Upstart Holdings, Inc. Announced Financial Result for Q1 2024

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Upstart Holdings, Inc., (UPST) the leading AI lending marketplace, has announced its financial results for the first quarter of fiscal year 2024 ended March 31, 2024. The company reported a 24% increase in revenue to $128 million, while total fee revenue increased 18% year-over-year. Transaction volume and conversion rate reached $1.1 billion across the platform, up 13% from the previous year. Income from operations was $67.5 million, up from $131.8 million in the same quarter. Net income and EPS increased by 64.6% and 27.2%, respectively. Contribution profit reached $81.1 million in Q1, up 20% year-over-year, with a contribution margin of 59%. Adjusted EBITDA was $20.3 million, up from $31.1 million in Q1 2021.

Upstart (UPST) expects revenue of approximately $125 million in Q2, revenue from fees of around $135 million, net interest income of $10 million, contribution margin of 56%, net income of $75 million, adjusted net income of 36 million, and adjusted EBITDA of $25 million. For the second half of 2024, Upstart (UPST) expects revenue from fees of $300 million, and positive EBITDA in the fourth quarter.

The company has not reconciled forward-looking non-GAAP measures to comparable GAAP measures due to potential variability and uncertainty in future costs and expenses. Key operating metrics and non-GAAP financial measures are described in the section titled "Key Operating Metrics" below. 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.

Upstart (UPST), an AI-powered lending platform, has been a key player in the market for loans, with the total addressable market (TAM) for annual loan originations reaching $3 trillion. The company's executives have expressed optimism about the future of the company, citing growing consumption and flat personal income rates as driving the need for lending solutions like Upstart's. They anticipate a return to sequential growth in the second half of the year and positive EBITDA by the end of the year, even in the current credit environment.

Upstart's (UPST) earnings beat Wall Street expectations, but its forecast for the current quarter came up short compared to market sentiment. The company reported that 90% of loans were fully automated, and 91% of automated approvals converted to funded loans, which is 3x the conversion rate of non-automated loans. Average loan size was down due to robust growth in smaller dollar loans.

Upstart's (UPST) revenue rose to $128 million, beating both Wall Street estimates and the company's own. The company's AI and machine learning lending solutions are powered by more than 1,600 variables, with models trained on over 65 million repayment events and adding an average of 82,000 new repayments each business day. With Upstart's AI lending marketplace, the company claims that lenders can approve more borrowers at lower APRs while simultaneously delivering a digital-first experience customers demand.

Technical Outlook
Despite beating world street expectations Upstart stock (UPST) is down 5.56% with a Relative Strength Index (RSI) of 45.95 trading below the 200-day Moving Average (MA).