Upstart (UPST) Q4 2020

Upstart which is my second largest holding after MGNI released results today as well. Forecast is blowing it out of the park and after market is up over 40%

Q4 revenue 86.7 mil (increase of 39 % YOY)
fee revenue 84.4 mil (increase of 38 % YOY)

Lending volume 123,396 loans up 57% YOY

Ops Income of 10.4 mil (increase of 196% YOY)

Net Income of 1 mil (not sure this number matters as much in todays market but good to see they are positive on the bottom line)

Adj EBIDTA of 15.5 mil (up over 123%)


Q1 21 revenue of 112 to 118 mil

Margin at 44%

Adj EBIDTA of 14.6 to 15.3 mil

Also acquired Prodigy software which is in Auto retail software. Allows them to get more insights into the auto market which could be huge for them into the future

Full release link is below…

Have not dived fully into the details but had added some more on the downturn at 68 and had second guessed a few times but held on for results . Patience has been rewarded and plan to hold for the foreseable future as they have a huge TAM with the banking and auto market combined.



Upstart is an AI-powered lending and underwriting platform. The AI uses thousands of data points to measure credit risk, which has resulted in a 75% reduction in defaults without a reduction in approval rate and a 173% increase in approvals at the same loss rate. Additionally, loans approved through Upstart result in 5.6% missed payments vs the industry average of 11.4%.

Loans through Upstart are now 70% fully automated vs 34% in 2017, meaning there was no human interaction during the process.

Upstart began with personal loans, credit card consolidation, debt consolidation, home improvement loans, medical loans, wedding loans, moving loans, etc. The 1st auto loan was approved in Q3 2020.

FY 2017 revenue = $57M
FY 2018 revenue = $99M (+74% YoY)
FY 2019 revenue = $164.4M (+66% YoY)
FY 2020 revenue = $233.4M (+42% YoY)
FY 2021 guidance = $500M (+115% YoY)

I haven’t had a chance to listen to the CC yet, but it’s apparent that they’re expecting a large acceleration in loan volume and revenue growth in 2021.

Q1 2021 guidance = $112-118M which is +32% QoQ. This is equal to 50% of the total revenue they generated in 2020.

Upstart experienced a slowdown in the beginning of 2020 due to a contraction of lending, so they will have easy comps in the coming quarters.

FY 2020 OpEx was 95% of revenue compared to 103% in 2019
Q4 2020 OpEx was 88% of revenue



Well what a day for $UPST share price today.

I was very fortunate to buy during the recent correction so I’m now scrambling to see where the growth lies for this company as its smashed my price targets very quickly.

I had a read of the CC. Some interesting points:

The stimulus programme has been acting as a headwind for them. So demand could get even higher once those dollars are spent.

The 2021 guide of $500m does not include any revenue from the new acquisition, Prodigy Software. They don’t expect this to start contributing meaningfully until 2022.

The jump in growth is reflective of the advances their product and technology has made in 2020 and a general catch up to where they would have been pre Covid.

I was very impressed with the CEO on their first public earnings call. Really painted the opportunity they have in AI learning and came across as quite bullish on future growth.