portion of this revenue is shared with us. From time to time, we offer certain integrated merchants promotional incentives to promote our platform to their customers, such as rebates of interchange fees incurred by the merchant. These amounts are recorded as a reduction of card network revenue.

Our contracts with our card-issuing partners are defined at the transaction level and do not extend beyond the service already provided. The revenue collected from card-issuing partners for each transaction are determined as a percentage of the interchange fees charged on transactions facilitated on the payment processor network, and

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revenue is recognized at the point in time the transaction is completed successfully. The amounts collected are presented in revenue, net of associated transaction-related processing fees paid to our card-issuing partners. We have concluded that the revenue collected does not give rise to a future material right because the pricing of each transaction does not depend on the volume of prior successful transactions. We do not have any capitalized contract costs, and do not carry any material contract balances.

Our service comprises a single performance obligation to the card-issuing partner to facilitate transactions with consumers.

A portion of card network revenue relates to incentive payments from card network partners, which we are eligible to receive for reaching certain cumulative volume targets on program cards issued by our card-issuing partners. We earn incentive revenue as a percentage of each associated transaction and estimate the applicable percentage based on observed cumulative volume on program cards. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the transaction is completed successfully.

Interest Income

Interest income consisted of the following components (in thousands):


	Three Months Ended September 30,
		2024		2023
Contractual interest income on unpaid principal balance		$	337,159	$	226,158
Amortization of discount on loans		56,697		45,118
Amortization of premiums on loans		(4,633)		(3,980)
Interest receivable charged-off, net of recoveries		(12,159)		(4,617)
Total interest income		$	377,064	$	262,679

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 September 30, 2024 and June 30, 2024, the balance of loans held for investment on non-accrual status was $4.3 million and $2.6 million, respectively.

The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements. Past due status is based on the contractual terms of the loans. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is charged-off.

Gain on Sales of Loans

We sell certain loans we originate or purchase from our originating bank partners directly to third-party investors or to securitizations. We recognize a gain or loss on sale of loans sold to third parties or to unconsolidated securitizations by calculating the difference between the proceeds received and the carrying value of the loan. This amount is adjusted for the initial recognition of any assets or liabilities incurred upon sale. These generally include a net servicing asset or liability in connection with our ongoing obligation to continue to service the loans and a liability in connection with our loan repurchase obligation for loans that do not meet certain contractual requirements and such information about the loan was unknown at the time of sale.

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Additionally, we recognize a risk sharing asset or liability in certain arrangements where payments are made or received based on the actual versus expected loan performance, as contractually agreed upon with the third party. Refer to Note 12. Fair Value of Financial Assets and Liabilities for further discussion of risk sharing arrangements.

Servicing Income

Servicing income includes contractual fees specified in our servicing agreements with third-party loan owners and unconsolidated securitizations that are earned from providing professional services to manage loan portfolios on their behalf. The servicing fee is calculated on a daily basis by multiplying a set fee percentage (as outlined in the executed agreements with third-party loan owners) by the outstanding loan principal balance. Servicing income also includes fair value adjustments for servicing assets and servicing liabilities.

4. Loans Held for Investment and Allowance for Credit Losses

Loans held for investment consisted of the following (in thousands):


	September 30, 2024		June 30, 2024
Unpaid principal balance	$	6,330,283	$	5,697,965
Accrued interest receivable	72,507		62,796
Premiums on loans held for investment	8,247		7,822
Less: Discount due to loss on loan purchase commitment	(67,275)		(63,682)
Less: Discount due to loss on directly originated loans	(32,916)		(34,829)
Less: Fair value adjustment on loans acquired through business combination	(12)		(16)
Total loans held for investment	$	6,310,834	$	5,670,056

Loans held for investment includes loans originated through our originating bank partners and directly originated loans. The majority of the loans that are underwritten using our technology platform and originated by our originating bank partners are later purchased by us. We purchased loans from our originating bank partners in the amount of $6.4 billion and $4.6 billion during the three months ended September 30, 2024 and 2023, respectively. We directly originated $1.3 billion and $0.9 billion of loans during the three months ended September 30, 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. and Canada, with the majority of loans originated within the U.S. Given that our loan portfolio focuses on one product segment, unsecured consumer installment loans, we generally evaluate the entire portfolio as a single homogeneous loan portfolio to predict future losses, considering factors such as country of origin, loan product, origination channel, merchant and various borrower characteristics.

We closely monitor credit quality for our loan receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting, where loan applications are assessed against the credit underwriting policy and procedures for our directly originated loans and originating bank partner loans, and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal historical experience, including the consumer’s prior repayment history on our platform as well as other measures. We combine these factors to establish a proprietary score as a credit quality indicator.

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

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The ITACs model analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to: basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes. When a consumer passes both fraud and credit policy checks, the application is assigned an ITACs score. ITACs is also used for portfolio performance monitoring. Our credit risk team closely tracks the distribution of ITACs at the portfolio level, as well as ITACs at the individual loan level to monitor for signs of a changing credit profile within the portfolio. Repayment performance within each ITACs band is also monitored to support both the integrity of the risk scoring models and to measure possible changes in consumer behavior amongst various credit tiers.

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


	September 30, 2024
	Amortized Costs Basis by Fiscal Year of Origination
	2025		2024		2023		2022		2021		Prior		Total
96+	$	2,207,126	$	1,789,407	$	127,477	$	7,896	$	136	$	12	$	4,132,054
94 – 96	880,282		802,823		13,650		334		8		5		1,697,102
90 – 94	151,785		142,247		1,794		175		4		2		296,007
<90	29,023		22,536		32		186		2		1		51,780
No score (1)	1,247		8,343		43,919		7,678		151		46		61,384
Total amortized cost basis	$	3,269,463	$	2,765,356	$	186,872	$	16,269	$	301	$	66	$	6,238,327


	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.

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The following table presents net charge-offs by fiscal year of origination as of September 30, 2024 (in thousands):


	September 30, 2024
	Net Charge-offs by Fiscal Year of Origination
	2025	2024	2023	2022	2021	Prior	Total
Current period charge-offs	(1,552)	(107,403)	(11,829)	(510)	(94)	(60)	(121,448)
Current period recoveries	88	3,184	3,357	1,227	242	54	8,152
Current period net charge-offs	(1,464)	(104,219)	(8,472)	717	148	(6)	(113,296)

Loan receivables are defined as past due if either the principal or interest have not been received within four calendars days of when they are due in accordance with the agreed upon contractual terms. The following table presents an aging analysis of the amortized cost basis excluding accrued interest receivable of loans held for investment and loans held for sale by delinquency status (in thousands):


	September 30, 2024		June 30, 2024
Non-delinquent loans	$	5,899,332	$	5,331,462
4 – 29 calendar days past due	169,338		134,434
30 – 59 calendar days past due	67,042		55,021
60 – 89 calendar days past due	54,805		47,764
90 – 119 calendar days past due(1)	47,810		38,615
Total amortized cost basis	$	6,238,327	$	5,607,296

(1)Includes $47.7 million and $38.6 million of loan receivables as of September 30, 2024 and June 30, 2024, respectively, that are 90 days or more past due, but are not on non-accrual status.

We maintain an allowance for credit losses at a level sufficient to absorb expected credit losses based on evaluating known and inherent risks in our loan portfolio. The allowance for credit losses reflects our estimate of expected lifetime credit losses, which consider the remaining contractual term, historical credit losses, consumer payment trends, estimated recoveries, and future payment expectations as of each balance sheet date. Adjustments to the allowance for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented on our interim condensed consolidated statements of operations and comprehensive 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.

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The following table details activity in the allowance for credit losses, including charge-offs, recoveries and provision for loan losses (in thousands):


	Three Months Ended September 30,
		2024		2023
Balance at beginning of period		$	309,097	$	204,531
Provision for loan losses		154,805		92,827
Charge-offs		(121,448)		(70,842)
Recoveries of charged-off receivables		8,152		5,552
Balance at end of period		$	350,606	$	232,068

Loan Modifications for Borrowers Experiencing Financial Difficulty

We have a loan modification program for borrowers experiencing financial difficulty if certain eligibility criteria are met. A loan is evaluated for modification program eligibility when a borrower self-reports financial hardship, either when a borrower contacts us directly or upon making contact with the borrower to determine eligibility when a loan payment is past due. The objectives of the loan modification program are to offer borrowers assistance during times of financial stress, increase collections, and minimize losses.

We have two primary loan modification strategies: payment deferrals and loan re-amortization. A payment deferral provides the borrower relief by extending the due date for the next payment due. While a borrower may obtain more than one deferral, the total deferral period may not exceed three months. A loan re-amortization provides the borrower relief by lowering monthly payments through extending the term length of the loan; however, the total remaining term may not exceed twenty-four months. In addition, the total interest due from the consumer will not exceed the initial total interest due prior to modification, and a loan may not be re-amortized more than once.

The following table presents the amortized cost basis of loans excluding accrued interest receivable that were modified for borrowers experiencing financial difficulty during the three months ended September 30, 2024 and 2023, by type of modification (in thousands):


	Three Months Ended September 30,
	2024			2023(1)
Payment deferral	$	10,975		$	8,990
Loan re-amortization	165			270
Total	$	11,140		$	9,260
% of total loan receivables outstanding	0.18		%	0.21		%

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

With respect to borrowers who received payment deferrals during the three months ended September 30, 2024 and 2023, the length of each deferral period was one month.

With respect to borrowers who received a loan re-amortization during the three months ended September 30, 2024 and 2023, the payment amount was reduced by half and the term of the loan was extended between one month and twelve months.

During the modification process, the loans are made current, and payment schedules for these loans are updated according to the modified terms. We closely monitor the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. We hold an

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

The following tables present the delinquency status as of September 30, 2024 and 2023, by amortized cost basis excluding accrued interest receivable, of loan receivables that have been modified within the last 12 months where the borrower was experiencing financial difficulty at the time of modification (in thousands):


	September 30, 2024
	Payment Deferral		Loan Re-amortization		Total
Non-delinquent loans	$	12,645	$	287	$	12,932
4 – 29 calendar days past due	3,717		93		3,810
30 – 59 calendar days past due	2,689		51		2,740
60 – 89 calendar days past due	3,951		67		4,018
90 – 119 calendar days past due	2,652		63		2,715
Total amortized cost basis	$	25,654	$	561	$	26,215


	September 30, 2023 (1)
	Payment Deferral		Loan Re-amortization		Total
Non-delinquent loans	$	15,095	$	446	$	15,541
4 – 29 calendar days past due	3,417		169		3,586
30 – 59 calendar days past due	686		88		774
60 – 89 calendar days past due	362		12		374
90 – 119 calendar days past due	304		6		310
Total amortized cost basis	$	19,864	$	721	$	20,585

(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 September 30, 2024 and September 30, 2023, respectively, where the borrower was experiencing financial difficulty at the time of modification, the amortized cost basis of loans which have been charged off was $16.0 million and $1.4 million, respectively.

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5. Balance Sheet Components

Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, affiliate network partners and servicing fees due from third-party loan owners. For each of these groups, we evaluate accounts receivable to determine management’s current estimate of expected credit losses based on historical experience and future expectations and record an allowance for credit losses. Our allowance for credit losses with respect to accounts receivable was $17.2 million and $14.9 million as of September 30, 2024 and June 30, 2024, respectively.

Property, Equipment and Software, net

Property, equipment and software, net consisted of the following (in thousands):


	September 30, 2024		June 30, 2024
Internally developed software	$	719,971	$	630,129
Leasehold improvements	21,072		21,023
Computer equipment	10,311		9,827
Furniture and equipment	8,991		8,913
Total property, equipment and software, at cost	$	760,345	$	669,892
Less: Accumulated depreciation and amortization	(287,326)		(242,206)
Total property, equipment and software, net	$	473,019	$	427,686

Depreciation and amortization expense on property, equipment and software was $46.1 million and $26.0 million for the three months ended September 30, 2024 and 2023, respectively.

No impairment losses related to property, equipment and software were recorded during the three months ended September 30, 2024 and 2023.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the three months ended September 30, 2024 were as follows (in thousands):


Balance as of June 30, 2024	$	533,439

Adjustments (1)	3,306
Balance as of September 30, 2024	$	536,745

(1)Adjustments to goodwill during the three months ended September 30, 2024 primarily pertained to foreign currency translation adjustments.

No impairment losses related to goodwill were recorded during the three months ended September 30, 2024 or during the three months ended September 30, 2023.

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Intangible assets consisted of the following (in thousands):


	September 30, 2024
	Gross		Accumulated Amortization		Net		Weighted Average Remaining Useful Life (in years)
Merchant relationships	$	37,949	$	(37,389)	$	560	0.1
Developed technology	39,510		(39,392)		118		0.0
Assembled workforce	12,490		(12,490)		—		0.0
Trademarks and domains, definite	1,461		(1,221)		240		0.9
Trademarks, licenses and domains, indefinite	12,191		—		12,191		Indefinite
Other intangibles	350		—		350		Indefinite
Total intangible assets	$	103,951	$	(90,492)	$	13,459


	June 30, 2024
	Gross		Accumulated Amortization		Net		Weighted Average Remaining Useful Life (in years)
Merchant relationships	$	37,847	$	(36,741)	$	1,106	0.1
Developed technology	39,444		(39,311)		133		0.0
Assembled workforce	12,490		(12,490)		—		0.0
Trademarks and domains, definite	1,450		(1,165)		285		1.0
Trademarks, licenses and domains, indefinite	11,628		—		11,628		Indefinite
Other intangibles	350		—		350		Indefinite
Total intangible assets	$	103,209	$	(89,707)	$	13,502

Amortization expense for intangible assets was $0.6 million and $14.2 million for the three months ended September 30, 2024 and 2023, respectively. No impairment losses related to intangible assets were recorded during the three months ended September 30, 2024 and 2023.

The expected future amortization expense of these intangible assets as of September 30, 2024 is as follows (in thousands):


2025 (remaining nine months)	$	748
2026	155
2027	15
2028	—
2029 and thereafter	—
Total amortization expense	$	918

Commercial Agreement Assets

In November 2021, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). The warrants were granted in exchange for certain performance

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provisions and the benefit of acquiring new users. We recognized an asset of $133.5 million associated with the portion of the warrants that were fully vested upon grant. The asset was valued based on the fair value of the warrants and represents the probable future economic benefit to be realized over the expected benefit period of four years. For the three months ended September 30, 2024 and 2023, we recognized amortization expense of $5.2 million and $10.4 million, respectively, in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense. Refer to Note 13. Stockholders’ Equity for further discussion of the warrants.

In July 2020, we recognized an asset in connection with a commercial agreement with Shopify Inc. (“Shopify”), in which we granted warrants in exchange for the opportunity to acquire new merchant partners. This asset represents the probable future economic benefit to be realized over the expected benefit period and is valued based on the fair value of the warrants on the grant date. We recognized an asset of $270.6 million associated with the fair value of the warrants, which were fully vested as of September 30, 2024. During fiscal year 2022, the expected benefit period was extended from four to six years upon the execution of the commercial agreement term. The benefit period is reevaluated each reporting period. During the three months ended September 30, 2024 and 2023, we recorded amortization expense related to the commercial agreement asset of $9.0 million for both periods in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense.

Other Assets

Other assets consisted of the following (in thousands):


	September 30, 2024		June 30, 2024
Processing reserves	$	70,361	$	55,754
Risk sharing asset	45,330		33,884
Prepaid expenses	40,332		28,799
Equity securities, at cost	35,806		37,806
Foreign deferred tax asset	20,149		21,206
Fixed term deposit	21,076		35,203
Operating lease right-of-use assets	19,699		21,863
Other receivables	16,635		18,263
Prepaid payroll taxes for stock-based compensation	14,774		21,395
Derivative instruments	7,587		17,207
Other assets	6,912		7,960
Total other assets	$	298,661	$	299,340

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands)


	September 30, 2024		June 30, 2024
Accrued expenses	$	54,022	$	59,613
Operating lease liability	35,830		39,493
Other liabilities	39,841		30,680
Collateral held for derivative instruments	7,770		17,643
Total accrued expenses and other liabilities	$	137,464	$	147,429

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6. Leases

We lease facilities under operating leases with various expiration dates through 2030. We have the option to renew or extend our leases. Certain lease agreements include the option to terminate the lease with prior written notice ranging from nine months to one year. As of September 30, 2024, we have not considered such provisions in the determination of the lease term, as it is not reasonably certain these options will be exercised. Leases have remaining terms that range from less than one year to six years.

Several leases require us to obtain standby letters of credit, naming the lessor as a beneficiary. These letters of credit act as security for the faithful performance by us of all terms, covenants and conditions of the lease agreement. We are required to post collateral for the letters of credit in the form of cash or eligible securities. As of September 30, 2024, the collateral totaled $7.4 million, which was in the form of securities that have been classified as securities available for sale at fair value in the interim condensed consolidated balance sheets. As of June 30, 2024, the collateral totaled $8.8 million, of which $2.0 million was in the form of cash that was classified as restricted cash, and $6.8 million was in the form of securities which was classified as securities available for sale at fair value on our consolidated balance sheets.

No impairment charge was incurred related to leases during the three months ended September 30, 2024. During the three months ended September 30, 2023, we subleased a portion of our leased office space in San Francisco, resulting in an impairment charge of $0.8 million, included in general and administrative expense on our interim condensed consolidated statements of operations and comprehensive loss.

Operating lease expense is as follows (in thousands):


	Three Months Ended September 30,
		2024	2023
Operating lease expense (1)		$2,853	$2,986

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

We have subleased a portion of our leased facilities. Sublease income totaled $1.3 million and $0.9 million during the three months ended September 30, 2024 and 2023, respectively.

Lease term and discount rate information are summarized as follows:


						September 30, 2024
Weighted average remaining lease term (in years)						3.0
Weighted average discount rate						5.0%

Affirm Holdings, Inc. [AFRM] Filings
10-Q	[2024-11]
10-K	[2024-08]
10-Q	[2024-05-08]
10-Q	[2024-02-08]
10-Q	[2023-11-08]
10-K	[2023-08-25]
10-Q	[2023-05-09]
10-Q	[2023-02-08]
10-Q	[2022-11-08]
10-K	[2022-08-29]
10-Q	[2022-05-13]
10-Q	[2022-02-14]
10-Q	[2021-11-15]
10-K	[2021-09-17]
10-Q	[2021-05-17]
10-Q	[2021-02-17]
S-1	[2020-11-18]