Upstart Holdings, Inc. · NASDAQ:UPST

Upstart — Q3 2022 Earnings Presentation

27 slides from Upstart's earnings presentation, Nov 8, 2022

  1. Slide 1: Q3 FY 2022 Earnings

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx CONFIDENTIAL October 2020 Q3 FY 2022 Earnings November 8, 2022

  2. Slide 2: Disclaimer

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx 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

  3. Slide 3: This is Upstart

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx This is Upstart Our mission is to enable effortless credit based on true risk. Why? Because credit really matters. Money is a fundamental ingredient of life, and unless you’re in the few

  4. Slide 4: Upstart at a glance

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Upstart at a glance Upstart is an AI lending marketplace partnering with banks and and credit unions to improve access to affordable credit Two-sided business consumers connected to AI-en

  5. Slide 5: Q3'22 Key financial highlights

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Q3’22 Key financial highlights Revenue, millions Revenue Contribution profit Revenue: $157M, down 31% Y|Y Income (Loss) from Operations: ($58.1M), down from $28.6M in Q3’21 Contribution Pro

  6. Slide 6: Personal Unsecured Lending

    Personal Unsecured Lending Model accuracy improved as much in last four months as Bank and Credit Union Partners1 prior two years. Model automation reached its highest level to date at 75% Grew Small Dollar loan volume 4x from prior quarter to over 9,000 loans. The Upstart model approves 43% more Bl

  7. Slide 7: Emerging Lending Products

    Emerging Lending Products Launched largest Upstart Auto Retail software update of the Auto Dealer Rooftops2 year. Allowing buyers to build and price autos before they arrive on dealer lots. Upstart Auto Retail lending is live at three dealer groups across four states, representing 25% of the US auto

  8. Slide 8: $5T annual loan origination TAM

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx $5T annual loan origination TAM $ 1 $ 4 Mortgage 3.8T Small Business 644B Auto $ 2 786B Personal $ 3 146B 1 Total mortgage originations using data provided by TransUnion for Q2 2021 – Q1

  9. Slide 9: Upstart's model provides about 5X more risk separation than FICO

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Upstart’s model provides about 5X more risk separation than FICO Upstart separates risk significantly better than FICO (annualized default rates)1 Upstart Risk Grades A+ B C D E- Average 7

  10. Slide 10: Upstart Macro Index (UMI)

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Upstart Macro Index (UMI) Upstart Macro Index measures the impact of the external macro environment on loan defaults in our particular borrower portfolio, by controlling for underwriting

  11. Slide 11: In-period losses vs expectations

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx In-period losses vs expectations In-Period Defaults vs. Modeled (Prior 4 Year Vintages)1 This increase in defaults followed a stimulus-driven period during 2020 where defaults were approx

  12. Slide 12: Upstart platform performance vs target is recovering

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Upstart platform performance vs target is recovering1 Against a target of approximately 8% gross return since Q1 2018, the Upstart platform has seen 13 vintages overperform, with 5 expect

  13. Slide 13: Q3'22 summary P&L and non-GAAP metrics

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Q3’22 summary P&L and non-GAAP metrics (in millions, except ratios and per share data) Q3’22 Q2’22 Q|Q Q3’21 Y|Y Revenue $157.2 $228.2 (31%) $228.5 (31%) Revenue from Fees $179.3 $258.3 (

  14. Slide 14: Balance Sheet items and key operating metrics

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Balance Sheet items and key operating metrics (in millions, except Transaction Volume (number of loans), % fully automated, ratios and conversion rate) Q3’22 Q2’22 Q3’21 Cash and Restrict

  15. Slide 15: Loans Held on Balance sheet

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Loans Held on Balance sheet (in millions, except ratios) Q3’22 Q2’22 Q1’22 Testing and $451 $484 $445 Evaluation (R&D)1 Auto $398 $385 $230 Other $53 $99 $215 Core Personal $249 $140 $153

  16. Slide 16: Lending by Product

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Lending by Product (in millions, except number of loans and ratios) Personal Unsecured Q3’22 Q2’22 Q|Q Q3’21 Y|Y Number of Loans 185,663 311,245 (40%) 360,051 (48%) Transaction Dollars $1

  17. Slide 17: Outlook

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Outlook Q4’22 Revenue ~ $125-145 million Fee Revenue ~$160 million Net Interest Income ~($25) million Contribution Margin ~ 54% Net Income ~ ($87) million Non-GAAP Adjusted Net Income1 ~

  18. Slide 18: Financial Statements

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Financial Statements (in thousands, except share and per share data) December 31, September 30, 2021 2022 Assets Cash $ 986,608 $ 683,970 Restricted cash 204,633 145,956 Loans (at fair va

  19. Slide 19: Financial Statements

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Financial Statements (in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2021 2022 2021 2022 Revenue: Revenue from fees, net $

  20. Slide 20: Financial Statements

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Financial Statements (in thousands, except share and per share data) Nine Months Ended September 30, 2021 2022 Cash flows from operating activities Net income (loss) $ 76,499 $ (53,402) A

  21. Slide 21: Financial Statements

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Financial Statements (in thousands, except share and per share data) Nine Months Ended September 30, 2021 2022 Cash flows from investing activities Purchase of loans held-for-investment (

  22. Slide 22: Reconciliation of non-GAAP financial measures

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Reconciliation of non-GAAP financial measures (in thousands, except ratios) Three Months Ended Nine Months Ended September 30, September 30, 2021 2022 2021 2022 Revenue from fees, net $ 21

  23. Slide 23: Reconciliation of non-GAAP financial measures

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Reconciliation of non-GAAP financial measures (in thousands, except ratios) Nine Months Ended Three Months Ended September 30, September 30, 2021 2022 2021 2022 Total revenue $ 228,450 $ 1

  24. Slide 24: Reconciliation of non-GAAP financial measures

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Reconciliation of non-GAAP financial measures (in thousands, except ratios, and per share data) Nine Months Ended Three Months Ended September 30, September 30, 2021 2022 2021 2022 Net inc

  25. Slide 25: Key Operating Metrics

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx Key Operating Metrics Key Operating Metrics We review a number of operating metrics, including number of loans transacted and conversion rate, to evaluate our business, measure our perfor

  26. Slide 26: Non-GAAP Financial Metrics

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx 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”

  27. Slide 27: Thank you

    IBDROOT\PROJECTS\IBD-NY\GRIFFINS2019\645303_1\Presentations\2020.12.02 Roadshow Deck\2020.12.02 Roadshow v7.pptx CONFIDENTIAL Thank you Thank you!

Upstart Holdings — Q3 2022 Earnings Presentation on 6ix