Affirm Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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10. Investments
- Investments
Marketable Securities
Marketable securities include certain investments classified as cash and cash equivalents and securities available for sale, at fair value, and consist of the following as of each date presented within the interim condensed consolidated balance sheets (in thousands):
| September 30, 2024 | June 30, 2024 | |
|---|---|---|
| Cash and cash equivalents: | ||
| Money market funds | $173,988 | $63,389 |
| Commercial paper | 13,815 | 57,964 |
| Government bonds - US | — | 3,492 |
| Securities available for sale: | ||
| Certificates of deposit | 26,138 | 34,473 |
| Corporate bonds | 247,299 | 242,660 |
| Commercial paper | 198,358 | 239,882 |
| Agency bonds | 13,410 | 15,159 |
| Municipal bonds | 5,187 | 3,953 |
| Government bonds | ||
| Non-US | 3,125 | 5,275 |
| US (1) | 541,242 | 538,556 |
| Securitization notes receivable and certificates (2) | 38,926 | 51,670 |
| Total marketable securities: | $1,261,488 | $1,256,473 |
(1)As of September 30, 2024 and June 30, 2024, these securities include $55.2 million and $54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.
(2)These securities include $35.5 million and $46.7 million as of September 30, 2024 and June 30, 2024, respectively, pledged as collateral in connection with sale and repurchase agreements as discussed within Note 8. Debt.
Securities Available for Sale, at Fair Value
The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of securities available for sale as of September 30, 2024 and June 30, 2024 were as follows (in thousands):
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |
|---|---|---|---|---|---|
| Certificates of deposit | $26,080 | $58 | $— | $— | $26,138 |
| Corporate bonds | 245,675 | 1,877 | (253) | — | 247,299 |
| Commercial paper (1) | 211,941 | 325 | (93) | — | 212,173 |
| Agency bonds | 13,372 | 38 | — | — | 13,410 |
| Municipal bonds | 5,147 | 40 | — | — | 5,187 |
| Government bonds | |||||
| Non-US | 3,129 | — | (4) | — | 3,125 |
| US (1) (2) | 540,265 | 1,228 | (251) | — | 541,242 |
| Securitization notes receivable and certificates (3) | 39,387 | 654 | (77) | (1,038) | 38,926 |
| Total securities available for sale | $1,084,996 | $4,220 | $(678) | $(1,038) | $1,087,500 |
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |
|---|---|---|---|---|---|
| Certificates of deposit | $34,468 | $9 | $(4) | $— | $34,473 |
| Corporate bonds | 243,639 | 95 | (1,074) | — | 242,660 |
| Commercial paper (1) | 298,005 | 7 | (166) | — | 297,846 |
| Agency bonds | 15,283 | — | (124) | — | 15,159 |
| Municipal bonds | 3,943 | 10 | — | — | 3,953 |
| Government bonds | |||||
| Non-US | 5,310 | — | (35) | — | 5,275 |
| US (1) (2) | 543,421 | 33 | (1,406) | — | 542,048 |
| Securitization notes receivable and certificates (3) | 51,726 | 699 | (91) | (664) | 51,670 |
| Total securities available for sale | $1,195,795 | $853 | $(2,900) | $(664) | $1,193,084 |
(1)Commercial paper and US government bonds include $13.8 million and $61.5 million as of September 30, 2024 and June 30, 2024, respectively, classified as cash and cash equivalents within the interim condensed consolidated balance sheets.
(2)As of September 30, 2024 and June 30, 2024, these securities include $55.2 million and $54.1 million, respectively, pledged as collateral in connection with our standby letters of credit for office leases and certain commercial agreements.
(3)Approximately $35.5 million and $46.7 million as of September 30, 2024 and June 30, 2024, respectively, of these securities have been pledged as collateral in connection with sale and repurchase agreements discussed within Note 8. Debt.
As of September 30, 2024 and June 30, 2024, there were no material reversals of prior period allowance for credit losses recognized for available for sale securities.
A summary of securities available for sale with unrealized losses for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time that individual securities have been in a continuous loss position as of September 30, 2024 and June 30, 2024, are as follows (in thousands):
| Less than or equal to 1 year | Greater than 1 year | Total | ||||
|---|---|---|---|---|---|---|
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |
| Corporate bonds | $12,374 | $(8) | $43,923 | $(245) | $56,297 | $(253) |
| Commercial paper | 5,882 | (93) | — | — | 5,882 | (93) |
| Government bonds | ||||||
| Non-US | 3,125 | (4) | — | — | 3,125 | (4) |
| US | 12,155 | (5) | 49,088 | (246) | 61,243 | (251) |
| Total securities available for sale (1) | $33,536 | $(110) | $93,011 | $(491) | $126,547 | $(601) |
| Less than or equal to 1 year · Greater than 1 year · Total | ||||||||
|---|---|---|---|---|---|---|---|---|
| Fair Value · Unrealized Losses · Fair Value · Unrealized Losses · Fair Value · Unrealized Losses | ||||||||
| Certificates of deposit | $9,647 | $(4) | $— | $— | $9,647 | $(4) | ||
| Corporate bonds | 119,353 | (252) | 57,846 | (822) | 177,199 | (1,074) | ||
| Commercial paper | 245,536 | (166) | 245,536 | (166) | ||||
| Agency bonds | 10,417 | (41) | 4,743 | (83) | 15,160 | (124) | ||
| Government bonds | ||||||||
| Non-US | — | — | 5,275 | (35) | 5,275 | (35) | ||
| US | 251,113 | (185) | 123,633 | (1,221) | 374,746 | (1,406) | ||
| Total securities available for sale (1) | $636,066 | $(648) | $191,497 | $(2,161) | $827,563 | $(2,809) | ||
(1)The number of positions with unrealized losses for which an allowance for credit losses has not been recorded totaled 19 and 137 as of September 30, 2024 and June 30, 2024, respectively.
The length of time to contractual maturities of securities available for sale as of September 30, 2024 and June 30, 2024 were as follows (in thousands):
| Within 1 year | Greater than 1 year, less than or equal to 5 years | Total | ||||
|---|---|---|---|---|---|---|
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |
| Certificates of deposit | $26,080 | $26,138 | $— | $— | $26,080 | $26,138 |
| Corporate bonds | 127,159 | 127,223 | 118,516 | 120,076 | 245,675 | 247,299 |
| Commercial paper (1) | 211,941 | 212,173 | — | — | 211,941 | 212,173 |
| Agency bonds | 8,521 | 8,556 | 4,851 | 4,854 | 13,372 | 13,410 |
| Municipal bonds | — | — | 5,147 | 5,187 | 5,147 | 5,187 |
| Government bonds | ||||||
| Non-US | 3,129 | 3,125 | — | — | 3,129 | 3,125 |
| US (1) | 463,977 | 464,161 | 76,288 | 77,081 | 540,265 | 541,242 |
| Securitization notes receivable and certificates (2) | — | — | 39,387 | 38,926 | 39,387 | 38,926 |
| Total securities available for sale | $840,807 | $841,376 | $244,189 | $246,124 | $1,084,996 | $1,087,500 |
| Within 1 year | Greater than 1 year, less than or equal to 5 years | Total | ||||
|---|---|---|---|---|---|---|
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |
| Certificates of deposit | $34,468 | $34,473 | $— | $— | $34,468 | $34,473 |
| Corporate bonds | 118,547 | 118,039 | 125,092 | 124,621 | 243,639 | 242,660 |
| Commercial paper (1) | 298,005 | 297,846 | — | — | 298,005 | 297,846 |
| Agency bonds | 10,457 | 10,416 | 4,826 | 4,743 | 15,283 | 15,159 |
| Municipal bonds | — | — | 3,943 | 3,953 | 3,943 | 3,953 |
| Government bonds | ||||||
| Non-US | 2,150 | 2,150 | 3,160 | 3,125 | 5,310 | 5,275 |
| US | 465,338 | 464,298 | 78,083 | 77,750 | 543,421 | 542,048 |
| Securitization notes receivable and certificates (2) | — | — | 51,726 | 51,670 | 51,726 | 51,670 |
| Total securities available for sale | $928,965 | $927,222 | $266,830 | $265,862 | $1,195,795 | $1,193,084 |
(1)Commercial paper and US government bonds include $13.8 million and $61.5 million as of September 30, 2024 and June 30, 2024, respectively, classified as cash and cash equivalents within the interim condensed consolidated balance sheets.
(2)Based on weighted average life of expected cash flows as of September 30, 2024 and June 30, 2024.
Gross proceeds from matured or redeemed securities were $303.4 million and $381.8 million for the three months ended September 30, 2024 and 2023, respectively.
For available for sale securities realized gains and losses from portfolio sales were not material for the three months ended September 30, 2024 and 2023.
Non-marketable Equity Securities
Equity investments without a readily determinable fair value held at cost were $35.8 million and $37.8 million as of September 30, 2024 and June 30, 2024, respectively, and are included in other assets within the interim condensed consolidated balance sheets.
During the three months ended September 30, 2024, we recognized an impairment of $3.0 million within other income, net in the interim consolidated statements of operations and comprehensive loss in connection with one of our non-marketable equity security investments. The fair value of the investment was determined utilizing a methodology based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements. We did not record any impairment during the three months ended September 30, 2023.
There have been no upward or downward adjustments due to observable changes in orderly transactions for the three months ended September 30, 2024 and 2023.
Fixed Term Deposits
Fixed term deposits were $21.1 million and $35.2 million as of September 30, 2024 and June 30, 2024, respectively, consist of interest bearing deposits held at financial institutions with an original maturities greater than three months but no more than twelve months. These deposits are carried at cost, which approximates fair value, and are included in other assets within the interim condensed consolidated balance sheets.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.