Upstart(UPST) - 2024 Q4 - Annual Results

Financial Highlights Summarizes Upstart's financial performance for Q4 and full fiscal year 2024, showcasing significant growth and improved profitability Fourth Quarter 2024 Financial Highlights Upstart achieved significant Q4 2024 growth with 56% revenue increase, positive Adjusted EBITDA, and near GAAP profitability - The CEO highlighted dramatic growth across all product categories and a return to Adjusted EBITDA levels not seen since Q1 2022, nearly achieving GAAP profitability[3] Q4 2024 Key Financial Metrics | Metric | Q4 2024 | Q4 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $219 million | $140.3 million | +56% | | Total Fee Revenue | $199 million | $152.8 million | +30% | | GAAP Net Loss | ($2.8) million | ($42.4) million | Improved | | Adjusted Net Income | $29.9 million | ($9.7) million | Improved | | GAAP Diluted EPS | ($0.03) | ($0.50) | Improved | | Adjusted Diluted EPS | $0.26 | ($0.11) | Improved | | Adjusted EBITDA | $38.8 million | $0.6 million | +6367% | | Contribution Profit | $122 million | $95.6 million | +28% | Q4 2024 Key Operating Metrics | Metric | Q4 2024 | Q4 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Transaction Volume, Dollars | $2.1 billion | $1.25 billion | +68% | | Transaction Volume, Number of Loans | 245,663 | 129,664 | +89% | | Conversion Rate | 19.3% | 11.6% | +7.7 p.p. | Fiscal Year 2024 Financial Highlights Upstart's FY 2024 total revenue grew 24%, significantly reducing GAAP net loss and achieving positive Adjusted EBITDA Full Year 2024 Key Financial Metrics | Metric | FY 2024 | FY 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $637 million | $513.6 million | +24% | | Total Fee Revenue | $635 million | $560.4 million | +13% | | GAAP Net Loss | ($129) million | ($240) million | Improved | | Adjusted Net Loss | ($17.8) million | ($46.9) million | Improved | | GAAP Diluted EPS | ($1.44) | ($2.87) | Improved | | Adjusted Diluted EPS | ($0.20) | ($0.56) | Improved | | Adjusted EBITDA | $10.6 million | ($17.2) million | Improved | | Contribution Profit | $382 million | $353.3 million | +8% | Full Year 2024 Key Operating Metrics | Metric | FY 2024 | FY 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Transaction Volume, Dollars | $5.9 billion | $4.6 billion | +28% | | Transaction Volume, Number of Loans | 697,092 | 437,659 | +59% | | Conversion Rate | 16.5% | 9.7% | +6.8 p.p. | Financial Outlook Provides Upstart's financial projections for Q1 and the full fiscal year 2025, including revenue and profitability targets First Quarter 2025 Outlook Upstart projects Q1 2025 revenue of approximately $200 million, anticipating an Adjusted Net Income of $16 million Q1 2025 Financial Outlook | Metric | Expected Value | | :--- | :--- | | Revenue | ~$200 million | | Revenue From Fees | ~$185 million | | Contribution Margin | ~57% | | GAAP Net Income (Loss) | ~($20) million | | Adjusted Net Income (Loss) | ~$16 million | | Adjusted EBITDA | ~$27 million | Full Year 2025 Outlook Upstart targets approximately $1 billion in FY 2025 revenue, aiming for an 18% Adjusted EBITDA Margin and GAAP net income breakeven Full Year 2025 Financial Outlook | Metric | Expected Value | | :--- | :--- | | Revenue | ~$1 billion | | Revenue From Fees | ~$920 million | | Adjusted EBITDA Margin | ~18% | | GAAP Net Income | At least breakeven | Corporate Information and Definitions Details corporate announcements and defines key operating and non-GAAP financial metrics used for business evaluation Corporate Announcements Upstart will host an "Upstart AI Day" on May 14, 2025, in New York City to discuss its technology and strategy - Upstart will host an "Upstart AI Day" on May 14, 2025, in New York City for leadership to discuss the company's technology, business model, and strategy[8] Key Operating Metrics and Non-GAAP Measures Upstart uses transaction volume and conversion rate as key operating metrics, alongside non-GAAP measures for core performance evaluation - Transaction volume, measured in dollars and number of loans, is used as a proxy for the company's overall scale and platform reach[17][18] - Conversion rate, which is the number of loans divided by legitimate rate inquiries, is tracked to understand the efficiency of the borrower funnel[19] - Non-GAAP measures are used to supplement GAAP results for evaluating operating performance, planning, and forecasting, by excluding items like stock-based compensation to enhance comparability[21][22] Consolidated Financial Statements Presents Upstart's consolidated balance sheets, statements of operations, and cash flows for the reported periods Consolidated Balance Sheets Upstart's total assets increased to $2.37 billion by Dec 31, 2024, driven by higher cash and borrowings Balance Sheet Summary (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $788,422 | $368,405 | | Loans (at fair value) | $806,304 | $1,156,413 | | Total Assets | $2,366,958 | $2,017,100 | | Borrowings | $1,402,168 | $1,040,424 | | Total Liabilities | $1,733,740 | $1,381,795 | | Total Stockholders' Equity | $633,218 | $635,305 | Consolidated Statements of Operations Upstart's FY 2024 total revenue increased 24% to $636.5 million, significantly narrowing its net loss Statement of Operations Summary (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenue from fees, net | $635,466 | $560,431 | | Total Revenue | $636,528 | $513,562 | | Total operating expenses | $809,384 | $770,087 | | Loss from operations | ($172,856) | ($256,525) | | Net loss | ($128,581) | ($240,132) | | Net loss per share, diluted | ($1.44) | ($2.87) | - For the full year 2024, Platform and referral fees grew to $502.4 million from $414.1 million in 2023, while Servicing and other fees decreased to $133.1 million from $146.3 million[30] Consolidated Statements of Cash Flows Upstart generated $186.3 million in operating cash flow in 2024, significantly increasing its year-end cash balance Cash Flow Summary (in thousands) | Activity | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $186,331 | ($111,712) | | Net cash used in investing activities | ($237,726) | ($118,455) | | Net cash provided by financing activities | $559,871 | $165,487 | | Change in cash, cash equivalents and restricted cash | $508,476 | ($64,680) | | Cash, cash equivalents and restricted cash at end of year | $976,263 | $467,787 | Reconciliation of GAAP to Non-GAAP Financial Measures Provides detailed reconciliations of GAAP financial results to non-GAAP measures like Contribution Profit, Adjusted EBITDA, and Adjusted Net Income Contribution Profit Reconciliation Contribution Profit increased to $381.5 million in FY 2024, with Q4 2024 reaching $121.9 million Contribution Profit Reconciliation (in thousands) | Period | Revenue from fees, net | Contribution Profit | Contribution Margin | | :--- | :--- | :--- | :--- | | Q4 2024 | $199,276 | $121,898 | 61% | | Q4 2023 | $152,846 | $95,595 | 63% | | FY 2024 | $635,466 | $381,533 | 60% | | FY 2023 | $560,431 | $353,294 | 63% | Adjusted EBITDA Reconciliation Adjusted EBITDA turned positive in FY 2024 at $10.6 million, with Q4 2024 reaching $38.8 million Adjusted EBITDA Reconciliation (in thousands) | Period | Net Loss | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | :--- | | Q4 2024 | ($2,755) | $38,775 | 18% | | Q4 2023 | ($42,398) | $619 | 0% | | FY 2024 | ($128,581) | $10,594 | 2% | | FY 2023 | ($240,132) | ($17,217) | -3% | Adjusted Net Income (Loss) Reconciliation Adjusted Net Loss significantly reduced to $17.8 million in FY 2024, with Q4 2024 achieving a positive Adjusted Net Income of $29.9 million Adjusted Net Income (Loss) Reconciliation (in thousands, except per share data) | Period | Net Loss | Adjusted Net Income (Loss) | Adjusted Diluted EPS | | :--- | :--- | :--- | :--- | | Q4 2024 | ($2,755) | $29,935 | $0.26 | | Q4 2023 | ($42,398) | ($9,726) | ($0.11) | | FY 2024 | ($128,581) | ($17,834) | ($0.20) | | FY 2023 | ($240,132) | ($46,933) | ($0.56) |