Lending Partnerships and Revenue - In the year ended December 31, 2025, the top three lending partners originated 83% of the loans facilitated through the marketplace, contributing to 61% of total revenue[34] - Upstart has more than 100 lending partners as of December 31, 2025, allowing for a diverse capital supply and risk-sharing arrangements[48] AI and Technology - As of December 31, 2025, the AI personal loan underwriting model expanded from 23 variables in 2014 to over 2,500 variables, trained on nearly 104 million repayment events[37] - In 2025, 91% of Upstart-powered loans were fully automated, an increase from approximately 70% at the time of the initial public offering in December 2020[52] - An internal study in 2025 showed that Upstart's AI model approves 43% more borrowers and yields 33% lower average APR for approved loans compared to traditional models[52] - Upstart's technology platform is built on Amazon Web Services, designed for high availability and horizontal scalability, allowing for rapid feature development[58] - The company utilizes AI and proprietary tools to streamline loan origination and servicing, enhancing the user experience for borrowers[68] Customer Acquisition and Marketing - Upstart's customer acquisition channels include direct mail, email marketing, organic traffic, online advertising, and marketing affiliates, with a significant number of borrowers coming through partners like Credit Karma[71] Operations and Servicing - Upstart's operations team focuses on expediting the approval process for borrowers with non-automated applications and addressing any issues during the application process[69] - The company emphasizes early intervention for borrowers who miss payments, utilizing AI for customized servicing interventions[72] - Upstart holds collections licenses in most states and conducts both first-party collections and partnerships with third-party agencies for charged-off loans[73] Market Competition - The consumer lending market is highly competitive, with Upstart competing against banks, non-bank lenders, and fintech platforms[75] - Upstart's competitive advantages include advanced AI models, compelling loan offers, an automated application process, and strong brand recognition[79] Regulatory Compliance - The company is subject to extensive regulations from various federal and state agencies, including the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC)[78] - The company is committed to compliance with federal and state laws, including the Truth in Lending Act and the Fair Credit Reporting Act, to ensure consumer protection[81] - The company has developed a compliance management system to minimize compliance-related risks associated with consumer protection laws[104] - The company is subject to extensive state and local laws governing consumer lending, which may impose various requirements including licensing and interest rate limitations[101] Financial Performance and Risks - As of December 31, 2025, the company held $930.8 million in loans on its consolidated balance sheets, up from $703.4 million in 2024, indicating a significant increase in loan volume[457] - A hypothetical 100 basis point increase in the discount rate would result in a $12.0 million decrease in the fair value of loans as of December 31, 2025[457] - The company was exposed to credit risk on $930.8 million of loans as of December 31, 2025, with a hypothetical 10% increase in credit risk leading to a $10.5 million decrease in fair value[464] - The fair value of beneficial interest assets was estimated at $396.2 million as of December 31, 2025, with a hypothetical 100 basis point increase in the discount rate resulting in a $4.9 million decrease in fair value[461] - A hypothetical 10% adverse change in the credit risk spread would lead to a $44.4 million decrease in the fair value of beneficial interest assets and a $4.7 million increase in liabilities as of December 31, 2024[466] - A hypothetical 20% adverse change in the credit risk spread would result in a $89.6 million decrease in beneficial interest assets and a $10.3 million increase in liabilities as of December 31, 2024[466] - An increase in interest rates could lead to higher delinquencies, defaults, and charge-offs, adversely affecting the company's business[471] Employee and Organizational Structure - The company employed 1,405 full-time employees as of December 31, 2025, with no employees represented by a labor union[117] - The company has implemented a digital-first approach, allowing employees in eligible roles to work from anywhere in the U.S. and Canada, enhancing talent acquisition[115] - The company provides competitive employee benefits, including a 401(k) match and a generous Employee Stock Purchase Plan, to attract and retain top talent[116] Asset Management - As of December 31, 2024, the company held beneficial interest assets of $176.8 million and liabilities of $10.1 million, which increased to $396.2 million and $5.1 million, respectively, by December 31, 2025[466][467] - The company held cash, cash equivalents, and restricted cash totaling $976.3 million as of December 31, 2024, increasing to $1,057.0 million by December 31, 2025[469] - As of December 31, 2024, and 2025, $137.4 million and $191.6 million of cash were held by an institutional investor related to line of credit receivable and beneficial interest asset[470] - The company was exposed to interest rate risk on $195.6 million and $97.3 million under warehouse credit facilities as of December 31, 2024, and 2025, respectively[472] - The carrying value of non-marketable equity securities, which do not have readily determinable fair values, totaled $41.3 million as of December 31, 2024, and 2025[475] - The company assesses non-marketable equity securities for impairment on a quarterly basis, considering both qualitative and quantitative factors[474] - The company manages counterparty risk by selecting financially strong counterparties and spreading risk among multiple entities[468] Intellectual Property - The company had four patents granted and six patent applications pending in the United States related to its proprietary risk model and data engineering as of December 31, 2025[106]

Exhibit 99.1 Financial Outlook Beginning in 2026, Upstart intends to provide annual financial guidance and discontinue issuing quarterly guidance, reflecting the company's long-term focus and evolving disclosure framework. Upstart is also providing financial guidance for the 2025-2028 period. 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 ...

Core Insights - Upstart Holdings (UPST) is expected to report its Q4 and full-year 2025 results on February 10, with anticipated growth in revenues and earnings per share [1][7] - The company has a strong history of surpassing earnings estimates, having done so in the last four quarters [2] Financial Performance Expectations - Management has guided for Q4 revenues of approximately $288 million, reflecting sequential growth despite typical holiday seasonality [3] - Fee revenues are projected to be around $262 million, with net interest income expected at about $26 million [3] - For Q4, adjusted EBITDA is anticipated to be approximately $63 million, with GAAP net income around $17 million and adjusted net income near $52 million [3] Profitability Metrics - Contribution margin is expected to moderate to about 53%, indicating a shift towards optimizing customer lifetime value rather than maximizing short-term margins [4] Funding and Growth Potential - Upstart has secured a $1.5 billion forward-flow agreement with Castlelake, enhancing its lending capacity and reducing balance sheet exposure [5] - The company is also seeing growth in newer verticals such as auto and home loans, which are becoming significant contributors to overall volume and revenues [5] Revenue Estimates - The Zacks Consensus Estimate for Q4 revenues is set at $288.47 million, representing a 31.74% increase year-over-year [6] - For the full year 2025, total revenues are projected to be about $1.035 billion, with fee revenues of roughly $946 million and net interest income of approximately $89 million [8] Earnings Projections - The consensus estimate for full-year EPS stands at $1.68, indicating a significant increase from a loss of 20 cents in the previous year [9]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Investment Opportunity - A specific company is highlighted as a potential investment opportunity, possessing critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI data centers [3][7] - This company is not a chipmaker or cloud platform but is positioned to benefit significantly from the anticipated surge in electricity demand driven by AI technologies [3][6] Energy Demand and Infrastructure - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The company in focus is involved in the U.S. LNG exportation sector, which is expected to grow under the current administration's energy policies [7] Financial Position - The company is noted for being completely debt-free and holding a substantial cash reserve, amounting to nearly one-third of its market capitalization [8] - It is trading at a low valuation of less than 7 times earnings, making it an attractive option for investors seeking exposure to AI and energy sectors [10] Market Trends - The article discusses the broader trends of onshoring and tariffs that are influencing the energy and manufacturing sectors, positioning the company favorably within these dynamics [5][14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure [12] Conclusion - The company is portrayed as a key player in the intersection of AI and energy, with significant growth potential as the demand for AI technologies escalates [11][13]

Group 1 - Financial giants have shown a bearish sentiment towards Upstart Holdings, with 84% of traders exhibiting bearish tendencies and only 15% being bullish, indicating a significant lack of confidence in the stock [1] - The options trading data reveals that there were 13 unusual trades, with 8 puts valued at $320,165 and 5 calls valued at $214,170, further emphasizing the bearish outlook [1] - The predicted price range for Upstart Holdings over the last three months is between $35.0 and $50.0, suggesting a focus on this price band by major market movers [2] Group 2 - An analysis of volume and open interest indicates that tracking these metrics is crucial for understanding the liquidity and interest in Upstart Holdings' options, particularly within the $35.0 to $50.0 strike price range [3] - The largest options trades observed for Upstart Holdings reflect the company's position in the market, which provides credit services through a proprietary AI lending platform that connects consumer demand for loans with bank partners [4] - Current market sentiment includes a consensus target price of $59.0 from analysts, with a recent downgrade to Buy by Truist Securities, indicating a potential upside despite the current bearish sentiment [6] Group 3 - Upstart Holdings' stock price is currently at $40.0, down 4.48%, with a trading volume of 2,284,255, suggesting a possible oversold condition as indicated by RSI indicators [7] - The next earnings report for Upstart Holdings is expected to be released in 7 days, which could impact market sentiment and trading activity [7]

Core Insights - Upstart Holdings has faced a challenging four years, with stock performance stagnating since its peak in late 2021, despite a return to growth in 2023 [1][2] - The company utilizes an AI algorithm that assesses over 2,500 variables to evaluate creditworthiness, resulting in 43% more loan approvals without additional defaults compared to traditional methods [4][3] - Upstart's revenue increased nearly 80% year-over-year through the first three quarters of 2025, indicating a positive trajectory moving forward [5] Company Overview - Upstart is a unique lending platform that differentiates itself from traditional credit scoring agencies like Equifax, Experian, and TransUnion by employing advanced AI technology [3] - The platform has gained traction, with over 100 banks and credit unions as regular customers [5] Financial Performance - Despite a recent downturn in loan originations due to economic headwinds, analysts project a per-share profit of $2.38 for the current year, with the stock trading at less than 20 times this figure, suggesting it is undervalued [9][6] - The company's gross margin stands at an impressive 97.61%, reflecting strong operational efficiency [7] Market Sentiment - The stock has not reacted positively to recent warnings about economic challenges affecting loan origination, leading to market panic [6] - Analysts expect that as the year progresses, investors will recognize the company's actual profit potential, which has been understated in recent earnings reports [9]

Core Insights - Upstart is leveraging artificial intelligence to innovate in the credit space, analyzing 2,500 variables to assess borrower risk and improve loan approval rates [1][6] - The stock has shown significant volatility, trading 88% below its peak but has increased 144% over the past three years, despite a 35% decline in the last year [2][6] - Upstart's revenue grew by 71% year-over-year in Q3 2025, driven by a 128% increase in transaction volume, with personal loans being the primary product [3][4] Financial Performance - Management forecasts a net income of $50 million for the full year, aided by controlled engineering and product development costs [4] - The current market capitalization of Upstart is $4.5 billion, with a gross margin of 97.61% [6] Market Potential - Upstart operates in a massive total addressable market worth trillions, focusing on various lending verticals and collaborating with banks and credit unions [6] - The company is experiencing early success in auto loans and HELOCs, indicating potential for further growth [3] Long-term Outlook - There is speculation that if Upstart maintains a 20% annualized growth rate, an initial investment of $10,000 could grow to $1 million in 25 years, outperforming the S&P 500's historical average [2][7] - However, long-term success is uncertain due to the cyclical nature of the business and competition from larger financial institutions investing heavily in AI [7][8]

Core Viewpoint - The article emphasizes the identification of investment opportunities in undervalued companies through thorough research and analysis of financial statements and market trends [1] Group 1: Investment Opportunities - The focus is on mid and small-cap companies that are currently undervalued, suggesting potential for growth and investment [1] Group 2: Research and Analysis - The analysis includes a comprehensive review of financial statements, market trends, and upcoming events that could impact specific companies or industries [1]

Core Insights - Kim Long Motor, a Vietnamese auto manufacturer, is partnering with China's BYD to develop a $130 million plant for producing batteries for commercial electric vehicles in central Vietnam [1] Company Developments - The collaboration aims to enhance the production capabilities of electric vehicle batteries in Vietnam, indicating a strategic move towards sustainable transportation solutions [1] - The investment of $130 million highlights the growing interest and commitment to the electric vehicle market in the region [1] Industry Trends - The partnership reflects a broader trend in the automotive industry towards electrification and the increasing demand for commercial electric vehicles [1] - This development is part of a larger shift in Vietnam's automotive sector, which is increasingly focusing on electric mobility and sustainable energy solutions [1]

Company Performance - Upstart Holdings, Inc. closed at $45.29, reflecting a -2.14% change from the previous day, underperforming the S&P 500's daily gain of 0.03% [1] - Over the past month, shares have depreciated by 4.02%, compared to the Finance sector's loss of 0.08% and the S&P 500's gain of 0.6% [1] Upcoming Earnings - The earnings report for Upstart Holdings, Inc. is scheduled for February 10, 2026, with expected earnings of $0.47 per share, indicating year-over-year growth of 80.77% [2] - Revenue is projected at $288.47 million, reflecting a 31.74% increase from the same quarter last year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $1.68 per share, representing a +940% change from the prior year, while revenue is expected to remain at $1.04 billion [3] Analyst Estimates - Recent modifications to analyst estimates indicate the dynamic nature of near-term business trends, with positive revisions suggesting confidence in business performance [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks Upstart Holdings, Inc. at 3 (Hold) [6] Valuation Metrics - Upstart Holdings, Inc. has a Forward P/E ratio of 17.5, which is a premium compared to the industry average Forward P/E of 11.75 [7] - The Financial - Miscellaneous Services industry, part of the Finance sector, holds a Zacks Industry Rank of 96, placing it in the top 40% of over 250 industries [7][8]