Upstart (UPST) Q2 2024 earnings summary

Executive summary

• Achieved sequential growth and progress toward EBITDA profitability, with Q2 2024 revenue at $127.6M–$128M, down 6% year-over-year, and a net loss of $54.5M.

• Major internal improvements include AI model advancements, increased automation (91% of loans fully automated), and a shift to committed funding partnerships.

• Expansion continues into auto loans, small-dollar relief loans, and HELOC, with notable product and operational milestones, including HELOC live in 30 states and DC.

• Workforce reductions of 10% in Q2 2024 and 20% in January 2023 were implemented to streamline operations and reduce costs.

• Named a 2024-2025 Best Company to Work For by US News & World Report.

Financial highlights

• Q2 2024 revenue from fees was $130.5M–$131M, down 9% year-over-year; total revenue was $127.6M–$128M, down 6% year-over-year.

• Net loss for Q2 2024 was $54.5M; adjusted EBITDA was -$9.3M; adjusted EPS was -$0.17.

• Loan transaction volume reached 143,900–144,000, up 31% year-over-year, with average loan size decreasing to $7,700.

• Contribution margin was 58%, down from 67% in Q2 2023.

• Cash and restricted cash at quarter-end was $560.6M, up from $509.9M at the start of the year.

Outlook and guidance

• Q3 2024 guidance: total revenue ~$150M, fee revenue ~$155M, contribution margin ~57%, net loss ~$49M, adjusted EBITDA ~$-5M.

• Second half 2024: fee revenue ~$320M, positive adjusted EBITDA expected in Q4.

• Guidance does not assume macroeconomic improvement or interest rate cuts; ongoing macro and funding challenges expected.