Blend Labs (BLND) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01Our business is substantially dependent on revenue from the financial services industry and is therefore subject to risks impacting the mortgage industry and the larger financial services industry27% rewritten
2. 02Increases in market interest rates have, and will likely continue to, adversely affect our business, financial condition, and results of operations22% rewritten
3. 03Unfavorable conditions in our industry or the global economy or reductions in technology spending could limit our ability to grow our business and adversely affect our financial condition and results of operations
4. 04We have a history of net losses, and we may not be able to achieve or maintain profitability in the future32% rewritten
5. 05If we fail to retain our existing customers or to acquire new customers in a cost-effective manner, or if our customers fail to maintain their utilization of our products and services, our revenue may decrease and our business, financial condition, and results of operations could be adversely affected
6. 06We face intense competition, and if we are unable to compete effectively, our business, financial condition, and results of operations could be adversely affected
7. 07We have a limited operating history in an evolving industry, and have experienced fluctuating growth rates in recent periods, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful
8. 08Our business, financial condition, and results of operations depend on our ability to adapt to technological change as well as global trends in the way customers access cloud-based banking software and successfully introduce new and enhanced products, services and business models43% rewritten
9. 09Our results of operations have fluctuated from period to period, which has caused the market price of our Class A common stock to fluctuate
10. 10We often rely on self-reporting of completed transactions by our customers due to our primarily success-based model, which can make it difficult to estimate and forecast revenue21% rewritten
11. 11consummate the acquisition. Further, any issuances of equity as part of the consideration for the target will dilute our existing stockholdersNew
12. 12The impairment of intangible assets, goodwill, and other assets arising from any future acquisitions or investments may have an adverse effect on our business, financial condition, and results of operations
13. 13A cyberattack, security breach, or incident affecting us or the third parties we rely on or partner with could expose us or our customers and consumers to a risk of loss or misuse of confidential information and have an adverse effect on our reputation, brand, business, financial condition, and results of operations59% rewritten
14. 14The success of our business depends on a trustworthy reputation and strong brand and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand our base of customers and our ability to increase their level of engagement
15. 15If we fail to manage our operations effectively, our reputation, business, and financial condition could be adversely affected
16. 16Systems failures and resulting interruptions in the availability of our website or platform, or other delays or slow response times from our website or platform, could adversely affect our business, financial condition, and results of operations
17. 17If we are unable to successfully implement AI to our platform, core solutions, or applications, our business could be harmed
18. 18Our sales cycle can be unpredictable, time-consuming, and costly
19. 19We may encounter deployment challenges, which could adversely affect our business, financial condition, and results of operations
20. 20Defects, errors, or vulnerabilities in our applications, backend systems, or other technology systems and those of third-party technology providers could harm our reputation and brand and adversely impact our business, financial condition, and results of operations
21. 21Any failure to offer high-quality customer support by us or by partners, vendors, and other service providers may adversely affect our relationships with our customers and could adversely affect our reputation, brand, business, financial condition, and results of operations
22. 22We experience seasonal fluctuations in our financial results, which could cause our Class A common stock price to fluctuate
23. 23The market for cloud-based banking software is still in relatively early stages of growth and if this market does not continue to grow, grows more slowly than we expect, or fails to grow as large as we expect, our business, financial condition, and results of operations could be adversely affected
24. 24Misconduct and errors by our employees, partners, vendors, and other service providers could adversely affect our business, financial condition, results of operations, and reputation
25. 25We are committed to expanding our platform and enhancing the user experience, which may not maximize short-term financial results and may yield results that conflict with the market’s expectations, which could result in our stock price being adversely affected
26. 26We rely on assumptions, estimates, and unaudited financial information to calculate certain of our key metrics and other figures presented herein, and real or perceived inaccuracies in such metrics could adversely affect our reputation and our business
27. 27Our marketing efforts to help grow our business may not be effective
28. 28We believe that our company culture has been critical to our success. We have invested substantial time and resources in building out our team with an emphasis on our shared beliefs and practices and a commitment to diversity and inclusion
29. 29If we are not able to maintain and evolve our culture, our business, financial condition, and results of operations could be adversely affected
30. 30Our presence outside the United States and any future international expansion strategy will subject us to additional costs and risks and our plans may not be successful
31. 31We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all47% rewritten
32. 32If we raise additional funds through future issuances of equity, equity-linked securities, or convertible debt securities, our existing stockholders could suffer significant dilution, and any new securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stockNew
33. 33If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired23% rewritten
34. 34If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected
35. 35Operating as a public company requires us to incur substantial costs and requires substantial management attention. In addition, key members of our management team have limited experience managing a public company
36. 36Our investment portfolio may become impaired by conditions in the financial markets and failures at financial institutions at which we deposit funds or maintain investments could adversely affect us21% rewritten

Risks Related to Our Legal and Regulatory Environment

1. 37We may be subject to claims, lawsuits, government investigations, and other proceedings that may adversely affect our business, financial condition, and results of operations24% rewritten
2. 38Our customers are, and in some cases we are or may be, subject to, and we facilitate compliance with, a variety of federal, state, and local laws, including those related to consumer protection and financial services47% rewritten
3. 39A heightened regulatory environment in the financial services industry may have an adverse impact on our customers and our business
4. 40We and our insurance carriers and underwriters are subject to extensive insurance industry regulations
5. 41The CFPB is a relatively new agency that has sometimes taken expansive views of its authority to regulate consumer financial services, creating uncertainty as to how the agency’s actions or the actions of any other new agency could adversely affect our business, financial condition, and results of operations
6. 42Our business could be adversely impacted by changes in the Internet and mobile device accessibility of consumers, and our software platform’s failure to comply with existing or future laws governing the Internet and mobile devices
7. 43Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection and other losses
8. 44We are subject to various U.S. and international anti-corruption laws and other anti-bribery and anti-kickback laws and regulations
9. 45Changes in, or interpretations of, U.S. and international tax laws and regulations could have a material adverse effect on our business, financial condition and results of operations42% rewritten
10. 46Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Our Dependence on Third Parties

1. 47We rely on partners, vendors, and other service providers to provide some of the software or data for our platform. If such partners, vendors, and other service providers interfere with the distribution of our platform or with our use of such software, our business could be adversely affected
2. 48We primarily rely on Amazon Web Services to deliver our services to users on our platform, and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, and results of operations
3. 49We depend on the interoperability of our platform across third-party applications and services that we do not control
4. 50The loss of access to credit, employment, financial and other data from external sources could harm our ability to provide our products and services

Risks Related to Our Intellectual Property

1. 51Failure to adequately protect our intellectual property could adversely affect our business, financial condition, and results of operations
2. 52Intellectual property infringement assertions by third parties could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation
3. 53Our platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our platform

Risks Related to Ownership of Our Class A Common Stock

1. 54of amendments to our Amended and Restated Certificate of Incorporation and amended and restated bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactionNew
2. 55The trading price of our Class A common stock has been and may continue to be volatile, and you could lose all or part of your investment
3. 56We currently qualify as an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors
4. 57Delaware law and provisions in our Amended and Restated Certificate of Incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market price of our Class A common stock
5. 58The holders of our Series A Preferred Stock are entitled to vote on an as-converted to Class A common stock basis and have rights to approve certain actions. Additionally, Haveli may exercise influence over us through their ability to designate a member of our board of directors
6. 59The holders of our Series A Preferred Stock have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our business before any payment may be made to holders of any other class or series of capital stock
7. 60If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendation regarding our Class A common stock adversely, the market price and trading volume of our Class A common stock could decline
8. 61We do not expect to pay dividends in the foreseeable future