UPST earnings report…

Initial response! Revenue is exactly what we were looking for: haven’t had time to digest the other numbers yet.

Revenue. Total revenue was $305 million, an increase of 252% from the fourth quarter of 2020. Total fee revenue was $287 million, an increase of 240% year-over-year.

Transaction Volume and Conversion Rate. Bank partners originated 495,205 loans, totaling $4.1 billion, across our platform in the fourth quarter, up 301% from the same quarter of the prior year. Conversion on rate requests was 24% in the fourth quarter of 2021, up from 17% in the same quarter of the prior year.


They also announced a $400 million share buyback.

Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending platform, today announced that its Board of Directors has approved a share repurchase program with authorization to purchase up to $400 million of common stock.

“With the volatility in the trading of our stock, we have seen what we believe to be attractive buying conditions at various times over the past year, and our profitability puts us in a position to be able to initiate this program and take advantage of those situations on behalf of our shareholders," said Sanjay Datta, CFO of Upstart.

Upstart may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. The share repurchase program does not obligate Upstart to acquire any particular amount of common stock, and the program may be suspended or terminated at any time by Upstart at any time at its discretion without prior notice.


They give the first guidance for next year’s revenue estitimes $1.4 billion, which, if my math is right, is about +65% next yera. Assuming some beat and raises throughout the year, they are probably expecting more like +80% growth next year, which is likely more than a lot of people were expecting.

and the only mention I see in this earnings release about fraud, refers to the fraud attached in the “third quarter of 2021”. That seems like good news that there is no mention of a significant issue with fraud extending into the fourth quarter. That was one of my bigger concerns.

I’m glad I held onto a small stake in UPST. Looking forward to the call this afternoon



I think a lot of us were looking for revenue guidance of at least 1.18 billion. They gave guidance of 1.4 billion. Best part “…auto loan originations on our platform are ramping quickly…”


It seems that Q1 guidance is 0% QoQ at best (295M - 305M). Last year was 40% QoQ.
However, for FY22 they are guiding about 64.9% ($1.4B x $849M), which is not bad. But Q1 guidance sounded low.


Modelling the impact of auto using the guidance of $1.4B, which equates to 6% QoQ for the year and assuming that transaction volume ($) growth continues to roughly track revenue growth:

        Rev    QoQ      Vol($B)  QoQ
1Q21	$323 	6%	$4,346 	6%
2Q21	$343 	6%	$4,607 	6%
3Q21	$363 	6%	$4,883 	6%
4Q21	$385 	6%	$5,176 	6%

Guidance for auto volume is $1.5B (FY), so let’s say $500M for Q3 and $1B for Q4.

So by the end of 2022 auto would be 20% ($1B/$5176B) of the business? Not bad.

Dave Girouard did say that typically they would take 1 year R&D, 1 year seeding and testing, and 1 year scaling. I assume they are currently in the seeding and testing stage, so in 2023 we’ll see volumes scale massively.

From the presentation, “Auto Refi funnel performance is now comparable to personal loan funnel circa 2019”. Personal loans shot up in 3Q20, 6 months from the end of 2019, so this also lines up.


“It seems that Q1 guidance is 0% QoQ at best (295M - 305M).”

Exactly . . . That really threw me. I was totally unprepared for a miserable QonQ guide but the YonY guide was even better than I expected. I’m not selling any shares, but I’m really curious to see how the market will react to this.


I think it is not a bad guidance:

  1. they should beat it by some margin, so Q1 will end up better than Q4;
  2. there should be some seasonal factor, Q3 typically is highest volume Q in a year for personal loan;
  3. Omicron is at peak in Q1 in US.

“It seems that Q1 guidance is 0% QoQ at best (295M - 305M).”

Exactly . . . That really threw me. I was totally unprepared for a miserable QonQ guide but the YonY guide was even better than I expected. I’m not selling any shares, but I’m really curious to see how the market will react to this.

Management has always tagged Q1 as its seasonally weakest. QoQ growth from Q4 to Q1 was -18% in 2019 and 2% in 2020. 2021 was the outlier. The after hours reaction suggests (to me as least) the market isn’t shocked or disappointed in this Q1 guide, especially because the FY guides implies the usual upward QoQ trend from Q2-Q4.


Management has always tagged Q1 as its seasonally weakest. QoQ growth from Q4 to Q1 was -18% in 2019 and 2% in 2020. 2021 was the outlier. The after hours reaction suggests (to me as least) the market isn’t shocked or disappointed in this Q1 guide, especially because the FY guides implies the usual upward QoQ trend from Q2-Q4.

following on stocknovice’s point,

On the earnings call they referred to the “seasonal contraction” from Q4 to Q1, saying that business slows in Q1 for “tax return season”.

So I guess they are saying that when people get tax refunds in Q1, they don’t need to borrow as much at that time, compared to in other quarters



Hello, I have one question.

Should there be any concern that their EBITDA margin guidance of 17% for 2022 looks very weak? They did 27% EBITDA margin for 2021.

It feels like they didn’t sandbag their revenue guidance for 2022 too much, so why would their EBITDA guidance be sandbagged to such a great extent?

Thanks for the replies.


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UPST’s Dave G stated very plainly that all Upstart auto loans (and other pipeline products!) are retained wholly on the books until the design team feels the AI/ML algos are tuned properly and the funnel is fully developed to the desired state.

As a result there are two implications:

  1. All of those loans are not accreting fee revenue to the bottom line immediately (no upfront payment and a longer lag for periodic payments to arrive)
  2. The loans are net outflows, requiring retained capital to be an outflow for each incremental loan fund.

With auto loans being larger in nature, that development process cuts twice on margins.

It is temporary and indicated that this impact will be 6 months to 12 months in term for auto products. (1/2 half improvements as guidance implies)


Excellent quarter for Upstart.

Rev of 17% beat and 33% QoQ are stellar numbers, but it’s the outlook that got me revved up.

With 1.4B rev guidance for FY22, I’d expect actual revs at 1.6B+ conservatively. That’s ~90% yoy.

From the earnings call it was clear that management is encouraged by auto rollout.

In regards to auto, CEO Girouard said “we’ve crossed the chasm”. This statement stands in stark contrast to previous comments from a management hesitant to provide much detail or confidence on this new flavor of credit.

“Auto Refi is now comparable to personal loans in 2019”. Big statement, as we all know what happened a year later. Is Auto Refi basing and poised to accelerate in 2023?
Also next year, the direct auto sales portion will increase contribution.

and speaking of 2023, a Mortgage product is expected (whether that’s testing or limited rollout, we’ll see). But again, this is the first time I’ve heard management comfortable/confident enough to commit to a timeline on this massive step in their journey.

All this taken together, I see 2022 as a very strong year but still one in which Upstart is coiling, with 2023 and beyond ripe for dual waves of growth from sequential and simultaneous rollout of Auto and Mortgage, both huge markets.

A buyback starts to make sense.

Of course, risks remain and a long road of execution awaits.

I have held all upst shares since June/July and will likely add to my position this week.



Long time lurker here, with Upst as my second largest position. I am a bit surprised by the buyback announcement when they are trying to grow multiple lines of business.

For Auto, they are even planning to retain all of those loans for the next few quarters. With that, it feels a bit surprising that they are actively looking to buy back. The stock is clearly cheaper than ever, but I sense a bit of dissonance, given we are perhaps in the later stages of a credit cycle.

Would someone have a good sense for over how long they’re looking to deploy this cash. Anything less than a year feels aggressive, but beyond that is perhaps defensible.


One thing I noticed for the first time, is the mention of Small Business Loan TAM of $644 B in addition to the previous stated TAM of Mortgage (4.6T) Auto ($727 B, up from $672B previously) and Personal Loans ( $96B, up as well).

  • Markets in which they operate are growing
  • Is this a new segment they will tap into? I had not heard them mention Small Business Loans before as a market they will explore.

I think Q2 and Q3 for Upstart will be flattish unless they can accelerate Auto, but 2023 is shaping up to be massive if they can continue to execute on Auto Loan originations and fees; the supply chain issues for semiconductors easing up, and their Auto Loan Product in 2020-2021 Personal Loan growth mode.



Regarding the buy back plan:

Company officers often announce buy back plans as a vote of confidence. This is equivalent to talking your book even louder through actions.

Let’s break this down a bit since this is not something commonly seen with hypergrowth companies.

$400MM buy back plan

Current Market cap: $8900MM
Cash and equivalents: $1900MM

Even if they go through with the entire plan of $400MM, this will not be a significant outlay, but provides a very strong signal that management believes in the plan and values the company far higher than the current market tape.

Sometimes the company doesn’t even go through with the plan at all. The announcement is sufficient.


Recommendations: 0
Am I the only one who thinks this was a blowout quarter!?

A handsome beat on revenue, back to sequential QoQ growth in the 30s. Fully automated loans back to 70% aka fraud concerns from Q321 are alleviated.

2022 guidance exceeded expectations with 65% YoY growth as well as auto opportunity substantiated.

They also clarified some of the concerns market had about what kind of a company they are, and also their ambition/potential to remain a high growth company for years to come…


Last sale in after-market at $133.94, up +24.83% from yesterday’s close of $109.11.

Profit: +.89 CENTS per share
+71.15% eBEAT of analysts’ earnings expectations of +.52 CENTS per share
+16.90% rBEAT of anlaysts’ revenue expectations of $262.80 Million (actual $304.80 Million revenue)
Earnings growth for Q4 2021 +481.30% yoy
Revenue growth for Q4 2021 +251.60% yoy
Raised guidance for next quarter +17.94%

Deeper Earnings Details:

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This question came up in the conference call. I found the answer to be extremely positive and down right exciting.

Arvind Ramnani
Terrific. And if I could squeeze one last in. Certainly, on the EBITDA compression, you provided some color in your prepared remarks on ramp-up in auto and hiring in tech. But if you think of like first for 12 months from now, what do you think may drive kind of upside? I mean, certainly, you have to invest in auto and you’re going to have hire tech folks. But is there any levers you have in place that can drive some upside in EBITDA margins?

Sanjay Datta
Yes, absolutely. And I would think that, if you think about the auto business itself, it’s going to go through a cycle much like the personal loan business did, where in the early days you’re ramping, you’re developing your sort of acquisition programs. They’re not quite at scale. Your operations are not finally tuned.

And so, in the early days of our personal loans, if you look back to our corporate history, we knew we had a lower level of profitability. And as that business scaled, it started accreting pretty directly to the bottom line. And I – we believe that auto is going to go through a similar cycle, maybe a more accelerated one, because we know the playbook now.

But as it is today, where we’re starting to achieve meaningful volume, our CACs are not as efficient as they are in personal lending, our operations unit costs are not as efficient as they are in personal lending, but they will get there. And as the models get better, the conversion funnel improves.

All of the things that happened to our personal loan business, we anticipate will happen on the auto business. And so whereas in 2022, it will be, maybe a bit sort of dilutive to our contribution margins at scale and at maturity, we think that it will have the same sort of profitability profile as our core business today.

So that’s just something – I think we’re sort of like incubating new businesses as we go. Dave sort of alluded to a pace of, you don’t want to read 6 to 12 months of new business, and it will go through an investment cycle.

But as we get more and more in our portfolio, that have matured and are sort of now ‘cash cows.’ I think the natural profitability of the overall model will just, kind of, trend to its equilibrium direction, which we believe is higher than where it is today.