Core Insights - The article highlights five cloud computing-centric stocks that are expected to deliver strong returns in the short term, emphasizing their earnings and revenue growth potential for 2025 [3][4]. Group 1: Cloud Computing Overview - Cloud computing provides on-demand access to computing resources over the Internet, transitioning from traditional on-premises infrastructure to cloud-based solutions [1]. - Organizations can access shared resources from cloud service providers, which reduces operating costs and enhances productivity and scalability [2]. Group 2: Stock Picks and Performance - The selected stocks include Five9 Inc. (FIVN), Affirm Holdings Inc. (AFRM), Microsoft Corp. (MSFT), Juniper Networks Inc. (JNPR), and Tyler Technologies Inc. (TYL), all showing strong earnings growth potential [3][4]. - Each stock has received positive earnings estimate revisions in the last 60 days and carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [4]. Group 3: Company-Specific Insights Five9 Inc. (FIVN) - Five9 provides intelligent cloud software for contact centers, offering a virtual platform for customer service and sales functions [8]. - The company is experiencing growth due to the adoption of AI tools, with an expected revenue growth rate of 9.6% and earnings growth of 10.9% for the current year [11][10]. Affirm Holdings Inc. (AFRM) - Affirm has diversified revenue streams and expects revenues between $3.13 billion and $3.19 billion in fiscal 2025, driven by partnerships and expanding into new markets [12][13]. - The expected revenue growth rate is 37.1%, with earnings growth projected at 96.4% for the current year [14]. Microsoft Corp. (MSFT) - Microsoft reported strong fiscal Q3 2025 results, driven by AI business growth and Azure cloud infrastructure [15][16]. - The expected revenue growth rate is 13.7%, with earnings growth of 12.7% for the current year [17]. Juniper Networks Inc. (JNPR) - Juniper Networks reported strong Q1 2025 results, benefiting from demand for AI-driven enterprise solutions and data center virtualization [18][19]. - The expected revenue growth rate is 7.3%, with earnings growth of 21.5% for the current year [20]. Tyler Technologies Inc. (TYL) - Tyler Technologies is capitalizing on the public sector's shift to cloud-based systems and the hybrid working trend, with an expected revenue growth rate of 8.9% and earnings growth of 15.6% for the current year [21][22].

Core Insights - Affirm experienced significant growth in its fiscal third quarter, with gross merchandise value (GMV) and revenues both increasing 36% year over year to $8.6 billion and $783 million, respectively, although guidance indicates a slight deceleration in growth rates ahead [1][3][5] Financial Performance - The Affirm Card's GMV surged 115% year over year to $807 million, with 2 million active cardholders, contributing to a total of 21.9 million active consumers, up 23% from a year ago [6][1] - Revenues rose 36% to $783 million, with 0% APR monthly installments growing by 44%, accounting for 13% of the company's GMV [4][5] - Merchant counts increased by 20% to 358,000, while charge-offs are trending toward 3.5% and loss rates for Pay in 4 loans are below 1% [6] Guidance and Future Outlook - Guidance for the current quarter anticipates revenues between $815 million and $845 million, with a midpoint of $830 million, slightly below the Street's consensus of $840 million [7] - The company expects year-on-year growth of 34%, down from the 36% growth seen in the last quarter, with elevated growth rates observed in April [9] Macroeconomic Considerations - Affirm expressed confidence in managing various macroeconomic environments, anticipating increased demand for payment flexibility during stress scenarios [2][9] - The company estimates that in a recession scenario with a ~50% increase in credit stress, a reduction in approvals could cost about 10 percentage points of GMV growth [9] Consumer Behavior and Credit Reporting - Affirm noted healthy repayment rates and a slight uptick in prepayments, indicating positive credit signals [7] - The company highlighted the importance of credit reporting, stating that timely repayments help consumers build their credit history and improve their credit scores [10]

Market Overview - Markets experienced a rise due to optimistic sentiment surrounding trade deals with U.S. partners, particularly following an agreement with the UK that maintained a +10% tariff [1] - The Dow Jones Industrial Average increased by +254 points (+0.62%), while the S&P 500 rose by +0.58%. The Nasdaq and Russell 2000 saw even larger gains of +1.07% and +1.85%, respectively [2] Earnings Reports - Expedia (EXPE) reported Q1 earnings of $0.40 per share, missing the Zacks consensus of $0.42, despite a +90% year-over-year increase. Revenues were $2.99 billion, below the expected $3.03 billion, leading to a -6.7% decline in after-hours trading [3] - Affirm (AFRM) exceeded bottom line expectations with earnings of +$0.01 per share against a forecast of -$0.08. Revenues matched estimates at $783 million, while Gross Merchandise Value (GMV) rose +36% year over year. However, shares fell -8% in late trading [3] - DraftKings (DKNG) reported a bottom line of -$0.07 per share, an improvement from the projected -$0.30. Revenues of $1.41 billion grew +20% year over year but missed the Zacks consensus of $1.42 billion. The company lowered revenue guidance and adjusted EBITDA forecasts, yet shares rose +3% in post-market trading [4]

Core Insights - Affirm Holdings reported revenue of $783.14 million for the quarter ended March 2025, reflecting a year-over-year increase of 35.9% [1] - The company's EPS was $0.01, a significant improvement from -$0.43 in the same quarter last year, resulting in an EPS surprise of +111.11% [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $783.85 million, indicating a surprise of -0.09% [1] Key Financial Metrics - Gross Merchandise Volume (GMV) reached $8,558 billion, exceeding the average estimate of $8,129.51 billion [4] - Transactions per Active Consumer were 6, surpassing the estimated average of 5 [4] - Active Consumers totaled 22, slightly above the average estimate of 21 [4] - Revenue from the Merchant network was $213.97 million, compared to the estimated $199.48 million, marking a year-over-year increase of 34.3% [4] - Revenue from the Card network was $58.57 million, exceeding the estimated $46.40 million, with a year-over-year growth of 64.2% [4] - Revenue from Interest income was $402.70 million, slightly below the estimated $414.44 million, but still reflecting a year-over-year increase of 27.6% [4] - Revenue from Servicing income was $32.05 million, above the estimated $31.25 million, representing a year-over-year change of 26.7% [4] - Revenue from Gain on sales of loans was $75.84 million, below the estimated $81.19 million, but showing a significant year-over-year increase of 88.7% [4] Stock Performance - Affirm Holdings' shares have returned +16.3% over the past month, outperforming the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential for outperformance in the near term [3]

Core Viewpoint - Affirm Holdings reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.09 per share, marking an earnings surprise of 111.11% [1] - The company has consistently exceeded consensus EPS estimates over the last four quarters [2] Financial Performance - Affirm Holdings generated revenues of $783.14 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.09%, compared to $576.16 million in the same quarter last year [2] - The company has topped consensus revenue estimates three times in the last four quarters [2] Stock Performance and Outlook - Affirm Holdings shares have declined approximately 15.4% year-to-date, while the S&P 500 has decreased by 4.3% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.08 for the upcoming quarter and -$0.06 for the current fiscal year [4][7] Industry Context - The Internet - Software industry, to which Affirm Holdings belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable environment for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Core Viewpoint - Affirm reported stronger-than-expected earnings for the third quarter of fiscal year 2025, but its revenue forecast for the fourth quarter fell short of analyst expectations, leading to a 10% drop in stock price during after-hours trading [1]. Group 1: Financial Performance - For Q3 FY2025, Affirm's earnings per share were $0.01, exceeding the expected loss of $0.03 per share, with a net profit of $2.8 million compared to a loss of $133.9 million in the same period last year [1]. - Revenue for the quarter was $783 million, matching expectations, and represented a 36% year-over-year increase from $576 million [1]. - The total Gross Merchandise Volume (GMV) reached $8.6 billion, surpassing the market expectation of $8.2 billion, reflecting a 36% year-over-year growth [1]. Group 2: Future Outlook - Affirm's revenue forecast for Q4 is between $815 million and $845 million, with a midpoint of $830 million, which is below the expected $841 million, disappointing investors [1]. - The company anticipates Q4 GMV to be between $9.4 billion and $9.7 billion, with a midpoint of $9.55 billion, exceeding market expectations of $9.2 billion [2]. - Adjusted operating margin is expected to be between 23% and 25%, aligning closely with the market estimate of 23.8% [2]. Group 3: User Growth and Partnerships - The total number of active users has increased to 22 million, with 2 million new users added [2]. - The "Affirm Card" business saw GMV surge by 115% year-over-year, with the number of active card users doubling [2]. - Partnerships with major platforms like Apple, Amazon, and Shopify continue to drive transaction volume growth [2]. Group 4: Regulatory Environment - The Consumer Financial Protection Bureau (CFPB) announced the cessation of a regulation that increased compliance difficulties for BNPL providers, which is viewed as a positive development for Affirm and similar companies [2]. - The volume of 0% interest loans has increased significantly, rising 44% year-over-year, often subsidized by merchants to boost sales [2]. - Affirm's core "4-installment payment" product maintains stable credit quality, with a default rate below 1% [2]. Group 5: Stock Performance - Despite improvements in fundamentals, Affirm's stock has declined by 11% year-to-date, while the Nasdaq index has decreased by approximately 7% during the same period [3].

Affirm is partnering with Costco to offer online shoppers the option to pay over time for transactions.The financial services company announced the collaboration Thursday (May 8) in a shareholder letter. Customers, if approved, will be to able select monthly Affirm payment plans when shopping on Costco’s website.“[We] are proud to announce our online partnership with Costco — a brand and a retailer I have personally admired for a long time because of their unwavering commitment to customer experience and tr ...

Financial Data and Key Metrics Changes - The company is pleased to improve its outlook for the current quarter and the fiscal year, indicating a positive trend in financial performance [6][7] - The quarter showed strong growth in GMV (Gross Merchandise Volume), with March being the strongest month at 40% year-on-year growth [20] Business Line Data and Key Metrics Changes - Strong growth was observed across various business lines, particularly in direct-to-consumer services, which outpaced the overall business growth [19] - The zero APR product is gaining traction, although it has a lower revenue and return on loan compared to interest-bearing loans [10][12] Market Data and Key Metrics Changes - The company noted broad-based strength in GMV across its merchant base, with only one category experiencing a decline [19] - The company is actively engaging with merchants to promote zero APR offers, which are seen as beneficial for both parties [11][28] Company Strategy and Development Direction - The company aims to balance growth and profitability while continuing to take market share [7] - There is a focus on enhancing the Affirm app to improve user engagement and repayment rates, with ongoing updates and features being rolled out [61][63] Management's Comments on Operating Environment and Future Outlook - Management is mindful of potential economic challenges, including the impact of student loan enforcement and broader economic conditions [59] - The company is prepared for recession scenarios and has a proactive approach to adjusting credit quality and underwriting standards as needed [34][112] Other Important Information - The partnership with Costco is highlighted as a significant development, although specific timelines and metrics are not disclosed [70][71] - The company is committed to reporting loan data to credit bureaus, which is seen as beneficial for consumers and the company's brand [40][42] Q&A Session Summary Question: Can you discuss the balance of economics between zero APR and interest-bearing loans? - Management indicated that while zero APR loans generate less revenue, they enhance brand loyalty and customer acquisition, leading to better credit quality in the long term [10][12] Question: What are the pockets of strength in GMV? - The company reported strong growth across most categories, with direct-to-consumer services leading the charge [19][20] Question: How does the company view the impact of student loan enforcement? - Management is monitoring the situation closely and has already factored student loan delinquencies into their underwriting processes [59] Question: Can you elaborate on the competition and funding structure? - The competitive landscape remains intense, but the company focuses on conversion and impact rather than pricing to maintain its market position [122][123] - A bank charter is not seen as a solution for the current funding strategy, but the company remains open to pursuing one if necessary for product development [116][120]

Financial Data and Key Metrics Changes - The company is pleased to improve its outlook for the current quarter and the fiscal year, indicating a positive trend in financial performance [6] - The company is on a journey towards becoming GAAP profitable, balancing growth and profitability [6] Business Line Data and Key Metrics Changes - The strength in GMV (Gross Merchandise Volume) was broad-based, with strong growth across various categories, particularly in direct-to-consumer services, which grew faster than the overall business [18][19] - March was highlighted as the strongest month of growth, achieving a 40% year-on-year GMV growth [19] Market Data and Key Metrics Changes - The company noted that the 0% APR product is gaining excellent traction, with a focus on maintaining high credit quality [10][12] - The company is actively responding to merchant requests for promotional financing, which is seen as a growth opportunity [10][12] Company Strategy and Development Direction - The company aims to balance growth opportunities with excellent credit quality while being judicious in spending [6] - The management emphasized the importance of the 0% APR product as a tool for market share growth and customer acquisition, viewing it as a long-term value booster [12][28] Management Comments on Operating Environment and Future Outlook - Management is mindful of the potential implications of student loan enforcement and has factored this into their underwriting processes [59] - The company is continuously monitoring credit trends and is prepared to adjust its strategies based on market conditions [110][115] Other Important Information - The company is focused on enhancing its app to improve user engagement and repayment rates, with ongoing updates and improvements [61][64] - The partnership with Costco is seen as a significant opportunity, although specific timelines for impact were not disclosed [70][71] Q&A Session Summary Question: Can you discuss the balance between zero APR loans and interest-bearing loans? - Management indicated that while zero APR loans generate slightly lower revenue, they significantly improve credit quality and customer acquisition, leading to long-term benefits [10][12] Question: What are the pockets of strength in GMV? - The company reported strong growth across various categories, with direct-to-consumer services leading the charge [18][19] Question: How does the company view the competitive landscape? - Management acknowledged the competitive environment but emphasized their focus on conversion and impact rather than pricing [126][129] Question: What are the implications of student loan enforcement? - The company is monitoring the situation closely and has already incorporated student loan data into their underwriting processes [59] Question: Can you provide an update on international expansion? - The partnership with Adyen is expected to speed up integration in the UK, with ongoing efforts to educate the market about the company's offerings [91][92] Question: How is AI being utilized within the company? - The company is leveraging machine learning for credit scoring and operational efficiency, while also exploring generative AI for customer interactions [96][100]

Part I - Financial Information This section provides Affirm Holdings, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Affirm Holdings, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed notes on accounting policies, revenue, loans, debt, and equity for the periods ended March 31, 2025 and June 30, 2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20(Unaudited)) This section presents the company's unaudited condensed consolidated balance sheets as of March 31, 2025, and June 30, 2024, detailing assets, liabilities, and stockholders' equity Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------- | :--------------------------- | | Cash and cash equivalents | $1,351,148 | $1,013,106 | | Loans held for investment, net | $6,255,459 | $5,360,959 | | Total assets | $10,436,187 | $9,519,619 | | Convertible senior notes, net | $1,152,019 | $1,341,430 | | Notes issued by securitization trusts | $4,084,934 | $3,236,873 | | Total liabilities | $7,561,272 | $6,787,630 | | Total stockholders' equity | $2,874,916 | $2,731,989 | - Assets of consolidated Variable Interest Entities (VIEs) increased to **$6.24 billion** as of March 31, 2025, from **$5.38 billion** as of June 30, 2024, primarily driven by an increase in loans held for investment within these entities[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)%20(Unaudited)) This section presents the unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended March 31, 2025 and 2024 Statements of Operations Highlights - 3 Months Ended March 31 (in thousands) | Metric | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------- | | Total revenue, net | $783,135 | $576,157 | +36% | | Operating loss | $(8,393) | $(160,789) | -95% | | Net income (loss) | $2,804 | $(133,936) | +102% | | Basic EPS | $0.01 | $(0.43) | N/A | | Diluted EPS | $0.01 | $(0.43) | N/A | Statements of Operations Highlights - 9 Months Ended March 31 (in thousands) | Metric | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------- | | Total revenue, net | $2,347,995 | $1,663,814 | +41% | | Operating loss | $(145,337) | $(542,387) | -73% | | Net income (loss) | $(17,058) | $(472,621) | -96% | | Basic EPS | $(0.05) | $(1.53) | N/A | | Diluted EPS | $(0.05) | $(1.53) | N/A | - The company achieved **net income of $2.8 million** for the three months ended March 31, 2025, a significant improvement from a net loss of **$133.9 million** in the prior-year period, primarily driven by strong revenue growth and reduced operating losses[19](index=19&type=chunk) [Condensed Consolidated Statement of Stockholders' Equity (Unaudited)](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20STOCKHOLDERS'%20EQUITY%20(Unaudited)) This section presents the unaudited condensed consolidated statement of stockholders' equity for the nine months ended March 31, 2025 - Total stockholders' equity increased from **$2.73 billion** as of June 30, 2024, to **$2.87 billion** as of March 31, 2025, primarily due to stock-based compensation, vesting of warrants, and net income in the latest quarter, partially offset by common stock repurchases[21](index=21&type=chunk)[24](index=24&type=chunk) Stockholders' Equity Changes - 9 Months Ended March 31, 2025 (in thousands) | Item | 9 Months Ended March 31, 2025 (in thousands) | | :------------------------------------ | :------------------------------------------- | | Balance as of June 30, 2024 | $2,731,989 | | Stock-based compensation | $394,493 | | Vesting of warrants for common stock | $230,102 | | Repurchases of common stock | $(250,000) | | Net income (loss) | $(17,058) | | Balance as of March 31, 2025 | $2,874,916 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(Unaudited)) This section presents the unaudited condensed consolidated statements of cash flows for the nine months ended March 31, 2025 and 2024 Cash Flow Activities - 9 Months Ended March 31 (in thousands) | Cash Flow Activity | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash provided by operating activities | $719,272 | $381,375 | | Net cash used in investing activities | $(628,550) | $(787,516) | | Net cash provided by financing activities | $364,166 | $767,180 | | Net increase in cash, cash equivalents and restricted cash | $440,560 | $359,747 | | Cash, cash equivalents and restricted cash, end of period | $1,735,959 | $1,619,691 | - Net cash provided by operating activities significantly increased to **$719.3 million** for the nine months ended March 31, 2025, from **$381.4 million** in the prior-year period, driven by improved net loss and non-cash adjustments[26](index=26&type=chunk)[288](index=288&type=chunk)[290](index=290&type=chunk) - Cash payments for interest expense increased to **$302.8 million** for the nine months ended March 31, 2025, from **$228.5 million** in the prior-year period[28](index=28&type=chunk) [1. Business Description](index=13&type=section&id=1.%20Business%20Description) This section describes Affirm Holdings, Inc.'s business model, focusing on its transparent payment solutions and proprietary risk underwriting platform - Affirm Holdings, Inc. provides consumers with a simpler, more transparent, and flexible alternative to traditional payment options, enabling them to pay for purchases over time with no hidden fees, deferred interest, or penalties[30](index=30&type=chunk)[31](index=31&type=chunk) - The company's next-generation commerce platform utilizes a proprietary risk model for underwriting loans, which are directly originated or funded and issued by its originating bank partners[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the significant accounting policies used in preparing the interim condensed consolidated financial statements, including consolidation and recent accounting pronouncements - The interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP and consolidate all wholly-owned subsidiaries and Variable Interest Entities (VIEs) where Affirm has a controlling financial interest[32](index=32&type=chunk)[33](index=33&type=chunk) - There were no material changes to Affirm's significant accounting policies as disclosed in its Annual Report on Form 10-K for the fiscal year ended June 30, 2024[38](index=38&type=chunk) - Affirm is currently evaluating the impact of recently issued ASUs on Segment Reporting (ASU 2023-07), Income Taxes (ASU 2023-09), Reporting Comprehensive Income (ASU 2024-03), and Debt with Conversion and Other Options (ASU 2024-04)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [3. Revenue](index=15&type=section&id=3.%20Revenue) This section details the components of Affirm's net revenue, including merchant network revenue, card network revenue, interest income, gain on sales of loans, and servicing income Revenue by Source - 3 Months Ended March 31 (in thousands) | Revenue Source | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | Change (YoY) | | :---------------------- | :--------------------------------------- | :--------------------------------------- | :------------- | | Merchant network revenue | $213,973 | $159,292 | +34% | | Card network revenue | $58,572 | $35,676 | +64% | | Interest income | $402,701 | $315,712 | +28% | | Gain on sales of loans | $75,838 | $40,183 | +89% | | Servicing income | $32,050 | $25,294 | +27% | | **Total revenue, net** | **$783,135** | **$576,157** | **+36%** | Revenue by Source - 9 Months Ended March 31 (in thousands) | Revenue Source | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | Change (YoY) | | :---------------------- | :--------------------------------------- | :--------------------------------------- | :------------- | | Merchant network revenue | $643,207 | $493,599 | +30% | | Card network revenue | $164,194 | $108,421 | +51% | | Interest income | $1,189,132 | $866,737 | +37% | | Gain on sales of loans | $264,739 | $127,170 | +108% | | Servicing income | $86,723 | $67,887 | +28% | | **Total revenue, net** | **$2,347,995** | **$1,663,814** | **+41%** | - Merchant network revenue primarily consists of merchant fees, recognized at the point of transaction confirmation, which vary based on gross merchandise volume (GMV) and product offering terms, with incentives recorded as a reduction to revenue[44](index=44&type=chunk)[46](index=46&type=chunk) [4. Loans Held for Investment and Allowance for Credit Losses](index=18&type=section&id=4.%20Loans%20Held%20for%20Investment%20and%20Allowance%20for%20Credit%20Losses) This section provides details on loans held for investment and the allowance for credit losses, reflecting the company's loan portfolio and credit risk management Loans Held for Investment Components (in thousands) | Component | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------------------- | :---------------------------- | :--------------------------- | | Unpaid principal balance | $6,656,169 | $5,697,965 | | Accrued interest receivable | $68,997 | $62,796 | | Premiums on loans held for investment | $9,897 | $7,822 | | Less: Discount due to loss on loan purchase commitment | $(77,000) | $(63,682) | | Less: Discount due to loss on directly originated loans | $(27,612) | $(34,829) | | Less: Fair value adjustment on loans acquired through business combination | $(5) | $(16) | | **Total loans held for investment** | **$6,630,446** | **$5,670,056** | - The allowance for credit losses increased to **$375.0 million** as of March 31, 2025, from **$309.1 million** as of June 30, 2024, reflecting management's estimate of expected lifetime credit losses[67](index=67&type=chunk) Allowance for Credit Losses Activity - 9 Months Ended March 31 (in thousands) | Activity | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | | :-------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Balance at beginning of period | $309,097 | $204,531 | | Provision for loan losses | $445,313 | $325,914 | | Charge-offs | $(409,152) | $(261,657) | | Recoveries of charged-off receivables | $32,695 | $20,406 | | Balance at end of period | $374,987 | $289,088 | [5. Balance Sheet Components](index=22&type=section&id=5.%20Balance%20Sheet%20Components) This section details key balance sheet components, including property, equipment and software, goodwill, intangible assets, and commercial agreement assets Property, Equipment and Software, Net (in thousands) | Component | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :---------------------------------------- | :---------------------------- | :--------------------------- | | Internally developed software | $898,459 | $630,129 | | Total property, equipment and software, at cost | $939,648 | $669,892 | | Less: Accumulated depreciation and amortization | $(396,321) | $(242,206) | | **Total property, equipment and software, net** | **$543,327** | **$427,686** | - Goodwill decreased slightly to **$522.3 million** as of March 31, 2025, due to foreign currency translation adjustments, while intangible assets, primarily indefinite-lived trademarks and licenses, totaled **$12.4 million**[78](index=78&type=chunk)[79](index=79&type=chunk) - Commercial agreement assets, related to warrants granted to Amazon and Shopify, decreased due to ongoing amortization, with the Shopify agreement's expected benefit period extended from six to nine years in fiscal year 2025[81](index=81&type=chunk)[82](index=82&type=chunk) [6. Leases](index=25&type=section&id=6.%20Leases) This section describes Affirm's operating lease arrangements for facilities, including lease terms, discount rates, and related expenses and income - Affirm leases facilities under operating leases with various expiration dates through 2032, with a **weighted average remaining lease term of 4.2 years** and a **weighted average discount rate of 5.6%** as of March 31, 2025[85](index=85&type=chunk)[89](index=89&type=chunk) Operating Lease Expenses and Sublease Income (in thousands) | Metric | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | | :---------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Operating lease expense | $2,915 | $2,894 | $8,633 | $8,826 | | Sublease income | $900 | $1,300 | $3,400 | $3,300 | [7. Commitments and Contingencies](index=26&type=section&id=7.%20Commitments%20and%20Contingencies) This section outlines Affirm's loan repurchase obligations and involvement in various legal proceedings, assessing their potential financial impact - Affirm has a loan repurchase obligation of **$8.3 million** as of March 31, 2025, for loans held by third-party investors or unconsolidated VIEs, which may be triggered by breaches in representations and warranties[90](index=90&type=chunk) - The company is involved in several legal proceedings, including class action and shareholder derivative lawsuits (Kusnier, Quiroga, Jeffries, Vallieres actions), primarily alleging false statements and breaches of fiduciary duty[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Management has determined that the aggregate estimable losses from legal proceedings would not have a material adverse effect on Affirm's consolidated financial position, results of operations, or cash flows[96](index=96&type=chunk)[97](index=97&type=chunk) [8. Debt](index=28&type=section&id=8.%20Debt) This section details Affirm's debt structure, including warehouse facilities, securitization notes, and convertible senior notes, along with compliance with debt covenants Debt Outstanding by Type as of March 31, 2025 (in thousands) | Debt Type | March 31, 2025 Debt Outstanding (in thousands) | | :------------------------------ | :------------------------------------------- | | US warehouse facilities | $1,467,383 | | International warehouse facilities | $364,062 | | Variable funding notes | $51,131 | | Sales and repurchase agreements | $44,218 | | Notes issued by securitization trusts | $4,100,000 | | Convertible senior notes (2026 & 2029) | $1,168,704 | | **Total Debt Outstanding** | **$7,195,499** | - Affirm issued approximately **$920 million** in 0.75% convertible senior notes due 2029 in December 2024 and repurchased **$1.1 billion** aggregate principal amount of 2026 Notes for **$1.0 billion** cash, resulting in an **$82.4 million gain** on early extinguishment of debt[108](index=108&type=chunk)[119](index=119&type=chunk) - The company was in compliance with all applicable covenants in its funding debt agreements and revolving credit facility as of March 31, 2025[104](index=104&type=chunk)[123](index=123&type=chunk) [9. Securitization and Variable Interest Entities](index=33&type=section&id=9.%20Securitization%20and%20Variable%20Interest%20Entities) This section explains Affirm's consolidation of Variable Interest Entities (VIEs) and its exposure to losses from unconsolidated VIEs and securitization activities - Affirm consolidates Variable Interest Entities (VIEs), including warehouse credit facilities and securitization trusts, where it is deemed the primary beneficiary due to its power to direct activities and significant economic exposure[125](index=125&type=chunk)[127](index=127&type=chunk) Consolidated VIEs Assets and Liabilities as of March 31, 2025 (in thousands) | Consolidated VIEs | March 31, 2025 Assets (in thousands) | March 31, 2025 Liabilities (in thousands) | March 31, 2025 Net Assets (in thousands) | | :-------------------------- | :----------------------------------- | :---------------------------------------- | :--------------------------------------- | | Warehouse credit facilities | $2,044,461 | $1,831,884 | $212,577 | | Securitizations | $4,196,423 | $4,146,394 | $50,029 | | **Total consolidated VIEs** | **$6,240,884** | **$5,978,278** | **$262,606** | - For unconsolidated VIEs, where Affirm holds a variable interest but is not the primary beneficiary, the maximum exposure to losses was **$51.4 million** as of March 31, 2025, primarily through retained notes and residual trust certificates[133](index=133&type=chunk) [10. Investments](index=36&type=section&id=10.%20Investments) This section provides information on Affirm's marketable securities, including cash equivalents and available-for-sale securities, and any recognized impairments - Total marketable securities, including cash and cash equivalents and securities available for sale, decreased to **$931.4 million** as of March 31, 2025, from **$1.26 billion** as of June 30, 2024[138](index=138&type=chunk) Marketable Securities by Category (in thousands) | Category | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :---------------------------------------- | :---------------------------- | :--------------------------- | | Cash and cash equivalents (Money market, Commercial paper, US Gov bonds) | $151,191 | $124,845 | | Securities available for sale (CDs, Corp bonds, Commercial paper, Agency bonds, Municipal bonds, Gov bonds, Securitization notes) | $780,170 | $1,131,628 | | **Total marketable securities** | **$931,361** | **$1,256,473** | - An impairment of **$3.0 million** was recognized for non-marketable equity securities for the nine months ended March 31, 2025, compared to **$14.1 million** in the prior-year period[144](index=144&type=chunk) [11. Derivative Financial Instruments](index=40&type=section&id=11.%20Derivative%20Financial%20Instruments) This section details Affirm's use of interest rate derivatives to manage market risk, including notional amounts and fair value adjustments - Affirm uses interest rate cap agreements and interest rate swaps to manage interest rate risk, with the total notional amount of derivative instruments decreasing to **$412.5 million** as of March 31, 2025, from **$1.00 billion** as of June 30, 2024[147](index=147&type=chunk) Derivative Financial Instruments as of March 31, 2025 (in thousands) | Derivative Type | March 31, 2025 Notional Amount (in thousands) | March 31, 2025 Derivative Assets (in thousands) | March 31, 2025 Derivative Liabilities (in thousands) | | :---------------------------------- | :-------------------------------------------- | :---------------------------------------------- | :--------------------------------------------------- | | Interest rate contracts - cash flow hedges | $0 | $0 | $0 | | Interest rate contracts (not designated as hedges) | $412,489 | $3,808 | $86 | | **Total gross derivative assets/liabilities** | **$412,489** | **$3,808** | **$86** | - Net derivative losses included in Accumulated Other Comprehensive Income (AOCI) are estimated to be **$0.1 million** and are expected to be reclassified into earnings within the next 12 months[148](index=148&type=chunk) [12. Fair Value of Financial Assets and Liabilities](index=42&type=section&id=12.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) This section presents the fair value measurements of Affirm's financial assets and liabilities, categorized by valuation input levels Fair Value Measurements of Financial Assets by Level (in thousands) | Fair Value Level | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--------------- | :---------------------------- | :--------------------------- | | Level 1 | $69,419 | $63,389 | | Level 2 | $814,893 | $1,158,621 | | Level 3 | $95,191 | $86,128 | | **Total Assets** | **$979,503** | **$1,308,138** | - Servicing assets and liabilities, securitization notes and residual trust certificates, profit share liability, and risk sharing arrangements are classified as Level 3 fair value measurements due to the use of significant unobservable inputs[153](index=153&type=chunk) - Loans held for investment, net, had a carrying amount of **$6.26 billion** and a fair value of **$6.68 billion** as of March 31, 2025, indicating a higher market valuation than book value[178](index=178&type=chunk) [13. Stockholders' Equity](index=53&type=section&id=13.%20Stockholders'%20Equity) This section details changes in stockholders' equity, including common stock reserved for issuance, share repurchases, and warrant exercises - As of March 31, 2025, **95.4 million shares** of common stock were reserved for issuance under equity compensation plans, an increase from **91.1 million shares** as of June 30, 2024[180](index=180&type=chunk) - Affirm repurchased **3.5 million shares** of Class A common stock for approximately **$250.0 million** during the nine months ended March 31, 2025, in connection with the issuance of the 2029 Notes[184](index=184&type=chunk) - Warrants granted to Amazon, with an exercise price of **$0.01 per share**, had **3.5 million shares** exercised as of March 31, 2025, and the term for remaining unexercised warrants was extended by **4.0 years** in February 2025[182](index=182&type=chunk) [14. Equity Incentive Plans](index=54&type=section&id=14.%20Equity%20Incentive%20Plans) This section provides information on stock-based compensation expense and unrecognized compensation related to equity incentive plans Stock-Based Compensation Expense by Category (in thousands) | Category | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | 9 Months Ended Mar 31, 2025 (in thousands) | 9 Months Ended Mar 31, 2024 (in thousands) | | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | General and administrative | $50,344 | $51,947 | $170,868 | $184,070 | | Technology and data analytics | $21,309 | $21,105 | $70,957 | $78,808 | | Sales and marketing | $3,749 | $3,858 | $13,426 | $13,628 | | Processing and servicing | $205 | $165 | $687 | $3,092 | | Capitalized into property, equipment and software, net | $44,369 | $30,981 | $138,555 | $99,441 | | **Total stock-based compensation** | **$119,976** | **$108,056** | **$394,493** | **$379,039** | - Total stock-based compensation expense for the nine months ended March 31, 2025, was **$394.5 million**, including **$255.9 million** in operating expenses and **$138.6 million** capitalized into property, equipment, and software[198](index=198&type=chunk) - Unrecognized compensation expense related to unvested stock options was approximately **$44.1 million** (expected over **2.3 years**) and for unvested RSUs was approximately **$485.4 million** (expected over **1.7 years**) as of March 31, 2025[191](index=191&type=chunk)[196](index=196&type=chunk) [15. Restructuring](index=57&type=section&id=15.%20Restructuring) This section confirms the completion of the February 2023 restructuring plan, including workforce reduction and office space adjustments - The February 2023 restructuring plan, which included workforce reduction and vacating a portion of the San Francisco office, was completed during fiscal 2024, with no outstanding liability as of March 31, 2025[199](index=199&type=chunk)[200](index=200&type=chunk) [16. Income Taxes](index=57&type=section&id=16.%20Income%20Taxes) This section details income tax expense and the company's valuation allowance against deferred tax assets due to cumulative losses - Income tax expense for the three and nine months ended March 31, 2025, was **$2.5 million** and **$6.9 million**, respectively, primarily attributable to various U.S. state and foreign income taxes[202](index=202&type=chunk) - Affirm continues to recognize a full valuation allowance against its U.S. federal and state and certain foreign net deferred tax assets due to the cumulative loss incurred over the prior three fiscal years[203](index=203&type=chunk) [17. Net Income (Loss) per Share Attributable to Common Stockholders](index=57&type=section&id=17.%20Net%20Income%20(Loss)%20per%20Share%20Attributable%20to%20Common%20Stockholders) This section presents basic and diluted net income (loss) per share attributable to common stockholders for the reported periods Basic and Diluted EPS - 3 Months Ended March 31 | Metric | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | | :----- | :-------------------------- | :-------------------------- | | Basic | $0.01 | $(0.43) | | Diluted | $0.01 | $(0.43) | Basic and Diluted EPS - 9 Months Ended March 31 | Metric | 9 Months Ended Mar 31, 2025 | 9 Months Ended Mar 31, 2024 | | :----- | :-------------------------- | :-------------------------- | | Basic | $(0.05) | $(1.53) | | Diluted | $(0.05) | $(1.53) | - Common stock equivalents totaling **8.4 million** for the three months ended March 31, 2025, and **41.4 million** for the nine months ended March 31, 2025, were excluded from diluted EPS calculations because their inclusion would have been anti-dilutive[205](index=205&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Affirm's financial condition and results of operations, detailing its financial model, key performance factors, operating metrics, revenue and expense analysis, liquidity, and critical accounting policies [Overview](index=60&type=section&id=Overview) This section provides an overview of Affirm's mission to reinvent payments through transparent consumer financing and its proprietary technology platform - Affirm aims to reinvent payments and commerce by offering transparent, fixed-amount payment solutions without deferred interest, late fees, or penalties, empowering consumers and enabling merchants to grow sales[207](index=207&type=chunk)[208](index=208&type=chunk) - The company's core competitive advantage lies in its proprietary technology platform and data analytics, utilizing machine learning and AI to price risk and develop differentiated and scalable products[210](index=210&type=chunk) [Our Financial Model](index=61&type=section&id=Our%20Financial%20Model) This section explains Affirm's revenue model, including merchant fees, interest income, and card network revenue, and its loan origination process - Affirm's revenue model includes merchant fees (typically higher for 0% APR products), interest income on simple interest loans, and card network revenue from interchange fees on transactions facilitated through its app and Affirm Card[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - For the three and nine months ended March 31, 2025, interest-bearing loans represented **72%** and **74%** of total GMV, respectively, while Pay-in-X and 0% APR installment loans accounted for smaller portions[213](index=213&type=chunk)[214](index=214&type=chunk) - Affirm's loan origination model involves underwriting through a proprietary risk model, with loans funded by originating bank partners (Cross River Bank, Celtic Bank, Lead Bank) or directly by Affirm's consolidated subsidiaries in Canada, the U.K., and several U.S. states[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) [Factors Affecting Our Performance](index=62&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses key factors influencing Affirm's performance, such as its funding model, product mix, and the macroeconomic environment - Affirm's performance is influenced by its capital-efficient funding model, which leverages diverse funding relationships including warehouse facilities, securitization trusts, forward flow arrangements, and bank partnerships[220](index=220&type=chunk) - Shifts in merchant volumes and product mix (e.g., low AOV vs. high AOV, 0% APR vs. interest-bearing) significantly impact GMV and revenue as a percentage of GMV, with low AOV offerings potentially leading to a decline in revenue as a percentage of GMV in the medium term[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - The macroeconomic environment, including inflation, interest rates, and recessionary concerns, affects consumer demand, borrowing costs, and capital market volatility, impacting Affirm's business and results of operations[226](index=226&type=chunk) [Key Operating Metrics](index=64&type=section&id=Key%20Operating%20Metrics) This section presents key operating metrics, including Gross Merchandise Volume (GMV), active consumers, and transactions per active consumer Key Operating Metrics | Metric | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | % Change | 9 Months Ended Mar 31, 2025 | 9 Months Ended Mar 31, 2024 | % Change | | :-------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | GMV (in billions) | $8.6 | $6.3 | 36% | $26.3 | $19.4 | 36% |\ | Active consumers (in thousands) | 21,888 | 18,134 | 21% | N/A | N/A | N/A |\ | Transactions per active consumer | 5.6 | 4.6 | 20% | N/A | N/A | N/A | - GMV increased by **36%** for both the three and nine months ended March 31, 2025, driven by growth in top five merchants, platform partners, direct-to-consumer products (Affirm Card), and overall increases in active merchants and consumers[233](index=233&type=chunk) - Active consumers grew **21%** to **21.9 million** as of March 31, 2025, and transactions per active consumer increased **20%** to **5.6**, indicating strong consumer adoption and repeat usage, with Affirm Card representing approximately **10%** of total transactions[238](index=238&type=chunk)[240](index=240&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of Affirm's revenue and operating expenses, leading to its operating and net income (loss) Results of Operations - 3 Months Ended March 31 (in thousands) | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :---------- | :--------- | | Total revenue, net | $783,135 | $576,157 | $206,978 | 36% | | Total operating expenses | $791,527 | $736,946 | $54,581 | 7% | | Operating loss | $(8,393) | $(160,789) | $152,396 | (95)% | | Net income (loss) | $2,804 | $(133,936) | $136,740 | (102)% | Results of Operations - 9 Months Ended March 31 (in thousands) | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :---------- | :--------- | | Total revenue, net | $2,347,995 | $1,663,814 | $684,181 | 41% | | Total operating expenses | $2,493,332 | $2,206,201 | $287,131 | 13% | | Operating loss | $(145,337) | $(542,387) | $397,050 | (73)% | | Net income (loss) | $(17,058) | $(472,621) | $455,563 | (96)% | - Sales and marketing expense decreased by **$58.9 million (44%)** for the three months and **$85.8 million (19%)** for the nine months ended March 31, 2025, primarily due to a significant decrease in Amazon warrant expense as a portion of the warrants became fully vested[265](index=265&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Affirm's liquidity position, capital resources, and funding strategy, including cash, investments, and available debt capacity - Affirm maintains a capital-efficient model through a diverse set of funding sources, including warehouse credit facilities, securitization trusts, forward flow arrangements, and partnerships with banks[271](index=271&type=chunk) Cash, Cash Equivalents and Investments in Debt Securities (in thousands) | Category | March 31, 2025 (in thousands) | June 30, 2024 (in thousands) | | :---------------------------------------- | :---------------------------- | :--------------------------- | | Cash and cash equivalents | $1,351,148 | $1,013,106 | | Investments in short-term debt securities | $537,159 | $865,766 | | Investments in long-term debt securities | $243,011 | $265,862 | | **Cash, cash equivalent and investments in debt securities** | **$2,131,318** | **$2,144,734** | - As of March 31, 2025, Affirm had **$2.1 billion** in cash and investments, **$4.4 billion** in available funding debt capacity, and **$330.0 million** in revolving credit facility borrowing capacity, which are believed to be sufficient for the next 12 months[272](index=272&type=chunk) [Off-Balance Sheet Arrangements](index=76&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes Affirm's off-balance sheet activities, primarily through unconsolidated VIEs and securitization transactions, and associated risk exposures - Affirm engages in off-balance sheet activities, primarily through unconsolidated Variable Interest Entities (VIEs) and sponsored securitization transactions, where it contractually services loans[296](index=296&type=chunk) - As of March 31, 2025, the aggregate outstanding balance of loans held by third-party investors and off-balance sheet securitizations was **$6.8 billion**[299](index=299&type=chunk) - For unconsolidated securitization transactions, Affirm's maximum exposure to losses as the sponsor and risk retention holder is up to **5%** of both the senior notes and residual trust certificates[298](index=298&type=chunk) [Critical Accounting Policies and Estimates](index=76&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to Affirm's critical accounting policies or estimates during the reported periods - There have been no material changes in Affirm's significant accounting policies or critical accounting estimates during the three and nine months ended March 31, 2025[300](index=300&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details Affirm's exposure to market risks, primarily interest rate risk and credit risk, and the strategies employed to manage them, including impacts on fixed-rate securities, variable-rate debt, and consumer loans [Interest Rate Risk](index=77&type=section&id=Interest%20Rate%20Risk) This section discusses Affirm's exposure to interest rate fluctuations and its potential impact on financial instruments and operations - Affirm is exposed to interest rate risk due to its **$780.2 million** of marketable debt securities and variable-rate funding arrangements, including warehouse facilities and securitization variable funding notes[303](index=303&type=chunk)[305](index=305&type=chunk) - A hypothetical instantaneous **100 basis point** upward parallel shock to interest rates is estimated to have a less than **$60.0 million** adverse impact on cash flows associated with market risk sensitive instruments over the next 12 months[306](index=306&type=chunk) - Continued volatility in interest rates and inflation may adversely impact consumer spending levels, repayment ability, and loan sale economics, potentially leading to increased delinquencies and charge-offs[304](index=304&type=chunk)[305](index=305&type=chunk) [Credit Risk](index=78&type=section&id=Credit%20Risk) This section outlines Affirm's credit risk exposure, primarily from consumer loans and off-balance sheet arrangements, and its mitigation strategies - Affirm's primary credit risk relates to its **$6.6 billion** in consumer loans held for investment as of March 31, 2025, which is managed through proprietary underwriting models, user limits, and down payment requirements[307](index=307&type=chunk)[309](index=309&type=chunk) - The company also has credit risk exposure from **$7.8 billion** of off-balance sheet loans subject to risk-sharing arrangements (maximum exposure **$94.3 million**) and retained interests in unconsolidated securitization trusts (**$50.9 million**)[310](index=310&type=chunk) - Loan receivables are geographically diversified, with approximately **11%** related to customers residing in California and **10%** in Texas as of March 31, 2025[309](index=309&type=chunk) [Item 4. Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that Affirm's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of March 31, 2025. It also states there were no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that Affirm's disclosure controls and procedures were effective as of March 31, 2025, and designed to ensure timely and accurate reporting[312](index=312&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025[313](index=313&type=chunk) Part II - Other Information This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 for details on legal proceedings and reiterates that no other current legal proceedings are expected to have a material adverse effect on the business, despite the inherent uncertainties and costs of litigation - Affirm is not presently a party to any legal proceedings that, if determined adversely, would individually or collectively have a material adverse effect on its business, results of operations, financial condition, or cash flows[317](index=317&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) This section highlights that the risks described in the Annual Report on Form 10-K for fiscal year 2024, along with updated risks related to indebtedness, could materially affect Affirm's business. It specifically addresses the substantial cash requirements for debt servicing and the potential inability to raise funds for convertible note settlements or repurchases - Servicing Affirm's debt, including the 2026 and 2029 Convertible Senior Notes, requires a significant amount of cash, and the company's future performance may not be sufficient to meet these obligations[321](index=321&type=chunk) - Affirm may not have the ability to raise the necessary funds to settle conversions of its convertible notes, repay them at maturity, or repurchase them upon a fundamental change, which could lead to a default on debt obligations[322](index=322&type=chunk)[323](index=323&type=chunk) - There have been no material changes to risk factors from the Annual Report on Form 10-K for the fiscal year ended June 30, 2024, except as reflected in the updated risks related to indebtedness[320](index=320&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[324](index=324&type=chunk) [Item 3. Defaults Upon Senior Securities](index=81&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred during the reporting period[325](index=325&type=chunk) [Item 4. Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to Affirm's business - Mine safety disclosures are not applicable to the company[326](index=326&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) This section discloses that Affirm's Chief Operating Officer, Michael Linford, and Chief Executive Officer, Max Levchin, adopted Rule 10b5-1 trading plans during the three months ended March 31, 2025, for the exercise of stock options and sale of underlying Class A common stock - Michael Linford, COO, adopted a Rule 10b5-1 trading plan on February 14, 2025, for the exercise of up to **200,000 employee stock options** and sale of underlying Class A common stock between May 16, 2025, and November 15, 2025[327](index=327&type=chunk) - Max Levchin, CEO, adopted a Rule 10b5-1 trading plan on March 17, 2025, for the exercise of up to **4,000,000 employee stock options** and sale of underlying Class A common stock between June 20, 2025, and June 18, 2026[328](index=328&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including warrant agreements, commercial agreements, cash incentive plans, officer severance plans, certifications, and XBRL-related documents - Key exhibits include the Second Replacement Warrant to Purchase Class A Common Stock with Amazon.com Services LLC and the Global Customer Installment Program Agreement with Shopify Inc., both dated February 14, 2025[331](index=331&type=chunk) - The filing includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002[331](index=331&type=chunk) [Signatures](index=84&type=section&id=Signatures) This section contains the signatures of Affirm Holdings, Inc.'s Chief Executive Officer, Max Levchin, and Chief Financial Officer, Rob O'Hare, certifying the filing of the report on May 8, 2025 - The report was signed by Max Levchin, Chief Executive Officer, and Rob O'Hare, Chief Financial Officer, on May 8, 2025[336](index=336&type=chunk)