Company: AFRM
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001820953-25-000052
Chunk: 102

Company: Affirm Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 3
Chunk 102
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 2025 and June 30, 2024, we were exposed to credit risk on $6.6 billion and $5.7 billion, respectively, of loans held on our interim condensed consolidated balance sheet. Loan receivables are diversified geographically. As of March 31, 2025 and June 30, 2024, approximately 11% of loan receivables related to customers residing in the state of California. Approximately 10% of loan receivables related to customers residing in the state of Texas as of March 31, 2025 but did not exceed 10% as of June 30, 2024. No other states or provinces exceeded 10%. 

In addition, we have credit risk exposure in relation to certain off-balance sheet loans sold to third parties where we have entered into risk sharing arrangements and through our retained interests in unconsolidated securitization trusts. As of March 31, 2025 and June 30, 2024, we have sold $7.8 billion and $4.2 billion, respectively, of unpaid principal balance of loans which are subject to risk sharing arrangements, of which our maximum exposure to losses was $94.3 million and $81.2 million, respectively. This amount includes our maximum potential loss with respect to risk sharing liabilities of $33.1 million and the fair value of risk sharing assets of $61.2 million, as of March 31, 2025. The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $50.9 million and $23.8 million as of March 31, 2025 and March 31, 2024, respectively.

We are also exposed to credit risk in the event of nonperformance by the financial institutions holding our cash and the issuers of our cash equivalents and available for sale securities. We maintain our cash deposits and cash equivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. We manage this risk by conducting business with well-established financial institutions, diversifying our counterparties and having guidelines regarding credit rating and investment maturities to safeguard liquidity. Although, we are not substantially dependent on a single financing source and have not historically experienced any credit losses related to these financial institutions, if multiple financing sources were to be unable to fulfill their funding obligations to us, it could have a material adverse effect on our financial condition, results of operations and cash flows.

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