Company: AFRM
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001820953-25-000052
Chunk: 83

Company: Affirm Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 83
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 of the unpaid principal balance of off-balance sheet loans. The average unpaid principal balance of off-balance sheet loans increased from $5.1 billion and 

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$4.7 billion during the three and nine months ended March 31, 2024, respectively, to $7.1 billion and $6.3 billion, respectively, during the same period in 2025, an increase of 40% and 32%, respectively. 

Loss on loan purchase commitment

We purchase certain loans from our originating bank partners that are processed through our platform and put back to us by our originating bank partners. 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 in our interim condensed consolidated statements of operations and comprehensive income (loss). These costs are incurred on a per loan basis.

Loss on loan purchase commitment increased by $13.1 million, or 30%, and $49.2 million, or 37%, for the three and nine months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily due to an increase in total volume of loans purchased. During the three and nine months ended March 31, 2025, we purchased $7.1 billion and $21.6 billion, respectively, of loans from our originating bank partners, compared to $5.1 billion and $15.6 billion, respectively, in the same period in 2024, representing an increase of 38% for both periods, respectively. Of the total loans purchased during the three and nine months ended March 31, 2025, $337.1 million and $1.1 billion represented 0% APR installment loans, respectively, an increase of 46% and 57%, compared to the same periods in 2024.

Provision for credit losses

Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses on our interim condensed consolidated balance sheet, which represents management’s estimate of future losses. In the event that our loans outperform expectation and/or we reduce our expectation of credit losses