Upbound Group (UPBD) FY2025 10-K Risk Factors: 7 New, 8 Dropped

What the changes say

Upbound Group added new operational risks tied to its Brigit fintech acquisition, increased regulatory and licensing scrutiny, and credit facility limits.
The company updated disclosures on AI integration, environmental factors, and its total indebtedness of approximately $1.6 billion.

What changed since the prior 10-K

New

NewRisks Relating to Our Strategy and Operations
Our operations depend on effective information management systems. Failure of our systems or those of our third-party retailers, bank partners or other commercial counterparties could negatively impact our business, financial condition and results of operations
System failures or security breaches affecting Upbound or its third-party retailers and bank partners could disrupt store, virtual lease-to-own, and Brigit operations.
NewRisks Relating to Our Strategy and Operations
We may be unable to attract and retain key employees needed to achieve our growth strategies
Competition for talent from consumer financial technology firms may increase the costs or difficulty of retaining executive leadership and key employees.
NewRisks Relating to Our Strategy and Operations
of products, commodities and energy, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require
Climate change concerns and new greenhouse gas regulations may increase tax, transportation, and utility expenses while damaging corporate reputation.
NewRisks Relating to Legal and Compliance Matters
Our businesses and industries are heavily regulated and subject to active enforcement including legal and regulatory proceedings that have in the past and may in the future result in damages, penalties or other significant monetary obligations and restrictions on our business operations
Active enforcement by regulators targeting subprime industries and plaintiffs bringing class actions and mass arbitrations threaten monetary penalties and operational restrictions.
NewRisks Relating to Legal and Compliance Matters
Our use of arbitration agreements may not allow us to avoid costly litigation or mass arbitrations
Judicial or legislative restrictions on arbitration agreements and class action waivers could eliminate their enforceability and lead to costly litigation.
NewRisks Relating to Legal and Compliance Matters
design constraints that could require Brigit to modify its offerings or limit its ability to offer its products in certain geographic areas in the same or materially similar manner as it currently does
Brigit faces state regulatory inquiries and licensing requirements that could result in fines, penalties, or the discontinuation of its business in certain areas.
NewRisks Relating to Our Indebtedness and Other Financial Matters
The amount of borrowings permitted under the ABL Credit Facility is limited to the value of certain of our assets, and we rely in part on available borrowings under the ABL Credit Facility for cash to operate our business, which subjects us to market and counterparty risk, some of which is beyond our control
Borrowings under the ABL Credit Facility are limited to the appraised value of eligible lease contracts, installment sales accounts, and inventory.

Dropped

DroppedRisks Relating to Our Strategy and Operations
Our operations are dependent on effective information management systems. Failure of our systems or those of our host retailers could negatively impact our business, financial condition and results of operations
DroppedRisks Relating to Our Strategy and Operations
We may be unable to retain key employees
DroppedRisks Relating to Legal and Compliance Matters
We may be subject to legal or regulatory proceedings from time to time that result in damages, penalties or other material monetary obligations or material restrictions on our business operations, and our use of arbitration agreements may not allow us to avoid costly litigation
DroppedRisks Relating to Legal and Compliance Matters
The outcome of the previously disclosed investigations by the CFPB, multi-state attorneys' general group and the New York Attorney General into certain of Acima’s business practices is uncertain and may materially and adversely affect our business
DroppedRisks Relating to Legal and Compliance Matters
invalid or unenforceable. Any litigation or claims relating to our intellectual property and proprietary information brought by or against us, whether with or without merit, or whether successful or not, could result in substantial costs and diversion of our resources, which could have a material adverse effect on us
DroppedRisks Relating to Legal and Compliance Matters
If our Brigit business was determined to be operating without having obtained necessary state or local licenses, registrations, or similar regulatory filings or approvals, it could adversely affect Brigit’s business, results of operations, financial condition, and future prospects
DroppedRisks Relating to Legal and Compliance Matters
Brigit has also received inquiries from certain state regulatory agencies regarding requirements to obtain licenses from or register with those states, and Brigit may receive additional such inquiries in the future
DroppedRisks Relating to Our Indebtedness and Other Financial Matters
event of default that, if not cured or waived, could result in the acceleration of certain of our debt, which could have a material adverse effect on our business, financial condition and results of operations

Reworded

79% rewrittenRisks Relating to Our Strategy and Operations
Environmental impacts and increased focus by stakeholders on environmental issues could adversely affect our business, financial condition and operating results
Updated to focus heavily on stakeholder focus regarding environmental sustainability matters, packaging recyclability, and diverse stakeholder expectations.
Was: The risks associated with climate change and other environmental impacts and increased focus by stakeholders on environmental issues, including those associated with climate change, could adversely affect our business, financial condition and operating results
73% rewrittenRisks Relating to Our Strategy and Operations
The integration and use of AI and similar technology in our business presents risks and challenges that could adversely affect our business, reputation, and results of operations
Expanded to state that the company is continuing to evaluate use cases of AI alongside its integration in the Brigit segment.
68% rewrittenRisks Relating to Our Strategy and Operations
Our success depends on the effective implementation and continued execution of our strategies to continue to grow and transform our business
Revised to emphasize digital and physical channel access and scalable financial health technology solutions following the Brigit acquisition.
Was: Our success depends on the effective implementation and continued execution of our strategies
65% rewrittenRisks Relating to Economic Conditions
The success of our business overall and each of our segments is dependent on macroeconomic and other factors affecting consumer demand, spending and payment behaviors that are outside of our control
Adjusted phrasing regarding macroeconomic factors and consumer spending, removing specific mention of the conflicts in Ukraine and the Middle East.
Was: The success of our business is dependent on factors affecting consumer spending and payment behaviors that are not under our control
63% rewrittenRisks Relating to Our Indebtedness and Other Financial Matters
As of December 31, 2025, our total indebtedness was approximately $1.6 billion. We also had undrawn commitments available for borrowings of an additional $237.6 million under the ABL Credit Facility (after giving effect to approximately $48.4 million of outstanding letters of credit)
Added specific figures stating total indebtedness was approximately $1.6 billion and undrawn commitments were $237.6 million as of December 31, 2025.
Was: As of December 31, 2024, our total indebtedness was approximately $1.3 billion. We also had undrawn commitments available for borrowings of an additional $428.3 million under the ABL Credit Facility (after giving effect to approximately $46.7 million of outstanding letters of credit)
62% rewrittenRisks Relating to Legal and Compliance Matters
Our Brigit segment is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws
Added arbitrations alongside lawsuits and governmental actions as potential consequences of Brigit non-compliance.
Was: Our Brigit business is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws
61% rewrittenRisks Relating to Legal and Compliance Matters
We may be unable to protect our intellectual property, or may be alleged to have infringed upon the intellectual property rights of others, which could result in a loss of our competitive advantage, a diversion of resources and a material adverse effect on our business and results of operations
Changed e-commerce platform to plural e-commerce platforms regarding proprietary technologies.
51% rewrittenRisks Relating to Our Indebtedness and Other Financial Matters
Restrictive covenants in certain of the agreements and instruments governing our indebtedness may materially and adversely affect our financial and operational flexibility
Minor structural edits to the restrictive covenants governing indebtedness without altering core terms.
50% rewrittenRisks Relating to Our Strategy and Operations
If we are unable to compete effectively within the growing e-commerce channel, our business and results of operations may be materially and adversely affected
Was: If we are unable to compete effectively within the growing e-commerce sector, our business and results of operations may be materially and adversely affected
46% rewrittenRisks Relating to Our Strategy and Operations
The industries in which we operate are highly competitive, which could impede our ability to maintain and grow consumer transaction volumes and pricing and have a material adverse effect on our prospects and operating results
Was: The industries in which we operate are highly competitive, which could impede our ability to maintain lease volumes and pricing and have a material adverse effect on our operating results
38% rewrittenRisks Relating to Our Strategy and Operations
Acts of nature, whether due to climate change, pandemic or otherwise, can disrupt our Rent-A-Center store operations and those of our Acima third-party retailers
Was: Acts of nature, whether due to climate change, pandemic or otherwise, can disrupt our operations and those of our third-party retailers
36% rewrittenRisks Relating to Our Strategy and Operations
If we are unable to successfully appeal to and engage with our target consumers and third-party retailers, our business and financial performance may be materially and adversely affected
35% rewrittenRisks Relating to Our Strategy and Operations
We must maintain corporate brands that are recognized and trusted by consumers and third-party retailers
33% rewrittenRisks Relating to Legal and Compliance Matters
Brigit previously entered into a settlement with the FTC under which it continues to have ongoing compliance obligations, noncompliance with which could result in material regulatory enforcement
31% rewrittenRisks Relating to Our Vendors, Suppliers, Products and Services
We rely on the receipt of information from third-party data vendors across our business segments, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition
Was: We rely on the receipt of information from third-party data vendors, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition
30% rewrittenRisks Relating to Our Strategy and Operations
If our Brigit segment’s key banking relationships are terminated and Brigit is not able to secure or successfully migrate client portfolios to a new bank partner or partners in a timely manner, Brigit’s business could be adversely affected
Was: If our Brigit business’s present or any future key banking relationships are terminated and Brigit is not able to secure or successfully migrate client portfolios to a new bank partner or partners, Brigit’s business would be adversely affected
30% rewrittenRisks Relating to Our Strategy and Operations
We may take advantage of additional merger and acquisition opportunities from time to time with the intent of advancing our key initiatives, but such activities may not prove successful and may subject us to additional risks
Was: We may take advantage of merger and acquisition opportunities from time to time with the intent of advancing our key initiatives, but such activities may not prove successful and may subject us to additional risks
30% rewrittenRisks Relating to Legal and Compliance Matters
The taxes applicable to our operations can be difficult to determine and are subject to change, and our failure to correctly calculate and pay such taxes could result in substantial tax liabilities and a material adverse effect on our results of operations
28% rewrittenRisks Relating to Our Strategy and Operations
Our strategy to grow the third-party retailer business depends on our ability to develop and offer robust virtual lease-to-own technology, including algorithmic decisioning programs and waterfall integrations
24% rewrittenRisks Relating to Our Strategy and Operations
If we are unable to attract, train and retain managerial personnel and hourly associates in our Rent-A-Center stores and staffed Acima locations, our reputation, sales and operating results may be materially and adversely affected
Was: If we are unable to attract, train and retain managerial personnel and hourly associates in our stores and staffed Acima locations, our reputation, sales and operating results may be materially and adversely affected
23% rewrittenRisks Relating to Our Strategy and Operations
The success of our franchising business is dependent on the ability and success of our third-party franchisees, over which we have limited control
Was: The success of our Franchising segment is dependent on the ability and success of our third-party franchisees, over which we have limited control
22% rewrittenRisks Relating to Legal and Compliance Matters
Our lease‑to‑own transactions are regulated by and subject to the requirements of federal and state laws and regulations that vary by jurisdiction, which require significant compliance costs and expose us to regulatory action or other litigation

All 55 risk factors

Headings as the filing states them, in filing order.

Risks Relating to Economic Conditions

01The success of our business overall and each of our segments is dependent on macroeconomic and other factors affecting consumer demand, spending and payment behaviors that are outside of our control65% rewritten

Risks Relating to Our Vendors, Suppliers, Products and Services

02Disruptions in our lease-to-own supply chain and other factors affecting the distribution of our merchandise could materially and adversely affect our business
03Our arrangements with our lease-to-own merchandise suppliers and other vendors may be materially and adversely affected by changes in our financial results or financial position or changes in consumer demand, which could materially and adversely affect our business
04We rely on the receipt of information from third-party data vendors across our business segments, and inaccuracies in or delays in receiving such information, or the termination of our relationships with such vendors, could have a material adverse effect on our business, operating results and financial condition31% rewritten
05We must successfully manage our Rent-A-Center inventory to reflect customer demand and anticipate changing consumer preferences and leasing trends or our revenue and profitability could be materially and adversely affected
06Allegations of or actual product safety and quality control issues for our leased products, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs

Risks Relating to Our Strategy and Operations

07Our success depends on the effective implementation and continued execution of our strategies to continue to grow and transform our business68% rewritten
08If we are unable to successfully appeal to and engage with our target consumers and third-party retailers, our business and financial performance may be materially and adversely affected36% rewritten
09We must maintain corporate brands that are recognized and trusted by consumers and third-party retailers35% rewritten
10Our proprietary algorithms and customer decisioning tools used to approve customers are subject to unexpected changes in behavior caused by macroeconomic conditions, which could cause these tools to no longer be indicative of our customers’ ability to perform under their agreements with us
11The industries in which we operate are highly competitive, which could impede our ability to maintain and grow consumer transaction volumes and pricing and have a material adverse effect on our prospects and operating results46% rewritten
12We may take advantage of additional merger and acquisition opportunities from time to time with the intent of advancing our key initiatives, but such activities may not prove successful and may subject us to additional risks30% rewritten
13Failure to effectively manage our costs could have a material adverse effect on our profitability
14Our strategy to grow the third-party retailer business depends on our ability to develop and offer robust virtual lease-to-own technology, including algorithmic decisioning programs and waterfall integrations28% rewritten
15If we are unable to compete effectively within the growing e-commerce channel, our business and results of operations may be materially and adversely affected50% rewritten
16The integration and use of AI and similar technology in our business presents risks and challenges that could adversely affect our business, reputation, and results of operations73% rewritten
17Our operations depend on effective information management systems. Failure of our systems or those of our third-party retailers, bank partners or other commercial counterparties could negatively impact our business, financial condition and results of operationsNew
18If our Brigit segment’s key banking relationships are terminated and Brigit is not able to secure or successfully migrate client portfolios to a new bank partner or partners in a timely manner, Brigit’s business could be adversely affected30% rewritten
19Failure to achieve and maintain effective internal controls could have a material adverse effect on our business
20We may be unable to attract and retain key employees needed to achieve our growth strategiesNew
21If we are unable to attract, train and retain managerial personnel and hourly associates in our Rent-A-Center stores and staffed Acima locations, our reputation, sales and operating results may be materially and adversely affected24% rewritten
22Acts of nature, whether due to climate change, pandemic or otherwise, can disrupt our Rent-A-Center store operations and those of our Acima third-party retailers38% rewritten
23Environmental impacts and increased focus by stakeholders on environmental issues could adversely affect our business, financial condition and operating results79% rewritten
24of products, commodities and energy, which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we requireNew
25The success of our franchising business is dependent on the ability and success of our third-party franchisees, over which we have limited control23% rewritten
26Our businesses are typically subject to seasonality, which causes our revenues and operating cash flows to fluctuate and may adversely affect our ability to borrow on our credit facilities, service our debt obligations and fund our operations
27Our current insurance program may expose us to unexpected costs and negatively affect our financial performance
28If we were not able to send or accept electronic payments, our business and financial results could be adversely affected

Risks Relating to Legal and Compliance Matters

29Our businesses and industries are heavily regulated and subject to active enforcement including legal and regulatory proceedings that have in the past and may in the future result in damages, penalties or other significant monetary obligations and restrictions on our business operationsNew
30Our use of arbitration agreements may not allow us to avoid costly litigation or mass arbitrationsNew
31Our lease‑to‑own transactions are regulated by and subject to the requirements of federal and state laws and regulations that vary by jurisdiction, which require significant compliance costs and expose us to regulatory action or other litigation22% rewritten
32Laws and regulations regarding information security and data collection, use and privacy are increasingly rigorous and subject to change, which may cause us to incur significant compliance costs and subject us to adverse impacts in the event of actual or alleged compliance failures
33Our reputation, ability to do business and operating results may be impaired by improper conduct by any of our employees, agents or business partners, including third-party retailers
34We may be unable to protect our intellectual property, or may be alleged to have infringed upon the intellectual property rights of others, which could result in a loss of our competitive advantage, a diversion of resources and a material adverse effect on our business and results of operations61% rewritten
35Brigit previously entered into a settlement with the FTC under which it continues to have ongoing compliance obligations, noncompliance with which could result in material regulatory enforcement33% rewritten
36Our Brigit segment is subject to extensive regulation and oversight in a variety of areas under federal, state and local laws62% rewritten
37design constraints that could require Brigit to modify its offerings or limit its ability to offer its products in certain geographic areas in the same or materially similar manner as it currently doesNew
38Due to Brigit’s bank partnership model, Brigit is and will continue to be subject to third-party risk management obligations, its business model may need to be substantially altered and Brigit may not be able to continue to operate its business as it is currently operated
39Disputes with or involving our franchisees may lead to litigation with our franchisees, which may materially and adversely affect our relationships with franchisees or our reputation, or cause us to incur significant expenses that materially and adversely affect our results of operations
40We may face liability or reputational harm for the actions, omissions and liabilities of our franchisees, which could materially and adversely affect our results of operation
41The taxes applicable to our operations can be difficult to determine and are subject to change, and our failure to correctly calculate and pay such taxes could result in substantial tax liabilities and a material adverse effect on our results of operations30% rewritten

Risks Relating to Our Indebtedness and Other Financial Matters

42We have significant indebtedness, and the level of our indebtedness could materially and adversely affect us
43As of December 31, 2025, our total indebtedness was approximately $1.6 billion. We also had undrawn commitments available for borrowings of an additional $237.6 million under the ABL Credit Facility (after giving effect to approximately $48.4 million of outstanding letters of credit)63% rewritten
44The amount of borrowings permitted under the ABL Credit Facility is limited to the value of certain of our assets, and we rely in part on available borrowings under the ABL Credit Facility for cash to operate our business, which subjects us to market and counterparty risk, some of which is beyond our controlNew
45Restrictive covenants in certain of the agreements and instruments governing our indebtedness may materially and adversely affect our financial and operational flexibility51% rewritten
46Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
47A change in control could accelerate our obligation to pay our outstanding indebtedness, and we may not have sufficient liquid assets at that time to repay these amounts
48Our organizational documents and our current or future debt instruments contain or may contain provisions that may prevent or deter another group from paying a premium over the market price to Upbound Group, Inc.’s stockholders to acquire its stock
49If our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings

Risks Relating to Our Structure or an Investment in Our Common Stock

50We are a holding company and are dependent on the operations and funds of our subsidiaries
51Our stock price is volatile, and you may not be able to recover your investment if our stock price declines
52There can be no assurance as to the dividends that we may pay on our common stock or as to future stock repurchases
53A lowering or withdrawal of the ratings assigned to Upbound Group, Inc.’s debt by rating agencies may increase our future borrowing costs and reduce our access to capital

Risks Relating to Our Acquisition of Brigit

54We may be unable to realize the anticipated benefits of the Brigit acquisition, including synergies, and have incurred substantial expenses related to the acquisition, which could have a material adverse effect on our business, financial condition and results of operations
55We may be unable to retain key personnel hired as a result of the Brigit acquisition

Other Upbound Group 10-Ks

FY2024 10-K risk factors
56 risks
Upbound Group faces regulatory and legal scrutiny, particularly regarding its Acima and Brigit businesses from the CFPB and FTC. The company relies heavily on proprietary algorithms and third-party bank and data partners. Consumer spending behavior and supply chain disruptions heavily influence lease-to-own operational success.
Filed Feb 25, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.