Revised Q2 2022 est of $228 mil would be an increase of only 17.5%. YoY from 2nd qrt 2021 (194mil)
Upstart is no longer a hypergrowth company…at 17.5% yoy revenue growth, not hypergrowth by a very long shot so OT for this board. Jon actually pointed this out last q already here: https://discussion.fool.com/my-original-upst-post-mortem-post-wa…
If anything, it is a turnaround story, so OT by a second criteria too.
Lastly this release from them just put the final, final, final nail in the proverbial coffin imho.
Just look at the last 2 guides and now this:
Feb 15th 2022
For the full year 2022, we expect revenue of approximately $1.4 billion, representing a growth rate of approximately 65% from the prior year; contribution margin of approximately 45%; adjusted EBITDA of approximately 17%; and an auto loan transaction volume of approximately $1.5 billion.
May 9th 2022
For the full year 2022, we now expect revenue of approximately $1.25 billion, representing a growth rate of approximately 47% from the prior year, down from $1.4 billion guided last quarter; contribution margin of approximately 48%; adjusted EBITDA of approximately 15%.
For Q2 of 2022, we are expecting revenues of $295 million to $305 million, representing year-over-year growth rate of 55% at the midpoint; contribution margin of approximately 45%; net income of negative $4 million to $0 million
→ That’s a 10.7% drop in full-year guidance, dropping your yoy growth by 18%pts in just 3 months. They also guided for a sequential slow-down in revenue from $310m to Q2 #305m, but which would at least still have been good for 57% yoy.
July 7th 2022
Second Quarter 2022 Preliminary Unaudited Financial Results:
Revenue is expected to be approximately $228 million, previously guided at $295 to $305 million
Contribution margin is expected to be approximately 47%, previously guided at approximately 45%
Net Income (loss) is expected to be in the range of ($31)-($27) million, previously guided at ($4) to $0 million.
→ That’s a 25.2% miss vs the lowered Q2 revenue guide of $305m of just two months ago! and now only good for 17.5% yoy growth and a 26% qoq contraction.
They probably released the prelim numbers because they had to as it was just so far off their prior guide…
In addition to the fact that this is just not good performance, how can you ever trust management again after this? I was an Upstart bull for quite a while, but a key underpinning of that was that I trusted management to have a better view of the business than others out there. However, contrary to Girouard’s contention that the market “misunderstands” Upstart, I now think the market understands Upstart pretty well, thank you very much - perhaps better than management, who, quite frankly, seem quite clueless about their own business performance to me in the above context.
-WSM.