Company: AFRM
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050295
Chunk: 59

Company: Affirm Holdings, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 and June 1 of each year. At the end of each offering 

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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 ExpenseThe following table presents the components and classification of stock-based compensation (in thousands):Three Months Ended September 30,20252024General and administrative$55,773 $62,804 Technology and data analytics24,764 25,972 Sales and marketing5,076 5,195 Processing and servicing240 262 Total stock-based compensation in operating expenses85,853 94,233 Capitalized into property, equipment and software, net52,885 49,478 Total stock-based compensation$138,738 $143,711 

15.   Income Taxes 

The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and the tax effect of discrete items occurring during the quarter. Our quarterly provision and the estimate of the annual effective tax rate are subject to significant variation due to several factors, including variability in the pre-tax jurisdictional mix of earnings and the impact of discrete items.For the three months ended September 30, 2025, we recorded income tax expense (benefit) of $2.3 million which was primarily attributable to various foreign income taxes. For the three months ended September 30, 2024, we recorded income tax expense (benefit) of $1.9 million which was primarily attributable to various U.S state and foreign income taxes.

As of September 30, 2025, we continue to recognize a full valuation allowance against our U.S. federal and state and certain foreign net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize the existing deferred tax assets.