Learn · Explainer
Risk factors (Item 1A)
What the risk section of a 10-K must contain, how to read it, and what it can't tell you.
The short answer
Risk factors are the section of a 10-K (Item 1A) where a company lists what could make an investment in it risky: competition, regulation, supply problems, debt, lawsuits and more. The rules ask for risks specific to the company, under clear headings, with a short summary up front when the section runs past 15 pages. In Apple's 10-K for fiscal 2026, the section runs from page 5 to page 20.
What the rule asks for
Item 105 of Regulation S-K sets the requirements:
- Discuss the material factors that make an investment speculative or risky.
- Organize them logically with headings, each risk under a subcaption that describes it.
- Avoid risks that could apply to any company; if generic ones are included, put them at the end under “General Risk Factors”.
- If the section is longer than 15 pages, open the report with a summary of no more than two pages.
How to read them
Risk factors are written by lawyers as well as managers, and they tend to list everything that could conceivably go wrong. A few habits help:
- Read the headings first. They're required to describe each risk, so they work as a table of contents.
- Look for the specific ones. A risk about one supplier, one product, one country or one lawsuit tells you more than a paragraph on general economic conditions.
- Compare with last year. A new risk, or one that moved to the top, is often the most informative change. Each 10-Q also has to report material changes in Part II, Item 1A.
- Check them against the numbers. If a risk is about customer concentration, the notes to the financial statements usually say how much revenue the largest customers bring in.
Read a few
Each link opens Item 1A in that company's latest 10-K on SEC EDGAR: Apple · Nvidia · Microsoft · JPMorgan Chase. Every Ticker Sage company page links to its own company's risk factors.
What risk factors aren't
They aren't a forecast or a ranking of what's likely. A long list doesn't mean a riskier company, and a short one doesn't mean a safe one. They're management's disclosure of what it considers material, and they sit next to MD&A, which explains how the year actually went.
Common questions
Where are risk factors in a 10-K?
In Item 1A of Part I, right after the business description. Quarterly 10-Qs report material changes in Part II, Item 1A.
Why are risk factor sections so long?
Companies include anything that could be material to protect themselves from claims that they didn't disclose it. The rules discourage generic risks and require a summary when the section runs past 15 pages.
What is the risk factor summary?
When the section is longer than 15 pages, Item 105 of Regulation S-K requires a bulleted or numbered summary of no more than two pages at the front of the report.
Do risk factors predict what will happen?
No. They describe what management considers material risks. They don't say how likely any of them are.
What are general risk factors?
Risks that could apply to almost any company, such as a recession. The rules ask companies to put those at the end of the section under the caption “General Risk Factors”.
Disclosures
- Editor holdings
- The editor holds no position in any company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 9, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.