Company: AFRM
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001820953-25-000052
Chunk: 55

Company: Affirm Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 55
---
 quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the notes receivable and residual trust certificates as of March 31, 2025 and June 30, 2024:March 31, 2025Unobservable InputMinimumMaximumWeighted Average (1)Discount rate2.26%30.29%6.89%Loss rate0.90%8.60%7.20%Prepayment rate18.25%23.00%22.52%June 30, 2024Unobservable InputMinimumMaximumWeighted Average (1)Discount rate5.73%41.41%8.93%Loss rate0.95%6.98%6.17%Prepayment rate12.40%27.70%23.33%(1)Unobservable inputs were weighted by relative fair value

47

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the notes receivable and residual trust certificates given hypothetical changes in significant unobservable inputs (in thousands):March 31, 2025June 30, 2024Discount rate assumption:Discount rate increase of 25%$(482)$(623)Discount rate increase of 50%$(948)$(1,223)Loss rate assumption:Loss rate increase of 25%$(2,238)$(705)Loss rate increase of 50%$(2,846)$(1,321)Prepayment rate assumption:Prepayment rate decrease of 25%$75 $58 Prepayment rate decrease of 50%$150 $116 Profit Share LiabilityOn January 1, 2021, we entered into a commercial agreement with an enterprise partner, in which we are obligated to share in the profitability of transactions facilitated by our platform. Upon capture of a loan under this program, we record a liability associated with the estimated future profit to be shared over the life of the loan based on estimated program profitability levels. This liability is measured using a discounted cash flow model and recorded at fair value and presented within accrued expenses and other liabilities in the interim condensed consolidated balance sheets. The following table summarizes the activity related to the fair value of the profit share liability (in thousands):Three Months Ended March 31,Nine Months Ended March 31,2025202420252024Fair value at beginning of period$6,111 $1,544 $1,974 $1,832 Facilitation of loans2,487