AFRM 10-K & 10-Q changes, risk factors and insider trading

•We have a history of operating losses and may not achievebe sustainedable to sustain profitability.

Our continued success also is dependent on our ability to successfully grow and develop relationships with our commercial partners, particularly early-stage relationships with large e-commerce retailers and platforms such as Apple Pay.Intuit. The pace of development, integration and rollout of these early-stage relationships is often unpredictable and is generally not within our control. Many of our agreements with our commercial partners are non-exclusive and lack any transaction volume commitments. Accordingly, these commercial partners may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the level of transaction volume and revenue growth that we seek to achieve or to otherwise satisfy the high expectations of our investors and financial analysts relating to those relationships. While some of our agreements with our commercial partners have provided for a period of exclusivity, those periods may be limited in duration, and we may not be able to negotiate extensions of those exclusivity periods on reasonable terms, if at all. If an exclusivity period with a commercial partner lapses, we may experience a decrease in GMV with the commercial partner, which may adversely impact our results of operations. In addition, our agreements with our commercial partners generally have terms that range from approximately 12 months to 36 months (with a majority auto-renewing), and some of our partners can terminate these agreements without cause upon 30 to 90 days’ prior written notice. We may, therefore, be compelled to renegotiate our agreements with commercial partners from time to time, possibly upon terms significantly less favorable to us than the terms included in our existing agreements with those commercial partners.

We operate in a highly competitive and dynamic industry. Our technology platform faces competition from a variety of players, including those who enable transactions and commerce via digital payments. Our primary competition consists of: legacy payment methods, such as credit and debit cards, including those provided by card issuing banks such as Synchrony, J.P. Morgan Chase, Citibank, Bank of America, Capital One, Bread Financial and American Express; technology solutions provided by payment companies such as Visa and MasterCard; mobile wallets such as PayPal;and other pay-over-time solutions offered by companies such as PayPal, Block and Klarna; and pay-over-time offerings by legacy financial and payments companies, including those mentioned above. Additionally, some merchants are increasingly offering proprietary pay-over-time options to consumers. We expect competition to intensify in the future, especially as the pay-over-time industry has low barriers to entry, both as emerging technologies continue to enter the marketplace and as large financial incumbents increasingly seek to innovate the services that they offer to compete with our platform. Technological advances and the continued growth of e-commerce activities have increased consumers’ accessibility to products and services and led to the expansion of competition in digital payment options such as pay-over-time solutions. Our pay-over-time offerings are increasingly presented alongside competitor options, including merchants’ proprietary pay-over-time options, at checkout, and we expect this trend to continue.

As discussed in Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and as may be updated from time to time in the Company’s future periodic reports and other filings with the SEC, a single commercial partner, or a small number of commercial partners, may represent a disproportionately large amount of our revenue and/or GMV during any given fiscal period. The loss of, or decrease in business with, any one of our significant commercial partner relationships, such as with Amazon or Shopify, due to a lapse in exclusivity or otherwise, would adversely affect our business. To the extent that any commercial partner constitutes a material portion of our total revenue or GMV for a fiscal period for which financial results are being reported in a Quarterly Report on Form 10-Q or Annual Report on Form 10-K, we will disclose the respective percentage contribution in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for that period.

We currently rely on a small number of originating bank partners, including Celtic Bank and Lead Bank (“Primary Originating Banks”), to originate substantially all of the loans facilitated through our platform, and a singlesmall number of card issuing bank partner,partners, including Evolve Bank & Trust and Stride Bank (“Card Issuing BankBanks”), to issue the Affirm Card. If our relationship with any of our Primary Originating Banks or our Card Issuing BankBanks terminates, or if any Primary Originating Bank or our Card Issuing Bank were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, and we are unable to engage another originating bank partner or card issuing bank partner on a timely basis or at all, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

As of the end of fiscal 2025,2026, we relied on two Primary Originating Banks to originate a majority of the loans facilitated through our platform and to comply with various federal, state, and other laws, with the balance of the loans facilitated on our platform being originated directly under our lending, servicing, and brokering licenses in Canada and across various states in the United States through our consolidated subsidiaries. Our Primary Originating Banks originate substantially all partner bank originated loans facilitated through our platform. In addition, as of the end of fiscal 2025,2026, we relied on a singletwo Card Issuing BankBanks to issue the Affirm Card, and we had entered into a payments program partnership with Stride Bank to be an additional issuing bank of the Affirm Card upon launch of the program.Card.

Our agreements with our Primary Originating Banks and Card Issuing BankBanks do not prohibit those banks from working with our competitors or from offering competing services, and each of those banks currently offeroffers loan programs or other issuing services, as applicable, through other competing platforms. Each Primary Originating Bank and Card Issuing Bank could decide not to work with us for any reason upon termination of the applicable agreement, could make working with us cost-prohibitive, or could decide to enter into an exclusive or more favorable relationship with one or more of our competitors. In addition, each Primary Originating Bank and Card Issuing Bank may not perform as expected under our respective agreement. We could in the future have disagreements or disputes with our Primary Originating Banks or Card Issuing Bank,Banks, which could negatively impact or threaten our relationship with other banks with whom we may seek to partner. For a further discussion of our relationship with our Primary Originating Banks, particularly the regulations applicable to this relationship, see “Business — Regulatory Environment.”

If any of our Primary Originating Banks or our Card Issuing BankBanks were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, or if our relationship with any Primary Originating Bank or our Card Issuing Bank were to otherwise terminate for any reason (including, but not limited to, its failure to comply with regulatory actions), we may need to implement an additional substantially similar arrangement with another bank, obtain additional state licenses, or curtail our operations. If we need to enter into alternative arrangements with a different bank to replace our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all. In addition, with respect to our Primary Originating Banks, transitioning loan originations to a new bank may result in delays in the issuance of loans or, if our platform becomes inoperable, may result in the inability to facilitate loans through our platform. If we are unable to enter into an alternative arrangement with different banks to fully replace or supplement our relationship with any Primary Originating Bank, we would potentially need to obtain additional state licenses to enable us to originate loans directly, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all. Moreover, with respect to our Card Issuing Bank,Banks, transitioning card issuance activities to a new bank may result in the need to replace existing virtual or physical cards, which may disrupt or delay consumer transactions.

Our solution is a technology-driven platform that relies on innovation to remain competitive. The process of developing new technologies and products, such as the Affirm Card,Edge, which offersembeds Affirm's pay-over-time functionality indirectly theinto Affirmcustomers’ App,primary banking and credit union apps, and AdaptAI, which is Affirm’s AI-powered personalized promotion platform, is complex, and we seek to build our own technology using the latest in artificial intelligence (“AI”) and machine learning (together, “AI/ML”), cloud-based technologies, and other tools to differentiate our products and technologies. In addition, our dedication to incorporating technological advancements into our platform requires significant financial and personnel resources and talent. Our development efforts with respect to these initiatives could distract management from current operations and could divert capital and other resources from other growth initiatives important to our business. We operate in an industry experiencing rapid technological change and frequent product introductions.

We may not be able to make technological improvements as quickly as demanded by our consumers and commercial partners, or we may not be able to accurately predict the demand or growth of our technological investments, which could harm our ability to attract consumers and commercial partners and have a material and adverse effect on our business, results of operations, financial condition, and future prospects. For example, our competitors or other third parties may incorporate AI into their products and services more quickly or more successfully than us, which could impair our ability to compete effectively. In addition, we may not be able to effectively implement new technology-driven products and services, includingsuch theas Affirm CardEdge or AdaptAI (Affirm’s AI-powered personalized promotion platform),AdaptAI, as quickly as competitors or be successful in marketing these products and services to consumers and commercial partners. Moreover, the profile of potential consumers using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve or have served in the past, which may lead to higher levels of delinquencies or defaults than we have historically experienced. If we are unable to successfully and timely innovate and continue to deliver a superior commercial partner and consumer experience, we could experience reputational damage and decreased demand for our products and technologies and our growth, business, results of operations, financial condition, and future prospects could be materially and adversely affected.

Our failure to accurately predict the demand or growth of our new products and technologies also could have a material and adverse effect on our business, results of operations, financial condition, and future prospects. New products and technologies are inherently risky, due to, among other things, risks associated with: the product or technology not working, or not working as expected; consumer and commercial partner acceptance; technological outages or failures; increased regulatory scrutiny; and the failure to meet consumer and commercial partner expectations. As a result of these risks, we could experience increased claims, reputational damage, or other adverse effects, which could be material. The profile of potential consumers using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve or have served in the past, which may lead to higher levels of delinquencies or defaults than we have historically experienced. Additionally, we can provide no assurance that we will be able to develop, commercially market, and achieve acceptance of our new products and technologies. In addition, our investment of resources to develop new products and technologies and make changes or updates to our platform may either be insufficient or result in expenses that exceed the revenue actually generated from these new products. Failure to accurately predict demand or growth with respect to our new products and technologies could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

Our high-velocity, capital efficient funding model is integral to the success of our commerce platform. To support this model and the growth of our business, we must maintain a variety of funding arrangements, including warehouse credit facilities, securities repurchase agreements, securitization trusts, pass-through securitizations, master trust facilities, and forward flow arrangements with a diverse set of funding sources.sources, including private credit funds and other institutional investors. If we are unable to maintain access to, or to expand, our network and diversity of funding arrangements, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.

In addition, our funding sources may reassess their exposure to our industry and either curtail access to uncommitted financing capacity, fail to renew or extend facilities, or impose higher costs to access our funding. While most of our facilities are committed capital, some facilities are uncommitted, which may allow such funding providers to, among other things, reduce available funding limits, subject to certain structural protections (including penalty fees in certain transactions). Further, our debt financing and loan sale forward flow facilities are generally fixed term in nature, with term lengths ranging between one to three years, during which we have access to committed and uncommitted capital pursuant to such facilities. If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, we wouldmay need to secure additional sources of funding or reduce our operations significantly.operations. The availability and diversity of our funding arrangements depends on various factors and are subject to numerous risks, many of which are outside of our control.

In addition, if the risk model we use contains errors or is otherwise ineffective, our reputation and relationships with consumers, our funding sources, our originating bank partners, and our commercial partners could be harmed, we may be subject to liability, and our ability to access our funding sources may be inhibited. Our ability to attract consumers to our platform and to build trust in our platform and products is significantly dependent on our ability to effectively evaluate consumer credit profiles and likelihoods of default. If any of the credit risk or fraud models we use contain programming or other errors or isare ineffective or the data provided by consumers or third parties is incorrect or stale, or if we are unable to obtain accurate data from consumers or third parties (such as credit reporting agencies), the loan pricing and approval process through our platform could be negatively affected, resulting in mispriced or misclassified loans or incorrect approvals or denials of loans. This could damage our reputation and relationships with consumers, our funding sources, our originating bank partners, and our commercial partners, which could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

InWe recentretain fiscal years, we have retained moresome loans on our balance sheet than we have historically,sheet, and these loans are primarily funded through our consolidated securitizations and warehouse lines. For these loans and any future loans facilitated through our platform that we purchase from our originating bank partners that may beare held for investment on our balance sheet, we bear the entire credit risk in the event of consumer default with respect to these loans. In addition, non-performance, or even significant underperformance, of the loan receivables that we own could have an adverse effect on our business.

In addition, 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 if actual losses on the loans sold exceed agreed-upon expected losses, subject to a cap based on a percentage of the principal balance of loans sold. Refer to “Note 13.12. Fair Value of Financial Assets and Liabilities” for additional information. If the loans subject to any existing or future risk sharing agreements underperform the expectations set forth in those agreements, we would be required to make payments under the agreements in proportion to the loan underperformance, which may have a material adverse effect on our business, results of operations, financial condition, and our relationships with existing and prospective third-party loan buyers.

Any acquisitions, strategic investments, new businesses, alliances, divestitures and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations.

In pursuing our business strategy, we routinely conduct discussions and evaluate opportunities for possible acquisitions, strategic investments, new businesses, joint ventures and other transactions. We have in the past acquired or invested in, and we continue to seek to acquire or invest in, businesses, technologies, or other assets that we believe could complement or expand our business.business, including acquisitions of new lines of business that are adjacent to or outside of our existing ecosystems or geographic territories. As we grow, the pace and scale of acquisitions may increase and may include larger acquisitions than we have completed historically. The identification, evaluation, and negotiation of potential acquisition or strategic investment or other transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed. There can be no assurance that we will be successful in identifying, negotiating, consummating and integrating favorable transaction opportunities. In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, any of which could harm our business and negatively impact our results of operations, including risks that:

•the transaction may not advance our business strategy or may harm our growthgrowth, (profitability, or profitability)reputation;

•we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business, and if the acquired business does not perform as expected, we may incur impairment charges, restructuring or wind-down costs, or experience other negative impacts to our business;

•acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and data security, and our due diligence process may not identify compliance issues or other liabilitiesliabilities. Moreover, acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures;

Additionally, strategic investments in which we have a minority ownership stake inherently involve a lesser degree of influence over business operations. The success of our strategic investments may be dependent on controlling shareholders, management, or other persons or entities that may have business interests, strategies, or goals that are inconsistent with ours. Business decisions or other actions or omissions of the controlling shareholders, management, or other persons or entities who control companies in which we invest may adversely affect the value of our investment, result in litigation or regulatory action against us, and damage our reputation and brand. Furthermore, if such investments are not successful, we may be required to write down all or a portion of our equity investments in such companies, which would result in financial losses.

We currently operate in the United States, Canada, the U.K., Australia, Spain and Poland (we do not currently facilitate loans in Spain or Poland) and plan to further expand our business internationally in the future. Managing new and existing international operations, including our planned expansion into the Netherlands, France, GermanyFrance and Australia,Germany, requires us to comply with new regulatory frameworks and additional resources and controls. International expansion subjects our business to risks associated with international operations, including:

• compliance with multiple, potentially conflicting, and changing governmental laws and regulations, including those relating to banking, anti-money laundering, securities, employment, tax, privacy, data protection, such as the EU General Data Protection Regulation (GDPR), artificial intelligence, such as the EU Artificial Intelligence Act, and climate disclosure, such as the Corporate Sustainability Reporting Directive (CSRD) and Australian Sustainability Reporting Standards (ASRS);

In addition to the risks of various taxing jurisdictions stated above, the Organisation for Economic Co-operation and Development (“OECD”) continueshas to put forthdeveloped various initiatives, including a framework to implement a global minimum corporate tax of 15% for certain large multinational enterprisesenterprise with global revenues and profits above certain thresholdsgroups (“MNEs”), commonly referred to as “Pillar TwoTwo.”). WhileCertain it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countriesjurisdictions in which we operate have adopted legislation,enacted, and otherothers countriesmay are in the process of introducingenact, legislation to implementimplementing Pillar Two.Two, Asincluding ofqualified Junedomestic 30,minimum 2025,top-up based on the countries in which we do business that have enacted legislation, we do not currently expect Pillar Two to have a material impact on our financial statements. However, this may change as other countries enact similar legislation and further guidance is released.taxes.

As of June 30, 2026, we do not currently expect Pillar Two to have a material impact on our financial statements; however, the ultimate impact will depend on future legislation, administrative guidance, interpretation, our operating results, jurisdictional income mix, tax attributes, and other facts. As a result of these risks, we may not be successful in managing our existing international operations, and our future international expansion efforts also may not be successful.

WeAlthough we have achieved GAAP profitability in recent periods, we have incurred net incomelosses of approximately $52.2 million forin the fiscal year ended June 30, 2025 and net losses of approximately $517.8 million and $985.3 million for the fiscal years ended June 30, 2024 and 2023 respectively.past. As of June 30, 20252026 and June 30, 2024,2025, our accumulated deficit was approximately $3.1$1.1 billion forand both$3.1 years.billion, respectively. Our operating expenses may increase in the future as we seek to continue to grow our business, attract consumers, merchants, funding sources, and additional originating bank partners, and further enhance and develop our products and platform. As we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate. Additionally, we may not realize the operating efficiencies we expect to achieve as a result of our acquisitions. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.expenses, which could result in net losses.

In August 2025, we announced that we achieved GAAP operating income profitability in the fourth quarter of fiscal 2025. Our ability to continue to operate our business profitably on a GAAP operating income basis is subject to many risks and uncertainties, including the potential for incurring operating expense increases and/or other charges and expenses not reflected in thatour forecast.forecasts. If we do not operate the business while maintaining GAAP operating income profitability, our reputation may be harmed and the market price of our Class A common stock could be materially and adversely impacted.

We experience seasonal fluctuations in our business as a result of consumer spending and savings patterns. Historically,Our GMV tends to be highest during our GMV has been the strongest during the second quarterand of ourfourth fiscal yearquarters due to increases in retail commerce during the holiday season.season Despiteand thesepromotional activity. During quarters with higher GMV levels, in fiscal 2025, 2024 and 2023,GMV, we generatedhave tended to generate less in periodin-period revenue as a percentage of GMV duringbecause oura secondportion fiscal quarter due toof the comparatively higher proportion of interest bearingincome for loans originated induring the latter half of the period, which typically results in lower merchant network revenue, which is recognized in period, and higher levels of interest income, whichquarter is recognized over afuture longer time horizon.periods. In addition, historically, our loan delinquencies aretend to be at their lowest during our fiscal third and fourth quarter, as consumer savings benefit from tax refunds. We expect these seasonal patterns to continue in future periods, and any adverse events that occur during our second or fourth fiscal quarterquarters could have a disproportionate effect on our financial results for the fiscal year.

Negative publicity about us or our industry, including the transparency, fairness, responsible lending, user experience, quality, and reliability of our platform or point-of-salepay lendinglater platformsproducts in general, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, originating bank partners, service providers, or others in our industry, the experience of consumers and investors with our platform or services or point-of-salepay lendinglater platformsproducts in general, or use of loan proceeds by consumers that have obtained loans facilitated through our platform or other point-of-salepay lendinglater platformsproducts for illegal purposes, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our platform, which could harm our reputation and cause disruptions to our platform. Any such reputational harm could further affect the behavior of consumers, including their willingness to obtain loans facilitated through our platform or to make payments on their loans. As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

In the ordinary course of business, we have been named as a defendant in various legal actions, including arbitrations and other litigation. In addition, weplaintiffs arehave currentlyappealed athe defendantdismissal inof a putative securities class action, Kusnier v. Affirm Holdings, Inc., et al.,al. andWe are also a defendant in three related derivative actions, Quiroga v. Levchin, et al., Jeffries v. Levchin, et al., and Vallieres v. Levchin, et al. For more information, refer to Note 8.7. Commitments and Contingencies of the accompanying notes to our consolidated financial statements. On July 1, 2025, we reincorporated from the State of Delaware to the State of Nevada (the “Nevada Reincorporation”). It is possible that our decision to pursue the Nevada Reincorporation could result in additional litigation, which, regardless of merit, could cause us to incur additional expense and divert management attention from operating the business. Further, if a court determines that any such litigation has merit, we may be required to pay substantial monetary damages or attorneys’ fees.

We maintain an allowance for credit losses at a level sufficient to estimate expected credit losses based on evaluating known and inherent risks in our loan portfolio. This estimate is highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies. Management has processes in place to monitor these judgments and assumptions, including review by our credit committee and our asset-liability committee, but these processes may not ensure that our judgments and assumptions are correct. The method for calculating the best estimate of expected credit losses takes into account our historical experience, adjusted for current conditions, and our judgment concerning the probable effects of relevant observable data, trends, and market factors. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that we will experience credit losses that are different from our current estimates. If our estimates and assumptions prove incorrect and our allowance for credit losses is insufficient, we may incur net charge-offs in excess of our reserves,allowance, or we could be required to increase our provision for credit losses, either of which would adversely affect our results of operations.

In March 2022, in response to inflationary conditions, the U.S. Federal Reserve began raising the federal funds interest rate and continued to do so through July 2023. While the U.S. Federal Reserve lowered the federal funds interest rate in the second half of 2024,2024 and again in the second half of 2025, as of August 2025,2026, the federal funds interest rate remains elevated compared to March 2022 rates, and the timing of additional interest rate cuts, if any, is uncertain.rates. Elevated interest rates have had, and may continue to have, an adverse impact on the spending levels of consumers and their ability and willingness to borrow money. Higher interest rates often lead to higher payment obligations, which may reduce the ability of consumers to remain current on their obligations and, therefore, lead to increased delinquencies, defaults, consumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on our business. Certain of our funding arrangements bear a variable interest rate. Given the fixed interest rates charged on the loans originated on our platform, in the event that variable interest rates rise across the market, our interest margin earned in these funding arrangements would be reduced. Dramatic increases in interest rates may make these forms of funding nonviable. In addition, certain of our loan sale agreements are repriced on a recurring basis using a mechanism tied to interest rates. To reduce our exposure to broad changes in prevailing interest rates, we maintain an interest rate hedging program which eliminates some, but not all, of the interest rate risk.

The generation of new loans facilitated through our platform, and the transactionrevenue feeswe andgenerate other fee income due to us associated withfrom such loans, depends upon sales of products and services by our commercial partners. Our commercial partners’ sales may decrease or fail to increase as a result of factors outside of their control, such as the macroeconomic conditions referenced above, or business conditions affecting a particular commercial partner, industry vertical, or region. Weak economic conditions also could extend the length of our commercial partners’ sales cycles and cause consumers to delay making (or not make) purchases of our commercial partners’ products and services. The decline of sales by our commercial partners for any reason will generally result in lower credit sales and, therefore, lower loan volume and associated fee incomerevenue for us.

Personal loans facilitated through our platform are not secured by any collateral, not guaranteed or insured by any third-party,third party, and not backed by any governmental authority in any way. Therefore, if we purchasehold the loans fromfor investment on our originatingbalance bank partners after they are originated,sheet, we are limited in our ability to collect on these loans if a consumer is unwilling or unable to repay them. A consumer’s ability to repay their loans can be negatively impacted by increases in their payment obligations to other lenders under mortgage, credit card, and other loans resulting from increases in base lending rates or structured increases in payment obligations. If a consumer neglects his or her payment obligations on a loan facilitated through our platform or chooses not to repay his or her loan entirely, it will have an adverse effect on our business, results of operations, financial condition, future prospects, and cash flows.

While we take precautions to prevent consumer identity fraud, itwe ishave possibleobserved thatfraudulent activity on our platform and additional identity fraud may still occur orin hasthe occurred,future, which may adversely affect the performance of the loans facilitated through our platform.

Most of our third-party partner agreements are terminable by the third-partythird party on little or no notice, and if our current third-party partners were to terminate their agreements with us or otherwise stop providing services to us on acceptable terms, we may be unable to procure alternatives from other vendors in a timely and efficient manner and on acceptable terms (or at all). If any third-party partner fails to provide the services we require, fails to meet contractual requirements (including compliance with applicable laws and regulations), fails to maintain adequate data privacy controls and electronic security systems, or suffers a cyber-attack or other security breach, such as the Evolve Bank & Trust cybersecurity incident reported in June 2024, we could be subject to CFPB, FTC and other federal and state regulatory enforcement actions, claims from third parties, including our consumers, and suffer economic and reputational harm that could have an adverse effect on our business. Further, we may incur significant costs to resolve any such disruptions in service, which could adversely affect our business.

For example, certain installment loans are originated by our originating bank partners and then disbursed to merchants via one-time-use virtual cards facilitated through our partnership with an issuer processor. This issuer processor issues one-time-use virtual cards through an issuing bank partner, which allow loans facilitated through our platform to be processed over the card network. Such loans facilitated through our platform can be used at merchants where we are not integrated at checkout, allowing consumers to complete purchases with virtual cards just as they would with a standard credit or debit card. In the event that our issuer processor becomes unable or unwilling to facilitate the disbursements to merchants and we are unable to reach an agreement with another third-party partner, such loans would no longer be able to be facilitated through our platform.

Our point-of-salepayment solutionsnetwork allowallows consumers to pay for purchases in fixed amounts without deferred interest, late fees, or penalties. We empower consumers to pay over time rather than paying for a purchase entirely upfront. This increases consumers’ purchasing power and gives them more control and flexibility. Our platform facilitates both true 0% APR payment options and interest-bearing loans. On the merchant side, we offer commerce enablement, demand generation, and consumer acquisition tools. Our solutions empower merchants to more efficiently promote and sell their products, optimize their consumer acquisition strategies, and drive incremental sales. We also provide valuable consumer- and product-level data and insights — information that merchants cannot easily get elsewhere — to better inform their strategies. Finally, for consumers, our app unlocks the full suite of Affirm productsproducts, forenabling a delightful end-to-end consumer experience. Consumers can use our appconsumers to apply for installment loans, and upon approval, they can use the Affirm Card digitally online or in-storesin-store to complete a purchase. Additionally, consumers can manage the prepre- and post purchasepost-purchase split of Affirm Card transactions into a loan, manage payments, open a high-yield savings account, and access a personalized shopping and offers marketplace.

From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction. Merchant fees depend on the individual arrangement between us and each merchant and may vary based on the loan terms of theand product offering; we generally earn larger merchant fees on 0% APR financing products. For the years ended June 30, 2025, 2024, and 2023, Pay-in-X represented 14%, 15%, and 19%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 13%, 11%, and 13%, respectively.

From consumers, we earn interest income on the simple interest loans that we originate or purchase from our originating bank partners. Interest rates charged to our consumers vary depending on the transaction risk, creditworthiness of the consumer, the repayment term selected by the consumer, the amount of the loan, and the individual arrangement with a merchant. Because our consumers are never charged deferred or compounding interest, late fees, or penalties on the loans, we are not incentivized to profit from our consumers’ hardships. In addition, interest income includes the amortization of any discounts or premiums on loan receivables created upon either the purchase of a loan from one of our originating bank partners or our direct origination of a loan. For the years ended June 30, 2025, 2024, and 2023, interest bearing loans represented 72%, 74%, and 68% of total GMV facilitated through our platform, respectively.

In order to accelerate our ubiquity, we facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. Similarly, we also facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App. Similarly, we also facilitate the issuance of virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.

When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model. Once approved for the loan, the consumer then selects their preferred repayment option. A portion of these loans are funded and issued by our originating bank partners, which include Cross River Bank, an FDIC-insured New Jersey state-chartered bank, Celtic Bank, an FDIC-insured Utah state-chartered industrial bank, and Lead Bank, an FDIC-insured Missouri state-chartered bank. These partnerships allow us to benefit from our partners’ ability to originate loans under their banking licenses while complying with various federal, state, and other laws. Under this arrangement, we must comply with our originating bank partners' credit policies and underwriting procedures, and our originating bank partners maintain ultimate authority to decide whether to originate a loan or not. When an originating bank partner originates a loan, it funds the loan through its own funding sources and may subsequently offer and sell the loan to us. Pursuant to our agreements with these partners, we are obligated to purchase the loans facilitated through our platform that such partner offers us and our obligation is secured by cash deposits. To date, we have purchased all of the loans facilitated through our platform and originated by our originating bank partners. When we purchase a loan from an originating bank partner, the purchase price is equal to the outstanding principal balance of the loan, plus a fee and any accrued interest. The originating bank partner also retains an interest in the loans purchased by us through a loan performance fee that is payable by us on the aggregate principal amount of a loan that is paid by a consumer. Refer to Note 13.12. Fair Value of Financial Assets and Liabilities ofin the accompanying notes to ourthe consolidated financial statements for more information on the performance fee liability.

WeDuring arethe alsoyear ableended toJune originate30, 2026, we originated loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., and across most states in the U.S. through our consolidated subsidiaries. We directly originated approximately $6.3 billion, or 17%, $4.5 billion, or 17%, and $3.7 billion, or 18% of loans forFor the years ended June 30, 2025,2026, 20242025 and 2023,2024, we directly originated approximately $9.5 billion, or 19%, $6.3 billion, or 17%, and $4.5 billion, or 17% of loans, respectively.

Our capital efficient funding model is integral to the success of our platform. As we scale the number of transactions on our network and grow GMV, we maintain a variety of funding relationships in order to support our network. Our diversified funding relationships include warehouse facilities, securitization trusts,transactions, variable funding notes, forward flow arrangements, and partnerships with banks. Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model. Our total platform portfolio is defined as the unpaid principal balance outstanding of all loans facilitated through our platform as of the balance sheet date, including loans held for investment, loans held for sale, and loans owned by third parties. As of both June 30, 20252026 and June 30, 2024,2025, our equity capital as a percentage of our total platform portfolio was 4% and 5%, respectively.4%. The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.

Product and economic terms of commercial agreements vary among our merchants, which may impact our results. For example, our low average order value (“AOV”) products generally benefit from shorter duration, but also have lower revenue as a percentage of GMV when compared to high AOV products. Merchant mix shifts are driven in part by the products offered by the merchant, the economic terms negotiated with the merchant, merchant-side activity relating to the marketing of their products, whether or not the merchant is fully integrated within our network, and general economic conditions affecting consumer demand. Our revenue as a percentage of GMV in any given period varies across products. As such, as we continue to expand our network to include more merchants and product offerings, revenue as a percentage of GMV may vary.

We experience seasonal fluctuations in our business as a result of consumer spending patterns, including Affirm Card, which we expect to mimic the seasonality of our general business in the near term.patterns. Historically, our GMV has beentended theto strongestbe higher during our second and fourth fiscal second quarterquarters, due to increases in retail commerce during the holiday season and ourother promotional activity. Our loan delinquencies aretend to be at their lowest during our fiscal third and fourth quarter,quarters, as consumer savings benefit from tax refunds. Adverse events that occur during ourthese second fiscal quarterquarters could have a disproportionate effect on our financial results for the fiscal year.

We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations. Since 2022, the U.S. Federal Reserve has maintained an elevated federal funds interest rate. DespiteFollowing the Federal Reserve’s decision to begin to decreasereducing the federal funds interest rate in Septemberlate 2024, interest rates have declined; however, uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods. Simultaneously, economic uncertainty and unpredictability, including the prospect of economic recessionrecession, persistent inflation, and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact both consumer spending.spending and loan repayments. These challenges have affected, and may continue to affect, our business and results of operations in the following ways:

•Shifts in consumer demand: Over the past two fiscal years, weWe have experiencedexperienced, varyingand levelsmay ofcontinue to experience, fluctuations in consumer demand across different merchandise categories ofas merchandise.well Thisas isan increase in delinquencies due to economic uncertaintyuncertainty, and unpredictability, recessionary concerns,persistent inflationary pressures andpressures, elevated interest rates.rates, and other macroeconomic factors. If macroeconomicsuch conditions deteriorate in future periods, consumer demand and loan repayments may be negatively impacted.

•Increased borrowingBorrowing costs: The Federal Reserve began decreasing the federal funds interest rate in late 2024, leading to a decline in our average funding costs. However, the overall interest rate environment remains elevated compared to historical levels, and there is continued uncertainty as to whether and to what extent the Federal Reserve may decrease or increase the federal funds rate further in the future. As a result, we may continue to experience higher transaction costs.

We continue to optimize our underwriting and take other actions to manage consumer loan repayment, increase collectionsrepayment and minimize losses. For example, we offer loan modifications to borrowers experiencing financial difficulty to provide greater flexibility for consumers to repay their obligations, through payment deferrals or loan re-amortizations. A payment deferral extends the next payment due date, and while a consumer may receive more than one deferral, the total deferral period may not exceed three months. A loan re-amortization lowers the monthly payments by extending the term by up to twelve additional months beyond the current remaining term, whichcapped mayat nota exceedtotal remaining term of twenty-four months.

These loan modification programs also impact our delinquency rates, and such impact can vary over time. As disclosed in Note 4. Loans Held for Investment and Allowance for Credit Losses in the notes to the consolidated financial statements, in fiscal 2024, we expanded the eligibility of our loan modification programs, which resulted in a modest benefit to delinquency rates for loans held for investment during that period. The volume of loan modifications during the fiscal year ended June 30, 20252026 decreased comparedincreased to the0.25% fiscalup yearfrom ended0.17% June 30, 2024. Loans modified duringin the fiscalsame yearsperiod endedin June 30, 2025 and 2024, represent 0.17% and 0.64%, respectively, of the outstanding principal balance of loans held on our balance sheet.2025. Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification. An unknown percentage of loans which have been modified and are current as of June 30, 2025 may become delinquent or charge off in the future. We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.

We are subject to the regulatory and enforcement authority of the Consumer Financial Protection Bureau (the “CFPB”) as a facilitator, servicer, acquirer or originator of consumer credit. As such, the CFPB has in the past requested reports concerning our organization, business conduct, markets, and activities, and we expect that the CFPB will continue to do so from time to time in the future. In addition, we are supervised by the CFPB, which enables it, among other things, to conduct comprehensive and rigorous examinations to assess our compliance with consumer financial protection laws, which in turn could result in matters requiring attention, enforcement investigations and actions, regulatory fines and mandated changes to our business products, policies and procedures.

U.S. Income Tax Developments

On July 4, 2025, the One Big Beautiful Bill Act (the “"Act”") was enacted into law, which included certain modifications to U.S. tax law. The Company iscontinues currentlyto evaluatingevaluate the future impact of these provisions of the Act on our Consolidated Financial Statements.

As of June 30, 2025,2026, we had approximately 23.027.8 million active consumers, which represented an increase of 23%21% and 48% compared to approximatelyJune 18.730, million2025, as ofand June 30, 2024, and 40% compared to approximately 16.5 million as of June 30, 2023.respectively. The increase was primarily due to a high retention rate of existing consumers, as well asincluding continued adoption ofand theengagement among Affirm Card,Card users, which represent an increasing percentage of our active consumer population, and the acquisition of new consumers through an expansion in active merchants and platform partnerships.

As of June 30, 2025,2026, we had approximately 5.87.0 transactions per active consumer, an increase of 20% compared to June 30, 2024 and an increase of 52%44%, compared to Junethe 30,same 2023.period in 2025 and 2024, respectively. The increase was primarily due to platform growth,growth and a higher frequency of repeat users driven by consumer engagement, andincluding growth of Affirm Card active consumers. As of June 30, 2025,2026, Affirm Card represented approximately 10%15% of the total number of transactions compared to approximately 8%10% and 2%8% as of June 30, 20242025 and 2023,2024, respectively.

(1)Not meaningful (“NM”) (2)Upon purchase of a loan from our originating bank partners at a price above the fair market value of the loan or upon the origination of a loan with a par value in excess of the fair market value of the loan, a discount is included in the amortized cost basis of the loan. For loans held for investment, this discount is amortized over the life of the loan into interest income. For loans held for sale, when a loan is sold to a third-party loan buyer or off-balance sheet securitization trust, the unamortized discount is released in full at the time of sale and recognized as part of the gain or loss on sales of loans. However, the cumulative value of the loss on loan purchase commitment or loss on origination, the interest income recognized over time from the amortization of discount while retained, and the release of discount into gain on sales of loans, together net to zero over the life of the loan. TheSee followingNote 4. Loans Held for Investment and Allowance for Credit Losses for a table detailsdetailing the discount activity for the discount, included in loans held for investment,investment for the periods indicated:presented.

Merchant network revenue increased by $267.3 million, or 30%, for the year ended June 30, 2025 increased by $208.1 million, or 31%,2026, compared to the same period in 2024.2025. The increase is primarily attributed to an increase in GMV of $10.0$13.5 billionbillion, or 38% in GMV37%, for the year ended June 30, 2025. GMV increased from $26.6 billion as of June 30, 2024 to $36.7 billion as of June 30, 2025. GMV from the top five merchants and platform partners as of June 30, 2025, increased 38%2026, compared to the same period in 2024.2025. OurThe activevolume-driven increase in merchant basenetwork andrevenue was offset by an increase in the numberloss ofon activeloan consumersoriginations alsoby grew, reaching approximately 377 thousand and 23.0$56.1 million, respectively,or as61%, offor the year ended June 30, 2025,2026. upAdditionally, frommerchant approximatelyincentives, 303 thousand and 18.7 million, respectively,recorded as a reduction of revenue, increased by $9.5 million for the year ended June 30, 2024.2026, compared to the same period in 2025.

Card network revenue increased by $62.7 million, or 27%, for the year ended June 30, 2025 increased by $79.9 million, or 53%,2026, compared to the same period in 2024.2025. Card network revenue growth is correlated with the growth of GMV processed by our issuercard-issuing processors.partners. As such, the increase is primarily driven by $11.9$17.5 billion of GMV processed through our issuercard-issuing processors,partners, an increase of 45%approximately 47% for the year ended June 30, 2025,2026, as compared to the same period in 2024.2025. This was driven by increased card activity primarily through Affirm Card and our one-time-use virtual debit cards, as well as growthGMV ingenerated existing and newby merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services. Card network revenue is also impacted by the mix of merchants as different merchants can have different interchange rates depending on their industry or size, among other factors.

ThereExcept as may be reflected in the updated risk factor included below, there have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

From merchants, we typically earn a fee when we help them convert a sale and facilitate a transaction. Merchant fees depend on the individual arrangement between us and each merchant and may vary based on the terms of the product offering; we generally earn larger merchant fees on 0% APR financing products. For the three and six months ended December 31, 2025, Pay-in-X represented 17% and 16%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 15% for both the three and six months ended December 31, 2025. For the three and six months ended December 31, 2024, Pay-in-X represented 15% and 14%, respectively, of total GMV facilitated through our platform while 0% APR installment loans represented 13% and 12%, respectively.

From consumers, we earn interest income on the simple interest loans that we originate or purchase from our originating bank partners. Interest rates charged to our consumers vary depending on the transaction risk, creditworthiness of the consumer, the repayment term selected by the consumer, the amount of the loan, and the individual arrangement with a merchant. Because our consumers are never charged deferred or compounding interest, late fees, or penalties on the loans, we are not incentivized to profit from our consumers’ hardships. In addition, interest income includes the amortization of any discounts or premiums on loan receivables created upon either the purchase of a loan from one of our originating bank partners or our direct origination of a loan. For the three and six months ended December 31, 2025, interest bearing loans represented 67% and 69%, respectively, of total GMV facilitated through our platform. For the three and six months ended December 31, 2024, interest bearing loans represented 72% and 73%, respectively, of total GMV facilitated through our platform.

In order to accelerate our ubiquity, we facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. Similarly, we also facilitate the issuance of the Affirm Card, a card that can be used physically or virtually and which allows consumers to link a bank account to pay in full, or pay later by accessing credit through the Affirm App. Similarly, we also facilitate the issuance of one-time-use virtual cards directly to consumers through our app, allowing them to shop with merchants that may not yet be fully integrated with Affirm. When these cards are used over established card networks, we earn a portion of the interchange fee from the transaction.

We are also able to originate loans directly under our lending, servicing, and brokering licenses in Canada, the U.K., and across most states in the U.S. through our consolidated subsidiaries. For the three and sixnine months ended DecemberMarch 31, 2025,2026, we directly originated approximately $2.8$2.3 billion, or 20%, and $4.7$7.0 billion, or 19%, respectively, of loans compared to approximately $1.7$1.5 billion, or 17%, and $3.0$4.5 billion, or 17%, for the same periods in 2024.2025.

Our capital efficient funding model is integral to the success of our platform. As we scale the number of transactions on our network and grow GMV, we maintain a variety of funding relationships in order to support our network. Our diversified funding relationships include warehouse facilities, securitization trusts, variable funding notes, forward flow arrangements, and partnerships with banks. Given the short duration and strong performance of our assets, funding can be recycled quickly, resulting in a high-velocity, capital efficient funding model. As of DecemberMarch 31, 20252026 and June 30, 2025, our equity capital as a percentage of our total platform portfolio, defined as the unpaid principal balance of all loans facilitated through our platform, was 5% and 4%, respectively. The mix of on-balance sheet and off-balance sheet funding is a function of how we choose to allocate loan volume, which is determined by the economic arrangements and supply of capital available to us, both of which may also impact our results in any given period.

Product and economic terms of commercial agreements vary among our merchants, which may impact our results. For example, our low average order value (“AOV”) products generally benefit from shorter duration, but also have lower revenue as a percentage of GMV when compared to high AOV products. Merchant mix shifts are driven in part by the products offered by the merchant, the economic terms negotiated with the merchant, merchant-side activity relating to the marketing of their products, whether or not the merchant is fully integrated within our network, and general economic conditions affecting consumer demand. Our revenue as a percentage of GMV in any given period varies across products. As such, as we continue to expand our network to include more merchants and product offerings, revenue as a percentage of GMV may vary.

We regularly monitor the direct and indirect impacts of the current macroeconomic conditions on our business, financial condition, and results of operations. Following the Federal Reserve’s decision to begin reducing the federal funds interest rate in September 2024, interest rates have declined; however, uncertainty remains as to whether and to what extent the federal funds interest rate will remain at current levels, increase or decrease in future periods. Simultaneously, economic uncertainty and unpredictability, including the prospect of economic recessionrecession, persistent inflation, and the magnitude, duration and impact of tariffs on global trade, has impacted and may continue to impact both consumer spending and loan repayments. These challenges have affected, and may continue to affect, our business and results of operations in the following ways:

•Shifts in consumer demand and loan repayment: We have experienced, and may continue to experience, fluctuations in consumer demand across different merchandise categories as well as an increase in delinquencies due to economic uncertainty, persistent inflationary pressures, elevated interest rates, and other macroeconomic factors. If such conditions deteriorate in future periods, consumer demand and loan repayments may be negatively impacted.

•Volatile capital markets: Since fiscal 2024, capital markets have shown improvement against recent periods. Strong loan performance has allowed us to add substantial capacity across funding channels. Despite these improvements, uncertainties remain in the macroeconomic environment, especially with regard to inflation, the prospect of recession, the magnitude, duration and impact of tariffs on global trade, and the potential for increased unemployment. To address these uncertainties, we leverage our diverse capital ecosystem consisting of multiple funding channels, a diverse set of counterparties, and varying maturity debt schedule to support resilience across various macroeconomic conditions and economic cycles.

These loan modification programs also impact our delinquency rates, and such impact can vary over time. The volume of loan modifications during the fiscal quarter ended DecemberMarch 31, 20252026 increased to 0.18%0.16% up from 0.15%0.09% in the same period in 2024.2025. As of DecemberMarch 31, 2025,2026, loans modified within the last twelve months represent 0.25%, respectively,0.28% of the outstanding principal balance of loans held on our balance sheet, compared to 0.29%,0.21% for the same periodsperiod in 2024.2025. Our reported delinquency and charge off rates include loans which have become past due or have charged off subsequent to modification. An unknown percentage of loans which have been modified and are current as of DecemberMarch 31, 20252026 may become delinquent or charge off in the future. We continue to evaluate the effectiveness of these programs and may modify, expand, or contract their usage, which may affect the timing of reported delinquencies and charge offs in future periods.

U.S. Income TaxTaxes

As of DecemberMarch 31, 2025,2026, we had approximately 25.826.8 million active consumers, which represented an increase of 23%22% compared to approximately 21.021.9 million active consumers as of DecemberMarch 31, 2024.2025. The increase was primarily due to a high retention rate of existing consumers and the acquisition of new consumers through an expansion in active merchants and platform partnerships.

As of DecemberMarch 31, 2025,2026, we had approximately 6.46.7 transactions per active consumer, an increase of 20% compared to DecemberMarch 31, 2024.2025. The increase was primarily due to platform growth and a higher frequency of repeat users driven by consumer engagement, including growth of Affirm Card active consumers. As of DecemberMarch 31, 20252026 and DecemberMarch 31, 2024,2025, Affirm Card represented approximately 13%14% and 10%, respectively, of the total number of transactions.

Comparison of the Three and SixNine Months Ended DecemberMarch 31, 20252026 and 20242025

Merchant network revenue increased by $83.5$54.1 million, or 34%,25%, and $150.3$204.3 million, or 35%,32%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase is primarily attributed to an increase in GMV of $3.6$3.0 billion, or 36%,35%, and $6.8$9.8 billion, or 38%, in GMV37%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. GMVThe fromvolume-driven ourincrease topin fivemerchant merchantsnetwork revenue was offset by an increase in the loss on loan originations by $10.5 million, or 44%, and platform$46.7 partnersmillion, or 69%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively. Additionally, merchant incentives, recorded as a reduction of revenue, increased 23%by $4.3 million and 27%,$5.7 million for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2024.2025.

Card network revenue increased by $14.9$7.9 million, or 26%,13%, and $36.7$44.6 million, or 35%,27%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. Card network revenue growth is correlated with the growth of GMV processed by our issuercard-issuing processors.partners. As such, the increase is primarily driven by $4.5$4.1 billion and $8.2$12.3 billion of GMV processed through our issuercard-issuing processors,partners, an increase of approximately 45%43% and 47%46% for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, as compared to the same periods in 2024.2025. This was driven by increased card activity primarily through Affirm Card and our one-time-use virtual debit cards, as well as growthGMV ingenerated existing and newby merchants utilizing our agreement with card-issuing partners as a means of integrating Affirm services. Card network revenue is also impacted by the mix of merchants as different merchants can have different interchange rates depending on their industry or size, among other factors.

Interest income increased by $84.3$129.7 million, or 21%,32%, and $161.3$291.1 million, or 21%,24%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. Generally, interest income is correlated with the changes in the average balance of loans held for investment, which increased by 22%29% to $8.0$8.7 billion and 23%24% to $7.7$7.9 billion for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025.

Gain on sales of loans increased by $59.9$51.4 million, or 48%,68%, and $115.4$166.7 million, or 61%,63%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase is driven by higher loan sale volume to third-party loan buyers and favorable transaction economics.economics, which are primarily driven by market conditions. We sold loans with an unpaid principal balance of $6.0$5.0 billion and $10.9$15.9 billion for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to $4.6$3.6 billion and $7.4$11.0 billion for the same periods in 2024,2025, respectively, an increase of 29%40% and 47%,44%, respectively.

Servicing income increased by $14.1$12.6 million, or 49%,39%, and $27.8$40.3 million, or 51%,47%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase was primarily due to an increase in servicing fee revenue which is calculated as a percentage of the unpaid principal balance of off-balance sheet loans. The average unpaid principal balance of loans held by third-party investors and off-balance sheet securitizations increased to $9.1$9.5 billion and $8.6$8.8 billion for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024,2025, an increase of 50%39% forand both47%, periods.respectively.

Loss on loan purchase commitment increased by $25.8$10.7 million, or 37%,19%, and $43.1$53.8 million, or 35%,30%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024,2025, primarily due to an increase in total volume of loans purchased. During the three and sixnine months ended DecemberMarch 31, 2025,2026, we purchased $10.8$9.4 billion and $19.5$28.9 billion, respectively, of loans from our originating bank partners, compared to $8.1$7.1 billion and $14.5$21.6 billion in the same periods in 2024,2025, respectively, representing an increase of 33% and 34%, respectively. Of the total loans purchased, 0% APR installment loans represented $1.8$1.4 billion and $3.1$4.5 billion during the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, and $1.2$1.1 billion and $2.0$3.1 billion for the same periods in 2024,2025, respectively, an increase of 54%,30%, and 57%,48%, respectively. The impact of higher loan purchase volume period over period was offset by a decrease in the average loan discount percentage period over period, due to lower benchmark interest rates.

Provision for credit losses increased by $61.2$49.3 million, or 40%,33%, and $64.1$113.4 million, or 20%,25%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. Provision expense is primarily related to loans held for investment, where the amount of provision expense recognized during the period will depend on the balance and composition of loans held for investment, future loss expectations and net charge-offs realized during the period. For the three and sixnine months ended DecemberMarch 31, 2025,2026, the provision expense for loans held for investment increased by $61.1$51.8 million, or 42%,37%, and $62.7$114.5 million, or 21%,26%, respectively. Over this same time period,Additionally, the average balance of loans held for investment increased toby $6.8$2.0 billionbillion, asor of29%, Decemberand $1.5 billion, or 24%, for the three and nine months ended March 31, 20252026, respectively, compared to $7.2the billionsame andperiods $7.0in billion as of September 30, 2025 and June 30, 2025, respectively.2025.

Funding costs increased by $4.0$6.1 million, or 4%,6%, and $9.8$16.0 million, or 5%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase is primarily due to an increase of funding debt and notes issued by securitization trusts during the three and sixnine months ended DecemberMarch 31, 2025.2026, partially offset by favorable pricing terms. The average total of funding debt from warehouses and securitizations for the three and sixnine months ended DecemberMarch 31, 20252026 was $7.2$7.8 billion and $7.0$7.2 billion, respectively, compared to $5.9$6.1 billion and $5.7 billion during the same periods in 2024,2025, an increase of $1.3$1.7 billion, or 22%,29%, and $1.3$1.4 billion, or 24%. This was offset by favorable pricing terms.25%.

Processing and servicing expense increased by $42.6$43.9 million, or 37%, and $81.3$125.2 million, or 39%,38%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. This increase is driven partially by an increase in payment processing fees of $29.6$28.9 million, or 46%,42%, and $53.2$82.1 million, or 44%,43%, related to an increase of $3.1$3.2 billion, or 40%,36%, and $6.0$9.2 billion, or 40%,39%, in payment volume for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. Platform fees increased by $6.1$14.8 million, or 19%,62%, and $17.1$31.9 million, or 32%,41%, respectively, primarily due to an increase in volume with a large enterprise partner. Additionally, our customer service and collection costs increased by $9.1$6.2 million, or 54%,36%, and $15.6$21.8 million, or 49%,44%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. TheseOur increases are driven by growth in our overall loan portfolio, including bothaverage loans held for investment and average loans serviced for third parties.parties increased by $4.6 billion, or 34%, and $4.4 billion, or 35%, for the three and nine months ended March 31, 2026, respectively, compared to the same periods in 2025.

Technology and data analytics expense increased by $36.7$39.0 million, or 25%,26%, and $70.5$109.5 million, or 25%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase is partially driven by amortization of internally-developed software which increased by $21.2$15.7 million, or 40%,27%, and $40.5$56.1 million, or 42%,36%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024,2025, as a result of an increase in the number of capitalized projects. Capitalized projects in service grew by 34%19% from approximately 1,2301,430 projects as of DecemberMarch 31, 20242025 to 1,6501,710 projects as of DecemberMarch 31, 2025.2026. Data infrastructure and hosting costs increased by $9.0$10.5 million, or 33%,37%, and $17.9$28.4 million, or 35%,36%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase in data infrastructure and hosting costs was primarily driven by an increase in the number of consumer transactions. For the three and sixnine months ended DecemberMarch 31, 2025,2026, the number of consumer transactions increased by 44%45% and 47%, respectively, from continued growth at our merchants and platform partners when compared to the same periods in 2024.2025. Payroll and personnel-related expenses increased by $2.6$7.2 million, or 5%,13%, and $6.0$13.2 million, or 6%,8%, for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024,2025, primarily due to an increase in headcount.

Sales and marketing expense decreased by $37.3$1.2 million, or 27%,2%, and $104.0$105.2 million, or 37%,30% during the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. TheDuring the nine months ended March 31, 2026, the decrease was primarily driven by a $25.6$95.6 million, or 29%, and $91.9 million, or 47%,39%, decrease in Amazon warrant expense during the three and six months ended December 31, 2025, respectively, compared to the same periodsperiod in 2024,2025, primarily due to a portion of the warrants becoming fully vested as of December 2024. Additionally, the decrease was also driven by a $6.2$15.4 million, or 69%, and $12.4 million, or 69%,65%, decrease in Shopify warrant expense during the three and sixnine months ended DecemberMarch 31, 2025, respectively,2026, compared to the same periodsperiod in 2024,2025, primarily due to an amendment made in our partnership agreement, which extended the period of benefit over which we amortize the commercial agreement asset.asset from six to nine years.

General and administrative expense increased by $1.8$11.0 million, or 1%,8%, and $8.3$19.3 million, or 3%,5%, during the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to the same periods in 2024.2025. The increase is primarily due to increasesgrowth in payroll and personnel costs, excluding stock-based compensation, and software and subscriptions.subscription expense.

Other income, net, decreasedincreased by $71.6$5.2 million, or 82%,38%, for the three months ended March 31, 2026 and $86.5decreased by $81.3 million, or 71%,60%, duringfor the three and sixnine months ended DecemberMarch 31, 2025, respectively,2026, compared to the same periods in 2024.2025. The decreaseincrease for the three months ended March 31, 2026 was primarily driven by a $62.8gain million,of or$1.2 100%,million andrelated to the fair value of our derivative instruments not designated as hedges, compared to a loss of $2.2 million during the same period in 2025. The decrease for the nine months ended March 31, 2026, was primarily driven by a $80.9 million, or 98% reduction in the gain recognized on the early extinguishment of convertible debt for the three and six months ended December 31, 2025, respectively,debt, reflecting fewer repurchases,repurchases compared to the same periodsperiod in 2024.2025.

We maintain a capital-efficient model through a diverse set of funding sources. When we originate a loan directly or purchase a loan originated by our originating bank partners, we often utilize warehouse credit facilities with certain lenders to finance our lending activities or loan purchases. We sell the loans we originate or purchase from our originating bank partners to whole loan buyers and securitization investors through forward flow arrangements and securitization transactions, and earn servicing fees from continuing to act as the servicer on the loans. We proactively manage the allocation of loans on our platform across various funding channels based on several factors including, but not limited to, internal risk limits and policies, capital market conditions and channel economics. OurDespite ongoing macroeconomic uncertainty, including recent reports of stress to certain private credit funds and other institutional investors, we believe our excess funding capacity and committed and long-term relationships with a diverse group of existing funding partners help provide flexibility as we optimize our funding to support the growth in loan volume.

Our principal sources of liquidity are cash and cash equivalents, available for sale securities, available capacity from warehouse and revolving credit facilities, securitization trusts, forward flow loan sale arrangements, and certain cash flows from our operations. As of DecemberMarch 31, 2025,2026, we had $2.3$2.5 billion in cash and cash equivalents and available for sale securities, $4.2$5.1 billion in available funding debt capacity, excluding our purchase commitments from third party loan buyers, and $330.0 million in borrowing capacity available under our revolving credit facility. We believe our principal sources of liquidity are sufficient to meet both our existing operating, working capital, and capital expenditure requirements and our currently planned growth for at least the next 12 months.

(1)Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions and short-term highly liquid marketable securities, including money market funds, agency bonds, corporate bonds, commercial paper, and government bonds purchased with an original maturity of three months or less.