UpStart Holdings Inc (UPST)

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Upstart Announces Second Quarter 2022 Results

https://www.sec.gov/Archives/edgar/data/1647639/000164763922000047/upst991prq22022.htm

SAN MATEO, Calif. – August 8, 2022 – Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, today announced financial results for its second quarter of fiscal year 2022 ended June 30, 2022. Upstart will host a conference call and webcast at 1:30 p.m. Pacific Time today. An earnings presentation and link to the webcast are available at ir.upstart.com.

“This quarter’s results are disappointing and reflect a difficult macroeconomic environment that led to funding constraints in our marketplace,” said Dave Girouard, co-founder and CEO of Upstart. “In response we’re taking the necessary actions to build a more resilient and committed funding model over time. We're confident that our AI-based risk model is more accurate than ever, and provides the opportunity for long-term, sustainable growth.”

Second Quarter 2022 Financial Highlights

Revenue. Total revenue was $228 million, an increase of 18% from the second quarter of 2021. Total fee revenue was $258 million, an increase of 38% year-over-year.

Transaction Volume and Conversion Rate. Bank partners originated 321,138 loans, totaling $3.3 billion, across our platform in the second quarter, up 12% from the same quarter of the prior year. Conversion on rate requests was 13% in the second quarter of 2022, down from 24% in the same quarter of the prior year.

Income (Loss) from Operations. Loss from operations was $(32.1) million, down from $36.3 million the prior year.

Net Income (Loss) and EPS. GAAP net loss was $(29.9) million, down from $37.3 million in the second quarter of 2021. Adjusted net income was $1.0 million, down from $58.5 million in the same quarter of the prior year. Accordingly, GAAP diluted loss per share was $(0.36), and diluted adjusted earnings per share was $0.01 based on the weighted-average common shares outstanding during the period.

Contribution Profit. Contribution profit was $120.9 million, up 25% year-over-year in the second quarter of 2022, with a contribution margin of 47% compared to a 52% contribution margin in the same quarter of the prior year.

Adjusted EBITDA. Adjusted EBITDA was $5.5 million, down from $59.5 million in the same quarter of the prior year. The second quarter 2022 adjusted EBITDA margin was 2% of total revenue, down from 31% in the second quarter of 2021.

Share Repurchases. Upstart repurchased 3.5 million shares of UPST totaling approximately $125 million.

Financial Outlook

For the third quarter of 2022, Upstart expects:

Revenue of approximately $170 million
Contribution Margin of approximately 59%
Net Income of approximately ($42) million
Adjusted Net Income of approximately ($9) million
Adjusted EBITDA of approximately $0
Basic Weighted-Average Share Count of approximately 81.8 million shares
Diluted Weighted-Average Share Count of approximately 85.5 million shares