Upstart Holdings Inc
NASDAQ:UPST
Upstart Holdings Inc
Upstart Holdings Inc. is a company that has positioned itself at the intersection of artificial intelligence and consumer finance, reshaping how personal lending is traditionally approached. Founded in 2012 by former Google executive Dave Girouard, along with Anna Counselman and Paul Gu, Upstart embarked on a mission to transform the lending process through technology-driven efficiencies. The firm employs complex AI algorithms to underwrite consumer loans, diverging from the traditional FICO score-focused evaluations. This AI-based model considers a broader spectrum of data points – such as education, employment history, and other personal data – to assess a borrower’s creditworthiness. As a result, Upstart aims to expand access to affordable credit for more borrowers, positioning itself as an innovative alternative in the competitive fintech landscape.
The company's primary revenue streams are derived from the fees it earns for arranging loans for its bank and credit union partners, as well as platform fees paid by these financial institutions to leverage Upstart's sophisticated AI models. Upstart does not retain the credit risk of these loans but instead facilitates the lending process, acting as a technological intermediary. This model allows partner banks to lower default rates and offer more competitive interest rates, benefiting borrowers and lenders alike while enabling Upstart to grow its footprint without assuming direct financial liability. By advancing its AI capabilities and continuously expanding its partner network, Upstart seeks to solidify its role in the digital lending ecosystem, harnessing innovation to drive more inclusive access to credit.
Upstart Holdings Inc. is a company that has positioned itself at the intersection of artificial intelligence and consumer finance, reshaping how personal lending is traditionally approached. Founded in 2012 by former Google executive Dave Girouard, along with Anna Counselman and Paul Gu, Upstart embarked on a mission to transform the lending process through technology-driven efficiencies. The firm employs complex AI algorithms to underwrite consumer loans, diverging from the traditional FICO score-focused evaluations. This AI-based model considers a broader spectrum of data points – such as education, employment history, and other personal data – to assess a borrower’s creditworthiness. As a result, Upstart aims to expand access to affordable credit for more borrowers, positioning itself as an innovative alternative in the competitive fintech landscape.
The company's primary revenue streams are derived from the fees it earns for arranging loans for its bank and credit union partners, as well as platform fees paid by these financial institutions to leverage Upstart's sophisticated AI models. Upstart does not retain the credit risk of these loans but instead facilitates the lending process, acting as a technological intermediary. This model allows partner banks to lower default rates and offer more competitive interest rates, benefiting borrowers and lenders alike while enabling Upstart to grow its footprint without assuming direct financial liability. By advancing its AI capabilities and continuously expanding its partner network, Upstart seeks to solidify its role in the digital lending ecosystem, harnessing innovation to drive more inclusive access to credit.
CEO Transition: Upstart announced co-founder Paul Gu will become CEO on May 1, with David Girouard moving to Executive Chairman.
Strong Growth: Originations grew 86% and revenue rose 64% in 2025, with new auto and home loan products each growing 5x year-on-year.
Profitability: The company reported a return to strong profitability, with Q4 net income of $19 million versus a loss of $2.8 million last year.
Balance Sheet Reduction: Loans on Upstart’s balance sheet fell by 20% in Q4, despite rapid growth in new products, as third-party funding increased.
2026 Outlook: Management guided for $1.4 billion in revenue and $1.3 billion in fee revenue in 2026, with an adjusted EBITDA margin of 21%.
Long-Term Targets: Upstart targets a 35% compound annual growth rate over the next three years and a 25% terminal adjusted EBITDA margin by 2028.
AI Leadership: The company highlighted significant advances in proprietary AI models, expanding data sets, and technology as key differentiators.
