Financial Data and Key Metrics Changes - The company reported Q4 revenues of $516 million, up 14% year-over-year, and full fiscal year revenues of $1.991 billion, up 16% compared to the prior year [6][22] - GAAP net income for the quarter was $155 million, an increase of 14%, with GAAP earnings of $6.42 per share, up 18% from the prior year [29] - For the full fiscal year, GAAP net income was $652 million, equating to $26.54 of earnings per share, up 27% and 30% respectively [29] Business Line Data and Key Metrics Changes - In the software segment, Q4 revenues were $204 million, flat year-over-year, while for the full year, revenues were $822 million, up 3% from last year [7][22] - The scores segment saw Q4 revenues of $312 million, up 25% year-over-year, driven primarily by B2B scores, which were up 29% [9][23] - Total scores revenues for the full year were $1.169 billion, up 27%, with mortgage origination revenues up 52% year-over-year [23] Market Data and Key Metrics Changes - The Americas region accounted for 87% of total company revenues, while EMEA generated 8% and Asia-Pacific delivered 5% [22] - The company noted that mortgage origination revenues accounted for 55% of B2B revenue and 45% of total scores revenue [23] Company Strategy and Development Direction - The company plans to advance its direct and indirect distribution strategy and invest to capture market opportunities from innovations like the FICO Platform [9] - The FICO Mortgage Direct License Program aims to drive competition and transparency in the mortgage market, allowing trimerge resellers to calculate and distribute FICO scores directly [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger growth in fiscal 2026, guiding for revenues of $2.35 billion, an increase of 18% over fiscal 2025 [33] - The company remains conservative in its guidance due to uncertainties in the macro environment, particularly regarding mortgage volumes and interest rates [72][78] Other Important Information - The company reported free cash flow of $211 million in Q4, with total free cash flow of $739 million over the last four quarters, representing a 22% increase year-over-year [30] - The company has a patent portfolio of over 230 issued patents, reinforcing its position in responsible AI development [9] Q&A Session Summary Question: Broader discussions with the FHFA and approval timeline for FICO 10T - Management confirmed constructive conversations with the FHFA and expressed confidence in the eventual release of FICO 10T [37] Question: Assumptions around the direct licensing model and its impact - Management indicated a conservative approach to guidance due to uncertainties in the macro environment and potential timing lags in performance-based fees [40][41] Question: Long-term pricing strategy and adjustments - Management stated that while they see a value gap in pricing, specific future pricing strategies remain uncertain [45][46] Question: Feedback from lenders on pricing models - Positive reception to the direct model was noted, with lenders appreciating the optionality provided by the two pricing models [50] Question: Adoption of FICO 10T in the non-conforming market - Management highlighted the importance of predictiveness in the non-conforming market and noted ongoing positive feedback from lenders [53] Question: Mortgage volume assumptions and potential upside - Management emphasized conservatism in volume assumptions, particularly regarding interest rates and market share retention [78] Question: Implementation progress with resellers - Management confirmed that resellers are on pace for adoption and that operational hurdles are minimal [82] Question: Performance model availability and pricing flexibility - Management clarified that pricing for the multi-year agreement with Zactus is set for 2026, with annual adjustments expected thereafter [75]

Financial Data and Key Metrics Changes - The company reported Q4 revenues of $516 million, up 14% year-over-year, and for the full fiscal year, revenues reached $1.991 billion, an increase of 16% compared to the prior year [6][22] - GAAP net income for the quarter was $155 million, up 14%, with GAAP earnings of $6.42 per share, an 18% increase from the prior year [28][29] - Non-GAAP net income for the quarter was $187 million, up 15%, with non-GAAP earnings per share of $7.74, an 18% increase year-over-year [29] - Free cash flow for the quarter was $211 million, with a total of $739 million over the last four quarters, representing a 22% year-over-year increase [30] Business Line Data and Key Metrics Changes - In the software segment, Q4 revenues were $204 million, flat year-over-year, while for the fiscal year, revenues were $822 million, up 3% from last year [7][22] - The scores segment saw Q4 revenues of $312 million, up 25% year-over-year, driven primarily by B2B scores, which increased by 29% [9][23] - Total scores revenues for the fiscal year were $1.169 billion, up 27%, with mortgage origination revenues up 52% year-over-year [23] Market Data and Key Metrics Changes - The Americas region accounted for 87% of total company revenues, while EMEA generated 8% and Asia-Pacific delivered 5% [22] - The company anticipates no significant improvement in the macro environment for its Scores business, with expectations of stable market share and volume in auto, card, and personal loan originations [24] Company Strategy and Development Direction - The company plans to advance its direct and indirect distribution strategy and invest to capture market opportunities emerging from innovations like the FICO Platform and FICO FFM [9][24] - The FICO Mortgage Direct License Program aims to drive competition and transparency in the mortgage market, with significant interest from resellers and lenders [12][13] - The company maintains a focus on efficiencies and prioritizes resources for strategic initiatives, including headcount for distribution and development of the FICO Platform [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger growth in fiscal 2026, guiding for revenues of $2.35 billion, a 18% increase over fiscal 2025 [33] - The company is being conservative in its guidance due to uncertainties in the macro environment, particularly regarding mortgage volumes and interest rates [72] - Management highlighted the importance of maintaining a competitive edge through innovations and the value provided by FICO scores [45][56] Other Important Information - The company has a patent portfolio of over 230 issued patents and nearly 80 pending applications, reinforcing its position in responsible AI development [9] - The effective tax rate for the quarter was 23.4%, with a full-year net effective tax rate of 18.8% [29][30] Q&A Session Summary Question: Feedback from FHFA and FICO 10T approval timeline - Management confirmed constructive conversations with the FHFA and expressed confidence in the eventual release of FICO 10T [36] Question: Assumptions around direct licensing model in guidance - Management indicated a conservative approach in guidance due to uncertainties in the macro environment and potential timing issues with the performance model [39][40] Question: Long-term pricing strategy - Management stated that while they recognize a value gap, specific pricing strategies for 2027 and beyond are not yet determined [44][45] Question: Feedback from lenders on pricing models - Positive reception to the direct model was reported, with lenders appreciating the optionality provided by the two pricing models [49] Question: Adoption of FICO 10T in the non-conforming market - Management noted that lenders in the non-conforming market prioritize default risk and are satisfied with the performance of FICO 10T [53] Question: Mortgage volume assumptions in guidance - Management acknowledged conservatism in guidance due to uncertainties around interest rates and trigger leads [72] Question: Reseller adoption of the direct model - Management confirmed that resellers are on pace for adoption, with no significant operational hurdles anticipated [82] Question: Credit bureaus and performance model availability - Management indicated uncertainty regarding the split between the per-score and performance models among lenders [85]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported revenues of $516 million, a 14% increase year-over-year, and for the full fiscal year, revenues reached $1.991 billion, up 16% compared to the prior year [4][21] - The company achieved record annual free cash flow, with Q4 free cash flow of $211 million and total free cash flow of $739 million over the last four quarters, representing a 22% year-over-year increase [28][29] - GAAP net income for Q4 was $155 million, up 14%, with GAAP earnings per share of $6.42, an 18% increase from the prior year [26][27] Business Line Data and Key Metrics Changes - In the software segment, Q4 revenues were $204 million, flat year-over-year, while for the full fiscal year, revenues were $822 million, up 3% [5][21] - The scores segment saw Q4 revenues of $312 million, a 25% increase year-over-year, driven primarily by B2B scores, which were up 29% [8][22] - For the full year, scores revenues totaled $1.169 billion, up 27%, with mortgage origination revenues up 52% in Q4 [22] Market Data and Key Metrics Changes - The Americas region accounted for 87% of total company revenues, while EMEA generated 8% and Asia-Pacific delivered 5% [21] - The company reported a dollar-based net retention rate of 102% for the quarter, with platform NRR at 112% and non-platform NRR at 97% [24] Company Strategy and Development Direction - The company plans to advance its direct and indirect distribution strategy and invest to capture market opportunities emerging from innovations like the FICO Platform and FICO FFM [8][30] - The FICO Mortgage Direct License Program aims to drive competition and transparency in the mortgage market, with significant interest from resellers and lenders [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger growth in fiscal 2026, guiding for revenues of $2.35 billion, a projected 18% increase over fiscal 2025 [30] - The company remains conservative in its guidance due to uncertainties in the macro environment, particularly regarding mortgage volumes and interest rates [50][51] Other Important Information - The company has a patent portfolio of over 230 issued patents, with many related to AI, reinforcing its position in responsible AI development [8] - Total debt at the end of the quarter was $3.06 billion, with a weighted average interest rate of 5.27% [28] Q&A Session Summary Question: What are the recent discussions with the FHFA regarding FICO 10T? - Management confirmed constructive conversations with the FHFA and expressed confidence in the eventual release of FICO 10T [31] Question: Can you clarify the assumptions around the direct licensing model in the guidance? - Management indicated a conservative approach due to uncertainties in the macro environment and potential timing issues with the performance model [32][34] Question: What feedback have you received from lenders regarding the pricing models? - Positive reception to the direct model was reported, with lenders appreciating the optionality provided by the two pricing models [37][38] Question: How do you view the adoption of FICO 10T in the non-conforming market? - Management noted strong interest and satisfaction among lenders regarding the predictiveness of FICO 10T, although adoption processes can be slow [39][40] Question: What is the outlook for mortgage volume in your guidance? - The company remains conservative in its assumptions, with mortgage volumes expected to vary primarily with interest rates [50][51]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue reached approximately $213 million, representing a 67% year-on-year growth [26] - Adjusted EBITDA was $43 million, indicating a significant scaling in operating leverage [29] - GAAP net loss was $2 million, which was better than expectations, reflecting strong performance on net interest income [28] Business Line Data and Key Metrics Changes - Platform originations grew 89% year-on-year, with personal loan originations flat sequentially but up 83% year-on-year [5][9] - Home and Auto lending saw sequential growth rates of 5242% and 42% respectively, with auto lending growing almost 5x compared to a year ago [6][13] - HELOC originations grew 52% quarter-on-quarter and more than 6x year-on-year [16] Market Data and Key Metrics Changes - The volume of loan transactions across the platform was approximately 241,000, up 102% from the prior year [27] - Average loan size increased to approximately $8,865 from $8,580 in the prior quarter [27] - The Upstart Macro Index remains elevated but stable, indicating improving consumer financial health [6] Company Strategy and Development Direction - The company aims to return to GAAP net income profitability in the second half of the year, with a focus on expanding both core and newer products [21][33] - Upstart is prioritizing AI advancements, with a goal to enhance its leadership in AI lending and improve risk models [20][24] - The company is diversifying its funding sources, with over 50% of loan funding now in committed partnership agreements [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to changing macroeconomic conditions, noting that credit performance has remained stable despite recent market turbulence [7][31] - The company is cautious about potential risks from reinflation and is planning for a steady macro environment [31] - Guidance for Q2 includes total revenues of approximately $225 million, with expectations for continued strong demand for credit [32] Other Important Information - The company has signed a one-year agreement with Walmart's FinTech, One Pay, to make its products available to Walmart customers [36] - Upstart's HELOC product has expanded its footprint to 37 states plus Washington D.C., covering almost 75% of the U.S. population [16] Q&A Session Summary Question: Can you talk about the Walmart partnership? - Management confirmed a one-year agreement with Walmart's FinTech, emphasizing the alignment of values in delivering consumer value [36][37] Question: Any trends in April and early May? - Management indicated that guidance captures the current trends, providing limited additional color [39] Question: Thoughts on conversion rates for the remainder of the year? - Management expects conversion rates to improve with better models and automation, aiming to reach around 20% [45] Question: Why is the 2025 outlook not higher despite new funding? - Management clarified that funding is not the gating item for growth; rather, it is the economic acquisition of the right borrowers [102] Question: How are funding partners reacting to market volatility? - Management reported no pullbacks from committed capital partners, indicating resilience in funding sources [70] Question: How is Upstart adapting to macroeconomic changes? - Management emphasized the adaptability of their models and a conservative approach to planning, with no assumptions of Fed rate cuts this year [74]