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Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Jun. 30, 2023

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, 2023 and June 30, 2022 (in thousands):

						June 30, 2023
						Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Money market funds						$	97,129					$	—					$	—					$	97,129
Commercial paper						—						54,402						—						54,402
Agency bonds						—						60,865						—						60,865
Securities, available for sale:
Certificates of deposit						—						97,224						—						97,224
Corporate bonds						—						256,772						—						256,772
Commercial paper						—						266,193						—						266,193
Agency bonds						—						84,276						—						84,276
Government bonds:
Non-U.S.						—						9,151						—						9,151
U.S.						—						441,096						—						441,096
Securitization notes receivable and residual trust certificates						—						—						18,913						18,913
Other						—						—						1,028						1,028
Servicing assets						—						—						880						880
Derivative instruments						—						50,545						—						50,545
Total assets						$	97,129					$	1,320,524					$	20,821					$	1,438,474
Liabilities:
Servicing liabilities						$	—					$	—					$	1,392					$	1,392
Performance fee liability						—						—						1,581						1,581
Residual trust certificates, held by third-parties						—						—						125						125
Profit share liability						—						—						1,832						1,832
Total liabilities						$	—					$	—					$	4,930					$	4,930

						June 30, 2022
						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
Securities, available for sale:
Certificates 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
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

Schedule of Servicing Assets at Fair Value

The following table summarizes the activity related to the aggregate fair value of our servicing assets (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	1,192					$	2,349
Initial transfers of financial assets						433						2,899
Subsequent changes in fair value						(745)						(4,056)
Fair value at end of period						$	880					$	1,192

Schedule of Servicing Liabilities at Fair Value

The following table summarizes the activity related to the aggregate fair value of our servicing liabilities (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	2,673					$	3,961
Initial transfers of financial assets						7,723						15,617
Subsequent changes in fair value						(9,004)						(16,905)
Fair value at end of period						$	1,392					$	2,673

Schedule of Significant Unobservable Inputs for Level 3 Fair Value Measurement

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of servicing assets and liabilities as of June 30, 2023 and June 30, 2022:

												June 30, 2023
						Unobservable Input						Minimum						Maximum						Weighted Average (3)
Servicing assets						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation (1)						0.92		%				2.31		%				0.93		%
						Gross default rate (2)						2.15		%				11.20		%				3.36		%
Servicing liabilities						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation (1)						0.92		%				2.31		%				2.27		%
						Gross default rate (2)						9.50		%				21.54		%				13.64		%

												June 30, 2022
						Unobservable Input						Minimum						Maximum						Weighted Average (3)
Servicing assets						Discount rate						30.00		%				30.00		%				30.00		%
						Adequate compensation (1)						0.78		%				1.85		%				1.10		%
						Gross default rate (2)						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		%
						Gross default rate (2)						9.03		%				24.44		%				13.81		%

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

(2)Annualized estimated gross charge-offs as a percentage of unpaid principal balance

(3)Unobservable inputs were weighted by relative fair value

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the performance fee liability as of June 30, 2023 and June 30, 2022:

						June 30, 2023
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						10.00%						10.00%						10.00%
Refund rate						4.50%						4.50%						4.50%
Default rate						1.79%						3.34%						2.86%

						June 30, 2022
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						10.00%						10.00%						10.00%
Refund rate						4.50%						4.50%						4.50%
Default rate						1.78%						3.10%						2.42%

(1)Unobservable inputs were weighted by remaining principal balances 

The following tables present 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, 2023 and June 30, 2022:

						June 30, 2023
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						10.00%						10.00%						10.00%
Loss rate						0.92%						0.92%						0.92%
Prepayment rate						7.70%						7.70%						7.70%

						June 30, 2022
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						10.00%						10.00%						10.00%
Loss rate						0.75%						0.75%						0.75%
Prepayment rate						8.00%						8.00%						8.00%

(1)Unobservable inputs were weighted by relative fair value

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, 2023 and June 30, 2022:

						June 30, 2023
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						5.72%						29.84%						7.30%
Loss rate						1.25%						14.96%						3.02%
Prepayment rate						5.90%						29.90%						18.10%

						June 30, 2022
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						3.68%						22.50%						5.37%
Loss rate						0.61%						10.95%						2.65%
Prepayment rate						5.25%						35.00%						18.48%

(1)Unobservable inputs were weighted by relative fair value

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the profit sharing liability as of June 30, 2023 and June 30, 2022:

						June 30, 2023
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						30.00%						30.00%						30.00%
Program profitability						1.13%						1.13%						1.13%

						June 30, 2022
Unobservable Input						Minimum						Maximum						Weighted Average (1)
Discount rate						30.00%						30.00%						30.00%
Program profitability						1.25%						3.54%						1.28%

(1)Unobservable inputs were weighted by relative fair value

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, 2023						June 30, 2022
Servicing assets
Gross default rate assumption:
Gross default rate increase of 25%						$	—					$	11
Gross default rate increase of 50%						$	(1)					$	22
Adequate compensation assumption:
Adequate compensation increase of 10%						$	(382)					$	—
Adequate compensation increase of 20%						$	(764)					$	—
Adequate compensation increase of 25%						$	—					$	(3,513)
Adequate compensation increase of 50%						$	—					$	(7,026)
Discount rate assumption:
Discount rate increase of 25%						$	(29)					$	(57)
Discount rate increase of 50%						$	(55)					$	(109)
Servicing liabilities
Gross default rate assumption:
Gross default rate increase of 25%						$	(9)					$	(10)
Gross default rate increase of 50%						$	(19)					$	(21)
Adequate compensation assumption:
Adequate compensation increase of 10%						$	2,798					$	—
Adequate compensation increase of 20%						$	5,597					$	—
Adequate compensation increase of 25%						$	—					$	6,139
Adequate compensation increase of 50%						$	—					$	12,278
Discount rate assumption:
Discount rate increase of 25%						$	(19)					$	(50)
Discount rate increase of 50%						$	(38)					$	(98)

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 (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	1,710					$	1,290
Purchases of loans						1,758						1,764
Settlements paid						(2,031)						(418)
Subsequent changes in fair value						144						(926)
Fair value at end of period						$	1,581					$	1,710

The following table summarizes the activity related to the fair value of the residual trust certificates held by third-parties (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	377					$	914
Repayments						(306)						(908)
Subsequent changes in fair value						54						371
Fair value at end of period						$	125					$	377

The following table summarizes the activity related to the fair value of the notes receivable and residual trust certificates (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	51,678					$	16,170
Additions						—						54,998
Cash received (due to payments or sales)						(33,544)						(19,559)
Change in unrealized gain (loss)						6						(509)
Accrued interest						1,205						595
Reversal of (impairment on) securities available for sale						(432)						(17)
Fair value at end of period						$	18,913					$	51,678

The following table summarizes the activity related to the fair value of the PayBright contingent consideration (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	23,348					$	153,447
Subsequent changes in fair value						(8,172)						(89,313)
Fair value of shares released from escrow						(13,674)						(32,110)
Effect of foreign currency translation						(1,502)						(8,676)
Fair value at end of period						$	—					$	23,348

The following table summarizes the activity related to the fair value of the profit share liability (in thousands):

						Year ended June 30,
						2023						2022
Fair value at beginning of period						$	1,987					$	2,464
Facilitation of loans						5,792						5,955
Actual performance						(7,009)						(7,642)
Subsequent changes in fair value						1,062						1,210
Fair value at end of period						$	1,832					$	1,987

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 trust certificates given hypothetical changes in significant unobservable inputs (in thousands):

						Year ended June 30,
						2023						2022
Discount rate assumption:
Discount rate increase of 25%						$	(218)					$	(1,410)
Discount rate increase of 50%						$	(429)					$	(2,295)
Loss rate assumption:
Loss rate increase of 25%						$	(165)					$	(729)
Loss rate increase of 50%						$	(243)					$	(964)
Prepayment rate assumption:
Prepayment rate decrease of 25%						$	(30)					$	(545)
Prepayment rate decrease of 50%						$	(59)					$	(519)

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

The following table presents the fair value and our assessment of the classification of this measurement within the fair value hierarchy for financial assets and liabilities held at amortized cost as of June 30, 2023 and June 30, 2022 (in thousands):

						June 30, 2023
						Carrying Amount						Level 1						Level 2						Level 3						Balance at Fair Value
Assets:
Loans held for sale						$	76					$	—					$	76					$	—					$	76
Loans held for investment, net						4,198,431						—						—						4,397,931						4,397,931
Other assets						9,325						—						9,325						—						9,325
Total assets						$	4,207,832					$	—					$	9,401					$	4,397,931					$	4,407,332
Liabilities:
Convertible senior notes, net (1)						$	1,414,208					$	—					$	1,053,866					$	—					$	1,053,866
Notes issued by securitization trusts						2,165,577						—						—						1,748,772						1,748,772
Funding debt (2)						1,775,698						—						—						1,777,635						1,777,635
Total liabilities						$	5,355,483					$	—					$	1,053,866					$	3,526,407					$	4,580,273

						June 30, 2022
						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, 2023 and June 30, 2022, debt issuance costs in the amount of $10.9 million and $10.8 million was included within funding debt.

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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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