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Fair Value Measurements
 6 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is estimated based on a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs.
•Level 1 - Quoted prices for identical instruments in active markets that the reporting entity has the ability to access as of the measurement date.
•Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable market data.
•Level 3 - Valuations for instruments with inputs that are significant and unobservable, are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and are not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such instruments.
This hierarchy requires the use of observable market data when available. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments that are valued using NAV as a practical expedient are excluded from this hierarchy.
As of September 30, 2025 and March 31, 2025, the fair value of these investments using the NAV per share practical expedient was $211.3 million and $259.1 million, respectively. During the three months ended September 30, 2025 and 2024, a loss of $3.2 million and a gain of $8.5 million, respectively, were recognized from changes in NAV, which are recorded within the investment income (loss), net line item of our consolidated statements of comprehensive income (loss). During the six months ended September 30, 2025 and 2024, a $15.9 million loss and $19.6 million gain, respectively, was recognized from changes in NAV, which is recorded within the investment income (loss) net, line item of our consolidated statements of comprehensive income (loss).
Financial instruments on a recurring basis
The Company’s financial assets and liabilities carried at fair value on a recurring basis, including the level in the fair value hierarchy, on September 30, 2025 and March 31, 2025 are presented below.
As of September 30, 2025
(Dollars in thousands)Level 1Level 2Level 3Total
Assets:
Public equity securities$4,376 $— $— $4,376 
Debt securities available-for-sale, other— — 1,777 1,777 
Liabilities:
Warrants liability
355 10 — 365 
As of March 31, 2025
(Dollars in thousands)Level 1Level 2Level 3Total
Assets:
Public equity securities$4,065 $— $— $4,065 
Other equity interests— 5 — 5 
Debt securities available-for-sale, other— — 1,687 1,687 
Liabilities:
Warrants liability
180 47 — 227 
A reconciliation of gain (loss) on financial instruments, net for each of the periods presented herein is included in the tables below (in thousands):
Three Months Ended September 30,Six Months Ended September 30,
2025202420252024
Public equity securities:
Other public equity securities$384 $745 $310 $(12)
Loss on initial issuance of convertible debt and warrant issuance to Yorkville
— (1,700)— (1,700)
Convertible debt
— 225 — 225 
Warrants liability
(169)710 (139)708 
Prepaid forward liability— 14 — 14 
Other equity securities and interests:
Related party, fair value using quoted market prices of similar assets in active market
(4)(173)(5)(538)
Other, without a readily determinable fair value
— — — (59)
Gain (loss) on financial instruments, net$211 $(179)$166 $(1,362)
The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis:
Investment in other equity securities and interests
As of September 30, 2025 and March 31, 2025, the fair value of these equity interests is calculated using quoted prices for similar instruments observed in the equity capital markets and is classified as a Level 2 investment in the fair value hierarchy.
Investment in debt securities available-for-sale
Other debt securities. The fair value of these debt securities is calculated using the market approach adjusted for the recoverability of the security. The following table provides quantitative information about the significant unobservable inputs used in the fair value measure of the Level 3 other debt securities (dollars in thousands):
Fair ValueValuation MethodologyUnobservable InputsRange Weighted Average
September 30, 2025$1,777 Market ApproachEnterprise value-to-revenue multiple
0.2x - 18.9x
1.75x
March 31, 2025$1,687 Market ApproachEnterprise value-to-revenue multiple
0.2x - 18.9x
1.75x
The following table reconciles the beginning and ending fair value of our Level 3 other debt securities:
(Dollars in thousands)Three Months Ended September 30,Six Months Ended September 30,
2025202420252024
Beginning balance$1,687 $1,943 $1,687 $1,964 
Gains (losses) recognized in accumulated other comprehensive income (loss)(1)
90 26 90 5 
Ending balance$1,777 $1,969 $1,777 $1,969 
(1) Recorded in unrealized gain (loss) on available-for-sale debt securities.
Warrants liability
As part of the transactions with Yorkville related to the convertible debentures discussed in Note 7, the Company also issued warrants to purchase our Class A common stock. These warrants are liability classified and subject to periodic remeasurement. The fair value of these warrants issued to Yorkville are measured using the Black-Scholes option pricing model. The key inputs used in the valuation as of September 30, 2025 were: expected terms (in years) - 1.85 to 2.12; stock price - $0.95; exercise price - $2.63; expected volatility - 34.7%; expected dividend rate - 0.0%; and risk-free rate - 3.4%. The key inputs used in the valuation as of March 31, 2025 were: expected terms (in years) - 2.35 to 2.62; stock price - $0.31; exercise price - $2.63; expected volatility - 90.1%; expected dividend rate - —%; and risk-free rate - 3.70%.
Financial instruments on a non-recurring basis
Equity securities without a readily determinable fair value
Certain of the Customer ExAlt Trusts hold investments in equity securities that do not have a readily determinable fair value. These equity securities are measured at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. The Company classifies these assets as Level 2 within the fair value hierarchy.
The value of these equity securities was $26.5 million and $26.5 million as of September 30, 2025 and March 31, 2025, respectively. Additionally, through September 30, 2025, one security has cumulative upward adjustments of $10.8 million based upon observable price changes, which was based on a then recent equity offering and stock to stock transactions. The cumulative upward adjustments occurred in fiscal year 2023. No significant adjustments were made during the three and six months ended September 30, 2025 and 2024.
Goodwill
During the first and second quarters of fiscal 2025, primarily as a result of a significant, sustained decline in our Class A common stock price and the Company’s related market capitalization, we concluded that it was more likely than not that the fair value of each of our reporting units with goodwill were below their respective carrying amounts, which resulted in us performing interim impairment assessments at each period end. As a result, we wrote the carrying value of each reporting unit with goodwill down to its estimated fair value and recognized non-cash goodwill impairment charges of $0.3 million and $3.7 million, respectively, during the three and six months ended September 30, 2024, which is reflected in loss on impairment of goodwill in the consolidated statements of comprehensive income (loss). During the first and second quarters of fiscal 2026, we concluded that a triggering event had not occurred and thus, we were not required to perform an interim impairment assessment during either of these periods. Through September 30, 2025, cumulative prior goodwill impairments totaled approximately $2.4 billion, with the vast majority of this goodwill impairment recognized in our 2024 fiscal year.
For the interim impairment assessment performed for the first and second quarters of fiscal 2025, the Company computed the fair value of each reporting unit by computing the overall enterprise value of the Company by valuing its various equity instruments, primarily based on the Class A common stock price per share. The overall enterprise value was allocated to each reporting unit using the discounted cash flow method to estimate the relative value of each reporting unit based on their future cash flows using a multi-year forecast, and a terminal value calculated using a long-term growth rate that was informed based on our industry, analyst reports of a public company peer set, current and expected future economic conditions and management expectations. The discount rate used to discount these future cash flows was determined using a capital asset pricing model based on the market value of equity of a public company peer set, adjusted for risk characteristics and expectations specific to the reporting unit, combined with an assessment of the cost of debt.
The discount rates used for each reporting unit ranged from 28.0% to 29.3% for the June 30, 2024 and September 30, 2024 impairment assessments. The Company applied a terminal year long-term growth rate of 3.0% for each reporting unit during each of the interim impairment assessments. Remaining goodwill at September 30, 2025 relates to Ben Custody and Ben Markets.
The change in goodwill at each reporting unit was as follows:
(Dollars in thousands)March 31, 2025ImpairmentSeptember 30, 2025
Ben Liquidity$— $— $— 
Ben Custody7,469 — 7,469 
Ben Insurance— — — 
Ben Markets2,445 — 2,445 
Total Goodwill$9,914 $— $9,914 
There were no other assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2025 and March 31, 2025.
Carrying amounts and estimated fair values
The estimated fair value of financial instruments, whether or not recognized in the consolidated statements of financial condition, for which it is practicable to estimate those values, are disclosed below. These fair value estimates are determined based on relevant market information and information about the financial instruments. Fair value estimates are intended to represent the price at which an asset could be sold or the price at which a liability could be transferred. However, our
estimates of many of these fair values are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated values. Nonfinancial instruments are excluded from disclosure requirements.
The carrying amounts and estimated fair values of the Company’s financial instruments not recorded at fair value as of September 30, 2025 and March 31, 2025, were as noted in the table below:
As of September 30, 2025
(Dollars in thousands)Level in Fair Value HierarchyCarrying AmountEstimated Fair Value
Financial assets:
Cash and cash equivalents1$4,902 $4,902 
Financial liabilities:
Debt due to related parties, net (1)
2103,960 132,622 
Accounts payable and accrued expenses1234,348 234,348 
As of March 31, 2025
(Dollars in thousands)Level in Fair Value HierarchyCarrying AmountEstimated Fair Value
Financial assets:
Cash and cash equivalents1$1,346 $1,346 
Financial liabilities:
Debt due to related parties, net (1)
2117,896 143,260 
Accounts payable and accrued expenses1156,770 156,770 
(1) - The estimated fair value of debt due to related parties, net, include the value of accrued but unpaid interest totaling $24.9 million and $19.4 million as of September 30, 2025 and March 31, 2025, respectively, that is included in other liabilities in the consolidated statements of financial condition.