Company: AFRM
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050295
Chunk: 51

Company: Affirm Holdings, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 51
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, 2025Unobservable InputMinimumMaximumWeighted Average (1)Discount Rate30.00%30.00%30.00%Program Profitability1.00%3.28%2.84%June 30, 2025Unobservable InputMinimumMaximumWeighted Average (1)Discount Rate30.00%30.00%30.00%Program Profitability0.23%3.28%2.86%(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.   We account for these arrangements as derivatives measured at fair value with gains and losses recognized in gain on sales of loans in our interim condensed consolidated statements of operations and comprehensive income (loss). For each counterparty, we have recognized a net asset or net liability based on the estimated fair value of future payments we expect to receive from or make to the counterparty. As of September 30, 2025, we estimated the fair value of future settlements using a discounted cash flow model.

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The following table summarizes the activity related to the fair value of the risk sharing assets (in thousands):Three Months Ended September 30,20252024Fair value at beginning of period$43,179 $33,884 Initial transfers of financial assets6,508 10,377 Cash settlements(8,340)— Subsequent changes in fair value218 1,069 Fair value at end of period$41,565 $45,330 The following table summarizes the activity related to the fair value of the risk sharing liabilities (in thousands):Three Months Ended September 30,20252024Fair value at beginning of period$90 $918 Cash settlements(90)— Subsequent changes in fair value883 Fair value at end of period$— $1,801 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the risk sharing arrangements as of September 30, 2025 and June 30, 2025:September