Upstart Holdings (UPST) FY2025 10-K Risk Factors: 11 New, 40 Dropped

What the changes say

Upstart faces heightened scrutiny on AI model performance, particularly underperforming loan vintages from late 2023 and early 2024.

What changed since the prior 10-K

New

NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to continue to improve our AI models or if our AI models are ineffective, including by failing to accurately or timely reflect changes in economic conditions on borrowers’ credit risk, our growth prospects, business, financial condition and results of operations would be adversely affected
Core personal loan vintages from Q4 2023 and Q1 2024 were forecasted to underperform relative to target returns as of December 31, 2025.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our success depends in significant part on the continued participation of lending partners in our marketplace, which provide both loan funding and a substantial portion of our revenue. A limited number of lending partners account for a significant portion of loan originations and revenue on our marketplace
A limited number of lending partners provide a substantial portion of loan funding and revenue for the marketplace.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our reputation and brand are important to our success, and failure to maintain, protect and promote our brand may harm our business
Brand reputation depends on AI model effectiveness, product quality, regulatory compliance, and competition from alternative platforms.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
A significant portion of our business has historically depended on a single loan product, and shifts in product demand or mix could adversely affect our business
Unsecured personal loans represent a significant portion of business, and macroeconomic downturns may cause borrowers to prioritize secured debt.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
requirements and new financial products and services with which we, and in some cases our lending partners, have limited or no prior development or operating experience
Scaling new loan products with different profiles and servicing obligations may require holding more loans on the balance sheet.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
We may pursue acquisitions or investments in other businesses or technologies, which could disrupt our business and may not achieve anticipated benefits
Acquisitions or investments in other businesses or technologies could disrupt operations and fail to achieve anticipated benefits.
NewRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our financial reporting relies on significant estimates, judgments, key operating metrics and effective internal controls, and inaccuracies or control failures could adversely affect our business
Financial reporting relies on significant estimates and internal controls, and material weaknesses could lead to delayed or unreliable reports.
NewRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Any significant disruption of, or failure in, our technology systems, including our AI lending platform, could adversely affect our business, financial condition and results of operations
The platform relies heavily on third-party cloud infrastructure provided by Amazon Web Services (AWS).
NewRISKS RELATED TO REGULATION AND LITIGATION
The CFPB and other consumer protection regulators have broad authority over our business, and increased supervision or enforcement could adversely affect our business
The CFPB has broad authority to regulate consumer financial protection and supervise non-bank entities or lending partners.
NewRISKS RELATED TO REGULATION AND LITIGATION
The collection, use, storage, sharing and other processing of personal information subjects us to privacy and data protection laws and regulations, and failures to comply could adversely affect our business
Processing personal information subjects the company to privacy laws like the Gramm-Leach-Bliley Act enforced by the CFPB and FTC.
NewRISKS RELATED TO REGULATION AND LITIGATION
If we are deemed to be an investment company, investment adviser or broker-dealer, or if our securities-related activities fail to comply with applicable laws, our business could be materially adversely affected
The SEC could deem loans or loan interests held on the balance sheet as investment securities requiring investment company registration.

Dropped

DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to continue to improve our AI models or if our AI models contain errors or are otherwise ineffective, our growth prospects, business, financial condition and results of operations would be adversely affected
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If our AI models do not accurately reflect the impact of economic conditions on borrowers’ credit risk in a timely manner, the performance of Upstart-powered loans may be worse than anticipated and our AI models may be perceived as ineffective
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If our existing lending partners cease or limit their participation in our marketplace or if we are unable to attract new lending partners to our marketplace, our business, financial condition and results of operations will be adversely affected
AI model errors or ineffectiveness affecting growth and financial condition.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
We have a relatively limited operating history, which may result in increased risks, uncertainties, expenses and difficulties, and makes it difficult to evaluate our future prospects
AI models lacking extensive testing during different types of economic downturns.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our revenue growth rate and financial performance in the past may not be indicative of future performance
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Dodd-Frank Act, the Investment Company Act of 1940, as amended, or the Investment Company Act, the so-called “Volcker Rule,” and states licensing requirement changes to include SPEs, may affect the type of securitizations that we are able to complete
Dependence on lending partner participation and 83% of revenue from platform and servicing fees in 2024.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our top three lending partners account for a significant portion of loan originations on our marketplace and our revenue
Limited operating history making it difficult to evaluate future prospects.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
orders against any of our lending partners, it could impact the viability of the bank partnership model or require additional actions by us and the lending partner to mitigate risks identified
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Substantially all of our revenue is derived from a single loan product, and we are thus particularly susceptible to fluctuations in the unsecured personal loan market
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
The sales and onboarding process of new lending partners could take longer than expected, leading to fluctuations or variability in expected revenues and results of operations
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Misconduct and errors by our employees, former employees, vendors, or service providers could harm our reputation and subject us to significant legal liability
Historical revenue growth rate not being indicative of future performance.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our business is heavily concentrated in U.S. consumer credit, and therefore our results are more susceptible to fluctuations in that market than a more diversified company
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we fail to effectively manage the fluctuations in our business, our business, financial condition and results of operations could be adversely affected
Dodd-Frank Act, Volcker Rule, and SPE licensing changes affecting securitizations.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
factors within our proprietary models, which helps mitigate this risk, it does not eliminate the risk of an inaccurate individual report
Top three lending partners originating 82% of volume and 63% of revenue in 2024.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our marketing efforts and brand promotion activities may not be effective
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
unenforceable, subject to rescission or otherwise impaired, we or other program participants may be subject to penalties, and/or our commercial relationships may suffer, each which would adversely affect our business and results of operations” for more information
Regulatory actions against lending partners impacting the bank partnership model.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If 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
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If 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 impaired
Substantially all revenue derived from a single unsecured personal loan product.
DroppedRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Some of our estimates, including our key metrics in this report, are subject to inherent challenges in measurement, and any real or perceived inaccuracies may harm our reputation and negatively affect our business
Sales and onboarding process taking two to twelve months, leading to revenue variability.
DroppedRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Any significant disruption in our AI lending platform could prevent us from processing loan applicants and servicing loans, reduce the effectiveness of our AI models and result in a loss of lending partners, institutional investors, applicants or borrowers
DroppedRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Some open source licenses contain requirements that we make source code available at no cost for modifications or derivative works we create based upon the type of open source software we use
Misconduct and errors by employees, vendors, or service providers.
DroppedRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
publicity related to quality standards or safety concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure
DroppedRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
Failure by our third-party vendors or our failure to comply with legal or regulatory requirements or other contractual requirements could have an adverse effect on our business
Business concentration in U.S. consumer credit and sensitivity to interest rates.
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
We contest our liability and the amount of damages, as appropriate, in each pending matter. The outcome of pending and future matters could be material to our results of operations, financial condition and cash flows, and could materially adversely affect our business
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
We are subject to or facilitate compliance with a variety of federal, state, and local laws, including those related to consumer protection and lending requirements
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
Internet-based loan origination processes may give rise to greater risks than paper-based processes and may not always be allowed under state law
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
If we are found to be operating without having obtained necessary state or local licenses, our business, financial condition and results of operations could be adversely affected
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
The CFPB 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 agency could impact our business
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
The collection, processing, storage, use and disclosure of personal information could give rise to liabilities as a result of existing or new governmental regulation, conflicting legal requirements or differing views of personal privacy rights
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
As the regulatory framework for AI and machine learning technology evolves, our business, financial condition and results of operations may be adversely affected
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
If we are required to register under the Investment Company Act, our ability to conduct business could be materially adversely affected
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
If we are required to register under the Investment Advisers Act, our ability to conduct business could be materially adversely affected
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
If we are required to register with the SEC or under state securities laws as a broker-dealer, our ability to conduct business could be materially adversely affected
DroppedRISKS RELATED TO OUR REGULATORY ENVIRONMENT
Our securitizations are subject to regulation under federal law, and failure to comply with those laws could adversely affect our business
DroppedRISKS RELATED TO INDEBTEDNESS
We rely on borrowings under our warehouse credit facilities to fund certain aspects of our operations, and any inability to meet our obligations as they come due or to comply with various covenants or representations contained in our warehouse credit facilities could harm our business
DroppedRISKS RELATED TO INDEBTEDNESS
We, through our warehouse trust special purpose entities, have entered into warehouse credit facilities to partially finance the purchase of certain loans from certain lending partners that originate loans through our marketplace, which credit facilities are secured by the purchased loans
DroppedRISKS RELATED TO TAXES
past tax liabilities on our financial statements, a successful assertion by one or more tax authorities could result in substantial tax liabilities in excess of such reserves as well as penalties and interest, and could harm our business, financial condition and results of operations
DroppedRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
Our common stock does not provide any rights directly related to the loans we hold
DroppedRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
To the extent a large number of shares of our common stock are sold in connection with any “sell to cover” transactions upon vesting of restricted stock units (RSUs) issued to our employees, our stock price may fluctuate
DroppedRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members

Reworded

100% rewrittenRISKS RELATED TO REGULATION AND LITIGATION
We have been in the past and may in the future be subject to federal and state regulatory inquiries, investigations or enforcement actions, which could adversely affect our business
Expanded to specify that regulatory inquiries and investigations can be time-consuming, costly, and harm reputation or investor confidence.
Was: We have been in the past and may in the future be subject to federal and state regulatory inquiries regarding our business
99% rewrittenRISKS RELATED TO REGULATION AND LITIGATION
Our business is subject to a wide range of laws and regulations, many of which are evolving, and failure or perceived failure to comply with such laws and regulations could harm our business, financial condition and results of operations
Updated to explicitly mention AI and machine learning technologies and evolving regulatory priorities regarding the bank partnership model.
97% rewrittenRISKS RELATED TO REGULATION AND LITIGATION
Anti-money laundering, sanctions and anti-corruption laws could adversely affect our business
Added the Foreign Corrupt Practices Act and clarified that obligations apply directly or through lending partners.
Was: Anti-money laundering, anti-terrorism financing, anti-corruption and economic sanctions laws could have adverse consequences for us
97% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
You may be diluted by the future issuance of additional common stock in connection with our equity incentive plans, acquisitions or otherwise
Removed specific share authorization figures and 2020 Equity Incentive Plan reservation numbers, generalizing potential equity financings.
96% rewrittenRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
The use of generative or agentic AI technologies by our employees or contractors could expose us to unexpected liability
Updated to agentic AI technologies and added risks of inaccurate or incomplete outputs relied upon by employees.
Was: The use of generative AI technologies by our employees or contractors could expose us to unexpected liability
96% rewrittenRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
Our proprietary AI models rely in part on the use of loan applicant and borrower data and other third-party data, and if we lose the ability to use such data, or if such data contain inaccuracies, our business could be adversely affected
Added specific risks regarding inaccurate, incomplete, or biased data, and open banking requirements limiting data access.
95% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
We are continuing to introduce and develop new loan products and service offerings, and if these products are not successful or we are unable to manage the related risks, our growth prospects, business, financial condition and results of operations could be adversely affected
Expanded to explicitly list auto loans, retail installment contracts, small dollar loans, and HELOCs.
Was: We are continuing to introduce and develop new loan products and services offerings, and if these products are not successful or we are unable to manage the related risks, our growth prospects, business, financial condition and results of operations could be adversely affected
95% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to manage the risks related to our loan servicing and collections obligations, our business, financial condition and results of operations could be adversely affected
Updated servicing fee revenue mention from 21% in 2024 to a meaningful portion of revenue from fees.
94% rewrittenRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Security breaches, improper access to our or borrowers’ data, or other security incidents may harm our reputation, adversely affect our results of operations and expose us to liability
94% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our quarterly results may fluctuate significantly, which could adversely affect our business and the trading price of our common stock
Was: Our quarterly results are likely to fluctuate and as a result may adversely affect the trading price of our common stock
93% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our business is subject to the risks of natural disasters and other catastrophic events, many of which are becoming more acute and frequent due to climate change, and to interruption by human-induced problems
92% rewrittenRISKS RELATED TO INDEBTEDNESS
We may need to raise additional funds in the future, including through equity, equity-linked, or debt financings, to support business growth, and those funds may not be available on acceptable terms, or at all
92% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
We have incurred net losses in the past, and we may not be able to sustain or achieve profitability in the future
Was: We have incurred net losses, and we may not be able to achieve profitability in the future
91% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to manage the risks associated with the Upstart Macro Index (UMI), our credibility, reputation, business, financial condition and results of operations could be adversely affected
Was: If we are unable to manage the risks associated with the Upstart Macro Index (UMI), which we introduced in 2023 and which does not have a long history or proven track record, our credibility, reputation, business, financial condition and results of operations could be adversely affected
91% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to maintain diverse and resilient loan funding to our marketplace from institutional investors or successfully manage risks associated with committed capital and other co-investment arrangements, our growth prospects, business, financial condition and results of operations could be adversely affected
90% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our business has been and will continue to be adversely affected by economic conditions and other factors that we cannot control
90% rewrittenRISKS RELATED TO REGULATION AND LITIGATION
Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and other adverse consequences
Was: Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses
89% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we do not compete effectively in our target markets, our business, results of operations and financial condition could be harmed
89% rewrittenRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Our platform and internal systems rely on software that is highly technical, and if our software contains undetected errors, our business could be adversely affected
89% rewrittenRISKS RELATED TO INDEBTEDNESS
Corporate and asset-backed debt ratings could adversely affect our ability to support loan funding for our marketplace at attractive rates, which could negatively affect our results of operations, financial condition and liquidity
88% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
The trading price of our common stock may be volatile, and you could lose all or part of your investment
88% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
The large number of shares of our capital stock eligible or registered for public sale could depress the market price of our common stock
86% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
The long-term impact of operating with a Digital First workforce on our business, financial condition and results of operations is uncertain
86% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to manage the risks associated with fraudulent activity, our brand and reputation, business, financial condition and results of operations could be adversely affected
83% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Unfavorable outcomes in legal proceedings may harm our business and results of operations
82% rewrittenRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
Some aspects of our business processes 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
81% rewrittenRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We rely on third-party vendors, and if such vendors do not perform adequately or terminate their relationships with us, or if regulatory scrutiny of vendor relationships increases, our business could be adversely affected
Was: We rely on third-party vendors and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected
81% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our success depends on the continued service of our senior management team and other highly skilled personnel. Our success also depends on our ability to identify, hire, develop, motivate and retain highly qualified personnel
Was: Our success significantly depends on the continued service of our senior management team and other highly skilled personnel. Our success also depends on our ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization
77% rewrittenRISKS RELATED TO TAXES
Our ability to use our deferred tax assets to offset future taxable income may be subject to certain limitations, which may have a material impact on our result of operations
75% rewrittenRISKS RELATED TO TAXES
Changes in tax laws could have a material adverse effect on our business, financial condition and results of operations
71% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to manage risks associated with the loans on our balance sheet, our business, financial condition and results of operations may be adversely affected
70% rewrittenRISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT
It may be difficult and costly to protect our intellectual property rights, and we may not be able to ensure their protection
66% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
We maintain cash deposits in excess of federally insured limits, and adverse developments affecting financial institutions could adversely affect our liquidity and financial performance
Was: We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance
65% rewrittenRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We rely on strategic relationships with loan aggregators to attract applicants to our marketplace, and if we cannot maintain effective relationships with loan aggregators or successfully replace their services, our business could be adversely affected
64% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we are unable to approve a significant number of borrowers for loans through our marketplace, our growth prospects, business, financial condition and results of operations would be adversely affected
59% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
The capped call transactions entered into in connection with the issuance of certain of the Notes may affect the market price of our common stock
Was: The capped call transactions entered into in connection with the issuance of each of the 2026 Notes and the 2029 Notes may affect the market price of our common stock
54% rewrittenRISKS RELATED TO INDEBTEDNESS
Provisions in the Indentures governing the Notes may deter or prevent a business combination that may be favorable to you
Was: Provisions in the Indentures governing our 2026 Notes, 2029 Notes and 2030 Notes may deter or prevent a business combination that may be favorable to you
52% rewrittenRISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
Transactions relating to the Notes may dilute the ownership interest of stockholders, or may otherwise depress the price of our common stock
Was: Transactions relating to our 2026 Notes, 2029 Notes and 2030 Notes may dilute the ownership interest of stockholders, or may otherwise depress the price of our common stock
50% rewrittenRISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We are subject to counterparty risk with respect to the capped call transactions
21% rewrittenRISKS RELATED TO OUR BUSINESS AND INDUSTRY
Borrowers may prepay a loan at any time without penalty, which could reduce our servicing fees and deter our lending partners and institutional investors from investing in loans facilitated through our lending marketplace

All 56 risk factors

Headings as the filing states them, in filing order.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

01Our business has been and will continue to be adversely affected by economic conditions and other factors that we cannot control90% rewritten
02If we are unable to maintain diverse and resilient loan funding to our marketplace from institutional investors or successfully manage risks associated with committed capital and other co-investment arrangements, our growth prospects, business, financial condition and results of operations could be adversely affected91% rewritten
03If we are unable to continue to improve our AI models or if our AI models are ineffective, including by failing to accurately or timely reflect changes in economic conditions on borrowers’ credit risk, our growth prospects, business, financial condition and results of operations would be adversely affectedNew
04If we are unable to manage the risks associated with the Upstart Macro Index (UMI), our credibility, reputation, business, financial condition and results of operations could be adversely affected91% rewritten
05If we are unable to approve a significant number of borrowers for loans through our marketplace, our growth prospects, business, financial condition and results of operations would be adversely affected64% rewritten
06Our success depends in significant part on the continued participation of lending partners in our marketplace, which provide both loan funding and a substantial portion of our revenue. A limited number of lending partners account for a significant portion of loan originations and revenue on our marketplaceNew
07We have incurred net losses in the past, and we may not be able to sustain or achieve profitability in the future92% rewritten
08If we are unable to manage risks associated with the loans on our balance sheet, our business, financial condition and results of operations may be adversely affected71% rewritten
09Our quarterly results may fluctuate significantly, which could adversely affect our business and the trading price of our common stock94% rewritten
10Our reputation and brand are important to our success, and failure to maintain, protect and promote our brand may harm our businessNew
11If we are unable to manage the risks related to our loan servicing and collections obligations, our business, financial condition and results of operations could be adversely affected95% rewritten
12A significant portion of our business has historically depended on a single loan product, and shifts in product demand or mix could adversely affect our businessNew
13We are continuing to introduce and develop new loan products and service offerings, and if these products are not successful or we are unable to manage the related risks, our growth prospects, business, financial condition and results of operations could be adversely affected95% rewritten
14requirements and new financial products and services with which we, and in some cases our lending partners, have limited or no prior development or operating experienceNew
15If we do not compete effectively in our target markets, our business, results of operations and financial condition could be harmed89% rewritten
16If we are unable to manage the risks associated with fraudulent activity, our brand and reputation, business, financial condition and results of operations could be adversely affected86% rewritten
17Our success depends on the continued service of our senior management team and other highly skilled personnel. Our success also depends on our ability to identify, hire, develop, motivate and retain highly qualified personnel81% rewritten
18Borrowers may prepay a loan at any time without penalty, which could reduce our servicing fees and deter our lending partners and institutional investors from investing in loans facilitated through our lending marketplace21% rewritten
19The long-term impact of operating with a Digital First workforce on our business, financial condition and results of operations is uncertain86% rewritten
20Unfavorable outcomes in legal proceedings may harm our business and results of operations83% rewritten
21We may pursue acquisitions or investments in other businesses or technologies, which could disrupt our business and may not achieve anticipated benefitsNew
22Our financial reporting relies on significant estimates, judgments, key operating metrics and effective internal controls, and inaccuracies or control failures could adversely affect our businessNew
23We maintain cash deposits in excess of federally insured limits, and adverse developments affecting financial institutions could adversely affect our liquidity and financial performance66% rewritten
24Our business is subject to the risks of natural disasters and other catastrophic events, many of which are becoming more acute and frequent due to climate change, and to interruption by human-induced problems93% rewritten

RISKS RELATED TO OUR INTELLECTUAL PROPERTY AND PLATFORM DEVELOPMENT

25Security breaches, improper access to our or borrowers’ data, or other security incidents may harm our reputation, adversely affect our results of operations and expose us to liability94% rewritten
26Any significant disruption of, or failure in, our technology systems, including our AI lending platform, could adversely affect our business, financial condition and results of operationsNew
27Our platform and internal systems rely on software that is highly technical, and if our software contains undetected errors, our business could be adversely affected89% rewritten
28It may be difficult and costly to protect our intellectual property rights, and we may not be able to ensure their protection70% rewritten
29Some aspects of our business processes 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 business82% rewritten
30The use of generative or agentic AI technologies by our employees or contractors could expose us to unexpected liability96% rewritten

RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES

31Our proprietary AI models rely in part on the use of loan applicant and borrower data and other third-party data, and if we lose the ability to use such data, or if such data contain inaccuracies, our business could be adversely affected96% rewritten
32We rely on strategic relationships with loan aggregators to attract applicants to our marketplace, and if we cannot maintain effective relationships with loan aggregators or successfully replace their services, our business could be adversely affected65% rewritten
33We rely on third-party vendors, and if such vendors do not perform adequately or terminate their relationships with us, or if regulatory scrutiny of vendor relationships increases, our business could be adversely affected81% rewritten
34We are subject to counterparty risk with respect to the capped call transactions50% rewritten

RISKS RELATED TO REGULATION AND LITIGATION

35Litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and other adverse consequences90% rewritten
36Our business is subject to a wide range of laws and regulations, many of which are evolving, and failure or perceived failure to comply with such laws and regulations could harm our business, financial condition and results of operations99% rewritten
37We have been in the past and may in the future be subject to federal and state regulatory inquiries, investigations or enforcement actions, which could adversely affect our business100% rewritten
38The CFPB and other consumer protection regulators have broad authority over our business, and increased supervision or enforcement could adversely affect our businessNew
39The collection, use, storage, sharing and other processing of personal information subjects us to privacy and data protection laws and regulations, and failures to comply could adversely affect our businessNew
40If we are deemed to be an investment company, investment adviser or broker-dealer, or if our securities-related activities fail to comply with applicable laws, our business could be materially adversely affectedNew
41Anti-money laundering, sanctions and anti-corruption laws could adversely affect our business97% rewritten

RISKS RELATED TO INDEBTEDNESS

42Corporate and asset-backed debt ratings could adversely affect our ability to support loan funding for our marketplace at attractive rates, which could negatively affect our results of operations, financial condition and liquidity89% rewritten
43We may need to raise additional funds in the future, including through equity, equity-linked, or debt financings, to support business growth, and those funds may not be available on acceptable terms, or at all92% rewritten
44Provisions in the Indentures governing the Notes may deter or prevent a business combination that may be favorable to you54% rewritten

RISKS RELATED TO TAXES

45Our ability to use our deferred tax assets to offset future taxable income may be subject to certain limitations, which may have a material impact on our result of operations77% rewritten
46Changes in tax laws could have a material adverse effect on our business, financial condition and results of operations75% rewritten

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

47The trading price of our common stock may be volatile, and you could lose all or part of your investment88% rewritten
48We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value. Share repurchases could also affect the trading price of our stock, increase volatility of our stock and diminish our cash reserves
49The capped call transactions entered into in connection with the issuance of certain of the Notes may affect the market price of our common stock59% rewritten
50Certain insiders have significant voting power, which could limit your ability to influence the outcome of key transactions, including a change of control
51The large number of shares of our capital stock eligible or registered for public sale could depress the market price of our common stock88% rewritten
52You may be diluted by the future issuance of additional common stock in connection with our equity incentive plans, acquisitions or otherwise97% rewritten
53Transactions relating to the Notes may dilute the ownership interest of stockholders, or may otherwise depress the price of our common stock52% rewritten
54Delaware 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 common stock
55Our common stock market price and trading volume could decline if equity or industry analysts do not publish research or publish inaccurate or unfavorable research about our business
56We do not intend to pay dividends for the foreseeable future

Other Upstart Holdings 10-Ks

FY2024 10-K risk factors
85 risks
Upstart faces heavy reliance on its top three lending partners, who generated 63% of total revenue in 2024. The company depends heavily on unsecured personal loans and institutional funding resilience. AI model performance during economic downturns remains a core operational risk.
Filed Feb 14, 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.