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Sale of Instacash Advances | 3 Months Ended
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Jul. 04, 2025
Receivables [Abstract] |
Sale of Instacash Advances | Sale of Instacash Advances Instacash Advance Product Overview Instacash Advances are our non-recourse earned wage access (EWA) product that provides customers with early access to their anticipated income deposits. Customers who link a RoarMoney or external bank account can access Instacash Advances at any time during a regular deposit period, up to an approved limit. This product gives customers financial flexibility to address short-term cash needs. Instacash Advance eligibility is based on verification of the customer’s identity, the linked bank account and identification of recurring income deposits. Repayments are made via pre-authorized bank debits, which customers may cancel without penalty, modify, defer, or reschedule within allowable limits. Customers must be current on Instacash Advance repayments in order to access new ones. Instacash Advances do not bear interest or mandatory fees. There are no fees for standard fund delivery, although expedited delivery is available for an optional fee (Turbo Fee). Customers may also leave an optional tip (Tip) for use of the service. Accounting for Instacash Advances Instacash Advances are not loans. The customer has no contractual obligation to repay an Instacash Advance although the customer must be current on Instacash Advance repayments to request another Instacash Advance. At the point of Instacash Advance origination, the customer requests an available Instacash Advance amount, decides whether to incur an optional Turbo Fee and leave a Tip, confirms the scheduled repayment date and authorizes automatic debit repayment. In the absence of directly applicable authoritative guidance, although Instacash Advances do not meet the U.S. GAAP definition of financial assets, we believe that financial asset accounting is the most relevant for financial reporting purposes, as there is a history of customers repaying the amount advanced. We originate Instacash Advances with an intent to immediately sell, and sales of Instacash Advances are accounted for as sales under ASC 860, Transfers and Servicing (ASC 860), when all required conditions are met, including legal isolation of the transferred assets, no constraints on the transferee’s ability to pledge or exchange the assets, and no effective control over the assets. Instacash Advances are sold pursuant to a Master Receivables Purchase Agreement (the Purchase Agreement) with Sound Point Capital Management LP (Sound Point). The Purchase Agreement allows the purchasers to acquire, on a committed basis and subject to certain conditions and concentration limits, a majority of our eligible Instacash Advances, up to an aggregate facility limit of $175 million at any given time. The Purchase Agreement has an initial two-year term beginning on June 30, 2024, with a one-year extension option upon mutual agreement. During the three months ended July 4, 2025, we sold $823 million of Instacash Advances under the Purchase Agreement and had $8 million of unused capacity as of July 4, 2025. Optional Turbo Fees and Tips associated with Instacash Advances are excluded from the sale and are not transferred under the Purchase Agreement. Each Instacash Advance portfolio is initially priced at a fixed discount based on historical portfolio performance and loss rates. Future purchase prices are subject to adjustment based on the updated portfolio performance and changes to the applicable discount rate. Consistent with ASC 860, Instacash Advances sold under the Purchase Agreement are removed from our balance sheet. We retain the associated servicing rights and earn a market-based servicing fee. Turbo Fees and Tips associated with Instacash Advances are not transferred under the Purchase Agreement. Turbo Fees and Tips are recognized as performance is completed. Instacash Advances that have been originated and are pending sale under the Purchase Agreement are classified as held for sale and are measured at the lower of cost or fair value. During the three months ended July 4, 2025, we recognized $36 million in loss on the mark-to-market and sale of Instacash Advances, which is recorded in sales and marketing within the Condensed Consolidated Statement of Operations. If an Instacash Advance does not qualify for sale pursuant to the Purchase Agreement or if the intent to sell ceases, the Instacash Advance is reclassified to Accounts receivable, net, and carried at net realizable value. In connection with the Purchase Agreement, MoneyLion Technologies Inc. (the Servicer), a wholly owned subsidiary of ours, entered into a Servicing Agreement with Sound Point and the purchasers party thereto. Under this agreement, we are responsible for servicing the sold receivables, including collections, remittances, and reporting. We earn a fixed percentage of net collections as a servicing fee, which is recognized as income when collections are received. As of July 4, 2025, we were responsible for servicing $194 million of Instacash Advances sold under the Purchase Agreement. For the three months ended July 4, 2025, the Company recognized $12 million in servicing income, recorded in Net revenues within the Condensed Consolidated Statement of Operations. As of July 4, 2025, we have $35 million payable to Sound Point relating to the servicing activity which will be settled using restricted cash and receivables from payment processors recorded in Other current assets. Refer to Note 7 for a disaggregated breakdown of Instacash Advances, Turbo Fees and Tips, which are included in accounts receivable, net on our Condensed Consolidated Balance Sheets.

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