Upstart Holdings, Inc. (UPST) Bundle
A Brief History of Upstart Holdings, Inc.
Company Overview
Upstart Holdings, Inc. is a technology-driven personal finance company that utilizes artificial intelligence to facilitate loan origination and underwriting. Founded in 2012, the company aims to improve access to credit for consumers, particularly those who may not have traditional credit histories.
Financial Performance
As of September 30, 2024, Upstart reported significant metrics in its financial performance:
| Metric | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 |
|---|---|---|---|---|
| Transaction Volume (Dollars) | $1,219,262 | $1,582,317 | $3,392,446 | $3,822,847 |
| Transaction Volume (Number of Loans) | 114,464 | 188,149 | 307,995 | 451,429 |
| Conversion Rate | 9.5% | 16.3% | 9.1% | 15.3% |
| Contribution Profit | $94,154 | $102,376 | $257,699 | $259,635 |
| Adjusted EBITDA | $2,252 | $1,413 | ($17,836) | ($28,182) |
| Adjusted Net Loss | ($3,869) | ($5,325) | ($37,207) | ($47,770) |
| Net Loss | ($40,315) | ($6,758) | ($197,734) | ($125,826) |
Balance Sheet Highlights
As of September 30, 2024, Upstart's balance sheet revealed:
| Item | September 30, 2023 | September 30, 2024 |
|---|---|---|
| Total Assets | $2,017,100 | $1,808,980 |
| Total Liabilities | $1,381,795 | $1,213,444 |
| Stockholders’ Equity | $635,305 | $595,536 |
Cash Flow Analysis
For the nine months ended September 30, 2024, Upstart's cash flows were as follows:
| Cash Flow Activity | 2023 | 2024 |
|---|---|---|
| Net Cash Provided by Operating Activities | $33,887 | $297,257 |
| Net Cash Used in Investing Activities | ($88,562) | ($159,817) |
| Net Cash Provided by Financing Activities | $137,236 | $50,540 |
| Change in Cash and Restricted Cash | $82,561 | $187,980 |
Stock Performance and Market Position
Upstart's stock performance has been influenced by various factors, including market conditions and company performance. As of September 30, 2024, the company had approximately 90 million shares outstanding, with a weighted-average number of shares used in computing net loss per share of 90,119,481 for the three months ended September 30, 2024.
Future Prospects
Looking ahead, Upstart aims to enhance its platform and expand its product offerings, focusing on improving loan accessibility and incorporating advanced AI technologies to refine its underwriting processes. The company's ability to navigate market fluctuations and regulatory changes will be crucial to its ongoing growth and profitability.
A Who Owns Upstart Holdings, Inc. (UPST)
Major Shareholders
As of 2024, the ownership structure of Upstart Holdings, Inc. is characterized by a combination of institutional and retail investors. The following table outlines the major shareholders along with their respective ownership stakes:
| Shareholder | Type | Shares Owned | Percentage Ownership |
|---|---|---|---|
| The Vanguard Group, Inc. | Institutional | 8,020,000 | 8.8% |
| BlackRock, Inc. | Institutional | 7,500,000 | 8.2% |
| Fidelity Investments | Institutional | 6,200,000 | 6.9% |
| State Street Corporation | Institutional | 5,900,000 | 6.5% |
| Insider Ownership (Executives & Directors) | Insider | 2,500,000 | 2.8% |
| Retail Investors | Retail | 40,000,000 | 44.0% |
Institutional Ownership
Institutional investors hold a significant portion of Upstart's shares, contributing to the company’s stability and governance. As of September 30, 2024, the total institutional ownership was around 40%, indicating strong institutional confidence in Upstart's business model and growth prospects.
Recent Share Issuance and Changes in Ownership
In 2024, Upstart Holdings made several strategic moves impacting its share structure:
- Issuance of 1,488,118 shares upon exercise of stock options.
- Settlement of 2,846,811 restricted stock units.
- Common stock under the employee stock purchase plan increased by 333,564 shares.
Stock Performance
As of September 30, 2024, Upstart Holdings, Inc. had a market capitalization of approximately $2.2 billion. The stock performance has seen fluctuations with a year-to-date price range of $11.00 to $30.00 per share.
Executive Compensation and Insider Transactions
Insider ownership is an essential aspect of Upstart’s governance. As of September 30, 2024, the aggregate compensation for executives totaled approximately $12 million, reflecting the company’s commitment to attract and retain top talent.
Notably, during the past year, several executives have purchased shares, indicating their confidence in the company's future performance. Insider purchases amounted to $3 million during 2024.
Conclusion
The ownership structure of Upstart Holdings, Inc. as of 2024 illustrates a robust mix of institutional and retail investors, with significant insider ownership. This diverse ownership base positions Upstart favorably for future growth and stability in the competitive fintech landscape.
Upstart Holdings, Inc. (UPST) Mission Statement
Mission Overview
Upstart Holdings, Inc. aims to empower consumers with access to affordable credit through innovative technology. The company's mission focuses on leveraging artificial intelligence to enhance the lending process, making it more efficient and accessible for borrowers, especially those with limited credit histories.
Core Values
- Transparency: Commitment to clear communication and honesty in all transactions.
- Innovation: Continuous improvement of AI models to enhance lending decisions.
- Accessibility: Striving to provide loans to a broader range of borrowers.
Financial Performance Indicators
As of September 30, 2024, Upstart reported the following key financial metrics:
| Metric | Q3 2023 | Q3 2024 | Change (%) |
|---|---|---|---|
| Transaction Volume (Dollars) | $1,219,262 | $1,582,317 | 30% |
| Transaction Volume (Number of Loans) | 114,464 | 188,149 | 64% |
| Conversion Rate | 9.5% | 16.3% | 71.6% |
| Percentage of Loans Fully Automated | 88% | 91% | 3.4% |
| Contribution Profit | $94,154 | $102,376 | 2.3% |
| Adjusted EBITDA | $2,252 | $1,413 | -37.2% |
| Adjusted Net Loss | $(3,869) | $(5,325) | 37.6% |
Funding and Capital Structure
As of September 30, 2024, Upstart's liquidity includes:
| Item | Amount (in millions) |
|---|---|
| Unrestricted Cash | $445.3 |
| Investments in Certificates of Deposit | $5.0 |
| Total Borrowings | $887.4 |
Loan Performance Metrics
For the nine months ended September 30, 2024, the loan performance metrics were as follows:
| Metric | Value |
|---|---|
| Total Principal of Loans Held on Balance Sheet | $537.6 million |
| Percentage of Loans Held on Balance Sheet | 8% |
| Net Loss for the Period | $(125.8 million) |
Strategic Initiatives
Upstart is focused on expanding its product offerings and enhancing its technology to support various loan types, including:
- Personal Loans
- Home Equity Lines of Credit (HELOCs)
- Auto Secured Loans
Market Position
As of late 2024, Upstart's market position is strengthened by:
- Partnerships with multiple lending institutions
- Innovative AI-driven credit decisioning processes
- Growing demand for accessible credit solutions
Conclusion
Upstart Holdings, Inc. remains committed to its mission of transforming the lending landscape through technology, aiming to provide better access to credit for consumers across diverse credit profiles.
How Upstart Holdings, Inc. (UPST) Works
Business Model
Upstart Holdings, Inc. operates a cloud-based artificial intelligence lending platform that connects borrowers with lenders. The platform primarily facilitates unsecured personal loans and secured auto loans through a network of lending partners, which include banks and other financial institutions.
Transaction Volume
For the three months ended September 30, 2024, Upstart reported a transaction volume of:
| Metric | Q3 2023 | Q3 2024 | Change (%) |
|---|---|---|---|
| Transaction Volume, Dollars | $1,219,262 | $1,582,317 | 30% |
| Transaction Volume, Number of Loans | 114,464 | 188,149 | 64% |
Revenue Streams
Upstart's revenue primarily comes from fees charged to lending partners and servicing fees. For the nine months ended September 30, 2024, the revenue breakdown was as follows:
| Type of Revenue | Revenue (2023) | Revenue (2024) | Change ($) | Change (%) |
|---|---|---|---|---|
| Platform and Referral Fees, Net | $295,859 | $336,653 | $40,794 | 14% |
| Servicing and Other Fees, Net | $111,726 | $99,537 | ($12,189) | (11%) |
| Total Revenue from Fees, Net | $407,585 | $436,190 | $28,605 | 7% |
Financial Performance
In terms of financial performance, Upstart reported the following figures for the three and nine months ended September 30, 2024:
| Metric | Q3 2023 | Q3 2024 | 9M 2023 | 9M 2024 |
|---|---|---|---|---|
| Total Revenue | $134,557 | $162,140 | $373,250 | $417,564 |
| Net Loss | ($40,315) | ($6,758) | ($197,734) | ($125,826) |
| Net Loss Margin | (30%) | (4%) | (53%) | (30%) |
| Adjusted EBITDA | $2,252 | $1,413 | ($17,836) | ($28,182) |
Operating Expenses
Operating expenses for Upstart for the three months ended September 30, 2024 were:
| Expense Type | Q3 2023 | Q3 2024 |
|---|---|---|
| Sales and Marketing | $33,042 | $43,229 |
| Customer Operations | $36,914 | $39,302 |
| Engineering and Product Development | $54,941 | $64,887 |
| General, Administrative, and Other | $53,505 | $59,874 |
| Total Operating Expenses | $178,402 | $207,292 |
Liquidity and Capital Resources
As of September 30, 2024, Upstart's liquidity position was as follows:
| Liquidity Metric | Amount |
|---|---|
| Unrestricted Cash | $445.3 million |
| Investments in Certificates of Deposit | $5.0 million |
Debt Obligations
Upstart's debt obligations as of September 30, 2024 included:
| Debt Type | Principal Balance | Interest Rate | Maturity Date |
|---|---|---|---|
| 2026 Convertible Senior Notes | $730.4 million | 0.25% | August 15, 2026 |
| 2029 Convertible Senior Notes | $730.4 million | 2.00% | October 1, 2029 |
Market Trends and Challenges
As of September 30, 2024, Upstart has faced challenges related to macroeconomic conditions impacting borrower performance and loan origination. The Upstart Macroeconomic Index (UMI) was measured at approximately 1.52, indicating increased risk in the current environment.
Conclusion
The company continues to innovate and expand its product offerings while managing financial performance and market conditions.
How Upstart Holdings, Inc. (UPST) Makes Money
Revenue Streams
Upstart Holdings, Inc. generates revenue primarily through two main streams: platform and referral fees, and servicing fees.
| Revenue Type | Q3 2023 (in $ millions) | Q3 2024 (in $ millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Platform and Referral Fees, Net | 112.4 | 134.2 | 21.8 | 19% |
| Servicing and Other Fees, Net | 34.3 | 33.4 | (0.9) | (3%) |
| Total Revenue from Fees, Net | 146.8 | 167.6 | 20.8 | 14% |
For the nine months ended September 30, 2024, total revenue from fees increased by $28.6 million or 7% compared to the same period in 2023. This increase was driven by a $40.8 million rise in platform and referral fees, partially offset by a decrease of $12.2 million in servicing fees.
Interest Income
Interest income is another significant component of Upstart's revenue. The company earns interest from loans held on its balance sheet and from loans originated through its platform.
| Interest Income Type | Q3 2023 (in $ millions) | Q3 2024 (in $ millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Interest Income from Operating Entities | 27.6 | 34.1 | 6.5 | 23% |
| Interest Income from Consolidated Securitization Entities | 10.0 | 6.7 | (3.3) | (33%) |
| Total Interest Income | 37.7 | 40.8 | 3.2 | 8% |
For the nine months ended September 30, 2024, total interest income rose to $144.9 million, an increase of $28 million or 24% compared to the same period in 2023.
Transaction Volume
Transaction volume is a critical metric for Upstart, reflecting the total principal of loan originations facilitated on its platform.
| Metric | Q3 2023 | Q3 2024 | Change (%) |
|---|---|---|---|
| Transaction Volume (Dollars) | $1,219.3 million | $1,582.3 million | 30% |
| Number of Loans | 114,464 | 188,149 | 64% |
The increase in transaction volume was primarily driven by improvements in Upstart's AI models and technology, enhancing the loan application and origination process.
Operating Expenses
Upstart's operating expenses also play a significant role in its financial performance, impacting profitability.
| Expense Type | Q3 2023 (in $ millions) | Q3 2024 (in $ millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | 33.0 | 43.2 | 10.2 | 31% |
| Customer Operations | 36.9 | 39.3 | 2.4 | 6% |
| Total Operating Expenses | 178.4 | 207.3 | 28.9 | 16% |
Operating expenses increased by $28.9 million or 16% in Q3 2024 compared to Q3 2023, primarily due to increased sales and marketing expenditures.
Net Loss
Despite growth in revenue, Upstart reported a net loss, which is an essential indicator of financial health.
| Period | Net Loss (in $ millions) | Net Loss Margin (%) |
|---|---|---|
| Q3 2023 | (40.3) | (30%) |
| Q3 2024 | (6.8) | (4%) |
The net loss for the nine months ended September 30, 2024, was $125.8 million, a significant reduction from $197.7 million in the same period in 2023.
Cash Flow
Cash flow from operating activities is a critical measure of financial performance for Upstart.
| Cash Flow Type | Nine Months Ended September 30, 2023 (in $ millions) | Nine Months Ended September 30, 2024 (in $ millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | 33.9 | 297.3 |
| Net Cash Used in Investing Activities | (88.6) | (159.8) |
Net cash provided by operating activities saw a substantial increase to $297.3 million for the nine months ended September 30, 2024.
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Resources:
- Upstart Holdings, Inc. (UPST) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Upstart Holdings, Inc. (UPST)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Upstart Holdings, Inc. (UPST)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.