afrm-20210930
FALSEQ1202206/300001820953P1MP1MP4D0.50.50.50.500018209532021-07-012021-09-30xbrli:shares0001820953us-gaap:CommonClassAMember2021-11-030001820953us-gaap:CommonClassBMember2021-11-03iso4217:USD00018209532021-09-3000018209532021-06-30iso4217:USDxbrli:shares0001820953us-gaap:CommonClassAMember2021-06-300001820953us-gaap:CommonClassAMember2021-09-300001820953us-gaap:CommonClassBMember2021-06-300001820953us-gaap:CommonClassBMember2021-09-300001820953us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-09-300001820953us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-06-300001820953afrm:MerchantNetworkMember2021-07-012021-09-300001820953afrm:MerchantNetworkMember2020-07-012020-09-300001820953afrm:VirtualCardNetworkMember2021-07-012021-09-300001820953afrm:VirtualCardNetworkMember2020-07-012020-09-3000018209532020-07-012020-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2021-06-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2021-06-300001820953us-gaap:AdditionalPaidInCapitalMember2021-06-300001820953us-gaap:RetainedEarningsMember2021-06-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2021-07-012021-09-300001820953us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001820953us-gaap:RetainedEarningsMember2021-07-012021-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2021-09-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2021-09-300001820953us-gaap:AdditionalPaidInCapitalMember2021-09-300001820953us-gaap:RetainedEarningsMember2021-09-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2020-06-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2020-06-300001820953us-gaap:AdditionalPaidInCapitalMember2020-06-300001820953us-gaap:RetainedEarningsMember2020-06-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000018209532020-06-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2020-07-012020-09-300001820953us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2020-07-012020-09-300001820953srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-06-300001820953srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-06-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001820953us-gaap:RetainedEarningsMember2020-07-012020-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2020-09-300001820953us-gaap:CommonStockMemberus-gaap:CommonStockMember2020-09-300001820953us-gaap:AdditionalPaidInCapitalMember2020-09-300001820953us-gaap:RetainedEarningsMember2020-09-300001820953us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-3000018209532020-09-300001820953srt:MinimumMember2021-07-012021-09-300001820953srt:MaximumMember2021-07-012021-09-300001820953srt:RestatementAdjustmentMember2021-06-300001820953srt:ScenarioPreviouslyReportedMember2021-06-300001820953srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2020-07-012020-09-30xbrli:pure0001820953srt:MinimumMember2021-09-300001820953srt:MaximumMember2021-09-300001820953afrm:ITACScoreGreaterThan96Member2021-09-300001820953afrm:ITACScore94To96Member2021-09-300001820953afrm:ITACScore90To94Member2021-09-300001820953afrm:ITACScoreLessThan90Member2021-09-300001820953afrm:ITACScoreNoScoreMember2021-09-300001820953afrm:FinancialAsset4To29DaysPastDueMember2021-09-300001820953afrm:FinancialAsset4To29DaysPastDueMember2021-06-300001820953us-gaap:FinancingReceivables30To59DaysPastDueMember2021-09-300001820953us-gaap:FinancingReceivables30To59DaysPastDueMember2021-06-300001820953us-gaap:FinancingReceivables60To89DaysPastDueMember2021-09-300001820953us-gaap:FinancingReceivables60To89DaysPastDueMember2021-06-300001820953us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-09-300001820953us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-06-300001820953srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-06-300001820953afrm:ShopBrainMember2021-07-012021-07-010001820953afrm:ShopBrainMemberus-gaap:CommonClassAMember2021-07-012021-07-010001820953afrm:ShopBrainMember2021-07-010001820953afrm:ShopBrainMemberus-gaap:DevelopedTechnologyRightsMember2021-07-012021-07-010001820953afrm:ShopBrainMember2021-07-012021-09-300001820953afrm:MerchantRelationshipsMember2021-09-300001820953afrm:MerchantRelationshipsMember2021-07-012021-09-300001820953us-gaap:DevelopedTechnologyRightsMember2021-09-300001820953us-gaap:DevelopedTechnologyRightsMember2021-07-012021-09-300001820953afrm:TrademarksAndDomainsMember2021-09-300001820953afrm:TrademarksAndDomainsMember2021-07-012021-09-300001820953us-gaap:OtherIntangibleAssetsMember2021-09-300001820953afrm:MerchantRelationshipsMember2021-06-300001820953afrm:MerchantRelationshipsMember2020-07-012021-06-300001820953us-gaap:DevelopedTechnologyRightsMember2021-06-300001820953us-gaap:DevelopedTechnologyRightsMember2020-07-012021-06-300001820953afrm:TrademarksAndDomainsMember2021-06-300001820953afrm:TrademarksAndDomainsMember2020-07-012021-06-300001820953us-gaap:OtherIntangibleAssetsMember2021-06-300001820953afrm:CommercialAgreementAssetShopifyIncWarrantsMember2021-07-012021-09-300001820953afrm:CommercialAgreementAssetShopifyIncWarrantsMember2021-09-300001820953afrm:CommercialAgreementAssetShopifyIncWarrantsMember2020-07-012020-09-300001820953afrm:CommercialAgreementAssetEnterprisePartnerStockAppreciationRightsMember2021-01-012021-01-310001820953afrm:CommercialAgreementAssetEnterprisePartnerStockAppreciationRightsMember2021-01-310001820953afrm:CommercialAgreementAssetEnterprisePartnerStockAppreciationRightsMember2021-07-012021-09-3000018209532021-01-310001820953afrm:CashCollateralAndDepositsForLettersOfCreditMember2021-09-300001820953afrm:CashCollateralAndDepositsForLettersOfCreditMember2021-06-300001820953stpr:CAus-gaap:GeographicConcentrationRiskMemberus-gaap:FinanceReceivablesMember2021-07-012021-09-300001820953stpr:CAus-gaap:GeographicConcentrationRiskMemberus-gaap:FinanceReceivablesMember2020-07-012021-06-300001820953us-gaap:CustomerConcentrationRiskMemberafrm:LargestMerchantPartnerMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001820953us-gaap:CustomerConcentrationRiskMemberafrm:LargestMerchantPartnerMemberus-gaap:SalesRevenueNetMember2020-07-012020-09-300001820953us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-09-300001820953srt:MinimumMemberafrm:WarehouseCreditFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-07-012021-09-300001820953afrm:WarehouseCreditFacilitiesMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-07-012021-09-300001820953afrm:WarehouseCreditFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-07-012021-09-300001820953afrm:WarehouseCreditFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-09-300001820953afrm:WarehouseCreditFacilitiesMemberus-gaap:LineOfCreditMember2021-09-300001820953afrm:WarehouseCreditFacilitiesMemberus-gaap:LineOfCreditMember2021-06-300001820953srt:MinimumMemberafrm:WarehouseCreditFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-07-012021-09-300001820953afrm:WarehouseCreditFacilitiesMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-07-012021-09-300001820953srt:MinimumMemberafrm:WarehouseCreditFacilitiesMemberus-gaap:RevolvingCreditFacilityMember2021-07-012021-09-300001820953afrm:WarehouseCreditFacilitiesMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2021-07-012021-09-300001820953srt:MinimumMemberafrm:PayBrightFundingFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberafrm:CommercialPaperRateMemberus-gaap:LineOfCreditMember2021-07-012021-09-300001820953srt:MaximumMemberafrm:PayBrightFundingFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberafrm:CommercialPaperRateMemberus-gaap:LineOfCreditMember2021-07-012021-09-300001820953afrm:PayBrightFundingFacilitiesMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-09-300001820953afrm:PayBrightFundingFacilitiesMemberus-gaap:LineOfCreditMember2021-09-300001820953afrm:RepurchaseAgreementMember2021-09-300001820953afrm:RepurchaseAgreementMemberafrm:OtherReceivablesMember2021-09-300001820953afrm:SeniorPledgedSecuritiesMember2021-09-300001820953afrm:ResidualCertificatePledgedSecuritiesMember2021-09-300001820953us-gaap:ConvertibleDebtMember2020-04-300001820953afrm:SeriesG1PreferredStockMember2020-09-012020-09-300001820953us-gaap:RevolvingCreditFacilityMember2021-01-190001820953us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-192021-01-190001820953us-gaap:RevolvingCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMember2021-01-192021-01-190001820953us-gaap:RevolvingCreditFacilityMemberafrm:OneMonthLondonInterbankOfferedRateLIBORMember2021-01-192021-01-190001820953us-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMember2021-01-192021-01-190001820953us-gaap:RevolvingCreditFacilityMember2021-01-192021-01-190001820953us-gaap:RevolvingCreditFacilityMember2021-09-300001820953afrm:AffirmAssetSecuritizationTrust2020Z2NotesMember2021-09-300001820953afrm:AffirmAssetSecuritizationTrust2020Z1NotesMember2021-09-300001820953afrm:AffirmAssetSecuritizationTrust2021ANotesMember2021-09-300001820953afrm:AffirmAssetSecuritizationTrust2020ANotesMember2021-09-300001820953afrm:ThirdPartyLoanBuyerMemberafrm:AffirmAssetSecuritizationTrust2020Z2NotesMember2021-09-30afrm:class0001820953afrm:AffirmAssetSecuritizationTrust2021BNotesMemberus-gaap:SecuredDebtMember2021-08-040001820953afrm:AffirmAssetSecuritizationTrust2021BNotesClassAMemberus-gaap:SecuredDebtMember2021-08-040001820953us-gaap:SecuredDebtMemberafrm:AffirmAssetSecuritizationTrust2021BNotesClassBMember2021-08-040001820953afrm:AffirmAssetSecuritizationTrust2021BNotesClassCMemberus-gaap:SecuredDebtMember2021-08-040001820953afrm:AffirmAssetSecuritizationTrust2021BNotesClassDMemberus-gaap:SecuredDebtMember2021-08-040001820953afrm:AffirmAssetSecuritizationTrust2021BNotesClassEMemberus-gaap:SecuredDebtMember2021-08-040001820953afrm:AffirmAssetSecuritizationTrust2021BNotesMemberus-gaap:SecuredDebtMember2021-09-300001820953afrm:WarehouseCreditFacilityMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-09-300001820953afrm:SecuritizationMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-09-300001820953afrm:WarehouseCreditFacilityMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-06-300001820953afrm:SecuritizationMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-06-300001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesMemberus-gaap:SecuredDebtMember2021-05-050001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesMember2021-05-050001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesResidualCertificatesMember2021-05-050001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesResidualCertificatesMemberafrm:ThirdPartyLoanBuyerMember2021-05-050001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesResidualCertificatesMemberafrm:ThirdPartyLoanBuyerMember2021-05-170001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesMember2021-05-180001820953afrm:AffirmAssetSecuritizationTrust2021Z1NotesResidualCertificatesMember2021-05-180001820953afrm:SecuritizationMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-09-300001820953us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-09-300001820953afrm:SecuritizationMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-06-300001820953us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2021-06-300001820953us-gaap:OtherAssetsMemberus-gaap:LineOfCreditMember2021-09-300001820953us-gaap:CertificatesOfDepositMember2021-09-300001820953us-gaap:CorporateBondSecuritiesMember2021-09-300001820953us-gaap:CommercialPaperMember2021-09-300001820953afrm:NonUSGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953afrm:SecuritizationNotesReceivableAndCertificatesMember2021-09-300001820953us-gaap:OtherDebtSecuritiesMember2021-09-300001820953afrm:SecuritizationNotesReceivableAndCertificatesMember2021-06-300001820953afrm:SecuritizationNotesReceivableAndCertificatesMemberus-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001820953us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:FairValueMeasurementsRecurringMember2021-09-300001820953us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2021-09-300001820953us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-09-300001820953us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2021-09-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2021-09-300001820953us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2021-09-300001820953us-gaap:FairValueInputsLevel1Memberafrm:NonUSGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:FairValueInputsLevel2Memberafrm:NonUSGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:FairValueInputsLevel3Memberafrm:NonUSGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-09-300001820953afrm:SecuritizationNotesReceivableAndCertificatesMemberus-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:FairValueInputsLevel2Memberafrm:SecuritizationNotesReceivableAndCertificatesMember2021-09-300001820953us-gaap:OtherDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:OtherDebtSecuritiesMember2021-09-300001820953us-gaap:OtherDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:FairValueInputsLevel1Member2021-09-300001820953us-gaap:FairValueInputsLevel2Member2021-09-300001820953us-gaap:FairValueInputsLevel3Member2021-09-300001820953us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-06-300001820953us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001820953us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-06-300001820953us-gaap:FairValueMeasurementsRecurringMember2021-06-30afrm:derivative_instrument00018209532020-07-012021-06-300001820953srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberafrm:MeasurementInputAdequateCompensationMember2021-09-300001820953srt:MaximumMemberafrm:MeasurementInputAdequateCompensationMember2021-09-300001820953afrm:MeasurementInputAdequateCompensationMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputDefaultRateMember2021-09-300001820953srt:MaximumMemberus-gaap:MeasurementInputDefaultRateMember2021-09-300001820953us-gaap:MeasurementInputDefaultRateMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2021-06-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2021-06-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2021-06-300001820953srt:MinimumMemberafrm:MeasurementInputAdequateCompensationMember2021-06-300001820953srt:MaximumMemberafrm:MeasurementInputAdequateCompensationMember2021-06-300001820953afrm:MeasurementInputAdequateCompensationMembersrt:WeightedAverageMember2021-06-300001820953srt:MinimumMemberus-gaap:MeasurementInputDefaultRateMember2021-06-300001820953srt:MaximumMemberus-gaap:MeasurementInputDefaultRateMember2021-06-300001820953us-gaap:MeasurementInputDefaultRateMembersrt:WeightedAverageMember2021-06-300001820953us-gaap:MeasurementInputDefaultRateMember2021-09-300001820953us-gaap:MeasurementInputDefaultRateMember2021-06-300001820953afrm:MeasurementInputAdequateCompensationMember2021-09-300001820953afrm:MeasurementInputAdequateCompensationMember2021-06-300001820953us-gaap:MeasurementInputDiscountRateMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMember2021-06-300001820953afrm:PerformanceFeeLiabilityMember2021-06-300001820953afrm:PerformanceFeeLiabilityMember2020-06-300001820953afrm:PerformanceFeeLiabilityMember2021-07-012021-09-300001820953afrm:PerformanceFeeLiabilityMember2020-07-012021-06-300001820953afrm:PerformanceFeeLiabilityMember2021-09-300001820953srt:MinimumMemberafrm:MeasurementInputRefundRateMember2021-09-300001820953srt:MaximumMemberafrm:MeasurementInputRefundRateMember2021-09-300001820953afrm:MeasurementInputRefundRateMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberafrm:MeasurementInputRefundRateMember2021-06-300001820953srt:MaximumMemberafrm:MeasurementInputRefundRateMember2021-06-300001820953afrm:MeasurementInputRefundRateMembersrt:WeightedAverageMember2021-06-300001820953afrm:SeriesG1PreferredStockMember2019-07-012020-06-300001820953afrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-06-300001820953afrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-07-012021-09-300001820953afrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMembersrt:WeightedAverageMember2021-09-300001820953afrm:MeasurementInputLossRateMembersrt:MinimumMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953afrm:MeasurementInputLossRateMembersrt:MaximumMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953afrm:MeasurementInputLossRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953srt:MaximumMemberus-gaap:MeasurementInputPrepaymentRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMember2021-09-300001820953us-gaap:MeasurementInputPrepaymentRateMemberafrm:ResidualTrustCertificatesHeldByThirdPartiesInConsolidatedVIEsMembersrt:WeightedAverageMember2021-09-300001820953afrm:MeasurementInputLossRateMember2021-09-300001820953us-gaap:MeasurementInputPrepaymentRateMember2021-09-300001820953afrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953afrm:SeniorNotesAndResidualTrustCertificatesMember2021-06-300001820953afrm:SeniorNotesAndResidualTrustCertificatesMember2021-07-012021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMembersrt:WeightedAverageMember2021-09-300001820953afrm:MeasurementInputLossRateMembersrt:MinimumMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953afrm:MeasurementInputLossRateMembersrt:MaximumMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953afrm:MeasurementInputLossRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953srt:MaximumMemberus-gaap:MeasurementInputPrepaymentRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMember2021-09-300001820953us-gaap:MeasurementInputPrepaymentRateMemberafrm:SeniorNotesAndResidualTrustCertificatesMembersrt:WeightedAverageMember2021-09-300001820953afrm:ContingentConsiderationMember2021-06-300001820953afrm:ContingentConsiderationMember2021-07-012021-09-300001820953afrm:ContingentConsiderationMember2021-09-300001820953afrm:ContingentConsiderationMembersrt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2021-09-300001820953afrm:ContingentConsiderationMemberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2021-09-300001820953afrm:ContingentConsiderationMemberus-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2021-09-300001820953afrm:ContingentConsiderationMembersrt:MinimumMemberafrm:MeasurementInputEquityVolatilityMember2021-09-300001820953afrm:ContingentConsiderationMemberafrm:MeasurementInputEquityVolatilityMembersrt:MaximumMember2021-09-300001820953afrm:ContingentConsiderationMemberafrm:MeasurementInputEquityVolatilityMembersrt:WeightedAverageMember2021-09-300001820953afrm:ContingentConsiderationMembersrt:MinimumMemberafrm:MeasurementInputRevenueVolatilityMember2021-09-300001820953afrm:ContingentConsiderationMemberafrm:MeasurementInputRevenueVolatilityMembersrt:MaximumMember2021-09-300001820953afrm:ContingentConsiderationMemberafrm:MeasurementInputRevenueVolatilityMembersrt:WeightedAverageMember2021-09-300001820953afrm:ManhattanEngineeringIncMember2021-09-300001820953afrm:ManhattanEngineeringIncMember2021-07-012021-09-300001820953afrm:CommercialAgreementProfitShareLiabilityMember2021-06-300001820953afrm:CommercialAgreementProfitShareLiabilityMember2021-07-012021-09-300001820953afrm:CommercialAgreementProfitShareLiabilityMember2021-09-300001820953srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberafrm:CommercialAgreementProfitShareLiabilityMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMemberafrm:CommercialAgreementProfitShareLiabilityMember2021-09-300001820953us-gaap:MeasurementInputDiscountRateMemberafrm:CommercialAgreementProfitShareLiabilityMembersrt:WeightedAverageMember2021-09-300001820953srt:MinimumMemberafrm:CommercialAgreementProfitShareLiabilityMemberafrm:MeasurementInputProgramProfitabilityMember2021-09-300001820953srt:MaximumMemberafrm:CommercialAgreementProfitShareLiabilityMemberafrm:MeasurementInputProgramProfitabilityMember2021-09-300001820953afrm:CommercialAgreementProfitShareLiabilityMemberafrm:MeasurementInputProgramProfitabilityMembersrt:WeightedAverageMember2021-09-300001820953us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-09-300001820953us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-09-300001820953us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-06-300001820953us-gaap:FairValueInputsLevel1Member2021-06-300001820953us-gaap:FairValueInputsLevel2Member2021-06-300001820953us-gaap:FairValueInputsLevel3Member2021-06-300001820953us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-06-300001820953us-gaap:SeriesGPreferredStockMember2019-07-012020-06-300001820953us-gaap:SeriesGPreferredStockMember2020-06-300001820953afrm:SeriesG1PreferredStockMember2020-06-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2021-01-120001820953us-gaap:EmployeeStockOptionMember2021-09-300001820953us-gaap:EmployeeStockOptionMember2021-06-300001820953afrm:ShareBasedPaymentAgreementOptionFutureGrantMember2021-09-300001820953afrm:ShareBasedPaymentAgreementOptionFutureGrantMember2021-06-30afrm:vote0001820953us-gaap:CommonClassAMember2021-01-122021-01-120001820953us-gaap:CommonClassBMember2021-01-122021-01-120001820953afrm:AmendedAndRestated2012StockPlanMemberus-gaap:CommonClassAMember2021-09-300001820953us-gaap:EmployeeStockOptionMembersrt:MinimumMember2021-07-012021-09-300001820953us-gaap:EmployeeStockOptionMembersrt:MaximumMember2021-07-012021-09-300001820953us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001820953us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-07-012021-09-300001820953us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2021-07-012021-09-300001820953afrm:PerformanceBasedStockOptionsMember2021-07-012021-09-300001820953afrm:PerformanceBasedStockOptionsMember2021-09-30afrm:segment0001820953us-gaap:RestrictedStockUnitsRSUMember2021-01-140001820953us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001820953us-gaap:RestrictedStockUnitsRSUMember2021-06-300001820953us-gaap:RestrictedStockUnitsRSUMember2021-09-300001820953us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001820953us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001820953afrm:TechnologyAndDataAnalyticsExpenseMember2021-07-012021-09-300001820953afrm:TechnologyAndDataAnalyticsExpenseMember2020-07-012020-09-300001820953us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001820953us-gaap:SellingAndMarketingExpenseMember2020-07-012020-09-300001820953afrm:ProcessingAndServicingExpenseMember2021-07-012021-09-300001820953afrm:ProcessingAndServicingExpenseMember2020-07-012020-09-300001820953us-gaap:CommonClassAMemberafrm:ReturnlyTechnologiesIncMember2021-05-012021-05-010001820953afrm:ReturnlyTechnologiesIncMember2021-05-012021-05-010001820953us-gaap:CommonClassAMember2021-07-012021-09-300001820953us-gaap:CommonClassBMember2021-07-012021-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2021-07-012021-09-300001820953us-gaap:RedeemableConvertiblePreferredStockMember2020-07-012020-09-300001820953us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001820953us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001820953us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001820953us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300001820953us-gaap:WarrantMember2021-07-012021-09-300001820953us-gaap:WarrantMember2020-07-012020-09-300001820953country:US2021-07-012021-09-300001820953country:US2020-07-012020-09-300001820953country:CA2021-07-012021-09-300001820953country:CA2020-07-012020-09-300001820953country:US2021-09-300001820953country:US2021-06-300001820953country:CA2021-09-300001820953country:CA2021-06-300001820953us-gaap:SubsequentEventMemberafrm:FirstWarrantSharesMemberus-gaap:CommonClassAMember2021-11-100001820953us-gaap:SubsequentEventMemberus-gaap:CommonClassAMemberafrm:SecondWarrantSharesMember2021-11-100001820953us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2021-11-10


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021

OR

 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  __________ to __________

Commission file number 001-39888

Affirm Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
84-2224323
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
650 California Street
San Francisco, California
94108
(Address of principal executive offices)
(Zip Code)
(415) 984-0490
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.00001 per shareAFRMThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes     No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
  
Non-accelerated filer  
Smaller reporting company
  
Emerging growth company
  
                
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes        No  

As of November 3, 2021, the number of shares of the registrant’s Class A common stock outstanding was 208,195,315 and the number of shares of the registrant's Class B common stock outstanding was 72,810,224.



Table of Contents

TABLE OF CONTENTS
Page



2

Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”), as well as information included in oral statements or other written statements made or to be made by us, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

our expectations regarding our future revenue, expenses, and other operating results and key operating metrics;
our ability to attract additional merchants and retain and grow our relationships with our existing merchant partners;
our ability to compete successfully in a highly competitive industry;
our ability to attract new consumers and retain and grow our relationships with our existing consumers;
our expectations regarding product launches;
our ability to successfully engage new originating bank partners;
the availability of funding sources to support our business model;
our ability to effectively price and score credit risk using our proprietary risk model;
the performance of loans facilitated through our platform;
the future growth rate of our revenue and related key operating metrics;
our ability to achieve or sustain profitability in the future;
our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business;
our ability to protect our confidential, proprietary, or sensitive information;
past and future acquisitions, investments, and other strategic investments;
our ability to maintain, protect, and enhance our brand and intellectual property;
litigation, investigations, regulatory inquiries, and proceedings;
the impact of macroeconomic conditions on our business, including the impact of the COVID-19 pandemic; and
the size and growth rates of the markets in which we compete.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Form 10-Q and our most recently filed Annual Report on Form 10-K. Other sections of this Form 10-Q may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.
3

Table of Contents

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, events, or circumstances. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report or to conform these statements to actual results or to changes in our expectations. You should read this Form 10-Q and the documents that we have filed as exhibits to this report with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (investors.affirm.com), our filings with the Securities and Exchange Commission (“SEC”), webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website. The contents of our website are not incorporated into this filing. We have included our investor relations website address as an inactive textual reference and for convenience only, and do not intend it to be an active link to our website.

4

Table of Contents
Part I - Financial Information

Item 1. Unaudited Financial Statements

AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except shares and per share amounts)
September 30, 2021June 30, 2021
Assets
Cash and cash equivalents$1,439,531 $1,466,558 
Restricted cash236,282 226,074 
Securities available for sale at fair value456,266 16,170 
Loans held for sale1,808 13,030 
Loans held for investment2,244,826 2,022,320 
Allowance for credit losses(152,021)(117,760)
Loans held for investment, net2,092,805 1,904,560 
Accounts receivable, net100,951 91,575 
Property, equipment and software, net84,925 62,499 
Goodwill540,770 516,515 
Intangible assets71,378 67,930 
Commercial agreement assets207,431 227,377 
Other assets169,952 274,679 
Total Assets$5,402,099 $4,866,967 
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable$425,854 $57,758 
Payable to third-party loan owners38,462 50,079 
Accrued interest payable3,304 2,751 
Accrued expenses and other liabilities450,662 323,577 
Notes issued by securitization trusts1,621,638 1,176,673 
Funding debt484,821 680,602 
Total liabilities3,024,741 2,291,440 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Class A common stock, par value $0.00001 per share: 3,030,000,000 shares authorized, 200,336,842 shares issued and outstanding as of September 30, 2021; 3,030,000,000 shares authorized, 181,131,728 shares issued and outstanding as of June 30, 2021
2 2 
Class B common stock, par value $0.00001 per share: 140,000,000 shares authorized, 77,380,330 shares issued and outstanding as of September 30, 2021; 140,000,000 authorized, 88,226,376 shares issued and outstanding as of June 30, 2021
1 1 
Additional paid in capital3,579,763 3,467,236 
Accumulated deficit(1,205,100)(898,485)
Accumulated other comprehensive gain 2,692 6,773 
Total stockholders’ equity2,377,358 2,575,527 
Total Liabilities and Stockholders’ Equity$5,402,099 $4,866,967 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.
5

Table of Contents

AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS, CONT.
(Unaudited)
(in thousands, except shares and per share amounts)

    The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the interim condensed consolidated balance sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The liabilities in the table below include liabilities for which creditors do not have recourse to the general credit of the Company. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate upon consolidation.
September 30, 2021June 30, 2021
Assets of consolidated VIEs, included in total assets above
Restricted cash$164,868 $142,385 
Loans held for investment2,035,653 1,743,810 
Allowance for credit losses(127,744)(94,463)
Loans held for investment, net1,907,909 1,649,347 
Accounts receivable, net8,195 8,209 
Other assets3,501 3,683 
Total assets of consolidated VIEs$2,084,473 $1,803,624 
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable$2,873 $2,927 
Accrued interest payable3,139 2,613 
Accrued expenses and other liabilities3,627 3,820 
Notes issued by securitization trusts1,621,638 1,176,673 
Funding debt374,817 607,394 
Total liabilities of consolidated VIEs2,006,094 1,793,427 
Total net assets$78,379 $10,197 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.
6

Table of Contents

AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended September 30,
20212020
Revenue
Merchant network revenue$92,244 $93,265 
Virtual card network revenue19,395 5,958 
Total network revenue111,639 99,223 
Interest income117,302 54,237 
Gain on sales of loans30,979 16,434 
Servicing income9,465 4,084 
Total Revenue, net$269,385 $173,978 
Operating Expenses
Loss on loan purchase commitment$51,678 $65,868 
Provision for credit losses63,647 28,931 
Funding costs16,753 10,352 
Processing and servicing25,201 13,498 
Technology and data analytics78,013 33,768 
Sales and marketing63,960 22,582 
General and administrative136,204 32,273 
Total Operating Expenses435,456 207,272 
Operating Loss$(166,071)$(33,294)
Other (expense) income, net(140,373)29,445 
Loss Before Income Taxes$(306,444)$(3,849)
Income Tax Expense 171 97 
Net Loss$(306,615)$(3,946)
Other Comprehensive Income (Loss)
Foreign currency translation adjustments$(3,802)$405 
Unrealized gain (loss) on securities available for sale, net(279) 
Net Other Comprehensive (Loss) Income(4,081)405 
Comprehensive Loss$(310,696)$(3,541)
Per share data:
Net loss per share attributable to common stockholders for Class A and Class B:
Basic$(1.13)$(0.06)
Diluted$(1.13)$(0.47)
Weighted average common shares outstanding:
Basic271,677,516 64,778,024 
Diluted271,677,516 68,256,189 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.
7

Table of Contents
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND STOCKHOLDERS’ DEFICIT
(Unaudited)
(in thousands, except share amounts)

Redeemable Convertible
Preferred Stock
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Deficit
SharesAmountSharesAmount
Balance as of June 30, 2021  269,358,104 $3 $3,467,236 $(898,485)$6,773 $2,575,527 
Issuance of common stock upon exercise of stock options— — 7,403,503 — 37,470 — — 37,470 
Issuance of common stock in acquisition— — 183,733 — 10,000 — — 10,000 
Vesting of restricted stock units— — 772,653 — — — — — 
Repurchases of common stock— — (821)— (5)— — (5)
Stock-based compensation— — — — 104,879 — — 104,879 
Tax withholding on stock-based compensation— — — — (39,817)— — (39,817)
Foreign currency translation adjustments— — — — — — (3,802)(3,802)
Unrealized gain (loss) on securities available for sale— — — — — — (279)(279)
Net Loss— — — — — (306,615)— (306,615)
Balance as of September 30, 2021  277,717,172 $3 $3,579,763 $(1,205,100)$2,692 $2,377,358 
Redeemable Convertible
Preferred Stock
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Deficit
SharesAmountSharesAmount
Balance as of June 30, 2020122,115,971 $804,170 47,684,427  80,373 (447,167)(302)$(367,096)
Issuance of common stock— — 388,246 — 1,741 — — 1,741 
Repurchases of common stock— — (115,625)— (584)— — (584)
Issuance of redeemable convertible preferred stock, net of issuance costs of $440
21,824,141 434,434 — — — — — — 
Vesting and exercise of warrants for common stock— — 5,074,398 — 67,645 — — 67,645 
Stock-based compensation— — — — 7,175 — — 7,175 
Conversion of convertible debt4,444,321 88,559 — — (42,124)— — (42,124)
Effects of adoption of new accounting standards— — — — — (9,980)— (9,980)
Foreign currency translation adjustments— — — — — — 405 405 
Net Loss— — — — — (3,946)— (3,946)
Balance as of September 30, 2020148,384,433 1,327,163 53,031,446 $ $114,226 $(461,093)$103 $(346,764)


The accompanying notes are an integral part of these interim condensed consolidated financial statements.

8

Table of Contents
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended September 30,
20212020
Cash Flows from Operating Activities
Net Loss$(306,615)$(3,946)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for credit losses63,647 28,931 
Amortization of premiums and discounts on loans, net(35,708)(11,123)
Gain on sales of loans(30,979)(16,434)
Changes in fair value of assets and liabilities139,884 (30,202)
Amortization of commercial agreement assets18,971 14,261 
Amortization of debt issuance costs5,231 1,083 
Stock-based compensation93,189 6,203 
Depreciation and amortization10,541 3,720 
Other4,002 608 
Purchases of loans held for sale(896,786)(346,878)
Proceeds from the sale of loans held for sale888,580 338,926 
Change in operating assets and liabilities:
Accounts receivable, net(12,076)10,175 
Other assets78,086 (64,412)
Accounts payable368,096 6,110 
Payable to third-party loan owners(11,618)(3,793)
Accrued interest payable553 798 
Accrued expenses and other liabilities(11,848)63,669 
Net Cash Provided by (Used in) Operating Activities365,150 (2,304)
Cash Flows from Investing Activities
Purchases and origination of loans held for investment(1,847,458)(1,177,769)
Proceeds from the sale of loans held for investment195,039 75,049 
Principal repayments and other loan servicing activity1,486,099 749,128 
Acquisition, net of cash and restricted cash acquired(5,999) 
Additions to property, equipment and software(16,347)(4,169)
Purchases of securities available for sale(443,560) 
Proceeds from maturities and repayments of securities available for sale889  
Other investing cash inflows4,827  
Other investing cash outflows(3,000) 
Net Cash Used in Investing Activities(629,510)(357,761)
Cash Flows from Financing Activities
Proceeds from funding debt682,106 773,938 
Payment of debt issuance costs(6,609)(4,617)
Principal repayments of funding debt(873,778)(890,556)
Proceeds from issuance of notes and residual trust certificates by securitization trusts499,789 518,232 
Principal repayments of notes issued by securitization trusts(55,204)(14,777)
Proceeds from issuance of redeemable convertible preferred stock, net 434,434 
Proceeds from exercise of common stock options and warrants37,470 1,741 
Repurchases of common stock(4)(584)
Payments of tax withholding for stock-based compensation(39,817) 
Net Cash Provided by Financing Activities243,953 817,811 
Effect of exchange rate changes on cash, cash equivalents and restricted cash3,588  
Net (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash(16,819)457,746 
Cash and cash equivalents and restricted cash, beginning of period1,692,632 328,128 
Cash and Cash Equivalents and Restricted Cash, end of period$1,675,813 $785,874 
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
9

Table of Contents
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONT.
(Unaudited)
(in thousands)

Three Months Ended September 30,
20212020
Supplemental Disclosures of Cash Flow Information
Cash payments for interest$10,195 $6,934 
Cash paid for income taxes72  
Cash paid for operating leases4,475 3,148 
Supplemental Disclosures of Non-Cash Investing and Financing Activities
Stock-based compensation included in capitalized internal-use software$11,690 $972 
Additions to property and equipment included in accrued expenses56 15 
Issuance of warrants in exchange for commercial agreement 67,645 
Conversion of convertible debt 88,559 
Issuance of common stock in connection with acquisition10,000  

The accompanying notes are an integral part of these interim condensed consolidated financial statements.
10

Table of Contents
1.   Business Description

Affirm Holdings, Inc. (“Affirm,” the “Company,” “we,” “us,” or “our”), headquartered in San Francisco, California, provides consumers with a simpler, more transparent, and flexible alternative to traditional payment options. Our mission is to deliver honest financial products that improve lives. Through our next-generation commerce platform and partnerships with originating banks, we enable consumers to confidently pay for a purchase over time, with terms ranging from one to sixty months. When a consumer applies for a loan through our platform, the loan is underwritten using our proprietary risk model, and once approved, the consumer selects their preferred repayment option. The majority of loans are funded and issued by our originating bank partners.

Merchants partner with us to transform the consumer shopping experience and to acquire and convert customers more effectively through our frictionless point-of-sale payment solution. Consumers get the flexibility to buy now and make simple regular payments for their purchases and merchants see increased average order value, repeat purchase rate, and an overall more satisfied customer base. Unlike legacy payment options and our competitors’ product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will owe — no hidden fees, no deferred interest, no penalties.

2.   Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), disclosure requirements for interim financial information, and the requirements of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended June 30, 2021. The balance sheet as of June 30, 2021 has been derived from the audited financial statements at that date. Management believes these interim condensed consolidated financial statements reflect all adjustments, including those of a normal and recurring nature, which are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. Certain prior period amounts have been reclassified to conform to the current period presentation.

Our interim condensed financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all wholly owned subsidiaries and variable interest entities (“VIEs”), in which we have a controlling financial interest. These include various business trust entities and limited partnerships established to enter into warehouse credit agreements with certain lenders for funding debt facilities and certain asset-backed securitization transactions.

Our variable interest arises from contractual, ownership, or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets. We consolidate a VIE when we are deemed to be the primary beneficiary. We assess whether or not we are the primary beneficiary of a VIE on an ongoing basis.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the interim condensed consolidated financial statements and the accompanying notes. Material estimates that are particularly susceptible to significant change relate to determination of the variable consideration for revenue, the allowance for credit losses, capitalized internal-use software development costs, valuation allowance for deferred tax assets, convertible debt derivatives, loss on loan purchase commitment, the fair value of servicing assets and liabilities, discount on self-originated loans, the fair value and useful lives of tangible and intangible assets acquired and liabilities assumed
11

Table of Contents
resulting from business combinations, the fair value of contingent consideration related to business combinations, the evaluation for impairment of intangible assets and goodwill, the incremental borrowing rate used in discounting our lease liabilities, the fair value of available for sale debt securities including retained interests in our securitizations trusts, the fair value of residual certificates issued by our securitization trusts held by third parties, and stock-based compensation. We base our estimates on historical experience, current events and other factors we believe to be reasonable under the circumstances. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results will be materially affected.

These estimates are based on information available as of the date of the interim condensed consolidated financial statements; therefore, actual results could differ materially from those estimates. 

Immaterial Correction of Prior Period Amounts

Subsequent to the issuance of our financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, which was filed with the SEC on September 17, 2021, we identified understatements in certain prior period amounts related to the fair value measurement of contingent consideration and stock-based compensation.

We remeasure the fair value of the contingent consideration liability recorded in connection with the PayBright, Inc. (“PayBright”) acquisition at each reporting date. An incorrect input in the Monte Carlo simulation used to estimate the fair value as of June 30, 2021, resulted in an understatement of accrued expenses and other liabilities of $5.6 million as of June 30, 2021.
We measure stock-based compensation based on the fair value of an award at the grant date and recognize expense over the vesting period of the award based on the estimated portion of the award that is expected to vest. An incorrect determination of the grant date and service inception dates for certain awards granted prior to our initial public offering (“IPO”), as well as incorrect treatment of expense recognition for certain terminated employees, resulted in an understatement of additional paid in capital of $4.5 million as of June 30, 2021.

Accordingly, we are correcting the relevant financial statements and related footnotes as of June 30, 2021 within these interim condensed consolidated financial statements from amounts previously reported. We have evaluated the materiality of these misstatements based on an analysis of quantitative and qualitative factors and concluded they were not material to the prior period financial statements, individually or in aggregate.

The following table provides the impact of the correction on our consolidated balance sheet as of June 30, 2021, as presented below (in thousands):

As of June 30, 2021
As Previously ReportedAdjustmentsAs Corrected
Accrued expenses and other liabilities 317,951 5,626 323,577 
Total liabilities2,285,814 5,626 2,291,440 
Additional paid in capital3,462,762 4,474 3,467,236 
Accumulated deficit(888,381)(10,104)(898,485)
Accumulated other comprehensive income 6,769 4 6,773 
Total stockholders’ equity 2,581,153 (5,626)2,575,527 

Significant Accounting Policies

Except for the addition of policies described below for marketable securities, there were no material changes to our significant accounting policies as disclosed in Note 2. Summary of Significant Accounting Policies
12

Table of Contents
of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, which was filed with the SEC on September 17, 2021.

Marketable Securities

During the three months ended September 30, 2021, we purchased certain investments in marketable debt securities which are accounted for under ASC Topic 320, “Investments - Debt Securities” (“ASC 320”). We have classified these investments as available for sale, as defined within ASC 320. These investments are held at fair value with changes in fair value recorded in unrealized gain (loss) on securities available for sale, net within other comprehensive income (loss). As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline in fair value which management identifies as a credit loss will be recognized as an allowance for credit losses through other (expense) income, net rather than unrealized gain (loss) on securities available for sale, net. To the extent management intends to sell or may be required to sell a security in an unrealized loss position, we 1) reverse any previously recorded allowance for credit losses with an offsetting entry to reduce the amortized cost basis of the security and 2) write-off any remaining portion of the amortized cost basis to equal its fair value, with this change recorded through other (expense) income, net.

Interest income for available for sale securities is recorded within other (expense) income, net.

Available for sale securities initially purchased with less than 90 days until maturity with quoted transaction prices in an active market are classified as cash and cash equivalents.

Refer to Note 12. Investments for additional information.

Advertising Costs

Advertising costs are expensed as incurred and are included within sales and marketing in our interim condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2021 and 2020, advertising costs totaled $18.3 million and $1.4 million, respectively.

Recently Adopted Accounting Standards

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326)” ("ASC 326"). The amendments replaced the incurred loss impairment methodology with the current expected credit loss model ("CECL"). Subsequent to the issuance of ASU 2016-13, the FASB issued several amendments to ASC 326 to clarify or improve the financial instruments credit losses standard such as codification and targeted improvements in ASUs 2018-19, 2019-04, 2019-05, 2019-11 and 2020-03.

Following the loss of our emerging growth company status in the third quarter of the prior fiscal year, we adopted ASC 326 effective July 1, 2020 using the modified retrospective approach for our loans held for investment. For the three months ended September 30, 2020, this adoption resulted in a decrease in the provision for credit losses of $11.3 million.

Convertible Debt Instruments

In August 2020, the FASB issued Accounting Standard Update (“ASU”) 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40),” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible
13

Table of Contents
instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. We early adopted the new standard effective July 1, 2021 on a modified retrospective basis. The adoption of the new standard did not have any material impact on our interim condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Interbank Offered Rate (“LIBOR”). This ASU is effective for all entities upon issuance as of March 12, 2020 through December 31, 2022. In January 2021, the FASB also issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which provides additional optional expedients and exceptions applicable to all entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. This ASU is effective for all entities upon issuance as of January 7, 2021 through December 31, 2022. We are in the process of reviewing our derivatives agreements, revolving credit agreements and loan sale agreements that utilize LIBOR as the reference rate and evaluating the impact of this new guidance. Throughout the remaining effective period for ASU 2020-04 and ASU 2021-01, we will continue to evaluate the applicable relief measures within each of these amendments and will determine any impact on our interim condensed consolidated financial statements.

3.   Interest Income

Interest income consisted of the following components (in thousands):
Three Months Ended September 30,
20212020
Interest income on unpaid principal balance$82,941 $42,502 
Amortization of discount on loans held for investment38,445 14,770 
Amortization of premiums on loans(2,737)(1,958)
Interest receivable charged-off, net of recoveries(1,347)(1,077)
Total interest income$117,302 $54,237 
We accrue interest income using the effective interest method. Interest income on a loan is accrued daily, based on the finance charge disclosed to the consumer, over the term of the loan based upon the principal outstanding. The accrual of interest on a loan is suspended if a formal dispute with the consumer involving either Affirm or the merchant of record is opened, or a loan is 120 days past due. Upon the resolution of a dispute with the consumer, the accrual of interest is resumed, and any interest that would have been earned during the disputed period is retroactively accrued. As of September 30, 2021 and June 30, 2021, the balance of loans held for investment on non-accrual status was $0.8 million and $1.1 million, respectively.

14

Table of Contents
4.   Loans Held for Investment and Allowance for Credit Losses

    Loans held for investment consisted of the following (in thousands):
September 30, 2021June 30, 2021
Unpaid principal balance$2,280,315 $2,058,863 
Accrued interest receivable16,817 15,466 
Premiums on loans held for investment7,175 7,071 
Less: Discount due to loss on loan purchase commitment(53,657)(53,177)
Less: Fair value adjustment on loans acquired through business combination(5,824)(5,903)
Total loans held for investment$2,244,826 $2,022,320 

The majority of the loans that are underwritten using our technology platform and originated by our originating bank partners are later purchased by us. We purchased loans from our originating bank partners in the amount of $2,244.2 million and $1,524.1 million during the three months ended September 30, 2021 and 2020, respectively.

These loans have a variety of lending terms as well as maturities ranging from one to sixty months. Given that our loan portfolio focuses on one product segment, point-of-sale unsecured installment loans, we evaluate the entire portfolio as a single homogeneous loan portfolio.

We closely monitor credit quality for our loan receivables to manage and evaluate our related exposure to credit risk. Credit risk management begins with initial underwriting, where loan applications are assessed against the credit underwriting policy and procedures of our originating bank partners, and continues through to full repayment of a loan. To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal historical experience, including the consumer’s prior repayment history on our platform as well as other measures. We combine these factors to establish a proprietary score as a credit quality indicator.

Our proprietary score (“ITACs”) is assigned to most loans facilitated through our technology platform, ranging from zero to 100, with 100 representing the highest credit quality and therefore the lowest likelihood of loss. The ITACs model analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to: basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes. When a consumer passes both fraud and credit policy checks, the application is assigned an ITACs score. ITACs is also used for portfolio performance monitoring. Our credit risk team closely tracks the distribution of ITACs at the portfolio level, as well as ITACs at the individual loan level to monitor for signs of a changing credit profile within the portfolio. Repayment performance within each ITACs band is also monitored to support both the integrity of the risk scoring models and to measure possible changes in consumer behavior amongst various credit tiers.

15

Table of Contents
The following table presents an analysis of the credit quality, by ITACs score, of the amortized cost basis by fiscal year of origination on loans held for investment (in thousands) as of September 30, 2021:

Amortized Costs Basis by Fiscal Year of Origination
20222021202020192018PriorTotal
96+$50,032 $5,695 $11 $ $ $ $55,738 
94 – 9696,076 74,820 819 8   171,723 
90 – 94236,342 211,078 4,191 246 2  451,859 
<90619,067 697,268 81,346 4,583 2  1,402,266 
No score(1)
79,039 58,216 9,484 1,201 273 18 148,231 
Total loan receivables$1,080,556 $1,047,077 $95,851 $6,038 $277 $18 $2,229,817 
Current period charge-offs$(29,454)$(943)$(56)$(1)$ $ $(30,454)
Current period recoveries1,200 978 839 385 267 42 3,711 
Current period net charge-offs$(28,254)$35 $783 $384 $267 $42 $(26,743)
(1)This balance represents loan receivables in new markets without sufficient data currently available for use by the Affirm scoring methodology as well as loan receivables originated by PayBright.  

Loan receivables are defined as past due if either the principal or interest have not been received within four calendars days of when they are due in accordance with the agreed upon contractual terms. The following table presents an aging analysis of the amortized cost basis on loans held for investment by delinquency status (in thousands):
September 30, 2021June 30, 2021
Non-delinquent loans$2,111,756 $1,939,976 
4 – 29 calendar days past due60,191 43,838 
30 – 59 calendar days past due26,499 17,267 
60 – 89 calendar days past due17,558 12,044 
90 – 119 calendar days past due13,813 6,759 
Total amortized cost basis$2,229,817 $2,019,884 

We maintain an allowance for credit losses at a level that we believe is appropriate to absorb probable losses inherent in our loans. The allowance for credit losses covers estimated losses for individually assessed loans and includes estimates which rely on economic conditions, forecasts, and historical loan performance. When loans are charged off, we recognize this as a charge against the allowance for credit losses. We may continue to attempt to recover amounts from the respective consumers. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. It is comprised of a specific allowance for individually assessed loans which are regularly evaluated to maintain a level adequate to absorb expected losses inherent in the loans.

16

Table of Contents
The following table details activity in the allowance for credit losses (in thousands):
Three Months Ended
September 30,
20212020
Balance at beginning of period$117,760 $95,137 
Adjustment due to adoption of new accounting standard 10,083 
Provision for credit losses61,004 29,121 
Charge-offs(30,454)(14,074)
Recoveries of charged-off receivables3,711 2,754 
Balance at end of period$152,021 $123,021 

5.   Business Combination

ShopBrain

On July 1, 2021, Affirm completed the acquisition of technology and intellectual property from Yroo, Inc. and entered into employment arrangements with certain of its employees (“the ShopBrain acquisition”). Yroo, Inc. is a data aggregation and cataloging technology company based in Canada (“ShopBrain”). The purchase price was comprised of (i) $30.0 million in cash and (ii) 151,745 shares of our Class A common stock issued to the shareholders of ShopBrain at closing.

The acquisition date fair value of the consideration transferred was approximately $40.0 million, which consisted of the following (in thousands):

Cash$30,000 
Fair value of Class A common stock transferred10,000 
Total acquisition date fair value of the consideration transferred$40,000 

The acquisition was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). The acquired identifiable intangible assets have been recorded at their estimated fair values with the excess purchase price assigned to goodwill. The goodwill was primarily attributed to future synergies from integration and the value of the assembled workforce. The goodwill is expected to be deductible for income tax purposes.

The following table summarizes the allocation of the consideration paid of approximately $40.0 million to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):


Intangible assets$9,488 
Total net assets acquired9,488 
Goodwill30,512 
Total purchase price$40,000 

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):
Fair ValueUseful Life (Years)
Developed technology$9,488 3.0

17

Table of Contents
The fair values of the intangible assets were determined by applying the replacement cost method. The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represents Level 3 measurements.

The transaction costs associated with the acquisition were approximately $0.1 million for the three months ended September 30, 2021, which are included in general and administrative expense within the interim condensed consolidated statements of operations and comprehensive loss.

Pro forma adjustments would only include the additional amortization that would have been charged assuming the intangible assets had been recorded as of July 1, 2020. Such adjustments would not be material to the interim condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2021 and 2020, respectively.


6.   Balance Sheet Components

Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, and servicing fees due from third-party loan owners. We evaluate accounts receivable estimated to be uncollectible and provide an allowance, as necessary, for doubtful accounts. This allowance was $7.1 million and $4.1 million as of September 30, 2021 and June 30, 2021, respectively.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the three months ended September 30, 2021 were as follows (in thousands):

Balance as of June 30, 2021516,515
Additions30,792
Effect of foreign currency translation(6,537)
Balance as of September 30, 2021$540,770 

Refer to Note 5. Business Combination for a description of additions to goodwill during the three months ended September 30, 2021. No impairment losses related to goodwill were recorded during the three months ended September 30, 2021 and 2020.

Intangible assets consisted of the following (in thousands):

September 30, 2021
GrossAccumulated AmortizationNetWeighted Average Remaining Useful Life
Merchant relationships$38,510 $(4,200)$34,310 4.5
Developed technology39,577 (6,166)