Upstart Holdings, Inc. (NASDAQ: UPST), the leading artificial intelligence (AI) lending marketplace, today announced financial results for the quarter ended September 30, 2026. Upstart will host a conference call and webcast at 5:00 a.m. Pacific Time today. An earnings presentation and link to the webcast are available at ir.upstart.com.
“Macro comes and goes, but alpha compounds,” said Paul Gu, Co-founder and CEO of Upstart. “In Q3, our technology and marketing advances helped drive record Contribution Profit, our secured products reached positive Contribution Margin a quarter ahead of plan, and we supported platform growth with proportionately less equity capital. Macro is putting pressure on our near-term outlook, but the progress we’re making gives me more confidence than ever in Upstart’s long-term potential.”
Third Quarter 2026 Highlights
- Originations: $4.1 billion, up 44% year-over-year (“YoY”). A record 574,089 loans originated, up 34% YoY.
- Total Revenue: $371 million, up 34% YoY. Revenue from fees was a record $364 million, up 41% YoY.
- Income from Operations: $36.0 million, compared to $23.7 million in Q3 2025.
- Net Income: $36.6 million, up 15% YoY from $31.8 million in Q3 2025. Diluted net income per share was $0.33, compared with $0.23 in Q3 2025.
- Contribution Profit: All-time high of $218 million, up 48% YoY. Contribution Margin was 60%, versus 57% in Q3 2025.
- Adjusted EBITDA: $89.3 million, up 26% YoY from $71.2 million in Q3 2025. Adjusted EBITDA Margin was 24%, down from 26% in Q3 2025.
Results by Product Category1
- Unsecured: Revenue from fees was $330 million, up 30% YoY. Contribution Profit was $212 million, up 35% YoY, while Contribution Margin was 64%, up 2 percentage points from 62% in both Q3 2025 and Q2 2026.
- Secured (Auto and Home): Combined Contribution Margin was positive 17%, up from negative 179% in Q3 2025 and up 52 percentage points from negative 35% in Q2 2026. This category reached positive Contribution Margin one quarter ahead of target.
Financial Outlook
For full-year 2026, Upstart expects:
- Revenue From Fees of approximately $1.32 billion
- Total Revenue of approximately $1.35 billion
- Adjusted EBITDA (Margin % of Total Revenue) of approximately $260 million (19%)
Conference Call and Webcast Information
- Live Conference Call and Webcast at 5:00 a.m. PT / 8:00 a.m. ET on November 3, 2026. To access the call in the United States and Canada: 800-330-6710, conference code 9806820. To access the call outside of the United States and Canada: +1 312-471-1353, conference code 9806820. A webcast is available at ir.upstart.com.
- Event Replay: A webcast of the event will be archived for one year at ir.upstart.com.
1 This disaggregation does not represent the Company’s operating segments under U.S. GAAP. While Unsecured Lending is a reportable segment, Secured Products include two operating segments, Auto Lending and Other. |
About Upstart
Upstart (NASDAQ: UPST) is the leading AI lending marketplace, connecting millions of consumers to more than 100 banks and credit unions that leverage Upstart’s AI models and cloud applications to deliver superior credit products. With Upstart AI, lenders can approve more borrowers at lower rates while delivering the exceptional digital-first experience customers demand. More than 90% of loans are fully automated, with no human intervention by Upstart. Founded in 2012, Upstart’s platform includes personal loans, automotive loans, home equity lines of credit, and Upstart’s new Cash Line product, a revolving line of credit. Upstart is based in Burlingame, California.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding our outlook for the full-year of 2026 and beyond. These statements may include words such as “anticipate”, “becoming”, “believe”, “can have”, “continue”, “could”, “estimate”, “expect”, “intend”, “likely”, “look forward”, “may”, “ongoing,” “plan”, “potential”, “predict”, “project”, “should”, “target”, “will”, “would,” or the negative of these terms or other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events that do not relate strictly to historical or current facts. Forward-looking statements give our current expectations and projections relating to our financial condition; macroeconomic factors; plans; objectives; product development; growth opportunities and the sustainability of our business and market position; assumptions; risks; future performance; business; investments; and results of operations, including revenue (including revenue from fees and net interest income (loss)), contribution margin, net income (loss), Adjusted EBITDA, basic weighted-average share count, and diluted weighted-average share count. Forward-looking statements are based on information available at the time those statements are made or management’s good faith beliefs and assumptions as of that time with respect to future events, including assumptions regarding macroeconomic conditions, credit performance, funding availability, and competitive dynamics, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in, or suggested by, the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results. Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
More information about factors that could affect our results of operations and risks and uncertainties are provided in our public filings with the Securities and Exchange Commission (the “SEC”), including “Risk Factors” in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting our investor relations website at ir.upstart.com or the SEC’s website at www.sec.gov. These risks and uncertainties include, but are not limited to, our ability to manage the adverse effects of macroeconomic conditions and disruptions in the banking sector and credit markets, including inflation and related changes in interest rates and monetary policy; our ability to access sufficient loan funding, including through securitizations, committed capital and other co-investment arrangements, whole loan sales, and warehouse credit facilities; the effectiveness of our credit decisioning models and risk management efforts, including reflecting the impact of macroeconomic conditions on borrowers' credit risk; our ability to retain existing, and attract new, lending partners; our future growth prospects and financial performance; our ability to manage risks associated with the loans on our balance sheet; our ability to improve and expand our platform and products; and our ability to operate successfully in a highly-regulated industry. Moreover, we operate in very competitive and rapidly changing environments, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Additional information will be available in other future reports that we file with the SEC from time to time, which could cause actual results to vary from expectations.
Key Operating Metrics and Non-GAAP Financial Measures
Beginning in the second quarter of 2026, we refer to the metrics “Transaction Volume, Dollars” and “Transaction Volume, Number of Loans” as “Originations, Dollars” and “Originations, Number of Loans,” respectively, to reflect management’s internal terminology. We define Originations, Dollars as the aggregate of: (i) the total principal of loan originations for personal loans, small dollar loans, and auto loans, (ii) committed amounts for HELOCs, and (iii) drawn amounts for unsecured revolving credit lines (Cash Line), in each case facilitated on our marketplace during the periods presented. We define Originations, Number of Loans as the total number of such originations, commitments, and draws, as applicable, facilitated on our marketplace during the periods presented. We believe these metrics are good proxies for our overall scale and reach as a marketplace.
We define Conversion Rate as the Originations, Number of Loans in a period divided by the total number of rate inquiries received that we estimate to be legitimate, which we record when a borrower actively requests a loan offer on our platform. We track this metric to understand the impact of improvements to the efficiency of our borrower funnel on our overall growth. Cash Line is excluded because those borrowers may make multiple draws after the line has been initially approved, and those subsequent draws do not represent additional conversions.
We define Percentage of Loans Fully Automated as the total number of loans in a given period originated end-to-end with no human involvement required by the Company divided by the Originations, Number of Loans in the same period. Cash Line is excluded because those borrowers may make multiple draws after the line has been initially approved, and those subsequent draws do not represent additional automation. Under this definition, “originated end-to-end” means (i) from initial rate request to final funding for personal loans, including small dollar loans, and (ii) from initial rate request to loan approval for auto loans and HELOCs, due to certain jurisdictions’ local requirements and external dependencies that require human action prior to funding.
To derive Contribution Profit, we subtract the sum of borrower acquisition costs as well as borrower verification and servicing costs from revenue from fees, net. To calculate Contribution Margin we divide Contribution Profit by revenue from fees, net.
We calculate Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense and certain payroll tax expenses, depreciation and amortization, expense on convertible notes, provision for income taxes, gain on debt extinguishment, net gain on lease modification and reorganization expenses, as applicable. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. Adjusted EBITDA and Adjusted EBITDA Margin include interest expense from warehouse and risk retention facilities which is incurred in the course of earning corresponding interest income.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included below. Upstart has not reconciled the forward-looking non-GAAP measures to comparable forward-looking GAAP measures because of the potential variability and uncertainty of incurring these costs and expenses in the future. Accordingly, a reconciliation is not available without unreasonable effort.
Upstart Holdings, Inc. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) | ||||||||
December 31, | September 30, | |||||||
2025 | 2026 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 652,388 | $ | 461,484 | ||||
Restricted cash | 404,624 | 666,984 | ||||||
Loans (at fair value)(1) | 984,552 | 940,747 | ||||||
Property, equipment, and software, net | 44,174 | 51,127 | ||||||
Operating lease right of use assets | 16,410 | 56,921 | ||||||
Beneficial interest assets (at fair value) | 396,216 | 613,652 | ||||||
Line of credit receivable (at fair value) | 112,742 | 110,110 | ||||||
Notes receivable and residual certificates (at fair value) | 97,416 | 144,613 | ||||||
Non-marketable equity securities | 41,250 | 41,000 | ||||||
Goodwill | 67,062 | 67,062 | ||||||
Other assets (includes $41,166 and $68,051 at fair value as of December 31, 2025 and September 30, 2026, respectively) | 157,971 | 185,342 | ||||||
Total assets | $ | 2,974,805 | $ | 3,339,042 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Liabilities: | ||||||||
Payable to investors | $ | 107,659 | $ | 166,729 | ||||
Borrowings | 1,829,145 | 2,027,322 | ||||||
Payable to securitization note holders (at fair value) | 46,542 | 25,505 | ||||||
Accrued expenses and other liabilities (includes $15,219 and $34,506 at fair value as of December 31, 2025 and September 30, 2026, respectively) | 171,495 | 171,075 | ||||||
Operating lease liabilities | 21,149 | 60,991 | ||||||
Total liabilities | 2,175,990 | 2,451,622 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.0001 par value; 700,000,000 shares authorized; 98,033,361 and 98,906,930 shares issued and outstanding as of December 31, 2025 and September 30, 2026, respectively | 10 | 10 | ||||||
Additional paid-in capital | 1,156,361 | 1,198,495 | ||||||
Accumulated deficit | (357,556 | ) | (311,085 | ) | ||||
Total stockholders’ equity | 798,815 | 887,420 | ||||||
Total liabilities and stockholders’ equity | $ | 2,974,805 | $ | 3,339,042 | ||||
(1) | Includes $53.8 million and $28.9 million of loans, at fair value, contributed as collateral for the consolidated securitization as of December 31, 2025 and September 30, 2026, respectively. | |
Upstart Holdings, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (In thousands, except share and per share data) (Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Revenue: | ||||||||||||||||
Revenue from fees, net(1) | $ | 258,539 | $ | 364,030 | $ | 684,791 | $ | 989,112 | ||||||||
Interest income, interest expense, and fair value adjustments, net: | ||||||||||||||||
Interest income(3) | 57,203 | 56,561 | 143,394 | 169,673 | ||||||||||||
Interest expense(3) | (8,794 | ) | (12,879 | ) | (23,586 | ) | (35,780 | ) | ||||||||
Fair value and other adjustments, net(4) | (29,843 | ) | (37,190 | ) | (56,832 | ) | (79,561 | ) | ||||||||
Total interest income, interest expense, and fair value adjustments, net | 18,566 | 6,492 | 62,976 | 54,332 | ||||||||||||
Total revenue | 277,105 | 370,522 | 747,767 | 1,043,444 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 78,844 | 102,080 | 210,919 | 321,047 | ||||||||||||
Customer operations | 49,790 | 63,339 | 136,537 | 179,753 | ||||||||||||
Engineering and product development | 64,026 | 92,652 | 190,689 | 266,624 | ||||||||||||
General, administrative, and other | 60,779 | 76,452 | 185,910 | 232,900 | ||||||||||||
Total operating expenses | 253,439 | 334,523 | 724,055 | 1,000,324 | ||||||||||||
Income from operations | 23,666 | 35,999 | 23,712 | 43,120 | ||||||||||||
Other income, net | 1,017 | 1,244 | 4,209 | 4,714 | ||||||||||||
Gain on debt extinguishment | 7,246 | — | 7,246 | — | ||||||||||||
Net income before income taxes | 31,929 | 37,243 | 35,167 | 47,834 | ||||||||||||
Provision for income taxes | 124 | 665 | 202 | 1,363 | ||||||||||||
Net income | $ | 31,805 | $ | 36,578 | $ | 34,965 | $ | 46,471 | ||||||||
Net income per share, basic | $ | 0.33 | $ | 0.37 | $ | 0.37 | $ | 0.48 | ||||||||
Net income per share, diluted | $ | 0.23 | $ | 0.33 | $ | 0.28 | $ | 0.44 | ||||||||
Weighted-average number of shares outstanding used in computing net income per share, basic | 96,682,774 | 97,998,632 | 95,503,380 | 97,162,308 | ||||||||||||
Weighted-average number of shares outstanding used in computing net income per share, diluted | 109,724,669 | 125,411,247 | 105,921,585 | 109,828,530 | ||||||||||||
(1) | The following table presents revenue from fees disaggregated by type of service for the periods presented: |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Revenue from fees, net: | ||||||||||||||||
Platform and referral fees, net | $ | 216,882 | $ | 283,139 | $ | 570,702 | $ | 791,823 | ||||||||
Servicing and other fees, net | 41,657 | 69,807 | 114,089 | 173,726 | ||||||||||||
Loan sales fees(2) | — | 11,084 | — | 23,563 | ||||||||||||
Total revenue from fees, net | $ | 258,539 | $ | 364,030 | $ | 684,791 | $ | 989,112 | ||||||||
(2) | Beginning in the second quarter of 2026, loan sales fees, which were previously included within servicing and other fees, net, are presented as a separate component of revenue from fees, net. Amounts for the three months ended March 31, 2026 have been reclassified to conform to the current-period presentation. | |
(3) | For the three and nine months ended September 30, 2026, interest income and interest expense include dividend income earned on certain cash accounts and expense on convertible senior notes, respectively, which were previously included in other income, net. Refer to “Note 1. Description of Business and Significant Accounting Policies” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for details. | |
(4) | The following table presents components of fair value and other adjustments, net for the periods presented: |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Fair value and other adjustments, net: | ||||||||||||||||
Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net | $ | (15,545 | ) | $ | (26,864 | ) | $ | (55,749 | ) | $ | (60,637 | ) | ||||
Fair value adjustments and realized losses on beneficial interests, net | (13,985 | ) | (7,067 | ) | (2,608 | ) | (2,340 | ) | ||||||||
Realized gain (loss) on sale of loans, net | (313 | ) | (3,259 | ) | 1,525 | (16,584 | ) | |||||||||
Total fair value and other adjustments, net | $ | (29,843 | ) | $ | (37,190 | ) | $ | (56,832 | ) | $ | (79,561 | ) | ||||
Upstart Holdings, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
2025 | 2026 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 34,965 | $ | 46,471 | ||||
Adjustments to reconcile net income to net cash used in operating activities | ||||||||
Change in fair value of loans | (83,448 | ) | 110,989 | |||||
Change in fair value of servicing assets | 12,795 | 17,753 | ||||||
Change in fair value of servicing liabilities | (1,009 | ) | (4,514 | ) | ||||
Change in fair value of beneficial interest assets | (16,205 | ) | (15,386 | ) | ||||
Change in fair value of beneficial interest liabilities | 18,813 | 17,726 | ||||||
Change in fair value of other financial instruments | (5,529 | ) | (473 | ) | ||||
Stock-based compensation | 99,497 | 119,232 | ||||||
Gain on loan servicing rights, net | (20,376 | ) | (37,481 | ) | ||||
Gain on debt extinguishment | (7,246 | ) | — | |||||
Depreciation and amortization | 18,374 | 19,103 | ||||||
Loan premium amortization | (33,560 | ) | (32,833 | ) | ||||
Non-cash interest expense and other | 5,219 | 11,982 | ||||||
Net changes in operating assets and liabilities: | ||||||||
Purchases and originations of loans held-for-sale | (6,410,254 | ) | (9,721,430 | ) | ||||
Proceeds from sale of loans held-for-sale | 5,994,691 | 9,038,098 | ||||||
Principal payments received for loans held-for-sale | 138,545 | 142,001 | ||||||
Principal payments received for loans held by consolidated securitization | 29,772 | 21,540 | ||||||
Settlements of beneficial interest liabilities, net | (15,716 | ) | (2,251 | ) | ||||
Proceeds from beneficial interest assets (derivatives) | 4,096 | 14,167 | ||||||
Settlements of beneficial interest assets (derivatives) | (1,659 | ) | (5,331 | ) | ||||
Other assets | 3,825 | (9,422 | ) | |||||
Operating lease liability and right-of-use asset | (918 | ) | (669 | ) | ||||
Accrued expenses and other liabilities | (20,949 | ) | (18,953 | ) | ||||
Net cash used in operating activities | (256,277 | ) | (289,681 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases and originations of loans held-for-investment | $ | (666,049 | ) | $ | (870,246 | ) | ||
Proceeds from sale of loans held-for-investment | 51,195 | 628,324 | ||||||
Principal payments received for loans held-for-investment | 221,996 | 244,315 | ||||||
Principal payments received for notes receivable and repayments of residual certificates | 12,895 | 45,456 | ||||||
Acquisition and settlements of beneficial interest assets (hybrid instruments) | (1,608 | ) | (10,138 | ) | ||||
Proceeds from beneficial interest assets (hybrid instruments) | 94,229 | 191,038 | ||||||
Issuance of line of credit receivable | (7,862 | ) | (721 | ) | ||||
Repayments of line of credit receivable | 783 | 2,791 | ||||||
Purchases of property and equipment | (190 | ) | (5,672 | ) | ||||
Capitalized software costs | (14,298 | ) | (13,003 | ) | ||||
Net cash provided by (used in) investing activities | (308,909 | ) | 212,144 | |||||
Cash flows from financing activities | ||||||||
Proceeds from borrowings | $ | 212,848 | $ | 771,672 | ||||
Proceeds from convertible notes issuance, net of debt issuance costs paid to lender | 678,270 | — | ||||||
Payment of debt issuance costs to third parties | (3,144 | ) | — | |||||
Repayments of borrowings | (207,494 | ) | (511,831 | ) | ||||
Repurchases and repayments of convertible notes | (224,154 | ) | (66,544 | ) | ||||
Purchase of capped calls, net | (54,636 | ) | — | |||||
Principal payments made on securitization notes | (32,023 | ) | (20,640 | ) | ||||
Payable to investors | 33,227 | 59,070 | ||||||
Net proceeds related to stock-based award activities | 22,934 | 17,323 | ||||||
Repurchases of stock | — | (100,057 | ) | |||||
Net cash provided by financing activities | 425,828 | 148,993 | ||||||
Change in cash, cash equivalents and restricted cash | (139,358 | ) | 71,456 | |||||
Cash, cash equivalents and restricted cash | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 976,263 | 1,057,012 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 836,905 | $ | 1,128,468 | ||||
Upstart Holdings, Inc. Key Operating and Non-GAAP Financial Metrics (In thousands, except per share data and ratios, or as noted) (Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Originations, Dollars | $ | 2,854,296 | $ | 4,117,800 | $ | 7,808,302 | $ | 11,790,116 | ||||||||
Originations, Number of Loans(1) | 428,056 | 574,089 | 1,041,361 | 1,557,459 | ||||||||||||
Conversion Rate(2) | 19.4 | % | 18.6 | % | 19.4 | % | 18.9 | % | ||||||||
Percentage of Loans Fully Automated | 91 | % | 90 | % | 91 | % | 91 | % | ||||||||
Contribution Profit | $ | 147,406 | $ | 217,970 | $ | 390,321 | $ | 548,375 | ||||||||
Contribution Margin | 57 | % | 60 | % | 57 | % | 55 | % | ||||||||
Adjusted EBITDA | $ | 71,162 | $ | 89,332 | $ | 166,792 | $ | 206,706 | ||||||||
Adjusted EBITDA Margin | 26 | % | 24 | % | 22 | % | 20 | % | ||||||||
(1) | Originations, Number of Loans is shown in ones for the periods presented. | |
(2) | Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Conversion Rate. Prior period figures have been recast to conform to the new definition and methodology. For additional information regarding this change, see “Key Operating and Non-GAAP Financial Metrics” in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition, we intend to discontinue reporting this metric beginning in the first quarter of 2027. See “Key Operating and Non-GAAP Financial Metrics” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for additional information. |
The following table provides disaggregated information for Originations, Dollars and Originations, Number of Loans for the periods presented:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Originations, Dollars | ||||||||||||||||
Unsecured Lending(1) | $ | 2,654,301 | $ | 3,531,378 | $ | 7,317,926 | $ | 10,208,908 | ||||||||
Other(2) | 199,995 | 586,422 | 490,376 | 1,581,208 | ||||||||||||
Total | $ | 2,854,296 | $ | 4,117,800 | $ | 7,808,302 | $ | 11,790,116 | ||||||||
Originations, Number of Loans(3) | ||||||||||||||||
Unsecured Lending(1) | 420,089 | 549,415 | 1,023,713 | 1,495,460 | ||||||||||||
Other(2) | 7,967 | 24,674 | 17,648 | 61,999 | ||||||||||||
Total | 428,056 | 574,089 | 1,041,361 | 1,557,459 | ||||||||||||
(1) | Refer to “Note 14. Segment Information” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for additional information regarding our Unsecured Lending segment and related Contribution Profit. | |
(2) | Includes Auto Lending and Other operating segments, which did not meet the separate reporting or aggregation criteria under GAAP. | |
(3) | Originations, Number of Loans, is shown in ones for the periods presented. |
The following table presents financial information, including Contribution Profit, for our Unsecured Lending segment:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Unsecured Lending(1) | ||||||||||||||||
Revenue from fees, net | $ | 253,192 | $ | 329,939 | $ | 672,254 | $ | 921,634 | ||||||||
Borrower acquisition costs(2) | (61,771 | ) | (76,280 | ) | (164,161 | ) | (241,371 | ) | ||||||||
Borrower verification and servicing costs(3) | (34,445 | ) | (41,522 | ) | (96,085 | ) | (118,924 | ) | ||||||||
Contribution Profit for Unsecured Lending | $ | 156,976 | $ | 212,137 | $ | 412,008 | $ | 561,339 | ||||||||
(1) | Beginning in the second quarter of 2026, we renamed our Personal Lending operating segment to Unsecured Lending. The name change was administrative in nature and had no impact to the segment results or our condensed consolidated financial statements. | |
(2) | Borrower acquisition costs consist of our sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for our business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses. | |
(3) | Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of our customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses. |
The following table presents a reconciliation of total Contribution Profit to Net income before income taxes:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Contribution Profit - Unsecured Lending | $ | 156,976 | $ | 212,137 | $ | 412,008 | $ | 561,339 | ||||||||
Reconciling items: | ||||||||||||||||
Contribution Profit/(Loss) - Other Segments(1) | (9,570 | ) | 5,833 | (21,687 | ) | (12,964 | ) | |||||||||
Sales and marketing, net of borrower acquisition costs(2) | (11,582 | ) | (10,883 | ) | (34,160 | ) | (35,309 | ) | ||||||||
Customer operations, net of borrower verification and servicing costs(3) | (5,919 | ) | (8,476 | ) | (18,826 | ) | (24,754 | ) | ||||||||
Engineering and product development | (64,026 | ) | (92,652 | ) | (190,689 | ) | (266,624 | ) | ||||||||
General, administrative, and other | (60,779 | ) | (76,452 | ) | (185,910 | ) | (232,900 | ) | ||||||||
Interest income, interest expense, and fair value adjustments, net | 18,566 | 6,492 | 62,976 | 54,332 | ||||||||||||
Other income, net | 1,017 | 1,244 | 4,209 | 4,714 | ||||||||||||
Gain on debt extinguishment | 7,246 | — | 7,246 | — | ||||||||||||
Net income before income taxes | $ | 31,929 | $ | 37,243 | $ | 35,167 | $ | 47,834 | ||||||||
(1) | Includes Auto Lending and Other operating segments, which did not meet the separate reporting or aggregation criteria under GAAP. | |
(2) | Borrower acquisition costs were $67.3 million and $91.2 million for the three months ended September 30, 2025 and 2026, respectively, and were $176.8 million and $285.7 million for the nine months ended September 30, 2025 and 2026, respectively. | |
(3) | Borrower verification and servicing costs were $43.9 million and $54.9 million for the three months ended September 30, 2025 and 2026, respectively, and were $117.7 million and $155.0 million for the nine months ended September 30, 2025 and 2026, respectively. | |
Upstart Holdings, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data and ratios, or as noted) (Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Revenue from fees, net | $ | 258,539 | $ | 364,030 | $ | 684,791 | $ | 989,112 | ||||||||
Income from operations | 23,666 | 35,999 | 23,712 | 43,120 | ||||||||||||
Operating Margin | 9 | % | 10 | % | 3 | % | 4 | % | ||||||||
Sales and marketing, net of borrower acquisition costs(1) | $ | 11,582 | $ | 10,883 | $ | 34,160 | $ | 35,309 | ||||||||
Customer operations, net of borrower verification and servicing costs(2) | 5,919 | 8,476 | 18,826 | 24,754 | ||||||||||||
Engineering and product development | 64,026 | 92,652 | 190,689 | 266,624 | ||||||||||||
General, administrative, and other | 60,779 | 76,452 | 185,910 | 232,900 | ||||||||||||
Interest income, interest expense, and fair value adjustments, net | (18,566 | ) | (6,492 | ) | (62,976 | ) | (54,332 | ) | ||||||||
Contribution Profit | $ | 147,406 | $ | 217,970 | $ | 390,321 | $ | 548,375 | ||||||||
Contribution Margin | 57 | % | 60 | % | 57 | % | 55 | % | ||||||||
(1) | Borrower acquisition costs were $67.3 million and $91.2 million for the three months ended September 30, 2025 and 2026, respectively, and were $176.8 million and $285.7 million for the nine months ended September 30, 2025 and 2026, respectively. | |
(2) | Borrower verification and servicing costs were $43.9 million and $54.9 million for the three months ended September 30, 2025 and 2026, respectively, and were $117.7 million and $155.0 million for the nine months ended September 30, 2025 and 2026, respectively. | |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 | 2026 | 2025 | 2026 | |||||||||||||
Total revenue | $ | 277,105 | $ | 370,522 | $ | 747,767 | $ | 1,043,444 | ||||||||
Net income | 31,805 | 36,578 | 34,965 | 46,471 | ||||||||||||
Net Income Margin | 11 | % | 10 | % | 5 | % | 4 | % | ||||||||
Adjusted to exclude the following: | ||||||||||||||||
Stock-based compensation and certain payroll tax expenses(1) | $ | 35,404 | $ | 40,945 | $ | 105,681 | $ | 122,938 | ||||||||
Depreciation and amortization | 6,131 | 6,119 | 18,374 | 19,103 | ||||||||||||
Reorganization expenses | — | — | — | 1,678 | ||||||||||||
Expense on convertible notes | 4,944 | 5,025 | 14,816 | 15,153 | ||||||||||||
Gain on debt extinguishment | (7,246 | ) | — | (7,246 | ) | — | ||||||||||
Provision for income taxes | 124 | 665 | 202 | 1,363 | ||||||||||||
Adjusted EBITDA | $ | 71,162 | $ | 89,332 | $ | 166,792 | $ | 206,706 | ||||||||
Adjusted EBITDA Margin | 26 | % | 24 | % | 22 | % | 20 | % | ||||||||
(1) | Payroll tax expenses include the employer payroll tax-related expense on employee stock transactions, as the amount is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20261103785778/en/