CREDIT CARD |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| CREDIT CARD | CREDIT CARD Credit Card Derivative Prosper recognizes unrealized and settled gains and losses on the Credit Card Derivative within Change in Fair Value of Financial Instruments on the accompanying consolidated statements of operations. These settled gains and losses primarily consist of interest income and debt sales on charged off balances, less Coastal program fees, credit losses and fraud losses. For the years ended December 31, 2025, 2024 and 2023 the Company recognized $9.6 million, $13.3 million and $26.1 million of unrealized gains, respectively, from estimated fair value changes on the Credit Card Derivative. Changes from settled transactions underlying the Credit Card Derivative were losses of $10.3 million, $9.1 million and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2024, the Company also recognized an $11.4 million reduction to the fair value of the Credit Card Derivative related to the underlying Credit Card receivables contributed to the PMCC 2024-1 securitization on November 1, 2024. Receivable from Credit Card Partner Fair value gains and losses on the Receivable from Credit Card Partner, which effectively consists of the underlying Credit Card receivables securitized through PMCC 2024-1 (as discussed at Note 2, Summary of Significant Accounting Policies, and at Note 7, Securitizations) are also recognized within Change in Fair Value of Financial Instruments. These gains and losses include changes related to estimated future cash flows, as well as actual charge-offs and debt sale recoveries. For the year ended December 31, 2025, the Company recognized fair value losses of $17.3 million related to the Receivable from Credit Card Partner, which primarily consisted of net charge-offs. For the year ended December 31, 2024, the Company recognized a fair value gain of $7.5 million gain upon the closing of the PMCC 2024-1 securitization on November 1, 2024, and a $1.9 million fair value gain subsequent to that date. As of December 31, 2025 and 2024, the outstanding principal balance of Credit Card receivables held by PMCC 2024-1 was $90.1 million and $91.2 million, respectively. Program Fees The Company records revenue from various fees generated from the Credit Card program and PMCC 2024-1, including interchange fees, annual fees and late fees, net of a portion of the interchange fees that must be remitted to Coastal. These fees are included in Transaction Fees, Net on the accompanying consolidated statements of operations. For the years ended December 31, 2025 and 2024 these fees totaled $25.1 million and $24.1 million, respectively. Servicing Obligation and Fees Under the program agreement, Prosper is responsible for servicing the entire underlying Credit Card portfolio. Coastal pays the Company a 1% per annum servicing fee on the daily outstanding principal balance of receivables designated as Coastal Allocations, which is approximately 5% of the portfolio. To the extent these servicing fees do not exceed the market servicing rate a market participant would require to service the entire Credit Card portfolio, the Company records a servicing obligation liability and measures it at fair value through the servicing period. The net balance of this servicing obligation liability is included in Other Liabilities on the accompanying consolidated balance sheets (see Note 10, Other Liabilities). Changes in the fair value of the Credit Card servicing obligation liability are recorded in Servicing Fees, Net on the accompanying consolidated statements of operations, and totaled a $0.3 million loss, a $0.8 million gain and a $6.0 million loss for the years ended December 31, 2025, 2024 and 2023, respectively. No servicing asset or obligation is recognized for the Credit Card receivables securitized within PMCC 2024-1, which is a consolidated entity.
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