Affirm Holdings, Inc.AFRM
Affirm Holdings, Inc. Revenue Disclosure
Revenue
The following table presents our revenue disaggregated by revenue source (in thousands):
| June 30, 2025 | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
| Merchant network revenue | $ | 882,658 | 674,607 | 507,600 | ||||||||||||||||
| Card network revenue | 231,308 | 151,401 | 119,338 | |||||||||||||||||
| Interest income | 1,608,221 | 1,204,355 | 685,217 | |||||||||||||||||
| Gain on sales of loans | 381,622 | 197,153 | 188,341 | |||||||||||||||||
| Servicing income | 120,602 | 95,483 | 87,489 | |||||||||||||||||
| Total revenue, net | $ | 3,224,412 | $ | 2,322,999 | $ | 1,587,985 | ||||||||||||||
Merchant Network Revenue — Revenue from Contracts with Customers
Merchant network revenue primarily consists of merchant fees. Merchant partners (or integrated merchants) are generally charged a fee based on gross merchandise volume (“GMV”) processed through the Affirm platform. The fees vary depending on the individual arrangement between us and each merchant and on the terms of the product offering. The fee is recognized at the point in time the merchant successfully confirms the transaction, which is when the terms of the executed merchant agreement are fulfilled.
Our contracts with merchants are defined at the transaction level and do not extend beyond the service already provided (i.e., each transaction represents a separate contract). The fees collected from merchants for each transaction are determined as a percentage of the value of the goods purchased by the consumer from merchants and consider a number of factors including the end consumer’s credit risk and financing term. We do not have any capitalized contract costs, and do not carry any material contract balances.
Our service comprises a single performance obligation to merchants to facilitate transactions with consumers. From time to time, we offer merchants incentives to promote our platform to their customers, such as fee reductions or rebates. These amounts are recorded as a reduction to merchant network revenue.
We may originate certain loans via our wholly-owned subsidiaries, with zero or below market interest rates. In these instances, the par value of the loans originated is in excess of the fair market value of such loans, resulting in a loss on loan origination, which we record as a reduction to merchant network revenue. In certain cases, the losses incurred on loans originated for a merchant may exceed the total merchant network revenue earned on those loans. We record the excess loss amounts as a sales and marketing expense.
A portion of merchant network revenue relates to affiliate network revenue, which is generated when a user makes a purchase on a merchant’s website after being directed from an advertisement on Affirm’s website or mobile application. We earn a fixed placement fee and/or commission as a percentage of the associated sale. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the sale occurs. For the years ended June 30, 2025, 2024, and 2023 affiliate network revenue was $123.4 million, $95.8 million, and $68.7 million, respectively.
For the years ended June 30, 2025, 2024, and 2023, there were no merchants that exceeded 10% of total revenue.
Card Network Revenue — Revenue from Contracts with Customers
We have agreements with card-issuing partners to facilitate the issuance of physical and one-time-use virtual cards to be used by consumers at checkout. Prior to purchase, consumers can apply at Affirm.com or via the Affirm App and, upon approval, use a physical or virtual card to complete their purchase online or in-store. Eligible consumers can also use the Affirm Card, a card issued by a card-issuing partner to pay in full or pay later, by using a unique post-purchase feature that allows them to instantly apply for an installment loan for any eligible debit transaction. Where applicable, our originating bank partner, or wholly-owned subsidiaries, then originates a loan to the consumer after the transaction is confirmed by the merchant. The merchant is charged interchange fees for each successful card transaction, and a portion of this revenue is shared with us by our card-issuing partners.
Merchants may also elect to utilize our agreement with card-issuing partners as a means of integrating Affirm services. Similarly, for these arrangements with integrated merchants, the merchant is charged interchange fees for each successful card transaction and a portion of this revenue is shared with us. From time to time, we offer certain integrated merchants promotional incentives to promote our platform to their customers, such as rebates of interchange fees incurred by the merchant. These amounts are recorded as a reduction of card network revenue.
Our contracts with our card-issuing partners are defined at the transaction level and do not extend beyond the service already provided. The revenue collected from card-issuing partners for each transaction are determined as a percentage of the interchange fees charged on transactions facilitated on the payment processor network, and revenue is recognized at the point in time the transaction is completed successfully. The amounts collected are presented in revenue, net of associated transaction-related processing fees paid to our card-issuing partners. We have concluded that the revenue collected does not give rise to a future material right because the pricing of each transaction does not depend on the volume of prior successful transactions. We do not have any capitalized contract costs, and do not carry any material contract balances.
Our service comprises a single performance obligation to the card-issuing partner to facilitate transactions with consumers.
A portion of card network revenue relates to incentive payments from card network partners, which we are eligible to receive for reaching certain cumulative volume targets on program cards issued by our card-issuing partners. We earn incentive revenue as a percentage of each associated transaction and estimate the applicable percentage based on observed cumulative volume on program cards. Revenue is recognized at the point in time when the performance obligation has been fulfilled, which is when the transaction is completed successfully.
Interest Income
Interest income consisted of the following components (in thousands):
| June 30, 2025 | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
Contractual interest income on unpaid principal balance (1) | $ | 1,423,439 | 1,043,019 | 561,192 | ||||||||||||||||
| Amortization of discount on loans | 254,964 | 204,654 | 158,703 | |||||||||||||||||
| Amortization of premiums on loans | (21,165) | (16,945) | (17,628) | |||||||||||||||||
Interest receivable charged-off, net of recoveries (2) | (49,016) | (26,373) | (17,050) | |||||||||||||||||
| Total interest income | $ | 1,608,221 | $ | 1,204,355 | $ | 685,217 | ||||||||||||||
(1)Contractual interest income on unpaid principal balance, for the year ended June 30, 2025, includes a reduction of $10.9 million and $15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $375.9 million and $369.7 million for the
same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.
(2)Interest receivable charged-off, net of recoveries, for the year ended June 30, 2025, includes a reduction of $10.9 million and $15.8 million, for the three months ended December 31, 2024, and March 31, 2025, respectively, which were previously reported as $25.8 million and $27.5 million for the same periods. The amounts for the year ended June 30, 2025 are unaffected, and the differences are not material to the current or prior period financial statements.
We accrue interest income using the effective interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan. 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 June 30, 2025, 2024, and 2023, the balance of loans held for investment on non-accrual status was $6.2 million, $2.6 million, and $1.8 million, respectively.
The account is charged-off in the period if the account becomes 120 days past due or meets other charge-off policy requirements. Past due status is based on the contractual terms of the loans. Previously recognized interest receivable from charged-off loans that is accrued but not collected from the consumer is charged-off.
Gain on Sales of Loans
We sell certain loans we originate or purchase from our originating bank partners directly to third-party investors or to securitizations. We recognize a gain or loss on sale of loans sold to third parties or to unconsolidated securitizations by calculating the difference between the proceeds received and the carrying value of the loan. This amount is adjusted for the initial recognition of any assets or liabilities incurred upon sale. These generally include a net servicing asset or liability in connection with our ongoing obligation to continue to service the loans and a liability in connection with our loan repurchase obligation for loans that do not meet certain contractual requirements and such information about the loan was unknown at the time of sale.
Additionally, we recognize a risk sharing asset or liability in certain arrangements where payments are made or received based on the actual versus expected loan performance, as contractually agreed upon with the third party.
Refer to Note 10. Securitization and Variable Interest Entities for further discussion on transfers of loan receivables and Note 13. Fair Value of Financial Assets and Liabilities for further discussion of risk sharing arrangements.
Servicing Income
Servicing income includes contractual fees specified in our servicing agreements with third-party loan owners and unconsolidated securitizations that are earned from providing professional services to manage loan portfolios on their behalf. The servicing fee is calculated on a daily basis by multiplying a set fee percentage (as outlined in the executed agreements with third-party loan owners) by the outstanding loan principal balance. Servicing income also includes fair value adjustments for servicing assets and servicing liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 28, 2025 | Showing above |
| 2024 | Aug 28, 2024 | |
| 2023 | Aug 25, 2023 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.