Company: AFRM
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050295
Chunk: 12

Company: Affirm Holdings, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 revenue, net of associated transaction-related processing fees paid to our card-issuing partners. We have concluded that the revenue collected does not give rise to a future material right because the pricing of each transaction does not depend on the volume of prior successful transactions. We do not have any capitalized contract costs, and do not carry any material contract balances.Our service comprises a single performance obligation to the card-issuing partner to facilitate transactions with consumers.A portion of card network revenue relates to incentive payments from card network partners, which we are eligible to receive for reaching certain cumulative volume targets on program cards issued by our card-issuing partners. We earn incentive revenue as a percentage of each associated transaction and estimate the applicable 

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percentage based on observed cumulative volume on program cards. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the transaction is completed successfully.Interest IncomeInterest income consisted of the following components (in thousands):Three Months Ended September 30,20252024Contractual interest income on unpaid principal balance$400,114 $337,159 Amortization of discount on loans71,316 56,697 Amortization of premiums on loans(6,244)(4,633)Interest receivable charged-off, net of recoveries(11,064)(12,159)Total interest income$454,122 $377,064 We accrue interest income using the effective interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan. Interest income on a loan is accrued daily, based on the finance charge disclosed to the consumer, over the term of the loan based upon the principal outstanding. The accrual of interest on a loan is suspended if a formal dispute with the consumer involving either Affirm or the merchant of record is opened, or a loan is 120 days past due. Upon the resolution of a dispute with the consumer, the accrual of interest is resumed, and any interest that would have been earned during the disputed period is retroactively accrued. As of September 30, 2025 and June 30, 2025, the balance of loans held for investment on non-accrual status was $6.7 million and $6.2 million, respectively.The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements. Past due status is based on