Company: AFRM
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050295
Chunk: 50

Company: Affirm Holdings, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 50
---
Unobservable InputMinimumMaximumWeighted Average (1)Discount Rate20.00%20.00%20.00%Default Rate9.38%9.38%9.38%Prepayment Rate47.91%47.91%47.91%June 30, 2025Unobservable InputMinimumMaximumWeighted Average (1)Discount Rate20.00%20.00%20.00%Default Rate8.88%8.88%8.88%Prepayment Rate48.85%48.85%48.85%(1)Unobservable inputs were weighted by relative fair valueThe following table summarizes the effect that adverse changes in estimates would have on the fair value of the residual interests in structured transactions given hypothetical changes in significant unobservable inputs (in thousands):September 30, 2025June 30, 2025Discount Rate assumption:Discount Rate increase of 20%$(296)$(181)Discount Rate increase of 40%$(562)$(343)Default Rate assumption:Default Rate increase of 20%$(40)$(28)Default Rate increase of 40%$(82)$(50)Prepayment Rate assumption:Prepayment Rate increase of 20%$(54)$(35)Prepayment Rate increase of 40%$(99)$(64)

46

Profit Share LiabilityWe have commercial agreements with certain enterprise partners, in which we are obligated to share in the profitability of transactions facilitated by our platform. Upon capture of a loan under these programs, we record a liability associated with the estimated future profit to be shared over the life of the loan based on estimated profitability levels of each program. The 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 September 30,20252024Fair value at beginning of period$9,323 $1,974 Facilitation of loans3,147 1,227 Actual performance(5,096)(3,028)Subsequent changes in fair value218 1,842 Fair value at end of period$7,592 $2,015 The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of September 30, 2025 and June 30, 2025:September 30