Company: AFRM
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001820953-25-000012
Chunk: 58

Company: Affirm Holdings, Inc.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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 fair value.The following table summarizes the effect that adverse changes in estimates would have on the fair value of the servicing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands):December 31, 2024June 30, 2024Servicing assetsGross default rate assumption:Gross default rate increase of 25%$1 $1 Gross default rate increase of 50%$2 $1 Adequate compensation assumption:Adequate compensation increase of 10%$(1,367)$(980)Adequate compensation increase of 20%$(2,734)$(1,961)Discount rate assumption:Discount rate increase of 25%$(32)$(23)Discount rate increase of 50%$(62)$(44)Servicing liabilitiesGross default rate assumption:Gross default rate increase of 25%$— $(1)Gross default rate increase of 50%$— $(1)Adequate compensation assumption:Adequate compensation increase of 10%$3,820 $3,153 Adequate compensation increase of 20%$7,639 $6,305 Discount rate assumption:Discount rate increase of 25%$(5)$(19)Discount rate increase of 50%$(9)$(37) Performance Fee LiabilityIn accordance with our agreements with our originating bank partners, we pay a fee for each loan that is fully repaid by the consumer, due at the end of the period in which the loan is fully repaid. We recognize a liability upon the purchase of a loan for the expected future payment of the performance fee. 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. Any changes in the fair value of the liability are reflected in other income, net, in the interim condensed consolidated statements of operations and comprehensive income (loss). 

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The following table summarizes the activity related to the fair value of the performance fee liability (in thousands):Three Months Ended December 31,Six Months Ended December 31,2024202320242023Fair value at beginning of period$1,541 $1,427 $1,503 $1,581 Purchases of loans566 493 1,089 869 Settlements paid(501)(508)(978)(992)Subsequent changes in fair value167 182 159 136