Upstart — Q3 2026 Earnings Summary

Financial Performance:

• Total revenue reached $371 million, a 34% increase year-over-year (YoY) from $277.1 million in Q3 2025.
• Revenue from fees hit a record $364 million, up 41% YoY from $258.5 million in Q3 2025.
• Income from operations was $36.0 million, compared to $23.7 million in Q3 2025.
• Net income was $36.6 million, up 15% YoY from $31.8 million in Q3 2025.
• Diluted net income per share was $0.33, compared to $0.23 in Q3 2025.
• Contribution Profit reached an all-time high of $218 million, up 48% YoY from $147.4 million in Q3 2025.
• Contribution Margin was 60%, up from 57% in Q3 2025.
• Adjusted EBITDA was $89.3 million, up 26% YoY from $71.2 million in Q3 2025.
• Adjusted EBITDA Margin was 24%, down from 26% in Q3 2025.
• Originations totaled $4.1 billion, up 44% YoY, with 574,089 loans originated, up 34% YoY.
• Cash and cash equivalents were $461.5 million as of September 30, 2026, down from $652.4 million as of December 31, 2025.
• Total borrowings increased to $2.0 billion as of September 30, 2026, from $1.8 billion as of December 31, 2025.

Guidance and Future Outlook:

• For full-year 2026, Upstart expects Revenue From Fees of approximately $1.32 billion.
• Full-year 2026 Total Revenue is expected to be approximately $1.35 billion.
• Full-year 2026 Adjusted EBITDA is expected to be approximately $260 million, representing a 19% margin of Total Revenue.

Business Segments and Product Lines:

• Unsecured Lending revenue from fees was $330 million, up 30% YoY.
• Unsecured Lending Contribution Profit was $212 million, up 35% YoY, with a Contribution Margin of 64% (up 2 percentage points from 62% in Q3 2025 and Q2 2026).
• Secured Products (Auto and Home) reached positive Contribution Margin of 17%, a significant improvement from negative 179% in Q3 2025 and negative 35% in Q2 2026.
• Secured Products achieved positive Contribution Margin one quarter ahead of plan.
• Loan sales fees, presented as a separate component of revenue from fees, totaled $11.1 million in Q3 2026 (vs. $0 in Q3 2025).

Market and Competitive Landscape:

• Upstart connects millions of consumers to over 100 banks and credit unions.
• More than 90% of loans are fully automated with no human intervention.
• The company operates in a highly regulated industry with competitive and rapidly changing environments.

Risks and Challenges:

• Macroeconomic conditions are putting pressure on the near-term outlook.
• Risks include the ability to manage adverse effects of macroeconomic conditions and disruptions in the banking sector and credit markets.
• Potential risks involve inflation, changes in interest rates, and monetary policy.
• Challenges include access to sufficient loan funding through securitizations, committed capital, and warehouse credit facilities.
• Risks include the effectiveness of credit decisioning models and the impact of macroeconomic conditions on borrower credit risk.
• The company faces risks related to retaining existing and attracting new lending partners.
• Operational risks include managing risks associated with loans on the balance sheet and operating in a highly regulated industry.

Management Commentary and Tone:

• Paul Gu, Co-founder and CEO, stated, "Macro comes and goes, but alpha compounds."
• Management noted that technology and marketing advances drove record Contribution Profit.
• CEO expressed increased confidence in Upstart's long-term potential despite macro pressures.
• Management highlighted that platform growth was supported with proportionately less equity capital.

Other Key Points:

• The company renamed its Personal Lending operating segment to Unsecured Lending in Q2 2026.
• Loan sales fees were reclassified as a separate revenue component beginning in Q2 2026.
• The Conversion Rate metric is scheduled to be discontinued beginning in Q1 2027.
• Upstart introduced a new product called Cash Line, a revolving line of credit.
• Stock repurchases of $100.1 million occurred during the nine months ended September 30, 2026.
• Proceeds from borrowings were $771.7 million for the nine months ended September 30, 2026.
• Reorganization expenses of $1.7 million were recorded for the nine months ended September 30, 2026.