Rise Companies' Net Loss Doubles Amid Soaring Tech Costs

TL;DR

**Rise's cash burn is accelerating, and their tech investments aren't translating to profit yet – stay away until they prove otherwise.**

AI Summary

Rise Companies Corp. reported a net loss of $2.916 million for the three months ended September 30, 2025, a significant increase from the $1.456 million net loss in the prior-year period. For the nine months ended September 30, 2025, the net loss was $8.829 million, compared to $4.480 million in the same period of 2024. Revenue slightly decreased to $14.329 million for the quarter, down from $14.838 million, but increased for the nine-month period to $43.812 million from $43.376 million. Total costs and expenses rose to $17.558 million for the quarter, up from $16.781 million, primarily driven by a substantial increase in technology and product development costs, which jumped to $4.763 million from $3.496 million. The company's cash and cash equivalents declined from $21.081 million at December 31, 2024, to $10.896 million at September 30, 2025. A notable gain on extinguishment of debt of $2.391 million was recorded for the nine-month period ended September 30, 2025, which was not present in the prior year. The company continues to depend on fee income from its Investment Products and faces risks related to data security breaches and real estate market illiquidity.

Why It Matters

Rise Companies' widening net loss and declining cash position are critical for investors, signaling potential liquidity challenges and increased operational inefficiencies. The substantial increase in technology and product development costs, up to $15.058 million for the nine months, suggests significant investment in the Fundrise Platform, but without a corresponding revenue surge, it pressures profitability. This performance could impact employee morale and future hiring, while customers might face reduced platform enhancements if financial strain continues. In a competitive fintech and real estate investment landscape, Rise's struggles could allow rivals to gain market share, especially given the illiquidity risks inherent in its real estate-focused Investment Products.

Risk Assessment

Risk Level: high — The company's net loss more than doubled from $4.480 million in the nine months ended September 30, 2024, to $8.829 million in the same period of 2025. Cash and cash equivalents decreased significantly from $21.081 million at December 31, 2024, to $10.896 million at September 30, 2025, indicating substantial cash burn. Furthermore, total stockholders' equity decreased from $42.595 million to $33.518 million over the same period, reflecting a deteriorating financial position.

Analyst Insight

Investors should exercise extreme caution and consider divesting, or at least holding off on new investments, given the accelerating net losses and significant decline in cash reserves. Monitor future filings closely for signs of improved cost management, a clear path to profitability, and successful monetization of their technology investments before considering any bullish positions.

Financial Highlights

debt To Equity

0.45

revenue

$14.329M

operating Margin

-19.9%

total Assets

$73.698M

total Debt

$15.162M

net Income

-$2.916M

eps

-$0.09

gross Margin

N/A

cash Position

$10.896M

revenue Growth

-3.97%

Key Numbers

• $14.329M — Revenue (Q3 2025) (Slight decrease from $14.838M in Q3 2024)
• $2.916M — Net Loss (Q3 2025) (Increased from $1.456M in Q3 2024)
• $8.829M — Net Loss (9M 2025) (Increased from $4.480M in 9M 2024)
• $10.896M — Cash and Cash Equivalents (Decreased from $21.081M at Dec 31, 2024)
• $15.058M — Technology and Product Development Costs (9M 2025) (Increased from $11.162M in 9M 2024)
• $2.391M — Gain on Extinguishment of Debt (9M 2025) (New gain not present in 9M 2024)
• $33.518M — Total Stockholders' Equity (Decreased from $42.595M at Dec 31, 2024)
• 32,491,518 — Weighted Average Shares Basic (Q3 2025) (Slight decrease from 32,792,905 in Q3 2024)

Key Players & Entities

• Rise Companies Corp. (company) — registrant and financial technology company
• Fundrise, LLC (company) — wholly-owned subsidiary operating the Fundrise Platform
• Fundrise Advisors, LLC (company) — wholly-owned subsidiary and registered investment adviser
• SEC (regulator) — Securities and Exchange Commission
• $2.916 million (dollar_amount) — net loss for three months ended September 30, 2025
• $8.829 million (dollar_amount) — net loss for nine months ended September 30, 2025
• $10.896 million (dollar_amount) — cash and cash equivalents at September 30, 2025
• $2.391 million (dollar_amount) — gain on extinguishment of debt for nine months ended September 30, 2025
• Fundrise Platform (company) — online investment platform
• Investment Company Act of 1940 (regulator) — governing act for investment programs

FAQ

Risk Factors

• Declining Cash Reserves [high — financial]: Cash and cash equivalents decreased significantly from $21.081 million at December 31, 2024, to $10.896 million at September 30, 2025. This substantial reduction in liquidity could impact the company's ability to fund operations and invest in growth initiatives.
• Increasing Net Losses [high — financial]: The company reported a net loss of $2.916 million for Q3 2025, a sharp increase from $1.456 million in the prior year. For the nine-month period, the net loss more than doubled to $8.829 million from $4.480 million in 2024, indicating deteriorating profitability.
• Rising Technology and Product Development Costs [medium — operational]: Technology and product development costs surged to $4.763 million for the quarter, up from $3.496 million year-over-year. While investment in innovation is crucial, this significant increase contributes to the widening net loss.
• Real Estate Market Illiquidity [medium — market]: The company faces risks associated with the illiquidity of the real estate market. This could make it difficult to divest assets or realize their full value, potentially impacting financial performance.
• Data Security Breach Risks [medium — operational]: Rise Companies Corp. is exposed to risks related to data security breaches. Such incidents could lead to financial losses, reputational damage, and regulatory penalties.

Industry Context

Rise Companies Corp. operates in a sector that relies heavily on fee income from investment products and is exposed to real estate market dynamics. The industry is characterized by the need for significant investment in technology and product development to remain competitive. Companies in this space also face increasing scrutiny regarding data security and regulatory compliance.

Regulatory Implications

The company must adhere to regulations concerning data privacy and security, as breaches can lead to significant penalties and reputational damage. Furthermore, its reliance on investment products means it is subject to financial industry regulations, requiring robust compliance frameworks.

What Investors Should Do

1. Monitor cash burn rate closely.
2. Analyze the sustainability of revenue streams.
3. Evaluate the return on increased technology investments.
4. Assess the impact of the gain on extinguishment of debt.

Glossary

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (Indicates the company has historically incurred more expenses than revenues, with a deficit of $179.165 million as of September 30, 2025.)

Non-controlling interests

The portion of equity in a subsidiary that is not attributable to the parent company. (Represents ownership interests in consolidated entities that do not belong to the parent company's shareholders, totaling $12.064 million.)

Gain on extinguishment of debt

A profit recognized when a company repays debt for less than its carrying amount. (A $2.391 million gain was recorded for the nine months ended September 30, 2025, which positively impacted net income but is a non-recurring item.)

Weighted Average Shares Basic

The average number of outstanding common shares during a period, used for calculating earnings per share. (The weighted average shares basic for Q3 2025 was 32,491,518, a slight decrease from the prior year, impacting EPS calculations.)

Year-Over-Year Comparison

Rise Companies Corp. experienced a widening net loss in the first nine months of 2025 compared to the prior year, with the loss increasing from $4.480 million to $8.829 million. While total revenue saw a modest increase for the nine-month period, quarterly revenue slightly decreased. A significant increase in technology and product development costs contributed to the deteriorating profitability. The company's cash position has also been substantially reduced, and it recorded a notable gain on extinguishment of debt in the current period that was not present previously.

Filing Documents

• rc-20250930.htm (10-Q) — 1045KB
• exhibit3111.htm (EX-31.1) — 11KB
• exhibit3121.htm (EX-31.2) — 11KB
• exhibit3211.htm (EX-32.1) — 6KB
• exhibit3221.htm (EX-32.2) — 6KB
• 0001628280-25-050640.txt ( ) — 5603KB
• rc-20250930.xsd (EX-101.SCH) — 41KB
• rc-20250930_cal.xml (EX-101.CAL) — 63KB
• rc-20250930_def.xml (EX-101.DEF) — 197KB
• rc-20250930_lab.xml (EX-101.LAB) — 532KB
• rc-20250930_pre.xml (EX-101.PRE) — 372KB
• rc-20250930_htm.xml (XML) — 605KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 32 Item 4.

Controls and Procedures

Controls and Procedures 32 PART II OTHER INFORMATION 33 Item 1.

Legal Proceedings

Legal Proceedings 33 Item 1A.

Risk Factors

Risk Factors 33 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 33 Item 3. Defaults Upon Senior Securities 34 Item 4. Mine Safety Disclosures 34 Item 5. Other Information 34 Item 6. Exhibits 34

Signatures

Signatures 36 i Rise Companies Corp. ("Rise," "Rise Companies," "we," "our," the "Company," and "us") makes statements in this Quarterly Report on Form 10-Q (the "Quarterly Report") that are considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "seek," "may," and similar expressions or statements regarding future periods are intended to identify forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Quarterly Report or in the information incorporated by reference into this Quarterly Report. The forward-looking statements included in this Quarterly Report are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties, and accordingly we can give no assurance that such expectations, plans, estimates, assumptions and beliefs are correct or will be achieved. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we beli

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Unaudited Financial Statements

Item 1. Unaudited Financial Statements. INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF RISE COMPANIES CORP. (Unaudited) Page Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Changes in Convertible Preferred Stock, Stockholders' Equity and Non-Controlling Interest 6 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements 9 3 RISE COMPANIES CORP. Condensed Consolidated Balance Sheets (Amounts in thousands, except share data) September 30, 2025 December 31, 2024 (Unaudited) (*) ASSETS Current assets: Cash and cash equivalents $ 10,896 $ 21,081 Restricted cash 219 74 Due from affiliates 6,515 7,147 Prepaid expenses 1,622 1,619 Notes receivable 13,069 12,500 Other current assets, net 2,297 1,569 Total current assets 34,618 43,990 Investments in Sponsored Programs 1,311 1,248 Property, software and equipment, net 31,309 35,082 Operating lease assets 3,031 3,359 Other assets, net 3,429 3,614 Total assets $ 73,698 $ 87,293 LIABILITIES Current liabilities: Accounts payable $ 338 $ 947 Accrued expenses 6,752 8,686 Due to stockholders 2,765 1,449 Operating lease liabilities, current 1,043 1,023 Loan payable, current — 2,690 Other current liabilities 366 457 Total current liabilities 11,264 15,252 Operating lease liabilities, non-current 3,615 4,153 Other liabilities 283 275 Total liabilities 15,162 19,680 Commitments and contingencies ( Note 16 ) Series A convertible preferred stock, $ 0.0001 par value; 15,000,000 shares authorized; 11,865,046 shares issued and outstanding; with an aggregate liquidation preference of $ 25,951 25,018 25,018 STOCKHOLDERS' EQUITY Class A Common Stock, $ 0.0001 par value; 43,000,000 shares authorized; 2,891,359 shares issued and 2,458,394 shares outstanding, 2,888,859 shares issued and 2,455,894 shares outstanding, respectively — — Class B Common

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