Upstart Earnings Review

1. Demand

Upstart guided to $210 million in quarterly revenue at the midpoint. Analysts were expecting $214.9 million in revenue. It posted $228.4 million beating its expectations by 8.8% and analyst estimates by 6.3%.

Upstart discloses revenue concentrations in its 10Q which will be published later in the week. I will include that information (and anything else notable) in the News of the Week post on Saturday. As of last quarter, Cross River Bank was originating 60% of Upstart’s volume vs. 79% year over year and Credit Karma traffic accounted for 49% of Upstart fees. I’ll be looking for these percentages to continue to fall as the partner base grows.

Note: The pandemic represented a severe demand headwind for loan activity and Upstart specifically. As a result, these Q3 2021 comps are extremely easy which helped boost the revenue growth metric alongside healthy demand. Quarterly growth is more telling of continued momentum here and is also exceedingly strong -- again.

2. Profitability

Upstart was expected to earn $0.27 per share. It earned $0.60 which beat expectations by $0.33 or 122%.

Upstart guided to the following midpoints:

  • Roughly $94.5 million in contribution profit. It posted $95.9 million beating expectations by 1.5%.
  • $20 million in GAAP net income. It posted $29.1 million beating expectations by 45.5%.
  • $30 million in Non-GAAP net income. It posted $57.4 million beating expectations by 91.3%.
  • $32 million in adjusted EBITDA. It posted $59.1 million beating expectations by 84.7%.

3. Guidance

Upstart was expected to guide to the following for the 4th quarter:

  • $227.6 million in revenue. It guided to $255-$265 beating expectations by 14.2%. Girouard also called this guide “reasonably conservative” during the Q&A.
  • $25.1 million in adjusted EBITDA. It guided to $51-$53 million beating expectations by 107.2%.

4. Co-Founder/CEO Dave Girouard Conference Call Notes

On banking partner progress:

7 banking partners have now signed up for Upstart Auto Retail (formerly Prodigy) vs. 5 last quarter.