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FAIR VALUE MEASUREMENT
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENT FAIR VALUE MEASUREMENT
FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon discounted cash flow model that use, as inputs, observable market-based parameters to the greatest extent possible.

The Company determines the fair value of its financial instruments and conducts an ongoing assessment of the techniques used to ensure their appropriateness, consistent application and the reasonableness of the assumptions. In determining the fair value of
each investment security, the Company reviews performance characteristics of the underlying loan pool including origination vintage, borrower credit quality, macroeconomic environment, etc. The Company determines the fair value for each investment security by then estimating significant assumptions including discount rate, cumulative net loss rate and prepayment rate which are reviewed and approved by management.

The Company also engages a third-party valuation service provider to estimate a range of fair values for all significant investment securities. The Company reviews and validates that each of its significant assumptions are within the range of the independent third-party service provider, including: discount rate, cumulative net loss rate, prepayment rate, etc. Finally, the Company reviews and validates that the fair value used for financial reporting is within the range of fair value estimates by the third-party service provider for the same significant investment securities.

Financial Assets and Liabilities Recorded at Fair Value

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):

September 30, 2025
Level 1Level 2Level 3Total
Assets:
Investments in loans and securities (Notes)$— $135,272 $209,491 $344,763 
Investments in loans and securities (Certificates)— — 541,363 541,363 
Liabilities:
Warrant liability$7,379 $— $— $7,379
Other liabilities (1)— — 8,715 8,715 

December 31, 2024
Level 1Level 2Level 3Total
Assets:
Investments in loans and securities (Notes) (2)$— $115,220 $125,054 $240,274 
Investments in loans and securities (Certificates) (2)— — 533,243 533,243 
Liabilities:
Warrant liability$890$3$—$893
Other liabilities (1)— — 6,090 6,090 
(1) Included in “Accrued expenses and other liabilities” in the unaudited condensed consolidated balance sheets. See Note 8 for additional information.
(2) Accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 1 and 2)

Warrant liability (Level 1)

The following tables summarize the Warrant liability activity for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended September 30, 2025
Balance as of June 30, 2025
$2,471 
Change in fair value4,908 
Balance as of September 30, 2025
$7,379 

Nine Months Ended September 30, 2025
Balance as of December 31, 2024$893 
Change in fair value6,486 
Balance as of September 30, 2025
$7,379 
Three Months Ended September 30, 2024
Balance as of June 30, 2024
$1,671 
Change in fair value1,213 
Balance as of September 30, 2024
$2,884 
Nine Months Ended September 30, 2024
Balance as of December 31, 2023$3,242 
Change in fair value(358)
Balance as of September 30, 2024
$2,884 

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Level 3)

Investments in Loans and Securities (Level 3)

As of September 30, 2025, the Company held investments in securities classified as available for sale. These assets are measured at fair value using a discounted cash flow model, and presented within investments in loans and securities on the unaudited condensed consolidated balance sheets. Changes in the fair value, other than declines in fair value due to credit, are reflected in other comprehensive income (loss) on the unaudited condensed consolidated statements of comprehensive loss. Declines in fair value due to credit are reflected in gains and (losses) on investments in loans and securities on the unaudited condensed consolidated statements of operations.

The Company held investments in securities under the fair value option. These assets are measured using a discounted cash flow methodology, while also considering market data as it become available, and presented within investments in loans and securities on the unaudited condensed consolidated balance sheets. The initial fair value measurement and subsequent measurement changes in fair value in the period are reflected in gains and (losses) on investments in loans and securities on the unaudited condensed consolidated statements of operations.

The following tables summarize the activity related to the fair value of the investments in loans and securities available for sale (Level 3 only) for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Balance, beginning of period$736,735 $853,418 $663,189 $626,368 
Transfer from Level 2—— — 10,469 
Additions67,811 130,271 316,789 536,966 
Cash received(40,407)(13,077)(148,423)(55,649)
Gain on sale of Investments in loans and securities2 — 8,595 — 
Loss on sale of Investments in loans and securities(16,279)— (16,279)— 
Change in accrued interest on investments10,599 — 20,497 — 
Change in fair value and other adjustments (OCI)(14,134)(19,711)(36,892)(87,342)
Credit-related impairment loss, net of recoveries8,137 (76,049)(55,012)(155,960)
Balance, end of period$752,464$874,852$752,464$874,852

Significant unobservable inputs used for our Level 3 fair value measurement of the loans and securities and credit losses are the discount rate, loss rate, and prepayment rate and consideration of any optional redemption features in our investment securities. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement.

The following tables present quantitative information about the significant unobservable inputs used for our Level 3 fair value measurement of the securities as of September 30, 2025 and December 31, 2024:

September 30, 2025
December 31, 2024
Unobservable InputMinimumMaximumWeighted AverageMinimumMaximumWeighted Average
Discount rate5.0 %15.0 %15.0 %5.0 %15.0 %15.0 %
Loss rate5.5 %33.0 %17.2 %5.8 %34.1 %19.5 %
Prepayment rate0.0 %45.0 %14.5 %0.0 %40.0 %9.4 %

Financial Assets and Liabilities Not Recorded at Fair Value

The Company believes that the carrying amount of cash, cash equivalents and restricted cash, fees receivables, accounts payables and other current liabilities approximate their fair value due to the short-term maturities of these instruments.

The below tables contain information about assets that are not measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025
Fair Value
Carrying
Value		Level 1Level 2Level 3Total
Assets:
Cash and cash equivalents, and restricted cash and cash equivalents
$264,767 $264,767 $— $— $264,767 
Fees receivables
154,976 — 79,154 75,822 154,976 
Investments in other loans and receivables1,610 — — 1,610 1,610 
Liabilities:
Secured borrowing$131,525 $— $— $133,667$133,667
Exchangeable notes148,148 — 381,382 — 381,382 
Long-term debt487,789 — 466,180 — 466,180 
December 31, 2024
Fair Value
Carrying
Value		Level 1Level 2Level 3Total
Assets:
Cash and cash equivalents, and restricted cash and cash equivalents
$226,518 $226,518 $— $— $226,518 
Fees receivables (1)
127,114 — 63,143 63,971 127,114 
Investments in other loans and receivables4,893 — — 4,893 4,893 
Liabilities:
Secured borrowing$176,089 $— $— $177,554 $177,554 
Exchangeable notes146,342 — 163,360 — 163,360 
Long-term debt321,317 — — 366,396 366,396 
 
(1) Accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to “Investment in loans and securities” to conform to the current period’s presentation.