Core Insights - Upstart Holdings, Inc. reported third-quarter earnings that missed revenue estimates, leading to a decline in stock price [1][5] Financial Performance - Quarterly earnings were 52 cents per share, exceeding the Street estimate of 42 cents [2] - Quarterly revenue was $277.1 million, falling short of the consensus estimate of $279.62 million [2] - Total loan originations reached approximately $2.9 billion, representing an 80% year-over-year increase [3][4] Operational Metrics - The company originated 428,056 loans, marking a 128% increase year-over-year, with a conversion rate of 20.6%, up from 16.3% [3] - The CEO highlighted a sixfold sequential increase in GAAP net income and 71% growth in revenue year-over-year [4] Future Outlook - For the fourth quarter, Upstart anticipates revenue of $288 million, below the analyst estimate of $303.61 million [5] - The fiscal 2025 revenue outlook has been revised down from $1.05 billion to $1.03 billion, compared to the previous estimate of $1.05 billion [5]

Core Insights - Upstart Holdings reported its first earnings miss in five consecutive quarters, with adjusted EPS of $0.23 against expectations of $0.43 and revenue of $277.11 million, missing the $285.22 million estimate [2][4][7] Financial Performance - Revenue increased by 71% year over year, with loan originations surging 80% to $2.9 billion [3][7] - The company returned to GAAP profitability with a net income of $31.81 million, compared to a loss of $6.76 million in Q3 2024 [3][6] - Adjusted EBITDA rose dramatically to $71.16 million from $1.41 million, representing a 26% margin [3][7] - Fee revenue grew 54% year over year to $259 million, with over 90% of loans processed fully automated [5] Cash Flow and Guidance - Operating cash flow turned negative at -$256.28 million, and free cash flow fell to -$270.58 million, indicating a significant weakness despite strong profitability metrics [6][10] - Management guided Q4 2025 revenue to approximately $288 million with adjusted EBITDA of $63 million and a contribution margin of 53% [6] Management Commentary - CEO Dave Girouard expressed optimism about the company's execution on its 2025 growth plan, emphasizing strong credit performance and the adaptability of its AI platform [8] - Management did not signal material concerns about demand or market conditions heading into the final quarter [8] Key Metrics - Adjusted EPS: $0.23 (down 47% from estimate) [7] - Revenue: $277.11 million (down 2.8% from estimate) [7] - Gross Profit: $258.54 million [7] - Operating Income: $23.71 million [7] - Loan Originations: $2.9 billion (up 80% year over year) [7]

Q3 2025 earnings November 4, 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 Q4 2025 and the full fiscal year 2025 under the heading "Outlook" and management's estimates under the heading " ...

Financial Performance - Transaction Volume, Dollars increased by 80% in Q3 2025 compared to Q3 2024, reaching $2,854,296, and increased by 104% in the nine months ended September 30, 2025, totaling $7,808,302[324]. - Transaction Volume, Number of Loans rose by 128% in Q3 2025 and 131% in the nine months ended September 30, 2025, with 428,056 loans in Q3 2025 and 1,041,361 loans in the nine months[324]. - The Conversion Rate improved to 20.6% in Q3 2025 and 21.2% in the nine months ended September 30, 2025, up from 16.3% and 15.3% in the same periods of 2024[327]. - Contribution Profit for Q3 2025 was $147,406, with a Contribution Margin of 57%[316]. - Adjusted EBITDA for Q3 2025 was $71,162, reflecting an Adjusted EBITDA Margin of 26%[316]. - Adjusted Net Income for Q3 2025 was $59,963, compared to a loss of $5,325 in Q3 2024[316]. - Total revenue for the nine months ended September 30, 2025, was $747.8 million, a $248.6 million increase, or 57%, compared to the same period in 2024[362]. - Net income for Q3 2025 was $31.8 million, compared to a net loss of $6.8 million in Q3 2024[365]. - Adjusted Net Income for the three months ended September 30, 2025, was $60.0 million, compared to an Adjusted Net Loss of $5.3 million in the same period of 2024[399]. Revenue Generation - Revenue from fees, net for the three months ended September 30, 2024, was $167.59 million, a significant increase from $258.54 million for the same period in 2025[335]. - Revenue from fees, net increased by $90.9 million, or 54%, in Q3 2025 compared to Q3 2024, driven by an 80% increase in transaction volume from $1,582.3 million to $2,854.3 million[361]. - Platform and referral fees, net increased by $82.7 million, or 62%, in Q3 2025 compared to Q3 2024[361]. - The company recognizes fees from auto dealers for using Upstart Auto Finance software, contributing to revenue generation[347]. Expenses and Costs - Operating expenses for Q3 2025 were $253.4 million, an increase from $207.3 million in Q3 2024[365]. - Sales and marketing expenses increased by $35.6 million, or 82%, in Q3 2025 compared to Q3 2024, driven primarily by a $34.5 million increase in advertising and borrower acquisition costs[371]. - Borrower acquisition costs for the three months ended September 30, 2024, were $32.75 million, while borrower verification and servicing costs were $32.47 million, totaling direct expenses of $65.21 million[335]. - Customer operations expenses increased by $10.5 million, or 27%, in Q3 2025 compared to Q3 2024, primarily due to a $6.6 million increase in information verification expenses[373]. - General, administrative, and other expenses increased by $0.9 million, or 2%, in Q3 2025 compared to Q3 2024, primarily due to a $1.0 million increase in payroll and other personnel-related expenses[378]. Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, totaled $489.8 million, providing a strong liquidity position for the company[401]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $425.8 million, a significant increase compared to $50.5 million in the same period of 2024[412]. - Net cash used in operating activities was $256.3 million for the nine months ended September 30, 2025, with a net income of $35.0 million[414]. - Net cash used in investing activities was $308.9 million, primarily due to $666.0 million in purchases and originations of loans held-for-investment[415]. - The company has entered into an "at the market" offering program with an aggregate offering price of up to $500 million, providing potential for future capital raising[402]. Loan and Investment Management - As of September 30, 2025, the company held $1,230.0 million of loans on its balance sheet, with $871.3 million originated for research and development purposes[418]. - The total loan purchase commitment as of September 30, 2025, was $113.7 million, indicating ongoing investment in loan purchases from lending partners[408]. - The company plans to sell loans held on its balance sheet to institutional investors over time through secondary sales or securitizations[418]. - The company has an aggregate principal balance of $1.69 billion in convertible senior notes, with varying interest rates and maturities between 2026 and 2032[405]. Risk Management - The Upstart Macro Index (UMI) was measured at approximately 1.54, indicating an incremental risk of 54% to repayment performance compared to the baseline[315]. - As of September 30, 2025, the company was exposed to market discount rate risk on $1,165.9 million of loans held on its balance sheet[426]. - A hypothetical 100 basis point increase in the discount rate would result in a $14.0 million decrease in the fair value of loans as of September 30, 2025[426]. - As of September 30, 2025, the company was exposed to credit risk on $1,165.9 million of loans held on its balance sheet[432]. - A hypothetical 10% increase in credit risk would result in a $13.1 million decrease in the fair value of loans as of September 30, 2025[432]. Impairment and Valuation - The company assesses its non-marketable equity securities for impairment on a quarterly basis, considering both qualitative and quantitative factors[442]. - Impairment analysis includes evaluation of the investee's financial metrics, market acceptance of the investee's product or technology, general market conditions, and liquidity considerations[442]. - Adjustments and impairments are recorded in other expense on the condensed consolidated statements of operations and comprehensive income (loss) upon recognition[442]. - The complexity of assessing fair values is due to the lack of readily available market data for privately-held companies[442].

Financial Performance - In Q3 2025, Upstart reported a 80% year-on-year growth in originations, totaling approximately $2.9 billion[3]. - Total revenue for Q3 2025 was $277 million, reflecting a 71% increase year-on-year, with revenue from fees at $259 million, up 54% year-on-year[6]. - GAAP net income for Q3 2025 was $31.8 million, an improvement from a loss of $6.8 million in Q3 2024, resulting in diluted net income per share of $0.23[6]. - Contribution profit reached $147 million, up 44% year-on-year, with a contribution margin of 57%[6]. - Adjusted EBITDA for Q3 2025 was $71.2 million, significantly up from $1.4 million in Q3 2024, with an adjusted EBITDA margin of 26%[6]. - Total revenue for the nine months ended September 30, 2025, was $747,767, compared to $417,564 in the same period of 2024, marking an increase of 79%[40]. - Adjusted net income for Q3 2025 was $59,963, a significant turnaround from a loss of $5,325 in Q3 2024[43]. - The company reported a net income of $31,805 for Q3 2025, a significant improvement from a net loss of $6,758 in Q3 2024, highlighting a positive trend in profitability[40]. Operational Metrics - Upstart expects to originate approximately 428,056 loans in Q4 2025, representing a 128% year-over-year increase[6]. - The conversion rate improved to 20.6% in Q3 2025, up from 16.3% in Q3 2024[6]. - The number of loans processed increased to 428,056 in Q3 2025, up from 188,149 in Q3 2024, indicating a growth of 127%[32]. - The percentage of loans fully automated remained stable at 91% across both Q3 2024 and Q3 2025, reflecting consistent operational capabilities[32]. - Borrower acquisition costs for the nine months ended September 30, 2025, totaled $176.8 million, compared to $80.8 million in the same period of 2024, indicating increased investment in customer acquisition[36]. Balance Sheet - Total assets increased to approximately $2.9 billion as of September 30, 2025, compared to $2.37 billion at the end of 2024[20]. - The company’s total liabilities rose to approximately $2.16 billion as of September 30, 2025, up from $1.73 billion at the end of 2024[20]. - Upstart's cash and cash equivalents decreased to $489.8 million as of September 30, 2025, down from $788.4 million at the end of 2024[20]. - Cash, cash equivalents, and restricted cash at the end of the period for September 30, 2024, were $655,767, compared to $836,905 for the same period in 2025, indicating a decrease of 21.6%[30]. Year-over-Year Comparisons - Total revenue for the three months ended September 30, 2024, was $162,140, a decrease from $277,105 in the same period of 2025, representing a decline of 41.4%[23]. - Net income for the three months ended September 30, 2024, was a loss of $6,758, compared to a net income of $31,805 for the same period in 2025, indicating a significant turnaround[23]. - Revenue from fees, net for the nine months ended September 30, 2024, was $436,190, while for the same period in 2025, it increased to $684,791, reflecting a growth of 56.9%[23]. - Operating expenses for the three months ended September 30, 2024, totaled $207,292, compared to $253,439 in the same period of 2025, showing a decrease of 18.2%[23]. - The company experienced a gain on debt extinguishment of $33,361 for the three months ended September 30, 2024, compared to $7,246 in the same period of 2025[23]. - The total fair value and other adjustments, net for the three months ended September 30, 2024, were $(35,477), while for the same period in 2025, it was $(29,843), indicating an improvement[25]. Transaction Volume - Transaction volume for the three months ended September 30, 2025, reached $2,854,296, representing a significant increase from $1,582,317 in the same period of 2024[32].

Core Insights - Upstart Holdings (UPST) is expected to report its third-quarter 2025 results on November 4, with management guiding revenues of $280 million and adjusted net income of approximately $44 million [1][6] - The Zacks Consensus Estimate for quarterly revenues is $281.02 million, reflecting a 73.3% increase year-over-year, while the consensus for earnings is 42 cents per share, a significant rise from a loss of 6 cents in the previous year [1][9] Financial Projections - For the full year 2025, management projects revenues of $1.055 billion and GAAP net income of approximately $35 million [2] - The Zacks Consensus Estimate for UPST's full-year revenues is $963.4 million, indicating a 51.36% year-over-year increase, with an EPS consensus of $1.66, up from a loss of 20 cents per share in the prior year [2] Earnings Surprise History - Upstart has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 192.09% [3] Earnings Prediction Model - The proprietary model does not predict an earnings beat for Upstart this time, as it has an Earnings ESP of 0.00% and a Zacks Rank 3 (Hold) [4][5] Revenue and Profitability Drivers - Management expects Q3 revenues of $280 million, with fee-based income contributing approximately $275 million and net interest income around $5 million [8][11] - The new underwriting model, Model 22, has improved conversion rates and is expected to sustain revenue growth, while tighter cost controls are anticipated to maintain a solid contribution margin [10] Market Performance and Valuation - Upstart's shares have declined 8.6% over the past six months, underperforming peers like LendingClub and SoFi, which have seen significant gains [12] - The stock is currently considered overvalued, with a Price/Sales ratio of 3.70X, above the industry average of 3.28X [13] Competitive Position and Growth Outlook - Upstart is making progress with revenue recovery and profitability, expanding into new lending verticals, and attracting new lending partners [17] - However, exposure to credit-sensitive borrowers and market liquidity challenges may create volatility in growth [18]

Institutional Investment Activity - Ameritas Advisory Services LLC acquired a new position in Upstart worth approximately $34,000 during the 2nd quarter [1] - GAMMA Investing LLC increased its position by 23.3% in the 1st quarter, now owning 1,662 shares valued at $77,000 after purchasing an additional 314 shares [1] - Bogart Wealth LLC grew its position by 140.0% in the 2nd quarter, now holding 1,200 shares worth $78,000 after acquiring 700 shares [1] - PNC Financial Services Group Inc. increased its position by 385.1% in the 1st quarter, now owning 1,950 shares valued at $90,000 after buying 1,548 shares [1] - NewEdge Advisors LLC lifted its holdings by 20.0% in the 1st quarter, now owning 1,997 shares worth $92,000 after acquiring 333 shares [1] - Institutional investors and hedge funds collectively own 63.01% of Upstart's stock [1] Analyst Ratings and Price Targets - Bank of America reduced its price target from $88.00 to $87.00, maintaining a "neutral" rating [2] - JPMorgan Chase & Co. upgraded its rating from "neutral" to "overweight," lowering the price target from $93.00 to $88.00 [2] - Goldman Sachs cut its price target from $78.00 to $54.00, assigning a "sell" rating [2] - Piper Sandler set a price target of $80.00 [2] - Morgan Stanley reaffirmed an "equal weight" rating [2] - The consensus rating for Upstart is "Hold" with a target price of $78.83 [2] Insider Trading Activity - CFO Sanjay Datta sold 13,473 shares at an average price of $61.12, totaling $823,469.76, reducing his ownership by 4.33% [3] - Director Kerry Whorton Cooper sold 500 shares at an average price of $69.21, totaling $34,605.00, representing a 1.93% decrease in ownership [3] - Insiders have sold 106,214 shares worth $6,803,558 over the last 90 days, with insiders owning 16.67% of the company's stock [3] Financial Performance - Upstart reported $0.36 EPS for the last quarter, exceeding the consensus estimate of $0.27 by $0.09 [5] - Revenue for the quarter was $257.29 million, surpassing the consensus estimate of $225.35 million, reflecting a year-over-year increase of 101.6% [5] - The company had a negative net margin of 0.75% and a negative return on equity of 5.95% [5] - Upstart's FY 2025 guidance includes EPS expectations, with analysts forecasting -0.03 EPS for the current year [5] Stock Performance and Market Metrics - Upstart shares opened at $47.52, with a market cap of $4.57 billion and a price-to-earnings ratio of -594.00 [4] - The stock has a beta of 2.27, indicating higher volatility compared to the market [4] - The 50-day simple moving average is $58.50, and the 200-day simple moving average is $59.96 [4] - The stock has experienced a one-year low of $31.40 and a one-year high of $96.43 [4]

Company Overview - Upstart is a small-cap fintech company with a current market cap of approximately $4.5 billion, significantly below its all-time high by about 88% [2][3] - The company is projected to achieve its first billion-dollar revenue year in 2025, indicating strong growth momentum [1] Financial Performance - Upstart reported an origination volume of $2.8 billion, reflecting a 154% year-over-year increase [7] - Revenue reached $257 million, more than double the amount from the previous year [7] - The company achieved a 21% adjusted EBITDA margin and GAAP profitability for the first time in years [7] Market Potential - The U.S. personal loan market exceeds $100 billion annually, with Upstart's predictive methods for loan defaults proving more effective than traditional approaches [4] - Upstart's newer verticals, including auto loans and home loans, are experiencing significant growth, with auto loan originations increasing sixfold and home loan originations growing 67% sequentially [5] - The potential for home equity loans is substantial, given that U.S. homeowners currently hold $35 trillion in home equity, presenting a significant opportunity as interest rates decline [5] Competitive Landscape - Upstart is positioned to potentially surpass Affirm, a leader in the buy now, pay later (BNPL) space, which has a market cap of $23.5 billion, approximately five times that of Upstart [2][3] - Despite Affirm's strong performance and effective leadership, Upstart's growth opportunities in a challenging lending environment are encouraging [3]

Core Viewpoint - Puma is undergoing significant restructuring, including cutting 900 corporate jobs by the end of 2026, to address declining sales and regain market share in the competitive sportswear industry [2][3][5] Group 1: Restructuring and Job Cuts - The company has expanded its cost-reduction program, which initially eliminated 500 positions earlier this year, to a total of 900 job cuts [2] - Chief Executive Arne Hoeld is tasked with restoring momentum to Puma, which has seen its market share erode due to competition from niche brands [3] - The restructuring aims to streamline operations, restore profitability, and refocus on higher-margin channels [5] Group 2: Sales Performance and Market Challenges - Puma's sales have declined, particularly in the U.S., where it faces challenges maintaining shelf space amid heavy discounting and cautious retailer ordering [4] - The company warned of an annual loss for 2025, marking its first loss in over a decade, with stock values falling by more than half in 2025 [5] - Revenue for the three months ending September decreased by 10.4% to $2.13 billion, slightly below market expectations [7] Group 3: Inventory and E-commerce Strategy - Inventories rose 17.3% year-on-year to approximately $2.3 billion in the third quarter, with expectations to normalize by the end of 2026 [6] - The company has reduced promotional activities in its e-commerce and retail operations to protect pricing integrity [6] - Puma is shifting its retail strategy towards direct sales and enhancing its e-commerce infrastructure [9] Group 4: Future Outlook and Strategic Focus - Management anticipates returning to top-line growth by 2027 after completing the restructuring and realigning distribution channels [7] - Hoeld emphasizes simplifying the organizational structure and sharpening product strategy to reinforce Puma's relevance in key categories [11] - The company is prioritizing long-term brand investments over short-term sales, with new initiatives expected in 2026 and 2027 [13]

Core Insights - A growing number of credit unions are adopting Upstart Holdings' AI platform to modernize their lending operations, indicating increased confidence in Upstart's technology from community lenders [1][2] Company Performance - Upstart reported revenues of approximately $257 million in Q2 2025, more than double the previous year, with loan originations reaching about $2.8 billion, the highest in three years [3] - The company returned to GAAP profitability with a net income of $5.6 million, and contribution profit increased to $141 million, reflecting margin improvement and higher conversion rates [3] - Upstart's auto lending business grew more than sixfold in the past year, while its home segment grew nearly ninefold, now accounting for over 10% of total volume [4] Technological Advancements - Upstart's AI model "Model 22" improved risk-separation accuracy by 17 percentage points compared to traditional credit models, with 92% of loans in Q2 2025 being fully automated [4] Market Context - Despite strong performance metrics, Upstart's stock has faced challenges due to concerns over softer credit conditions and turbulence in the used-car lending market [5] - The bankruptcy of a subprime auto lender has raised questions about downstream credit risk, highlighting the sensitivity of Upstart's model to shifting credit-cycle dynamics [5] Peer Comparison - LendingClub Corporation reported a 37% year-over-year increase in loan originations to $2.6 billion and a 32% increase in total revenues to $266.2 million in Q3 2025 [6] - SoFi Technologies reported record net revenues of $961.6 million, up 38% year over year, with significant growth in members and products [7] Valuation Insights - Upstart shares are currently considered overvalued, trading at a forward Price/Sales ratio of 3.81X, above the industry average of 3.40X [10] - The Zacks Consensus Estimate for full-year 2025 and 2026 EPS has been revised marginally upward, indicating significant year-over-year increases [11]