Upstart Holdings, Inc. · NASDAQ:UPST
Upstart — Q4 2024 Earnings Presentation
36 slides from Upstart's earnings presentation, Feb 11, 2025
Slide 1: Q4 and Full Year 2024 Earnings
Q4 and Full Year 2024 Earnings February 11, 2025
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements, other than statements of historical fact contained in this presentati
Slide 3: Upstart is the leading AI lending marketplace
Upstart is the leading AI lending marketplace 3M+ $42B+ 100+ 1 1 1 Customers Originations Banks We connect millions of customers to 100+ banks and credit unions who leverage Upstart’s artificial intelligence (AI) models and cloud applications to deliver superior credit products. With Upstart AI, lend
Slide 4: Q4'24 Summary
Q4’24 Summary Revenue Income from Operations Contribution Profit Margin Net Income Adjusted EBITDA $219.0M ($4.8M) 61% ($2.8M) $38.8M +56% y/y from ($47.5M) in Q4’23 vs 63% in Q4’23 from ($42.4M) in Q4’23 from $0.6M in Q4’23 Highlights 1 91% PTM 61% $1.3B 59% Of loans fully automated, Payment Transit
Slide 5: Full Year 2024 Summary
Full Year 2024 Summary Revenue Income from Operations Contribution Profit Margin Net Income Adjusted EBITDA $636.5M ($172.9M) 60% ($128.6M) $10.6M 24% y/y from ($256.5M) in FY23 vs 63% in FY23 from ($240.1M) in FY23 from ($17.2M) in FY23 Highlights >50% 28 Prime Model 18 Servicing Of funding comes fr
Slide 6: Key Investment Areas
1 Best rates for all Key Investment Areas 2 More efficient borrowing and lending 3 Expanding our footprint
Slide 7: Best rates for all
Best rates for all AI provides superior risk separation, leading to higher approvals and lower APRs Upstart's model is more accurate than traditional lending models; allowing lenders to Powered by more than 2,500 variables, our 1 approve more applicants at lower APRs. personal loan underwriting mode
Slide 8: More efficient borrowing and lending
More efficient borrowing and lending Enabled by better AI and more sophisticated risk models 84 Net promoter score Borrowers love Upstart with 49K+ rating us ‘Excellent’ on Trustpilot1 91% of loans are fully automated2 of instantly approved 93% borrowers convert to funded loans, 3X the conversion rat
Slide 9: Expanding our footprint
Expanding our footprint Product, borrower, and funding diversification can drive growth and provide greater resilience through market cycles 30% 115% 1 7x HELOC Sequential growth in Sequential growth in Increase in conversion Zero defaults across originations from banks Small Dollar Loan from rate re
Slide 10: Consumer and Credit Trends
Consumer and Credit Trends
Slide 11: UMI and consumer trends
UMI and consumer trends Macroeconomic risk to consumer credit has improved reflecting a recovery in key consumer trends 1 December consumer trends December UMI 3.8% Personal savings rate 1.40 2 vs 4.1% in September CPI (Inflation) 3.8% vs 4.0% in September -7% vs 1.50 in September 2024 62.5% Labor for
Slide 12: Recent vintages are on track to meet or exceed investors' return targets
Recent vintages are on track to meet or exceed investors’ return targets1 Improving investor confidence helps attract more capital to our marketplace If an investor invested equally in all Upstart cohorts, they would now expect inline annualized returns against a blended target of 9.6%2 Target cash fl
Slide 13: Impact and Scale
Impact and Scale
Slide 14: Upstart's impact
Upstart’s impact Dedicated to expanding access to credit for all “Money is a fundamental ingredient of life, and unless you’re one of the few percent of Americans with significant wealth, the price and difficulty of borrowing affects you every day. Throughout history, affordable credit has been centra
Slide 15: Upstart risk separation
Upstart risk separation Significantly better at differentiating risk than credit scores Annualized default rates1 Upstart Risk Grades A+ B C D E- Average Upstart’s risk grades predict 700 or 1.5% 4.7% 7.5% 9.1% 10.0% 4.4% a steadily increasing default rate from left Above to right as the borrowers get
Slide 16: Upstart's marketplace
Upstart’s marketplace Total addressable market of $3T in annual loan originations $ Home $ 1.4T1 Small Business 895B4 Auto $ 677B2 Personal $ 155B3 1 Total mortgage originations using data provided by TransUnion for Q3 2023 – Q2 2024 2 Total auto loans using data provided by TransUnion for Q3 2023 –
Slide 17: Financial Summary
Financial Summary
Slide 18: Q4'24 summary P&L and non-GAAP metrics
Q4’24 summary P&L and non-GAAP metrics (in millions, except ratios and per share data) Q4’24 Q3’24 Q|Q Q4’23 Y|Y Revenue $219.0 $162.1 35% $140.3 56% Revenue from Fees $199.3 $167.6 19% $152.8 30% Income (Loss) from Operations ($4.8) ($45.2) n/a ($47.5) n/a Net Income (Loss) ($2.8) ($6.8) n/a ($42.4
Slide 19: FY24 summary P&L and non-GAAP metrics
FY24 summary P&L and non-GAAP metrics (in millions, except ratios and per share data) FY24 FY23 Y|Y Revenue $636.5 $513.6 24% Revenue from Fees $635.5 $560.4 13% Income (Loss) from Operations ($172.9) ($256.5) n/a Net Income (Loss) ($128.6) ($240.1) n/a Adjusted Net Income (Loss) ($17.8) ($46.9) n/a
Slide 20: Balance Sheet items and key operating metrics
Balance Sheet items and key operating metrics (in millions, except transaction volume (number of loans), % fully automated, and conversion rate) Q4’24 Q3’24 Q4’23 Cash, Cash Equivalents and Restricted Cash $976.3 $655.8 $467.8 Loans, Notes, and Residuals $828.4 $666.4 $1,171.3 Total Assets $2,367.0
Slide 21: Loans Held on Balance Sheet
Loans Held on Balance Sheet Fair Value (in millions) Q4’24 Q3’24 Q4’23 Total whole loans in Q4’24: $703M Testing and Evaluation (R&D)1 $455 $399 $411 ● Declined 28% YoY as we’ve scaled our committed capital base. Auto $285 $283 $343 ● The QoQ increase reflects the impact of unexpectedly strong borrow
Slide 22: Committed Capital and Other Co-Investments
Committed Capital and Other Co-Investments (in millions) Q4’24 Q3’24 Q4’23 As of December 31, 2024: ● Capital co-invested is $433M and represents Capital co-invested 1 $433 $334 $99 management's estimate of the cumulative monetary value of Upstart’s investments made in committed capital and other co
Slide 23: Lending by Product
Lending by Product (in millions, except number of loans and ratios) Personal Lending Q4’24 Q3’24 Q|Q Q4’23 Y|Y Number of Loans 243,495 186,786 30% 129,078 89% Transaction Dollars $2,038 $1,539 32% $1,238 65% Auto Lending Q4’24 Q3’24 Q|Q2 Q4’23 Y|Y2 Number of Loans 1,715 1,080 59% 542 216% Transactio
Slide 24: Outlook
Outlook1 (in millions except for contribution margin) Q1’25 Revenue $200 million Revenue From Fees $185 million Net Interest Income (Loss) $15 million Contribution Margin2 57% GAAP Net Income (Loss) ($20) million Non-GAAP Adjusted Net Income (Loss)2 $16 million Adjusted EBITDA2 $27 million Basic wei
Slide 25: Financial Appendix
Financial Appendix
Slide 26: Financial Statements
Financial Statements (in thousands, except share and per share data) December 31, 2023 December 31, 2024 Assets Cash and cash equivalents $ 368,405 $ 788,422 Restricted cash 99,382 187,841 Loans (at fair value) (1) 1,156,413 806,304 Property, equipment, and software, net 42,655 39,013 Operating leas
Slide 27: Financial Statements
Financial Statements (in thousands, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2024 2023 2024 Revenue: Revenue from fees, net $ 152,846 $ 199,276 $ 560,431 $ 635,466 Interest income, interest expense, and fair value adjustments, net: Interest income
Slide 28: Financial Statements
Financial Statements (in thousands) Year Ended December 31, 2023 2024 Cash flows from operating activities Net loss $ (240,132) $ (128,581) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Change in fair value of loans 190,320 125,002 Change in fair value of s
Slide 29: Financial Statements
Financial Statements (in thousands) Year Ended December 31, 2023 2024 Cash flows from investing activities Purchases and originations of loans held-for-investment $ (157,223) $ (323,096) Proceeds from sale of loans held-for-investment 972 - Principal payments received for loans held-for-investment 10
Slide 30: Financial Statements
Financial Statements (in thousands) Year Ended December 31, 2023 2024 Cash flows from financing activities Proceeds from warehouse borrowings $ 626,910 $ 387,281 Proceeds from convertible notes issuance, net of debt issuance costs paid to lender - 913,440 Payment of debt issuance costs paid to third p
Slide 31: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures (in thousands, except ratios) Three Months Ended December 31, Year Ended December 31, 2023 2024 2023 2024 Revenue from fees, net $ 152,846 $ 199,276 $ 560,431 $ 635,466 Loss from operations (47,501) (4,750) (256,525) (172,856) Operating Margin (31%) (2%)
Slide 32: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures (in thousands, except ratios) Three Months Ended December 31, Year Ended December 31, 2023 2024 2023 2024 Total revenue $ 140,312 $ 218,964 $ 513,562 $ 636,528 Net loss (42,398) (2,755) (240,132) (128,581) Net Loss Margin (30%) (1%) (47%) (20%) Adjusted t
Slide 33: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures (in thousands, except ratios, and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2024 2023 2024 Net loss $ (42,398) $ (2,755) $ (240,132) $ (128,581) Adjusted to exclude the following: Stock-based compensation and certain pay
Slide 34: Key Operating Metrics
Key Operating Metrics Key Operating Metrics We review a number of operating metrics, including transaction volume, dollars; transaction volume, number of loans; conversion rate; and percentage of loans fully automated, to evaluate our business, measure our performance, identify trends affecting our b
Slide 35: Non-GAAP Financial Metrics
Non-GAAP Financial Metrics About Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we believe the non-GAAP measures of contribution profit, contribution margin, adjusted EBITDA, adjusted EBITDA
Slide 36: Thank You
Thank You