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Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Fair Value Measured on Recurring Basis

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 (in thousands):

						Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Money market funds						$	162,483					$	—					$	—					$	162,483
Certificates of deposit						—						16,026						—						16,026
Commercial paper						—						229,272						—						229,272
Government bonds - U.S.						—						58,541						—						58,541
Restricted cash:
Securities available for sale:
Certificate of deposit						—						300,390						—						300,390
Corporate bonds						—						368,671						—						368,671
Commercial paper						—						478,293						—						478,293
Government bonds:
Non-U.S.						—						17,955						—						17,955
U.S.						—						378,386						—						378,386
Securitization notes receivable and residual trust certificates						—						—						51,678						51,678
Total securities available for sale						—						1,543,695						51,678						1,595,373
Servicing assets						—						—						1,192						1,192
Derivative instruments						—						49,983						—						49,983
Total assets						$	162,483					$	1,897,517					$	52,870					$	2,112,870
Liabilities:
Servicing liabilities						$	—					$	—					$	2,673					$	2,673
Performance fee liability						—						—						1,710						1,710
Residual trust certificates, held by third-parties						—						—						377						377
Contingent consideration						—						—						23,348						23,348
Profit share liability						—						—						1,987						1,987
Total liabilities						$	—					$	—					$	30,095					$	30,095

The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 (in thousands):

						Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Money market funds						$	143,241					$	—					$	—					$	143,241
Restricted cash:
Securitization notes receivable and residual trust certificates						—						—						16,170						16,170
Servicing assets						—						—						2,349						2,349
Derivative instruments						—						2,880						—						2,880
Total assets						$	143,241					$	2,880					$	18,519					$	164,640
Liabilities:
Servicing liabilities						$	—					$	—					$	3,961					$	3,961
Performance fee liability						—						—						1,290						1,290
Residual trust certificates, held by third-parties						—						—						914						914
Contingent consideration						—						—						153,447						153,447
Profit share liability						—						—						2,464						2,464
Total liabilities						$	—					$	—					$	162,076					$	162,076

Schedule of Servicing Assets at Fair Value

The following table summarizes the activity related to the aggregate fair value of our servicing assets during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Servicing Assets
						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	2,349					$	2,132
Initial transfers of financial assets						2,899						2,915
Subsequent changes in fair value						(4,056)						(2,698)
Fair value at end of period						$	1,192					$	2,349

Schedule of Servicing Liabilities at Fair Value

The following table summarizes the activity related to the aggregate fair value of our servicing liabilities during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Servicing Liabilities
						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	3,961					$	1,540
Initial transfers of financial assets						15,617						8,794
Subsequent changes in fair value						(16,905)						(6,373)
Fair value at end of period						$	2,673					$	3,961

Schedule of Significant Unobservable Inputs for Level 3 Fair Value Measurement

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of servicing assets and liabilities as of June 30, 2022:

						Unobservable Input						Minimum						Maximum						Weighted Average
Servicing assets						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation (1)						0.78		%				1.85		%				1.10		%
						Net default rate						0.59		%				50.59		%				1.59		%
Servicing liabilities						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation (1)						2.13		%				2.34		%				2.21		%
						Net default rate						9.03		%				24.44		%				13.81		%

(1)Estimated cost of servicing a loan as a percentage of unpaid principal balance

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of servicing assets and liabilities as of June 30, 2021:

						Unobservable Input						Minimum						Maximum						Weighted Average
Servicing assets						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation(1)						0.70		%				0.84		%				0.81		%
						Net default rate						0.53		%				0.95		%				0.64		%
Servicing liabilities						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation(1)						1.29		%				3.70		%				2.71		%
						Net default rate						0.80		%				8.42		%				7.12		%

(1)Estimated cost of servicing a loan as a percentage of unpaid principal balance 

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the performance fee liability as of June 30, 2022:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						10.00%						10.00%						10.00%
Refund rate						4.50%						4.50%						4.50%
Default rate						1.78%						3.10%						2.42%

Level 3 fair value measurement of the performance fee liability as of June 30, 2021:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						10.00%						10.00%						10.00%
Refund rate						4.50%						4.50%						4.50%
Default rate						1.78%						2.83%						1.80%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the residual trust certificates held by third-parties as of June 30, 2022 and June 30, 2021:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						10.00%						10.00%						10.00%
Loss rate						0.75%						0.75%						0.75%
Prepayment rate						8.00%						8.00%						8.00%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the residual trust certificates as of June 30, 2022:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						3.68%						22.50%						5.37%
Loss rate						0.61%						10.95%						2.65%
Prepayment rate						5.25%						35.00%						18.48%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the residual trust certificates as of June 30, 2021:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						11.46%						11.46%						11.46%
Loss rate						0.61%						0.61%						0.61%
Prepayment rate						10.50%						10.50%						10.50%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the contingent consideration as of June 30, 2022:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						15.00%						15.00%						15.00%
Equity volatility						36.00%						139.00%						116.00%
Revenue volatility						11.00%						144.00%						34.00%

Level 3 fair value measurement of the contingent consideration as of June 30, 2021:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						12.00%						12.00%						12.00%
Equity volatility						37.00%						97.00%						62.00%
Revenue volatility						8.00%						98.00%						37.00%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of June 30, 2022:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						30.00%						30.00%						30.00%
Program profitability						1.25%						3.54%						1.28%

The following table presents quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of June 30, 2021:

Unobservable Input						Minimum						Maximum						Weighted Average
Discount rate						30.00%						30.00%						30.00%
Program profitability						1.79%						3.75%						3.75%

Schedule of Sensitivity Analysis of Fair Value, Servicing Assets and Liabilities

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the servicing assets and liabilities given hypothetical changes in significant unobservable inputs (in thousands):

						June 30, 2022						June 30, 2021
Servicing assets
Net default rate assumption:
Net default rate increase of 25%						$	11					$	(7)
Net default rate increase of 50%						$	22					$	(15)
Adequate compensation assumption:
Adequate compensation increase of 25%						$	(3,513)					$	(2,006)
Adequate compensation increase of 50%						$	(7,026)					$	(4,011)
Discount rate assumption:
Discount rate increase of 25%						$	(57)					$	(4)
Discount rate increase of 50%						$	(109)					$	(1)
Servicing liabilities
Net default rate assumption:
Net default rate increase of 25%						$	(10)					$	(40)
Net default rate increase of 50%						$	(21)					$	(61)
Adequate compensation assumption:
Adequate compensation increase of 25%						$	6,139					$	3,060
Adequate compensation increase of 50%						$	12,278					$	6,119
Discount rate assumption:
Discount rate increase of 25%						$	(50)					$	(137)
Discount rate increase of 50%						$	(98)					$	(263)

Summary of Activity for Liabilities With Significant Unobservable Inputs for Fair Value

The following table summarizes the activity related to the fair value of the performance fee liability during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Performance Fee Liability
						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	1,290					$	875
Purchases of loans						1,764						1,372
Settlements Paid						(418)						—
Subsequent changes in fair value						(926)						(957)
Fair value at end of period						$	1,710					$	1,290

The following table summarizes the activity related to the fair value of the residual trust certificates held by third-parties during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	914					$	—
Initial transfer of financial assets						—						1,622
Repayments						(908)						(508)
Subsequent changes in fair value						371						(200)
Fair value at end of period						$	377					$	914

The following table summarizes the activity related to the fair value of the notes receivable and residual trust certificates during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	16,170					$	—
Additions						54,998						16,144
Cash received (due to payments or sales)						(19,559)						—
Change in unrealized gain (loss)						(509)						29
Accrued interest						595						—
Reversal of (impairment on) securities available for sale						(17)						(3)
Fair value at end of period						$	51,678					$	16,170

The following table summarizes the activity related to the fair value of the PayBright contingent consideration during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	153,447					$	—
Subsequent changes in fair value						(89,313)						150,135
Fair value of shares released from escrow						(32,110)						—
Effect of foreign currency translation						(8,676)						3,312
Fair value at end of period						$	23,348					$	153,447

The following table summarizes the activity related to the fair value of the profit share liability during the years ended June 30, 2022 and June 30, 2021 (in thousands):

						Year ended June 30,
						2022						2021
Fair value at beginning of period						$	2,464					$	—
Facilitation of loans						5,955						4,206
Actual performance						(7,642)						(1,661)
Subsequent changes in fair value						1,210						(81)
Fair value at end of period						$	1,987					$	2,464

Schedule Sensitivity Analysis of Fair Value, Residual Trust Certificates

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the securitization residual certificates held by third-party investor(s) given hypothetical changes in significant unobservable inputs (in thousands):

						June 30, 2022						June 30, 2021
Discount rate assumption:
Discount rate increase of 25%						$	(6)					$	(21)
Discount rate increase of 50%						$	(11)					$	(42)
Loss rate assumption:
Loss rate increase of 25%						$	(8)					$	(28)
Loss rate increase of 50%						$	(16)					$	(56)
Prepayment rate assumption:
Prepayment rate decrease of 25%						$	(2)					$	(10)
Prepayment rate decrease of 50%						$	(3)					$	(20)

The following table summarizes the effect that adverse changes in estimates would have on the fair value of the securitization residual trust certificates given hypothetical changes in significant unobservable inputs (in thousands):

						Year ended June 30,
						2022						2021
Discount rate assumption:
Discount rate increase of 25%						$	(1,410)					$	(22)
Discount rate increase of 50%						$	(2,295)					$	(44)
Loss rate assumption:
Loss rate increase of 25%						$	(729)					$	(24)
Loss rate increase of 50%						$	(964)					$	(48)
Prepayment rate assumption:
Prepayment rate decrease of 25%						$	(545)					$	(13)
Prepayment rate decrease of 50%						$	(519)					$	(27)

Fair Value Hierarchy for Financial Assets and Liabilities Not Recorded at Fair Value

The following table presents the fair value hierarchy for financial assets and liabilities not recorded at fair value as of June 30, 2022 (in thousands):

						Carrying Amount						Level 1						Level 2						Level 3						Balance at Fair Value
Assets:
Loans held for sale						$	2,670					$	—					$	2,670					$	—					$	2,670
Loans held for investment, net						2,348,169						—						—						2,412,871						2,412,871
Other assets						12,661						—						12,661						—						12,661
Total assets						$	2,363,500					$	—					$	15,331					$	2,412,871					$	2,428,202
Liabilities:
Convertible senior notes, net (1)						$	1,706,668					$	—					$	984,285					$	—					$	984,285
Notes issued by securitization trusts						1,627,580						—						—						1,529,401						1,529,401
Funding debt(2)						683,395						—						—						683,388						683,388
Total liabilities						$	4,017,643					$	—					$	984,285					$	2,212,789					$	3,197,074

(1)The estimated fair value of the convertible senior notes is determined based on a market approach, using the estimated or actual bids and offers of the notes in an over-the-counter market on the last business day of the period.

(2)As of June 30, 2022, debt issuance costs in the amount of $10.8 million, was included within funding debt.

The following table presents the fair value hierarchy for financial assets and liabilities not recorded at fair value as of June 30, 2021 (in thousands):

						Carrying Amount						Level 1						Level 2						Level 3						Balance at Fair Value
Assets:
Loans held for sale						$	13,030					$	—					$	13,030					$	—					$	13,030
Loans held for investment, net						1,904,560						—						—						1,883,364						1,883,364
Accounts receivable, net						91,575						—						91,575						—						91,575
Other assets						171,250						—						171,250						—						171,250
Total assets						$	2,180,415					$	—					$	275,855					$	1,883,364					$	2,159,219
Liabilities:
Accounts payable						$	57,758					$	—					$	57,758					$	—					$	57,758
Payable to third-party loan owners						50,079						—						50,079						—						50,079
Accrued interest payable						2,751						—						2,751						—						2,751
Accrued expenses and other liabilities						161,502						—						159,387						2,115						161,502
Notes issued by securitization trusts						1,176,673						—						—						1,184,663						1,184,663
Funding debt						689,356						—						—						689,356						689,356
Total liabilities						$	2,138,119					$	—					$	269,975					$	1,876,134					$	2,146,109

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of information about fair value of asset and liability not measured at fair value.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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Tabular disclosure of a sensitivity analysis or stress test showing the hypothetical effect on the fair value of the transferor's interests in transferred financial assets (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported, independently determined from any change in another key assumption, and a description of the objectives, methodology, and limitations of the sensitivity analysis or stress test.

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Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes.

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Tabular disclosure of the activity in the balance of servicing liabilities subsequently measured at fair value (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (through assumptions of servicing obligations, and servicing obligations that result from transfers of financial assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value and a description of those changes, and other changes that affect the balance and a description of those changes.

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