Company: AFRM
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001820953-25-000052
Chunk: 56

Company: Affirm Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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 521 7,952 2,609 Actual performance(4,270)(2,634)(10,569)(2,128)Subsequent changes in fair value1,097 1,705 6,068 (1,177)Fair value at end of period$5,425 $1,136 $5,425 $1,136 Significant unobservable inputs used for our Level 3 fair value measurement of the profit share liability are the discount rate and estimated program profitability. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement.

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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 March 31, 2025 and June 30, 2024:March 31, 2025Unobservable InputMinimumMaximumWeighted Average (1)Discount rate30.00%30.00%30.00%Program profitability1.09%2.19%1.94%June 30, 2024Unobservable InputMinimumMaximumWeighted Average (1)Discount rate30.00%30.00%30.00%Program profitability0.32%1.01%0.96%(1)Unobservable inputs were weighted by relative fair valueRisk 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. As of March 31, 2025 and June 30, 2024, we have sold $7.8 billion and $4.2 billion, respectively, unpaid principal balance of loans under these risk sharing arrangements, of which our maximum exposure to losses is $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 risk sharing assets of $61.2 million, as of March 31, 2025.  We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in