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.
Revenue Growth: Upstart reported Q3 2025 revenue of approximately $277 million, up 71% year-over-year and 8% sequentially, driven by strong demand and transaction volume growth.
Profitability: The company achieved GAAP net income of about $32 million in Q3, a significant turnaround and well ahead of expectations.
Transaction Volume: Loan transaction volume rose 128% year-over-year and 15% sequentially to about 428,000, with application submissions hitting a three-year high.
Model Conservatism: Upstart’s AI models became more conservative in Q3, reducing conversion rates from 23.9% to 20.6% and approving fewer loans due to macroeconomic signals.
Product Diversification: Newer products—auto, home, and small-dollar loans—grew rapidly, now accounting for almost 12% of originations and 22% of new borrowers.
Funding Capacity: Upstart added 7 new bank and credit union partners and achieved an all-time high in monthly available funding, with strong institutional partner retention.
2025 Guidance: Full-year 2025 revenue is expected to be about $1.035 billion, with Q4 guided to $288 million in revenue; guidance was slightly below prior expectations.
