Rise Companies Corp.

03/23/2026 | Press release | Distributed by Public on 03/23/2026 13:56

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our audited annual consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and the related notes thereto contained in Item 8of this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially. See the section titled "Statements Regarding Forward-Looking Information" within this Annual Report. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Results of the Business
We are encouraged by both the performance of the alternative investments held by our Investment Products and by our own ability to navigate the evolving economic landscape. Despite ongoing challenges and macroeconomic headwinds such as persistent inflation, elevated interest rates, tariffs, and volatility in real estate markets, our investments continue to demonstrate resilience.
As of December 31, 2025 and December 31, 2024, there was approximately $3.1 billion and $2.9 billion in equity AUM, respectively, on the Fundrise Platform. The increase in equity AUM during 2025 was driven primarily by growth and performance in our Innovation Fund and the Credit Funds, while consistent property fundamentals, namely investing in the right locations and the right asset types, helped support steady performance across our remaining Investment Products despite the ongoing headwinds created by adverse economic conditions.
As of December 31, 2025, we have yet to generate any profits from our operations and are incurring net losses while we continue to invest in development and other initiatives to support the expansion of our business. Compared to 2024, our results of operations in 2025 reflect increased research and development expense, driven by a reduction in engineering salaries being capitalized as certain development efforts did not qualify for capitalization and increased spending on third-party software and tools to support the launch of RealAI. Our results also include costs to effect the Merger (see discussion of the Merger in Item 1, Businessabove), which contributed to lower profitability. At the same time, we continued to focus on increasing operating efficiency and cost discipline as part of our efforts to achieve future profitability.
Results of Operations
Revision of Prior Period Financial Statements
As discussed in Note 2, Summary of Significant Accounting Policies,the Company identified an immaterial classification error related to reimbursements of certain operating expenses of Sponsored Programs, primarily arising from an expense limitation agreement. These reimbursements were previously presented within operating expenses in the consolidated statements of operations. The Company concluded that these reimbursements represent consideration payable to a customer under ASC 606 and should therefore be presented as a reduction of revenue. Management determined the error was not material to any previously issued financial statements and corrected the error by retrospectively revising the annual consolidated financial statements for the year ended December 31, 2024 in this 2025 Form 10-K.
The revision reflects a reclassification within the consolidated statements of operations from operating expenses to a reduction of revenue, resulting in a net presentation of previously reported gross amounts, and has no impact on operating income, net income, earnings per share, assets, liabilities, equity, or cash flows.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
For the years December 31, 2025 and 2024, our results of operations are as follows:
Results
2025
(in thousands)
2024
(in thousands)
% Change
(from 2024)
Explanation
Revenue
Investment management and platform advisory, net $ 31,425 $ 28,331 11 %
Investment management and platform advisory income increased period over period, primarily driven by fees earned from the Innovation Fund due to increases in AUM.
Real estate operating platform 18,513 18,015 3 %
Real estate operating platform income remained consistent due to relatively consistent underlying asset values period-over-period.
Real estate management
7,305 8,398 -13 %
Real estate management income decreased period-over-period largely due to certain development projects reaching completion and assets being placed in-service, resulting in a decrease in associated fees.
Total revenue
$ 57,243 $ 54,744 5 %
Results
2025
(in thousands)
2024
(in thousands)
% Change
(from 2024)
Explanation
Costs and Expenses
Cost of revenue, exclusive of depreciation and amortization shown separately below
Cost of revenue, exclusive of depreciation and amortization shown separately below, consists primarily of: (i) allocated salaries and benefits for employees responsible for investor relations and service; (ii) salaries and benefits of personnel associated with real estate services such as closing of real estate investments and real estate asset management; and (iii) costs associated with maintaining the Fundrise Platform including cloud infrastructure costs, third-party expenses, and salaries and benefits of personnel responsible for the ongoing operations and delivery of our platform.
$ 9,009 $ 8,846 2 %
Cost of revenue expenses remained consistent period-over-period.
Technology and product development
Technology and product development expenses consist primarily of salaries and benefits for teams responsible for software engineering, product development, technology activities, as well as costs for third-party software. Technology and product development costs exclude capitalized internal-use software development costs, as they are capitalized as a component of Property, software and equipment, net, and amortized through Depreciation and amortization over the term of their useful life. All other Technology and product development expenses are expensed as incurred.
$ 20,149 $ 14,569 38 % Technology and product development expenses increased period-over-period due to an increase in development efforts related to initiatives that did not meet criteria for capitalization, resulting in a greater portion of engineering salaries being expensed as incurred in 2025.
Marketing
Marketing expenses consist primarily of the costs associated with engaging and enrolling investors in the Investment Products, including costs attributable to marketing our products. This primarily includes costs of building general brand awareness, and salaries and benefits expenses related to our marketing and design teams.
$ 7,762 $ 7,850 -1 %
Marketing expense remained consistent period-over-period.
General, administrative and other
General, administrative and other expenses consist primarily of salaries and benefits for our corporate functions (including finance, legal, human resources, and IT operations), as well as other software and office expenses, and professional fees.
Software and other office expenses $ 2,725 $ 2,768 -2 %
Software and other office expenses remained consistent period-over-period and are mainly comprised of software subscription expenses supporting corporate functions and corporate office lease expense.
Professional fees 2,598 1,615 61 %
Professional fees increased period-over-period due to an increase in legal fees related to the Merger, all or a portion of which we expect to be reimbursed in future periods.
Other general and administrative 18,166 19,588 -7 %
Other general and administrative expenses are comprised mainly of salaries and benefits of personnel responsible for our corporate functions, which decreased period-over-period due to a decrease in headcount.
Depreciation and amortization
Depreciation and amortization expense consists of depreciation expense for our fixed assets and amortization expense for certain software development costs.
$ 12,307 $ 10,005 23 %
Depreciation and amortization expense increased period-over-period due to an increase in amortization of internal use software as more projects were in service in 2025 compared to 2024.
Total costs and expenses
$ 72,716 $ 65,241 11 %
Results
2025
(in thousands)
2024
(in thousands)
% Change
(from 2024)
Explanation
Other Income
Gain on extinguishment of debt $ 2,391 $ - 100 %
In January 2025, the Company was notified that the PPP loan (as defined in Note 9, Loan Payable) was partially forgiven by the SBA, and recorded a corresponding gain. Refer to Note 9, Loan Payable for more details.
Gain on disposition of investments
- 605 -100 %
Fundrise LP, an affiliate of Rise, redeemed its investment in certain of the Investment Products over the course of 2024, resulting in a gain on disposition. Refer to Note 16, Related Party Transactions for more details.
Dividend and interest income
1,180 1,953 -40 %
Dividend and interest income decreased period-over-period largely due to a decrease in sweep dividends earned, due to a lower average daily cash balance and lower rates.
Equity in earnings
134 27 396 %
Equity in earnings earned from Rise and its subsidiaries' investments in the Investment Products increased period-over-period due to higher returns produced by the Sponsored Programs in 2025.
Total other income
$ 3,705 $ 2,585 43 %
Key Factors Impacting Our Current Year Performance
Our historical growth rates of the Fundrise Platform reflect a deliberate strategy that has allowed us to build and develop the various enterprise functions needed to meet the changing demands of our customers and to support our scale, including operations, risk controls, customer support, compliance and technology. The Investment Products have seen general reductions in AUM in recent years due in part to declines in certain real estate valuations and reduced transaction activity following the increase in interest rates during the early part of the decade. However, falling interest rates in 2024 and strong investment operating fundamentals drove growth in 2024 despite ongoing headwinds as a result of sustained higher borrowing costs. During 2025, our Investment Products have generally continued to see positive returns, despite various challenges, primarily in the real estate market. We believe that these returns stemmed primarily from the strength of the portfolio's underlying fundamentals combined with a high level of operational discipline. Additionally, strong performance within the venture portfolio of the Innovation Fund, driven primarily by investments in leading AI-focused technology companies, resulted in higher returns during 2025. Demand from investors and the modern financial industry will continue to inform our business and Investment Product decisions. Given this approach and the dynamic path of our experienced and expected future growth, we have focused in 2025 on a number of important developments within our business that we believe reflect the key factors impacting our performance in 2025. Refer to the "Key Factors We Expect to Impact Our Future Performance" section below for a description of these key factors.
Key Factors We Expect to Impact Our Future Performance
RealAI
In September 2025, we launched RealAI, a platform intended to provide AI-enabled insights related to real estate investing across the broader real estate market. RealAI is in the early stages of commercialization and did not generate material revenue for the year ended December 31, 2025. In early 2026, we publicly announced the platform and began making the product available to the general public. We expect to continue investing in the product's development and commercialization, and our results of operations could be impacted by the pace of user adoption and our ability to monetize the platform over time.
Innovation Fund Listing
As of the date of this filing, the Innovation Fund has been listed on the New York Stock Exchange ("NYSE") and converted from a closed-end tender offer fund into a listed closed-end fund. Following the listing and conversion, any incremental revenue will depend on the Innovation Fund's net assets, which are subject to market conditions, investor demand, and the Fund's investment performance.
Investment in Long-Term Growth
The core elements of our growth strategy include enhancing our technology infrastructure, expanding our product and feature offerings, enrolling new investors in our Investment Products, broadening our investment acquisition capabilities, and extending customer lifetime value. We plan to continue to invest resources needed to accomplish these goals, and we anticipate that certain operating expenses will increase in the future as a result. These investments are intended to contribute to our long-term growth, but they may continue to affect our near-term profitability.
Sources of Operating Revenues and Cash Flows
We generate revenues from investment management and platform advisory fees, real estate management fees, and real estate operating platform fees, which are detailed in Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in this Annual Report.
Interest Rates
During its September, October and December 2025 meetings, the Federal Reserve voted to cut its benchmark interest rate by 25 basis points each time, which were the first such cuts since late 2024. Real estate markets have faced persistent challenges following the Federal Reserve's interest rate increases beginning in late 2022. A decline in rates and improvement in market balance may positively impact real estate values in future periods, creating higher returns for our Investment Products.
Liquidity and Capital Resources
We have incurred operating losses since our inception and have an accumulated deficit of $182.3 million as of December 31, 2025. We have financed our operations primarily through our operating revenues as well as the issuance of equity securities. Our ability to achieve profitability depends on our ability to generate revenue growth in existing product lines, successfully launch new product lines, and manage costs. We may continue to incur substantial operating losses while we continue to build the business and invest in new innovation.
As of December 31, 2025 and 2024, we had $9.2 million and $21.1 million in cash and cash equivalents, respectively. The decrease in our cash and cash equivalents between those periods is primarily due to an increase in certain discretionary cash outflows, including employee bonuses, technology and product development expenses, and reimbursable professional fees related to the Merger, all of which were within the discretion of the Company. We anticipate that our cash and cash equivalents as of December 31, 2025 and forecasted revenue will provide sufficient liquidity for more than a twelve-month period from the date of filing this Annual Report. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to our product development and engineering efforts. While we believe our existing cash resources are sufficient to fund our current operations, we may seek additional financing, including through our Offering described below under "Other Details-Offering Results," to support future growth initiatives, including the continued development and expansion of our products.
As of December 31, 2025, our material commitments for capital expenditures consisted of an operating lease, as discussed in Note 6, Leasesin the Notes to the Consolidated Financial Statements included in this Annual Report.
Corporate Debt
As of December 31, 2025, we had no corporate debt. As of December 31, 2024, we had corporate debt payable of approximately $2.7 million. On April 20, 2020, the Company received a Paycheck Protection Program loan (the "PPP Loan") offered by the U.S. Small Business Administration (the "SBA") in the principal amount of $2.8 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). As explained more fully in Note 9, Loan Payable-PPP Loan Payableof our Notes to the Consolidated Financial Statements included in this Annual Report, according to the terms of the CARES Act and subsequent regulations, all or a portion of loans under the program may be forgiven if certain conditions are met. In July 2021 we applied for such forgiveness. In January 2025, the Company was notified that the PPP loan was forgiven up to the determined eligible amount of $2.3 million. On March 19, 2025, the Company has repaid the remaining $0.4 million of outstanding principal.
Other Details
Offering Results
As of December 31, 2025, we are offering up to 4,283,275 shares of our Class B Common Stock, which represents the shares available to be offered out of the rolling twelve-month maximum offering amount of $75 million under Regulation
A. The Offering is being conducted as a continuous offering pursuant to Rule 251(d)(3) of Regulation A, meaning that while the offering of securities is continuous, active sales of securities may occur sporadically over the term of the Offering. As of December 31, 2025, we had raised total gross offering proceeds of approximately $211.5 million from settled subscriptions.
As of December 31, 2025, we have sold 21,335,432 shares of our Class B Common Stock. This does not include 635,555 shares of Class B Common Stock that were sold in private placements pursuant to Rule 506(c) of Regulation D.
Shares are currently offered and are sold on a continuous basis only to existing investors in the Investment Products. The funds received from the issuance of our Class B Common Stock are a source of capital for our operating expenditures.
Off-Balance Sheet Arrangements
As of December 31, 2025 and December 31, 2024, we had no off-balance sheet arrangements.
Related Party Arrangements
For further information regarding "Related Party Arrangements," please see Note 16, Related Party Transactions, in our Notes to the Consolidated Financial Statements included in this Annual Report.
Critical Accounting Estimates
Management's Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report is based on the Notes to the Consolidated Financial Statements, which are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. By their nature, these estimates and assumptions are subject to an inherent degree of uncertainty and actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. For a complete description of our accounting policies, see Note 2, Summary of Significant Accounting Policiesin the Notes to the Consolidated Financial Statements.
Intangible Assets - Internal-Use Software
Internal-use software is capitalized into an intangible asset when preliminary development efforts are successfully completed, it is probable that the project will be completed, and that the software will be used as intended. Capitalized costs for internal-use software primarily consist of payroll-related costs for employees who are directly involved in the development efforts of a specific piece or pieces of software. Costs related to preliminary project activities and post implementation activities, including training and maintenance, are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Capitalized costs of platform and other software applications are included in property, software and equipment, net.
Capitalization of costs requires judgment in determining when a project has reached the application development stage, the proportion of time spent in the application development stage, and the period over which we expect to benefit from the use of that software. During the years ended December 31, 2025 and 2024, internal-use software costs capitalized were $5.9 million and $13.9 million, respectively. Once the software is placed in service, these costs are amortized over the estimated useful life of the software, generally four years, on a straight-line basis. Amortization of capitalized software was $12.0 million and $9.7 million for the years ended December 31, 2025 and 2024, respectively.
The Company reviews its long-lived assets (including definite-lived intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the year ended December 31, 2024, the Company recognized $0.1 million in impairment expense, which was recorded to Technology and product development expense in the condensed consolidated statements of operations. During the year ended December 31, 2025, the Company did not recognize any impairments.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has released several Accounting Standards Updates ("ASUs") that may have an impact on our financial statements. See Note 2, Summary of Significant Accounting Policies-Recent Accounting Pronouncements, in the Notes to the Consolidated Financial Statements for discussion of the relevant ASUs. We are
currently evaluating the impact of the ASUs not yet adopted on our financial statements and determining our plan for adoption.
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