Contribution margin of approximately 60%, net income of approximately negative $40 million, adjusted net income of approximately negative $7 million, adjusted EBITDA of approximately zero, and a diluted weighted average share count of approximately 83.1 million shares. Yeah. Was there any change there when you talk about better pricing? Upstart Holdings share price went up by 15.7% last month. But that huge gain needs . This is a critical first step toward building resiliency and predictability into our business. I thought I'd jump back into queue. According to Zacks Investment Research,. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Investors increasingly rely upon earnings announcement dates and changes to those dates to capitalize on trading opportunities or mitigate risk. After all, the newsletter theyhave run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. It's really what we're interested in with the long-term arrangements is third parties as the risk engine and they can finance as suits them. Our improving guidance is clearly not deriving from obvious improvements to the macro economy just yet. Got it. So I think that's a structure that we would expect to have for the long haul. Key limitations of our non-GAAP financial measures include: Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included below, (In Thousands, Except Share and Per Share Data), CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE INCOME (LOSS), CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, Net cash provided by (used in) investing activities, RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES, View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006181/en/, Investors Jason Schmidt And indeed, we now anticipate achieving this in the second quarter. Upstart Holdings (UPST) Earnings Date & Reports - TipRanks This is Sanjay. Upstarts (Nasdaq: UPST) mission is to enable effortless credit based on true risk. Upstart Announces First Quarter 2023 Results View All Recent Earnings Upstart Network, Inc. First Quarter 2023 Earnings Conference Call Upstart Network, Inc. First Quarter 2023 Earnings Release Upstart Network, Inc. First Quarter 2023 Earnings Presentation Form 10-Q View All SEC Filings May 31, 2023 4 View HTML 0001628280-23-020329.pdf But that's still that's under that umbrella of the total as Sanjay said, we -- and to stay at no more than $1 billion on our balance sheet, and those tend to be warehoused or at least some of them are. OK. We founded Upstart to improve access to credit, so delivering the best rates possible to all consumers will always be our true north. Upstart (UPST 3.57%) Q1 2023 Earnings Call May 09, 2023, 4:30 p.m. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Adjustments to reconcile net income (loss) to net cash used in operating activities: Change in fair value of financial instruments. We can tighten up a little bit more, but I -- we're sort of indicating that we think there's a nice path for growth from year on out and as we did -- as we demonstrated before, our cost base is going to scale very efficiently with the top line, and it'll sort of provide a -- provide nice margin materialization as we grow. 10 stocks we like better thanUpstartWhen our analyst team hasa stock tip, it can pay to listen. Invest better with The Motley Fool. Was curious what was driving that, and if you could talk a little bit about the performance you're seeing of your loans that are held on balance sheet loss rates and things of that nature. ET, according to S&P Global Market . Upstart to Report First Quarter 2023 Earnings on May 9, 2023. Upstart Q1 2023 Earnings Conference Call - Upstart Updates So apart from some preferential economics that essentially flow from our enhanced, unit economics, they tend to look very similar to what we would normally do through the capital markets. Upstart Q1 2022 Earnings Preview (NASDAQ:UPST) | Seeking Alpha Simon Clinch -- Atlantic Equities -- Analyst. Let's see. Upstart is a leading AI lending marketplace partnering with banks and credit unions to expand access to affordable credit. And it could imply that one or two of those banks accounts for 50% plus or even close to 60% of all of your kind of bank funding side of the platforms. The Motley Fool has a disclosure policy. We're including much higher default premiums in the loans. Better rates are unlocked first and foremost by a more accurate and predictive credit model. Upstart had a net margin of 0.55% and a return on equity of 0.70%. The Company's platform aggregates consumer demand for loans and connects it to its network of Upstart AI-enabled bank and credit union partners. Brett Schafer has no position in any of the stocks mentioned. Prior to the conference call, the first quarter 2023 earnings press release and investor presentation will be available on Upstarts investor relations website at ir.upstart.com. That was in clear. Yeah. And I'd like now to turn it over to Sanjay, our chief financial officer, to walk through our Q1 2023 financial results and guidance. Thank you. Hi. Upstart was founded by ex-Googlers in 2012 and is based in San Mateo, California and Columbus, Ohio. Please go ahead. Upstart will host a conference call and webcast at 1:30 p.m. Pacific Time today. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on . I'm hopeful that as we move through the year, you'll come to see Q1 as a transitional quarter for Upstart. ET . This quarter, we expanded our roster of institutional partners in ways that should help us deliver quality offers to consumers through all parts of the cycle. I mean, the banking sector is obviously right now in a bit of turbulence and that may increase or it may moderate and I think depending on what that banking, what that sector experiences over the coming quarters [Inaudible] price reflected it -- that reflected in their ability to or their appetite to lend and to take more balance sheet risk. Given the breadth and diversity of competition, we'll never 100% achieve this goal, but in a fierce effort to do so, we can become the market leader in a vitally important segment of our economy. Curious is there a way to kind of parse the impact that of stronger pricing or origination fees that are paid by borrowers versus maybe what your partners are paying you? Hi, guys. Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, announced today that its first quarter fiscal year 2023 business and financial results will be released on Tuesday, May 9, 2023 after the market close. So sort of a baseline of capital that we feel very good about being solid will be there and that would be a pretty dramatic reduction in cyclicality. Sanjay said they're starting off a little bespoke by probably not hard to imagine that would happen, but over time I think we would really like to almost programatize it though it's a little more structured. Nothing has changed with the business this week, though. In the first quarter of 2023, the company posted revenue of $105.52 million, well below the year-ago quarter's result of $310.14 million. Upstart will host a conference call and live webcast that day at 1:30 p.m. PT / 4:30 p.m. My question, I know in the past, you've been asked about becoming a bank and not wanting to do that, which I can totally appreciate. That's helpful. The banking sector turbulence has also contributed to wider market spreads on high-yield debt after a brief period of moderation in January and February, which is in turn causing institutional investors who rely on functioning ABS markets to be increasingly cautious in their deployment of capital. Upstart ( NASDAQ:UPST - Get Rating) last released its quarterly earnings results on Tuesday, November 8th. Brett Schafer for Together, I believe these efforts put us in a stronger position regardless of which direction the economy turns. That's right -- they think these 10 stocks are even better buys. Today's conference is being recorded. Two of those struggling stocks over the past year are Upstart Holdings ' ( UPST -5.85% . We are happy to be signaling a return to sequential growth and cash profitability in the current market environment. We also identified opportunities to reduce our technical infrastructure costs by as much as $10 million annually and sublet some unnecessary office space, both of which will go directly to the bottom line. I'm curious what level of concentration there is on the bank side of the funding platform, and have you seen any of those partners pull back in their buying activity recently? It is flowing from a combination of tenacious execution, operating discipline, margin expansion, and deal making. Do Not Sell My Personal Information (CA Residents Only). This is better than the analyst estimate for a loss per share of 81 cents . Our primary goal is to have loan funding capital committed at a level that allows us to remain flow positive to typical market cycles. The stock price has surged 127% year to date as of June 26. View source version on businesswire.com: https://www.businesswire.com/news/home/20230417005864/en/, Delayed Quote And so if the performance of our balance sheet will just reflect the underlying vintages that that you see on the broader platform. We also believe that non-GAAP financial measures provide consistency and comparability with past financial performance and assist investors with comparing Upstart to other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. Our footprint of dealers piloting our lending product expanded to 39 since last I updated you and we expect this rollout to continue throughout the year. . Shares of the artificial intelligence (AI) lending platform are up by as much as 25% this week after falling last week, according to data provided by S&P Global Market Intelligence. I think our workforce numbers are in very good shape now and borrowing any dramatic reversal in the business and the economy. And because we have expanded margins, really the way to think about these agreements are we're able to sort of share some modest preferential economics with long-term committed investors. Hey, James. The next quarterly earnings date for Upstart Holdings is scheduled on August 8, 2023. I mean, based yield requirements are going up, loss expectations are going up, and also the fees going up, all of which we certainly don't love, but it's the reality of the economy we're sitting in that we have to play in. Non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. So that sort of creates what the structure that you're seeing there, but it's not really in a true sense of revenue concentration. Upstart shares are likely up because of a short squeeze and the AI theme. And maybe a follow-up question to that. That's really helpful, thank you. Upstart Announces First Quarter 2023 Results | Upstart Network, Inc. Yeah. That's right -- theythink these 10stocks are even better buys. And in Q1, we launched a new AI model for this product that delivered the largest single accuracy improvement measured in our history. Upstart stock also is heavily shorted, with short interest estimated to be around 35%. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. And does any of your $2 billion is any of it structured in that kind of way where you pay a fixed rate, you hold more loans on balance sheet? Will the Fed follow Australia's decision to hike rates. We think it's a good thing, but I do think we want a significant fraction of the funding to be more long-term committed in getting a little bit of a preference for doing that. This is a great fit for Upstart for a few reasons. The -- I guess the crux of the question was would you consider being more, I guess, balance sheet intensive? To read more about Upstart's Q1 2023 earnings, visit here. First, our development teams made giant leaps forward in each of our main product areas. The live webcast will be accessible on Upstarts investor relations website, ir.upstart.com, and an archived webcast of the conference call will be available after the conference call. Yeah. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan", "intend", target, aim, "believe", "may", "will", "should", becoming, look forward, could, "can have", "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. To read more about Upstart's Q2'22 earnings, visit here. I think on a personnel -- from a personnel perspective, I think we did what we needed to do in Q1 and we're past it. Our next question comes from the line of Giuliano Bologna with Compass Point. And when the banking and credit markets eventually normalize, as surely they will, the true strength of our platform will become clear to all. So all across the -- I don't know exactly how many AI models in distinctive AI models we have, but it's quite a few. Upstart Personal Loan Details. First, 95% of HELOCs are financed by banks and credit unions, so it's an asset our lending partners know and value. And we don't expect that to go away. Reggie, this is Sanjay. ET. News | UPSTART HOLDINGS Stock Price Today - Markets Insider These symbols will be available throughout the site during your session. This particular indicator has demonstrated a strong correlation to borrow repayment health since the pandemic, and we are seeing this reflected in our Upstart Macro Index, which peaked last October and is showing signs of early recovery. The average HELOC today takes 36 days to fund, while we are aiming for online approval in 10 minutes and funding within five days. Upstart to Report First Quarter 2023 Earnings on May 9, 2023 | Upstart Please go ahead. E One Trading Day . Credit markets have tightened up, especially for individuals that Upstart targets, decreasing the number of loans flowing through its platform. So as far as the guidance I would say that Q1 was the anomaly in a sense which is normally you'd expect your balance sheet to have some modest positive income. Yep. Good evening, gentlemen. Yeah, sure. Got it. As I mentioned earlier, we've completed agreements with multiple strategic partners as of today and will continue to explore additional partnerships. This instant in automated process, which by the way 70% of consumers access by a mobile phone creates an unparalleled wow moment for the borrower, which is who is often surprised if not shocked to realize that there are no more steps in the approval process because consumers rightfully value their time, this delightful moment is often more impactful than the specific rate our bank partners offer. Good afternoon, everyone. UPST Earnings News Market News UPST Blasts Up after Killer Earnings Beat And that basically reflects the fact that apples-to-apples, the same consumer is defaulting at a rate that is maybe sort of two to three times higher than they were in mid-2021. Both are available on our Investor Relations website, ir.upstart.com. So that's how we're thinking about it. And I'll jump back into queue. own Websites. But it'll certainly be doing it against what it's currently a pretty challenging economy with respect to funding markets, base credit rates, interest rates, etc. Upstart Q4 & FY2022 - Earnings Report and CEO Transcript Compare Rates Via Credible.com's Website 3.5 Loan amounts $1,000 to $50,000 APR 4.60% to 35.99% Minimum credit score 600 Table of Contents Who Is Upstart Best For? Congrats on the quarter and on securing the $2 billion in funding. 9 minute read May 9, 2023 Home Upstart Updates Company News May 9, 2023 Editor's note: Upstart Co-Founder and CEO Dave Girouard shared thoughts on first quarter 2023 results during the company's quarterly earnings call. Upstart earnings: What to expect - MarketWatch So it looks like your conversion rates had declined from about 21% last year to 8%. We define transaction volume, number of loans as the number of loans facilitated on our platform between a borrower and the originating lending partner during the period presented. This improvement comes from better AI, which enables more sophisticated risk models, which in turn enable a faster and more efficient experience for consumers and lenders. Consumers reducing expenditures indicates to us that they're overspending less relative to income. To read more about Upstart's Q4 and FY2022 earnings, visit here. As Dave mentioned, there's sort of programs to sort of reduce -- we're large consumers of compute our machine learning models require a lot of sort of training resources and we want to get more efficient at that our engineering footprint, the resources we consume can get more efficient as well. There's also models that are more focused on automation than the pricing. ET. We also expressed confidence last quarter that through a combination of margin expansion, workforce reduction, and expenditure control, we could create a path to return to EBITDA break even at our current lower scale. Yeah. It does -- it sort of like income rate or sorry, interest rate stability, no large transactions, and some modest income from our remaining balance sheet. Upstart is a lending platform that uses its proprietary AI tools to price loans for consumers without the need of a credit score, hopefully with better performance rates than the competition. I got it. There -- look, there's still more work to be done on the opex side. And because of that change in pricing, two things are happening. I don't think there's anything necessarily more to parse there other than fees, primarily borne by borrowers that are getting loans, funded through institutions, tend to flex up at times like this. So we do use that for a capital efficiency, but it's not a primary funding mechanism just as our balance sheet ultimately is not a primary funding mechanism. Upstart Q1 2023 Earnings Deck As of Q1 2023, Upstart is holding ~$1B of loans, of which $489M are unsecured personal loans, and the rest are R&D loans (auto, auto refinance, small-dollar, etc. This press release contains forward-looking statements, including but not limited to, statements regarding our outlook for the second quarter of 2023 and our expectations regarding our long-term funding agreements. Hey, James. Q1 in particular didn't necessarily have adverse sort of interest rate movements, but what it did have is, we booked unrealized fair value marks that reflected a balance sheet transaction. It works with financial institutions to price loans for their own borrowers, taking a fee on every loan made. Investor Relations | Upstart Network, Inc. I think we'll sort of grow from here. To make the world smarter, happier, and richer. Upstart (UPST) to Report Q1 Earnings: What's in the Offing? - Yahoo Finance Yeah. Prior to the conference call, the first quarter 2022 earnings press release and investor presentation will be available on Upstart's investor relations website at ir.upstart.com. Just want to thank everybody for listening today. Would you consider like a warehouse type funding mechanism? Upstart (UPST) to Report Q1 Earnings: What's in the Offing? - Yahoo Finance We additionally need a strong presence and reputation in institutional and capital markets because the limited risk appetite of bank balance sheets will never serve the needs of the entire U.S. credit market. Upstart Holdings, Inc. is expected* to report earnings on 02/14/2023 after market close. Or is it all -- is all that $2 billion that you talked about purely arms length outside of balance sheet financing? Is most of it just the supply of credit or is it sometimes that potential borrowers are hitting that, that ceiling for interest rates or they're deciding to defer some kind of purchases to later on when they're maybe a little bit more of a stable economic condition? For the second quarter of 2023, Upstart expects: Upstart has not reconciled the forward-looking non-GAAP measures above to comparable forward-looking GAAP measures because of the potential variability and uncertainty of incurring these costs and expenses in the future. Its AI models are provided to bank partners within a consumer-facing cloud application that streamlines the end-to-end process of originating and servicing a loan. Wanted to go back on the secured funding, and I think you made the comment that there were some preferential terms that you were able to offer to them. Upstart Stock Is Up 140% in the Past Month: Has Anything Changed for One that excels at separating good risk from bad and AI is the key to this. Im pleased with the progress we made in Q1 against the objectives I set out last quarter, said Dave Girouard, co-founder and CEO of Upstart. Conversely, the funding side of the ecosystem remains challenging in the current climate. Your next question comes to the line of James Faucette with Morgan Stanley. Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. There's no warehousing on our side. This is Dave. And then even for those who are still getting approved, their prices are a lot higher and they're maybe less predisposed to taking the loan. We believe that these deals, as well as others in the pipeline, will provide us with a stronger and more resilient capital supply over the coming quarters. The business fundamentals look weak. Type a symbol or company name. It also has investments in Upstart Auto Retail, a front-end software-as-a-service application. And so the dynamic there is we continue to bring new sort of lending partner bank, credit union partners aboard, but existing one, they're obviously becoming a little bit more conservative. Thanks, Simon. Webcast: Click here Supporting Materials: Upstart First Quarter 2023 Earnings Presentation Great. The fintech Upstart ( UPST 1.41%) has been good to investors so far in 2023. For the first quarter, the company expects revenues between $295 million and. And therefore, I think what you're seeing now in our guidance for interest income just sort of reflects ongoing normality. All right. Upstart to Report Fourth Quarter and Full Year 2022 Earnings on Taken together, net revenue for Q1 came in at $103 million, slightly above guidance and representing a 67% contraction year over year. Payroll tax expenses include the employer payroll tax-related expense on employee stock transactions, as the amount is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business. The personal savings rate, which may be the most relevant predictor of UMI bottomed out mid-last year at 2.7% and has increased to 5.1% since then. Theyjust revealed what they believe are thetenbest stocksfor investors to buy right now and Upstartwasn't one of them! Copyright 2023 Surperformance. Conference Call Dial In. First, best rates for all. What is Upstart Holdings (UPST) earnings time? Please go ahead. But should we take that to mean that you're -- you feel like you're at the right cost base and that the kind of the first quarter would've been roughly the bottom from a revenue generation perspective and that you can grow at least for the remainder of this calendar year on a sequential basis, or are there incremental actions that mandate be need to be taken? And I think in terms of source capital dependency, I don't think anything is far greater than the ballpark that you just mentioned. UPST's next earnings date is UNCONFIRMED for Tuesday 08/08/2023 After Market. Average loan size of $12,000 was up 22% versus the same period last year. I was just curious going back to your -- the pace of your new model rollouts or updates through the quarter was pretty staggering. Now from there we may sort of continue to use the balance sheet as a platform tool. Thanks. That makes sense. Advertisement. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. Price as of June 28, 2023, 4:00 p.m. To wrap things up, I want to acknowledge that the financial industry is none out of the woods yet, but even in this challenging economy, I believe Upstart is in position to grow regionally through our typical run rate of model and technology improvements. On the revenue side, reflect up our take rates delivering a record contribution margin of 58% in Q1. I'll share more about our cost-reduction efforts later. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. UPST Upstart Holdings Earnings History and Price Movements Analysis Product and borrower diversification can also provide greater resilience through future market cycles. These risks and uncertainties include, but are not limited to, our future growth prospects and financial performance; our ability to manage the adverse effects of macroeconomic conditions and disruptions in the banking sector and credit markets, including inflation and related monetary policy changes, such as increasing interest rates; our ability to access sufficient loan funding, including in the securitization and whole loan sale markets; the effectiveness of our credit decisioning models and risk management efforts; our ability to achieve the expected cost savings from our reductions in workforce; geopolitical events, such as the Russia-Ukraine conflict; our ability to retain existing, and attract new, lending partners; and our ability to operate successfully in a highly-regulated industry. We believe non-GAAP information is useful in evaluating the operating results, ongoing operations, and for internal planning and forecasting purposes. 10 stocks we like better than UpstartWhen our analyst team has a stock tip, it can pay to listen. Importantly, there's a lot of opportunity to improve the process of originating HELOCs. Live webcast. The AI models use and analyze data from all of its bank partners. Irrespective of the environment, I push our team very hard to make sure Upstart improves constantly in four critical dimensions. So a lot of them are being pushed above the 36% APR threshold. And I'm curious when you think about flooding concentration with any partners, are there any partners that are kind of 10% or more of your overall funding or 15% or more of your overall funding? These statements are based on our current expectations and information available as of today and are subject to a variety of risks, uncertainties, and assumptions. 3 min read Upstart Holdings UPST is slated to release first-quarter 2022 results on May 9. This is Sanjay. Hey, Giuliano. Last quarter, I told you that I'm committed to running an operationally and fiscally tight ship. Upstart to Report First Quarter 2022 Earnings on May 9, 2022 | Upstart Third, more resilient, after all we have experienced in the last year, I'm keenly aware that we need to build more resilience into Upstart's business.