Financial Data and Key Metrics Changes - In 2025, the company achieved total revenue of approximately $1.04 billion, a 64% increase from 2024, with fee revenue reaching $950 million, exceeding guidance [22][28] - The net income for Q4 was approximately $19 million, a significant improvement from a loss of $2.8 million in the same quarter last year [14][27] - Adjusted EBITDA for the year was $230 million, representing a 22% margin, compared to just 2% the previous year [22][28] Business Line Data and Key Metrics Changes - Loan originations grew by 52% year-over-year in Q4, with personal loans increasing by 41% and new products like auto and home loans growing significantly [13][14] - The company reduced loans on its balance sheet by 20% in Q4, indicating a shift towards third-party funding for new products [8][24] - The average loan size increased to approximately $7,000, reflecting a growing mix of non-personal loan products [25] Market Data and Key Metrics Changes - The company reported a transaction volume of approximately 456,000 loans in Q4, up 86% from the previous year [25] - The average return of the last 12 quarterly vintages of loans exceeded U.S. Treasuries by 608 basis points, showcasing strong credit performance [16] Company Strategy and Development Direction - The company aims to establish itself as a leader in AI-powered lending, projecting a compound annual growth rate of 35% over the next three years [10][32] - A focus on expanding into secured products like auto and home loans is expected to contribute over $100 million in fee revenue in 2026 [30][31] - The company is evolving its financial guidance approach to emphasize annual outlooks and provide more frequent updates on origination volumes [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, stating that it has emerged from a multi-year rebuild and is now stronger than ever [9][12] - The company anticipates continued growth in its core personal loan business while also scaling up new secured product categories [30][32] - Management noted that the health of consumers is stabilizing, with UMI values indicating a return to pre-COVID normalization [53] Other Important Information - The company has undergone a leadership transition, with Paul Gu becoming the new CEO, while Dave Girouard remains as Executive Chairman [4][5] - The company launched significant model updates in Q4, enhancing its AI capabilities and improving loan performance metrics [17][18] Q&A Session Summary Question: How did the company manage to reduce balance sheet loans while experiencing strong growth in autos and HELOCs? - Management indicated that the reduction in balance sheet loans was part of a strategy to incubate new products and align with third-party funding, achieving liftoff in these areas [36][37] Question: How much conservatism is built into the UMI guidance? - Management clarified that the UMI guidance is based on their best estimate of consumer risk and does not imply conservatism or aggression [39] Question: What factors are influencing the expected decline in EBITDA margins for 2026? - Management explained that the decline is due to a changing mix towards larger secured products with lower take rates and a long-term view on customer lifetime value [43][45] Question: What is the current health and appetite for consumer credit among funding partners? - Management reported that their partners are performing well and have a steady appetite for credit, with new relationships being developed in secured segments [48][49] Question: How does the company view the personal loan market and its growth potential? - Management emphasized that they focus on gaining market share rather than overall market growth, and they believe their competitive product offerings will continue to drive growth [61][62]

Core Insights - Upstart Holdings, Inc. reported strong fourth-quarter earnings, surpassing both revenue and earnings estimates, leading to a rise in stock price [1][2]. Financial Performance - Quarterly earnings were reported at 17 cents per share, exceeding the analyst consensus estimate of 15 cents by 11.84% [2]. - Quarterly revenue reached $296.09 million, beating the Street estimate of $288.67 million and showing a significant increase from $218.964 million in the same period last year [2]. Growth Metrics - In 2025, Upstart achieved a remarkable 86% growth in originations and a 64% increase in revenues, while only increasing headcount by 18% [2]. - The company highlighted that auto and home originations grew fivefold in 2025, with further acceleration noted in Q4 [3]. Future Outlook - For fiscal 2026, Upstart anticipates revenue of $1.4 billion, which is above the analyst estimate of $1.27 billion [3]. - Following the earnings report, Upstart's stock price increased by 1.90%, reaching $39.73 in extended trading [3].

This presentation contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to, information or predictions concerning our future financial performance, including our financial outlook for Q4 2025 and the full fiscal year 2025 under the heading "Outlook" and management's estimates under the heading "Marketplace update," projected growth and other strategies, b ...

Lending Partnerships and Revenue - In the year ended December 31, 2025, the top three lending partners originated 83% of the loans facilitated through the marketplace, contributing to 61% of total revenue[34] - Upstart has more than 100 lending partners as of December 31, 2025, allowing for a diverse capital supply and risk-sharing arrangements[48] AI and Technology - As of December 31, 2025, the AI personal loan underwriting model expanded from 23 variables in 2014 to over 2,500 variables, trained on nearly 104 million repayment events[37] - In 2025, 91% of Upstart-powered loans were fully automated, an increase from approximately 70% at the time of the initial public offering in December 2020[52] - An internal study in 2025 showed that Upstart's AI model approves 43% more borrowers and yields 33% lower average APR for approved loans compared to traditional models[52] - Upstart's technology platform is built on Amazon Web Services, designed for high availability and horizontal scalability, allowing for rapid feature development[58] - The company utilizes AI and proprietary tools to streamline loan origination and servicing, enhancing the user experience for borrowers[68] Customer Acquisition and Marketing - Upstart's customer acquisition channels include direct mail, email marketing, organic traffic, online advertising, and marketing affiliates, with a significant number of borrowers coming through partners like Credit Karma[71] Operations and Servicing - Upstart's operations team focuses on expediting the approval process for borrowers with non-automated applications and addressing any issues during the application process[69] - The company emphasizes early intervention for borrowers who miss payments, utilizing AI for customized servicing interventions[72] - Upstart holds collections licenses in most states and conducts both first-party collections and partnerships with third-party agencies for charged-off loans[73] Market Competition - The consumer lending market is highly competitive, with Upstart competing against banks, non-bank lenders, and fintech platforms[75] - Upstart's competitive advantages include advanced AI models, compelling loan offers, an automated application process, and strong brand recognition[79] Regulatory Compliance - The company is subject to extensive regulations from various federal and state agencies, including the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC)[78] - The company is committed to compliance with federal and state laws, including the Truth in Lending Act and the Fair Credit Reporting Act, to ensure consumer protection[81] - The company has developed a compliance management system to minimize compliance-related risks associated with consumer protection laws[104] - The company is subject to extensive state and local laws governing consumer lending, which may impose various requirements including licensing and interest rate limitations[101] Financial Performance and Risks - As of December 31, 2025, the company held $930.8 million in loans on its consolidated balance sheets, up from $703.4 million in 2024, indicating a significant increase in loan volume[457] - A hypothetical 100 basis point increase in the discount rate would result in a $12.0 million decrease in the fair value of loans as of December 31, 2025[457] - The company was exposed to credit risk on $930.8 million of loans as of December 31, 2025, with a hypothetical 10% increase in credit risk leading to a $10.5 million decrease in fair value[464] - The fair value of beneficial interest assets was estimated at $396.2 million as of December 31, 2025, with a hypothetical 100 basis point increase in the discount rate resulting in a $4.9 million decrease in fair value[461] - A hypothetical 10% adverse change in the credit risk spread would lead to a $44.4 million decrease in the fair value of beneficial interest assets and a $4.7 million increase in liabilities as of December 31, 2024[466] - A hypothetical 20% adverse change in the credit risk spread would result in a $89.6 million decrease in beneficial interest assets and a $10.3 million increase in liabilities as of December 31, 2024[466] - An increase in interest rates could lead to higher delinquencies, defaults, and charge-offs, adversely affecting the company's business[471] Employee and Organizational Structure - The company employed 1,405 full-time employees as of December 31, 2025, with no employees represented by a labor union[117] - The company has implemented a digital-first approach, allowing employees in eligible roles to work from anywhere in the U.S. and Canada, enhancing talent acquisition[115] - The company provides competitive employee benefits, including a 401(k) match and a generous Employee Stock Purchase Plan, to attract and retain top talent[116] Asset Management - As of December 31, 2024, the company held beneficial interest assets of $176.8 million and liabilities of $10.1 million, which increased to $396.2 million and $5.1 million, respectively, by December 31, 2025[466][467] - The company held cash, cash equivalents, and restricted cash totaling $976.3 million as of December 31, 2024, increasing to $1,057.0 million by December 31, 2025[469] - As of December 31, 2024, and 2025, $137.4 million and $191.6 million of cash were held by an institutional investor related to line of credit receivable and beneficial interest asset[470] - The company was exposed to interest rate risk on $195.6 million and $97.3 million under warehouse credit facilities as of December 31, 2024, and 2025, respectively[472] - The carrying value of non-marketable equity securities, which do not have readily determinable fair values, totaled $41.3 million as of December 31, 2024, and 2025[475] - The company assesses non-marketable equity securities for impairment on a quarterly basis, considering both qualitative and quantitative factors[474] - The company manages counterparty risk by selecting financially strong counterparties and spreading risk among multiple entities[468] Intellectual Property - The company had four patents granted and six patent applications pending in the United States related to its proprietary risk model and data engineering as of December 31, 2025[106]

Exhibit 99.1 Financial Outlook Beginning in 2026, Upstart intends to provide annual financial guidance and discontinue issuing quarterly guidance, reflecting the company's long-term focus and evolving disclosure framework. Upstart is also providing financial guidance for the 2025-2028 period. Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Conversion Rate. Prior period figures have been recast to conform to the new definition and methodology. For ...

Core Insights - Upstart Holdings (UPST) is expected to report its Q4 and full-year 2025 results on February 10, with anticipated growth in revenues and earnings per share [1][7] - The company has a strong history of surpassing earnings estimates, having done so in the last four quarters [2] Financial Performance Expectations - Management has guided for Q4 revenues of approximately $288 million, reflecting sequential growth despite typical holiday seasonality [3] - Fee revenues are projected to be around $262 million, with net interest income expected at about $26 million [3] - For Q4, adjusted EBITDA is anticipated to be approximately $63 million, with GAAP net income around $17 million and adjusted net income near $52 million [3] Profitability Metrics - Contribution margin is expected to moderate to about 53%, indicating a shift towards optimizing customer lifetime value rather than maximizing short-term margins [4] Funding and Growth Potential - Upstart has secured a $1.5 billion forward-flow agreement with Castlelake, enhancing its lending capacity and reducing balance sheet exposure [5] - The company is also seeing growth in newer verticals such as auto and home loans, which are becoming significant contributors to overall volume and revenues [5] Revenue Estimates - The Zacks Consensus Estimate for Q4 revenues is set at $288.47 million, representing a 31.74% increase year-over-year [6] - For the full year 2025, total revenues are projected to be about $1.035 billion, with fee revenues of roughly $946 million and net interest income of approximately $89 million [8] Earnings Projections - The consensus estimate for full-year EPS stands at $1.68, indicating a significant increase from a loss of 20 cents in the previous year [9]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Investment Opportunity - A specific company is highlighted as a potential investment opportunity, possessing critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI data centers [3][7] - This company is not a chipmaker or cloud platform but is positioned to benefit significantly from the anticipated surge in electricity demand driven by AI technologies [3][6] Energy Demand and Infrastructure - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The company in focus is involved in the U.S. LNG exportation sector, which is expected to grow under the current administration's energy policies [7] Financial Position - The company is noted for being completely debt-free and holding a substantial cash reserve, amounting to nearly one-third of its market capitalization [8] - It is trading at a low valuation of less than 7 times earnings, making it an attractive option for investors seeking exposure to AI and energy sectors [10] Market Trends - The article discusses the broader trends of onshoring and tariffs that are influencing the energy and manufacturing sectors, positioning the company favorably within these dynamics [5][14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure [12] Conclusion - The company is portrayed as a key player in the intersection of AI and energy, with significant growth potential as the demand for AI technologies escalates [11][13]

Industry Overview - Many fintech stocks have experienced significant declines due to inflation, high interest rates, and macroeconomic challenges, impacting industry growth [1] - Intense competition has made it difficult for smaller players to scale their businesses and improve margins [1] Investment Opportunities - The recent sell-off in fintech stocks may present a buying opportunity for long-term investors, particularly in companies like Upstart and Affirm, which have seen their stock prices drop approximately 90% and 60% from all-time highs, respectively [2] Company Profiles - Upstart operates an AI-driven online lending marketplace, utilizing non-traditional data points to approve loans, having originated over $50.4 billion in loans for more than 3 million customers [3] - Affirm offers buy now, pay later services to younger, lower-income consumers, serving 24.1 million active consumers and 419,000 active merchants, without charging compound interest or hidden fees [4] Growth Projections - Analysts project Upstart's revenue and adjusted EBITDA to grow at CAGRs of 20% and 35% from 2025 to 2027, while Affirm's revenue and adjusted EBITDA are expected to increase at CAGRs of 25% and 125% from fiscal 2025 to fiscal 2028 [6] Valuation Insights - Upstart has an enterprise value of $4.6 billion, trading at 13 times next year's adjusted EBITDA, while Affirm, valued at $24.7 billion, trades at 16 times next year's adjusted EBITDA, indicating both stocks may be undervalued relative to their growth potential [7]

Group 1 - Financial giants have shown a bearish sentiment towards Upstart Holdings, with 84% of traders exhibiting bearish tendencies and only 15% being bullish, indicating a significant lack of confidence in the stock [1] - The options trading data reveals that there were 13 unusual trades, with 8 puts valued at $320,165 and 5 calls valued at $214,170, further emphasizing the bearish outlook [1] - The predicted price range for Upstart Holdings over the last three months is between $35.0 and $50.0, suggesting a focus on this price band by major market movers [2] Group 2 - An analysis of volume and open interest indicates that tracking these metrics is crucial for understanding the liquidity and interest in Upstart Holdings' options, particularly within the $35.0 to $50.0 strike price range [3] - The largest options trades observed for Upstart Holdings reflect the company's position in the market, which provides credit services through a proprietary AI lending platform that connects consumer demand for loans with bank partners [4] - Current market sentiment includes a consensus target price of $59.0 from analysts, with a recent downgrade to Buy by Truist Securities, indicating a potential upside despite the current bearish sentiment [6] Group 3 - Upstart Holdings' stock price is currently at $40.0, down 4.48%, with a trading volume of 2,284,255, suggesting a possible oversold condition as indicated by RSI indicators [7] - The next earnings report for Upstart Holdings is expected to be released in 7 days, which could impact market sentiment and trading activity [7]

Core Insights - Upstart Holdings has faced a challenging four years, with stock performance stagnating since its peak in late 2021, despite a return to growth in 2023 [1][2] - The company utilizes an AI algorithm that assesses over 2,500 variables to evaluate creditworthiness, resulting in 43% more loan approvals without additional defaults compared to traditional methods [4][3] - Upstart's revenue increased nearly 80% year-over-year through the first three quarters of 2025, indicating a positive trajectory moving forward [5] Company Overview - Upstart is a unique lending platform that differentiates itself from traditional credit scoring agencies like Equifax, Experian, and TransUnion by employing advanced AI technology [3] - The platform has gained traction, with over 100 banks and credit unions as regular customers [5] Financial Performance - Despite a recent downturn in loan originations due to economic headwinds, analysts project a per-share profit of $2.38 for the current year, with the stock trading at less than 20 times this figure, suggesting it is undervalued [9][6] - The company's gross margin stands at an impressive 97.61%, reflecting strong operational efficiency [7] Market Sentiment - The stock has not reacted positively to recent warnings about economic challenges affecting loan origination, leading to market panic [6] - Analysts expect that as the year progresses, investors will recognize the company's actual profit potential, which has been understated in recent earnings reports [9]