Upstart Announces Preliminary Unaudited Q2’22 Financial Results

Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, today announced preliminary unaudited financial results for the second quarter ending June 30, 2022. Upstart also announced that its final second quarter fiscal year 2022 business and financial results will be released on Monday, August 8, 2022 after the market close.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220707005843/en/

1. Data is for lending partners’ originations made via the Upstart platform as of July 5, 2022. (Graphic: Business Wire)

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

“Inflation and recession fears have driven interest rates up and put banks and capital markets on cautious footing,” said Dave Girouard, co-founder and CEO of Upstart. “Our revenue was negatively impacted by two factors approximately equally. First, our marketplace is funding constrained, largely driven by concerns about the macroeconomy among lenders and capital market participants. Second, in Q2, we took action to convert loans on our balance sheet into cash, which, given the quickly increasing rate environment, negatively impacted our revenue.”

“During the second quarter, we improved our unit economics and oriented ourselves toward continued positive cash flow even at lower loan origination volumes. With a low fixed cost base, we expect to continue adding to our almost $800 million unrestricted cash balance as well as to continue repurchasing Upstart shares as it makes sense. And finally, despite limiting hiring to critical areas, we continue to invest in our models and products and are confident Upstart will emerge from this cycle a stronger company.”

Sanjay Datta, CFO of Upstart, said "Despite the tumultuous economy, Upstart-powered loans have performed exceptionally well. For loans facilitated through our platform and held by our more than 60 bank and credit union partners, average returns have consistently met or exceeded expectations since the program’s inception in 2018."