Q2 2025 earnings August 5, 2025 Forward looking statements This presentation 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, information or predictions concerning our future financial performance, including our financial outlook for Q3 2025 and the full fiscal year 2025 under the heading "Outlook" and management's estimates under the heading "Ma ...

Financial Performance - Total transaction volume in dollars increased by 154% to $2,820,398,000 for the three months ended June 30, 2025, compared to the same period in 2024[303]. - The number of loans transacted increased by 159% to 372,599 for the three months ended June 30, 2025, compared to the same period in 2024[303]. - Contribution profit for the three months ended June 30, 2025, was $140,543,000, with a contribution margin of 58%[302]. - Adjusted EBITDA for the three months ended June 30, 2025, was $53,053,000, resulting in an adjusted EBITDA margin of 21%[302]. - Adjusted net income for the three months ended June 30, 2025, was $42,248,000, translating to an adjusted net income per share of $0.44[302]. - Total revenue for Q2 2025 was $257.3 million, compared to $127.6 million in Q2 2024, reflecting significant growth[378]. - Adjusted EBITDA for Q2 2025 was $53.1 million, compared to a loss of $9.3 million in Q2 2024, indicating a turnaround in operational performance[378]. - Net income for Q2 2025 was $5.6 million, a significant improvement from a net loss of $54.5 million in Q2 2024[378]. - Adjusted Net Income for the six months ended June 30, 2025, was $95.6 million, compared to a loss of $29.6 million in the same period of 2024[378]. Operational Metrics - The conversion rate improved to 23.9% for the three months ended June 30, 2025, up from 15.2% in the same period of 2024[313]. - The percentage of loans fully automated reached 92% for both the three and six months ended June 30, 2025, compared to 91% and 90% in the same periods of 2024[316]. - Institutional investors purchased 53% of the total principal of loans transacted on the marketplace during the six months ended June 30, 2025[288]. Revenue and Expenses - Revenue from fees, net for Q2 2024 was $130,532, while for Q2 2025 it increased to $240,777, representing an increase of 84% year-over-year[321]. - Total operating expenses for the first half of 2025 were $470,616, compared to $378,378 in the same period of 2024, reflecting an increase of 24%[342]. - Sales and marketing expenses for Q2 2025 were $73,105, up from $32,958 in Q2 2024, indicating a 121% increase[342]. - Customer operations expenses for the first half of 2025 were $86,747, compared to $78,092 in the same period of 2024, showing an increase of 11%[342]. - Engineering and product development expenses for Q2 2025 were $68,825, up from $58,453 in Q2 2024, reflecting a 17% increase[342]. - General, administrative, and other expenses for the first half of 2025 were $125,131, compared to $110,634 in the same period of 2024, an increase of 13%[342]. Cash Flow and Investments - As of June 30, 2025, cash and cash equivalents totaled $395.9 million, with an additional $5.0 million in investments in certificates of deposit[385]. - For the six months ended June 30, 2025, net cash used in operating activities was $133.6 million, compared to a net cash provided of $117.9 million in 2024[396]. - The company utilized $188.4 million in investing activities for the six months ended June 30, 2025, primarily for loan purchases and originations[399]. - Net cash provided by financing activities was $47.2 million for the six months ended June 30, 2025, mainly due to proceeds from borrowings[400]. Risk Exposure - As of December 31, 2024, the company was exposed to market discount rate risk on $703.4 million of loans held on its balance sheet, which increased to $943.7 million by June 30, 2025[410]. - A hypothetical 100 basis point increase in the discount rate would result in a $9.0 million decrease in the fair value of loans as of December 31, 2024, and a $11.8 million decrease as of June 30, 2025[410]. - The company was exposed to credit risk on beneficial interest assets of $176.8 million and $266.8 million as of December 31, 2024, and June 30, 2025, respectively[418]. - The company was exposed to interest rate risk on $195.6 million and $189.5 million under warehouse credit facilities as of December 31, 2024, and June 30, 2025, respectively[423].

Financial Performance - Total revenue for Q2 2025 reached $257 million, reflecting a 102% year-over-year growth, with revenue from fees at $241 million, up 84% year-over-year[5] - GAAP net income for Q2 2025 was $5.6 million, an improvement from a loss of $54.5 million in Q2 2024[5] - Adjusted EBITDA for Q2 2025 was $53.1 million, compared to a loss of $9.3 million in Q2 2024, resulting in an adjusted EBITDA margin of 21%[5] - Contribution profit for Q2 2025 was $141 million, an 85% increase year-over-year, maintaining a contribution margin of 58%[5] - For the full year 2025, Upstart expects total revenue of approximately $1.055 billion, with revenue from fees around $990 million and net interest income of approximately $65 million[5] - Total revenue for Q2 2025 was $257.3 million, a 101% increase from $127.6 million in Q2 2024[39] - Net income for Q2 2025 was $5.6 million, compared to a net loss of $54.5 million in Q2 2024, marking a significant turnaround[39] - Adjusted EBITDA for Q2 2025 was $53.1 million, with an adjusted EBITDA margin of 21%, compared to an adjusted EBITDA loss of $9.3 million in Q2 2024[39] - Contribution profit for Q2 2025 was $140.5 million, maintaining a contribution margin of 58%[35] - Adjusted net income for Q2 2025 was $42.2 million, compared to an adjusted net loss of $15.3 million in Q2 2024[42] - Basic net income per share for Q2 2025 was $0.06, a recovery from a loss of $0.62 per share in Q2 2024[42] - The operating margin improved to 2% in Q2 2025, compared to a negative 43% in Q2 2024[39] Loan Performance - Upstart originated 372,599 loans in Q2 2025, a 159% increase year-over-year, with a conversion rate of 23.9%, up from 15.2% in Q2 2024[5] - The conversion rate for loans processed was 15.2% for the three months ended June 30, 2024[32] - Transaction volume for the three months ended June 30, 2024, was $1,109,732,000, with 143,900 loans processed[32] - Upstart's platform continues to automate over 90% of loans, enhancing efficiency and customer experience[7] Assets and Cash Flow - Upstart's cash and cash equivalents decreased from $788.4 million at the end of 2024 to $395.9 million by June 30, 2025[20] - Total assets increased from $2.37 billion at the end of 2024 to $2.48 billion by June 30, 2025[20] - Cash, cash equivalents, and restricted cash at the end of the period were $560,618,000 for the six months ended June 30, 2024[30] Operational Costs - Borrower acquisition costs for Q2 2025 were $60.9 million, up from $23.2 million in Q2 2024[35] - Customer operations costs for Q2 2025 were $39.3 million, an increase from $31.2 million in Q2 2024[36] - Operating expenses for the three months ended June 30, 2024, totaled $183,116,000, leading to a loss from operations of $(55,486,000)[23] Profitability and Growth Indicators - The company achieved GAAP profitability a quarter earlier than expected, indicating a strong recovery and growth trajectory[3]

Group 1 - The article discusses the integration of artificial intelligence in the lending industry as consumer debt reaches all-time highs [1] - Upstart Holdings, Inc. is highlighted as an AI-driven lending platform that offers personal loans, auto loans, and home equity lines [1]

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [1][2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility observed in the tech sector [1]. - Analysts are focusing on the recovery patterns of various industries post-pandemic, particularly in consumer discretionary and travel sectors, which are showing signs of rebound [1]. Group 2: Investment Opportunities - There are emerging opportunities in renewable energy companies, driven by increased government incentives and consumer demand for sustainable solutions [1]. - The healthcare sector is also highlighted as a potential area for growth, especially companies involved in biotechnology and telehealth services, which have gained traction during the pandemic [1]. Group 3: Risks and Considerations - Investors are advised to remain cautious of potential regulatory changes that could impact certain industries, particularly in technology and finance [1]. - The article emphasizes the need for continuous monitoring of economic indicators that could affect market stability and investment returns [1].

Group 1 - Upstart is expected to report its Q2 2025 earnings on Tuesday after hours, which is highly anticipated by investors [1] - The core thesis revolves around Upstart's ability to attract outside investors to take on its balance sheet loans [1] Group 2 - The marketplace highlights a portfolio of undervalued investment opportunities, focusing on stocks with rapid growth potential and strong management [2] - The emphasis is on selecting the most attractive investments, with a commitment to thorough analysis and stock picking [2] Group 3 - The platform aims to simplify investing by showcasing stocks that deliver strong gains, contributing to the growth of savings [3] - Deep Value Returns' Marketplace is noted for its rapid growth and high-quality, actionable stock picks [3]

Core Insights - Upstart is an innovator in the financial services industry with an AI-powered lending platform that enhances creditworthiness assessment, leading to increased approval rates and controlled default risks [1] - The stock has shown significant volatility but has started to regain investor confidence, with a notable increase in value over the past three years [2][4] Performance Overview - Since July 31, 2022, Upstart's stock has surged by 250%, transforming a $1,000 investment into $3,500, despite currently trading 78% below its peak established in October 2021 [4] - The company has demonstrated meaningful financial improvements, with a 102% year-over-year increase in transaction volume and a 67% revenue gain in Q1 2025 [5] Market Valuation - Upstart shares are currently trading at a price-to-sales ratio of 10.9, indicating growing market optimism, but this high valuation introduces potential downside risk if the company fails to meet earnings expectations [7]

Core Viewpoint - Upstart Holdings, Inc. is expected to show significant growth in its upcoming earnings report, with a notable increase in both earnings per share (EPS) and revenue compared to the previous year [2][3]. Group 1: Recent Performance - Upstart Holdings, Inc. closed at $79.22, down 3.08% from the previous trading session, underperforming the S&P 500's loss of 1.6% [1] - Over the past month, the company's shares have appreciated by 10.73%, outperforming the Finance sector's gain of 0.8% and the S&P 500's gain of 2.25% [1]. Group 2: Upcoming Earnings Expectations - The earnings report is scheduled for August 5, 2025, with an expected EPS of $0.27, reflecting a 258.82% increase from the prior-year quarter [2]. - Revenue is forecasted to be $225.3 million, indicating a 76.52% growth compared to the same quarter of the previous year [2]. Group 3: Fiscal Year Projections - For the entire fiscal year, earnings are projected at $1.58 per share, representing an increase of 890% from the prior year [3]. - Revenue for the fiscal year is estimated at $1.02 billion, showing a growth of 59.46% compared to the previous year [3]. Group 4: Analyst Estimates and Market Sentiment - Recent changes to analyst estimates indicate a positive outlook for Upstart Holdings, reflecting analysts' confidence in the company's performance and profit potential [3]. - The Zacks Consensus EPS estimate has remained stagnant over the past month, and the company currently holds a Zacks Rank of 3 (Hold) [5]. Group 5: Valuation Metrics - Upstart Holdings, Inc. is currently traded at a Forward P/E ratio of 51.8, which is a premium compared to the industry average Forward P/E of 12.03 [6]. - The Financial - Miscellaneous Services industry, to which Upstart belongs, has a Zacks Industry Rank of 70, placing it in the top 29% of over 250 industries [6].

In the latest close session, Upstart Holdings, Inc. (UPST) was down 1.9% at $81.74. This change lagged the S&P 500's daily loss of 0.37%. On the other hand, the Dow registered a loss of 0.74%, and the technology- centric Nasdaq decreased by 0.03%. Coming into today, shares of the company had gained 13.54% in the past month. In that same time, the Finance sector gained 1.34%, while the S&P 500 gained 2.68%. The upcoming earnings release of Upstart Holdings, Inc. will be of great interest to investors. The co ...

Core Insights - The global fintech market is projected to reach $1.12 trillion by 2032, attracting investor interest in disruptors like StoneCo and Upstart that can scale profitably amid changing regulatory and macroeconomic conditions [1] Company Overview: StoneCo - StoneCo is focused on Brazil's micro, small, and medium business (MSMB) market, offering a full-stack payments, banking, and credit solution [2] - The company reported a 17% year-over-year increase in MSMB total payment volume (TPV) to R$119.5 billion and a 17% rise in active clients to 4.3 million in Q1 2025 [4] - Retail deposits grew by 38% year over year to R$8.3 billion, with R$6.3 billion in time deposits, enhancing funding diversification [5] - StoneCo's credit portfolio stands at R$1.4 billion with non-performing loans (NPLs) at 4.57%, indicating effective risk management [5] - A strategic divestiture of its software segment, including the R$3.41 billion sale of Linx, is expected to improve margins and operational focus [6] - The company has seen an increase in "heavy users" of its services, rising from 26% to 38% [6] Company Overview: Upstart - Upstart utilizes an AI-driven underwriting platform, automating 92% of loans in Q1 2025, with conversion rates improving to 19% [8] - The company is expanding into new verticals such as auto refinancing and HELOCs, with auto originations increasing by 42% sequentially and HELOC volumes growing by 52% [9] - Over 50% of Upstart's loan volume is now backed by committed capital, with 32% of originations coming from super-prime borrowers, indicating improved credit quality [9] Valuation and Performance Comparison - StoneCo trades at a forward Price/Sales (P/S) ratio of 1.39, while Upstart's P/S ratio is 6.64, suggesting StoneCo is more attractively valued [10][15] - StoneCo's sales and EPS estimates for 2025 imply year-over-year increases of 7.6% and 10.4%, respectively [12] - Upstart's sales estimates for 2025 indicate a significant year-over-year rise of 59.5% [14] - Year-to-date, StoneCo shares have outperformed both Upstart and the S&P 500 composite [16] Conclusion - StoneCo presents a compelling investment opportunity with its focus on profitable growth in an emerging market, while Upstart is recognized for its innovative approach in credit underwriting [18] - Despite both companies holding a Zacks Rank of 3 (Hold), StoneCo's valuation appears more favorable at this time [19]