SoFi Technologies (SOFI) risk factors, 2025 10-K

Risks Related to Strategic and New Products

1. 01Credit Market Related Risks

Regulatory, Tax and Other Legal Risks

1. 02Personnel and Business Continuity Risks
2. 03Risk Management and Financial Reporting Risks
3. 04Information Technology and Data Risks
4. 52As a bank holding company, we are subject to extensive supervision and regulation, and changes in laws and regulations applicable to bank holding companies could limit or restrict our activities and could have a material adverse effect on our operations
5. 53The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business
6. 54Failure to comply with applicable laws, regulations or commitments, or to satisfy our regulators’ supervisory expectations, could subject us to, among other things, supervisory or enforcement action, which could adversely affect our business, financial condition and results of operations
7. 55An inability to accept or maintain deposits due to market demand or regulatory constraints could materially adversely affect our liquidity position and our ability to fund our business
8. 56Legislative and regulatory policies and related actions have had and could in the future have a material adverse effect on our student loan portfolios and our student loan origination volume
9. 57If we fail to comply with federal and state consumer protection laws, rules, regulations and guidance, our business could be adversely affected
10. 58We hold state licenses that result in substantial compliance costs, and our business would be adversely affected if our licenses are impaired as a result of noncompliance with those requirements
11. 59Our compliance and risk management policies and procedures as a bank, bank holding company and otherwise regulated financial services company may not be fully effective in identifying or mitigating compliance and risk exposure in all market environments or against all types of risk
12. 60We may become subject to enforcement actions or litigation as a result of our failure to comply with laws and regulations, even though noncompliance was inadvertent or unintentional
13. 61Changes in applicable laws and regulations, as well as changes in government enforcement policies and priorities, may negatively impact the management of our business, results of operations, ability to offer certain products or the terms and conditions upon which they are offered, and ability to compete
14. 62Extensive regulation and supervision have a negative impact on our ability to compete in a cost-effective manner and may subject us to material compliance costs and penalties
15. 63We are subject to the risk that regulatory or enforcement agencies and/or consumer advocacy groups may assert that our business practices may violate certain rules, laws and regulations, including anti-discrimination statutes
16. 64Our investment adviser and broker-dealer subsidiaries are subject to regulation by the SEC and FINRA
17. 65We transferred our digital assets-related trading services to comply with regulations governing bank holding companies; this transfer could adversely impact our member relationships and our reputation
18. 66Failure to comply with anti-money laundering, economic and trade sanctions regulations, and similar laws could subject us to penalties and other adverse consequences
19. 67We are subject to anti-corruption, anti-bribery and similar laws, and noncompliance with such laws can subject us to significant adverse consequences, including criminal or civil liability, and harm our business
20. 68We conduct our business operations through subsidiaries and may in the future rely on dividends from our subsidiaries for a substantial amount of our cash flows
21. 69We have in the past, continue to be, and may in the future be subject to inquiries, exams, pending investigations, or enforcement matters
22. 70Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information, and adversely affect our business opportunities
23. 71It may be difficult and costly to protect our intellectual property rights, and we may not be able to ensure their protection
24. 72Some aspects of our platform include open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business
25. 73Our business is subject to increased risks of litigation and regulatory actions as a result of a number of factors and from various sources, including as a result of the highly regulated nature of the financial services industry and the focus of state and federal enforcement agencies on the financial services industry
26. 74Changes in tax law and differences in interpretation of tax laws and regulations may adversely impact our financial statements
27. 75We will be adversely affected if we, or any of our subsidiaries, are determined to have been subject to registration as an investment company under the Investment Company Act
28. 76We rely on our management team and will require additional key personnel to grow our business, and the loss of key management members or key employees, or an inability to hire key personnel, could harm our business
29. 77The job market and the optimization of our workforce creates a challenge and potential risk as we strive to attract and retain a highly skilled workforce
30. 78We transitioned to a flexible-first workforce model, which could subject us to increased business continuity and cyber risks, as well as other operational challenges and risks that could significantly harm our business and operations
31. 79Employee misconduct, which can be difficult to detect and deter, could harm our reputation and subject us to significant legal liability
32. 80If we fail to establish and maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline
33. 81We adjust our total number of members in the event a member is removed in accordance with our terms of service, and our total member count in any one period may not yet reflect such adjustments
34. 82Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
35. 83We incur significant costs and expend significant time and effort, as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives and corporate governance practices
36. 84Our risk management processes and procedures may not be effective
37. 85Incorrect estimates or assumptions by management in connection with the preparation of our consolidated financial statements or forecasts could adversely affect our reported or forecasted assets, liabilities, income, revenues or expenses
38. 86We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause our stock price to decline
39. 87Cyberattacks and other security incidents and compromises could have an adverse effect on our business, harm our reputation and expose us to liability and adversely affect our ability to collect payments and maintain accurate accounts. Efforts to prevent and respond to these attacks and incidents are costly
40. 88The processing of personal data and implementation of new technologies could give rise to liabilities as a result of federal, state and international laws and regulations, as well as our failure to adhere to the privacy and data security practices that we articulate to our members
41. 89Disruptions in the operation of our computer systems and third-party data centers and service providers could have an adverse effect on our business
42. 90cover a claim made against us by any such members affected by any disruptions, outages, or other performance or infrastructure problems

Business, Financial and Operational Risks

1. 05We operate in rapidly evolving industries and have limited experience in parts of our Financial Services and Technology Platform segments, which may make it difficult for us to successfully identify and address the risks and uncertainties we face
2. 06We have a history of losses and may experience net losses in the future and there is no assurance that our revenue and business model will be successful
3. 07regulation, and changes in laws and regulations applicable to bank holding companies could limit or restrict our activities and could have a material adverse effect on our operations”
4. 08We have experienced rapid growth in recent years, including through the addition of new products and lines of business and entry into new geographies, which may place significant demands on our operational, risk management, sales and marketing, technology, compliance, and finance and accounting resources
5. 09Our results of operations and future prospects depend on our ability to retain existing members and attract new members. We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed
6. 10Increased market volatility and adverse changes in financial market conditions may increase our market risk
7. 11Our future growth depends significantly on our branding and marketing efforts, and if our marketing efforts are not successful or we receive negative publicity, our business and results of operations will be harmed
8. 12Reputational harm, including as a result of our actual or alleged conduct or public opinion of the financial services industry generally, could adversely affect our business, results of operations, and financial condition
9. 13Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters
10. 14We may experience fluctuations in our quarterly operating results
11. 15We sell our loans to a concentrated number of whole loan purchasers and the loss of one or more significant purchasers could have a negative impact on our operating results
12. 16Galileo and Technisys depend on a small number of clients, the loss or disruptions in operations of any of which could have a material adverse effect on their businesses and financial results, and negatively impact our financial results and results of operations
13. 17We rely on third parties to perform certain key functions, and their failure to perform those functions could adversely affect our business, financial condition and results of operations
14. 18parties’ use of such technologies may impact their ability to carry out certain functions or impact the quality of their service or performance
15. 19customers via our broker-dealer may be impacted. As a result of these impacts, we might experience customer complaints, loss of revenue or other financial loss, or we may have to respond to regulatory inquiries related to such outages
16. 20The conditional conversion feature of our convertible notes, if triggered, may adversely affect our financial condition
17. 21The Capped Call Transactions may affect the value of the notes and our common stock
18. 22We are subject to counterparty risk with respect to the Capped Call Transactions, and the Capped Call Transactions may not operate as planned

Market and Interest Rate Risks

1. 23Our business and results of operations have in the past and may in the future be adversely affected by the financial markets, fiscal, monetary, and regulatory policies, and economic conditions generally
2. 24We have the option of pursuing a gain-on-sale origination model and, consequently, our business is affected by the cost and availability of funding in the capital markets
3. 25Changing expectations for inflation and fluctuations in interest rates could decrease demand for our lending products and negatively affect loan performance, as well as increase certain operating costs, such as employee compensation
4. 26Fluctuations in interest rates could negatively affect the demand for our checking and savings product
5. 27We are exposed to financial risks that may be partially mitigated but cannot be eliminated by our hedging activities, which carry their own risks
6. 28Our financial condition and results of operations have been and may in the future be adversely impacted by an epidemic or pandemic

Strategic and New Product Risks

1. 29We have in the past consummated, and from time to time we may evaluate and potentially consummate, acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results
2. 30Demand for our products may decline if we do not continue to innovate or respond to evolving technological or other changes
3. 31An increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure (including fines and other penalties), and could reduce the use and acceptance of SoFi Money and SoFi Credit Card
4. 32activity may not be detected until well after it occurs and the severity and potential impact may not be fully known for a substantial period of time after it has been discovered
5. 33We may be unable to realize the anticipated benefits of acquiring Technisys
6. 34We may continue to expand operations abroad where we have limited operating experience and may be subject to increased business, economic and regulatory risks that could adversely impact our financial results
7. 35We operate in a cyclical industry. In an economic downturn, member default rates may increase, there may be decreased demand for our products, and there may be adverse impacts to our business
8. 36If we do not make accurate credit and pricing decisions or effectively forecast our loss rates, our business and financial results will be harmed, and the harm could be material
9. 37If the information provided to us by applicants is incorrect or fraudulent, we may misjudge an applicant’s qualification to receive a loan or use one of our products, and our results of operations may be harmed
10. 38Internet-based loan origination processes may give rise to greater risks than paper-based processes
11. 39Student loans are subject to discharge in certain circumstances
12. 40We offer personal loans, which have a limited performance history, and therefore we have only limited prepayment, loss and delinquency data with respect to such loans on which to base projections
13. 41investigations, required corrective action and remediation, regulatory enforcement actions, class action lawsuits, and harm to our reputation
14. 42We perform and manage the loan origination process for all of the home loans that we originate. If we fail to properly perform these functions, our home loans business may be adversely affected
15. 43Potential geographic concentration of our members may increase the risk of loss on the loans that we originate and negatively impact our business
16. 44If we are unable to successfully manage our assets and liabilities on the balance sheet and our funding costs, including with respect to deposit-based funding, our ability to finance additional loans and introduce new products may be negatively impacted
17. 45If one or more of our warehouse facilities, on which we are highly dependent, is terminated or otherwise becomes unavailable, we may be unable to find replacement financing on favorable terms, or at all, which would have a material adverse effect on our business and financial condition
18. 46There can be no assurance that we will maintain compliance with all financial and other covenants included in our warehouse facilities in the future
19. 47Increases in member default rates on loans could make us and our loans less attractive to whole loan buyers, lenders under debt warehouse facilities and investors in securitizations, which may adversely affect our access to financing and our business
20. 48Wyndham's liability to its loan investors and loan insurers for mortgage loans originated by Wyndham, including repurchase obligations that might not be contingent upon the investor proving an error by Wyndham
21. 49We are unable to finance all of the receivables that we originate or other assets that we hold, and that illiquidity could result in a negative impact on our financial condition
22. 50Our checking and savings product is expected to continue to provide us with an important source of cost-efficient funding and any failure to scale the product due to our limited experience or a competitive marketplace could have a negative impact on our business, operating results and financial condition
23. 51Any failure to accurately capture credit risk or to execute our funding strategy for SoFi Credit Card could have a negative impact on our business, operating results and financial condition

Risks Related to Ownership of Our Securities

1. 91The price of our common stock has fluctuated and may be volatile in the future
2. 92We do not intend to pay cash dividends on our common stock for the foreseeable future
3. 93If analysts publish inaccurate or unfavorable research, our stock price and trading volume could decline
4. 94We may be subject to securities litigation, which is expensive and could divert management attention
5. 95Future resales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well
6. 96Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders
7. 97There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
8. 98Delaware law and our organizational documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable