Upstart’s first quarter results for 2025 drew a negative market reaction despite notable top- and bottom-line outperformance versus Wall Street expectations. Management attributed the strong revenue growth to a surge in platform originations, particularly from personal loans and rapid expansion in home equity and auto lending. CEO Dave Girouard highlighted that “model wins and improved borrower health combining with more competitive capital” drove higher conversion rates and that the company’s AI-powered underwriting improvements boosted automation and efficiency across products. Management also acknowledged that a shift toward super prime borrowers and new product scaling contributed to changes in revenue mix and margin dynamics.
Is now the time to buy UPST? Find out in our full research report (it’s free).
Upstart (UPST) Q1 CY2025 Highlights:
- Revenue: $213.4 million vs analyst estimates of $202.8 million (67% year-on-year growth, 5.2% beat)
- Adjusted EPS: $0.30 vs analyst estimates of $0.17 (75.9% beat)
- Adjusted Operating Income: $29.14 million vs analyst estimates of -$20.14 million (13.7% margin, significant beat)
- The company slightly lifted its revenue guidance for the full year to $1.01 billion at the midpoint from $1 billion
- EBITDA guidance for Q2 CY2025 is $37 million at the midpoint, above analyst estimates of $29.61 million
- Operating Margin: -2.1%, up from -52.8% in the same quarter last year
- Market Capitalization: $6.03 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Upstart’s Q1 Earnings Call
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Dan Dolev (Mizuho): Asked about the Walmart partnership details and its impact on current guidance. CEO Dave Girouard clarified that the partnership is in early stages and not expected to materially affect 2025 guidance yet.
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John Coffey (Barclays): Inquired about expected conversion rates for the rest of the year. Girouard responded that ongoing model improvements and automation should lead to higher conversion, but outcomes depend on both technology and macro conditions.
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Simon Clinch (Redburn Atlantic): Asked about contribution margin pressures and loan demand trends. CFO Sanjay Datta attributed lower margins to expanding into super prime and early-stage products, while Girouard noted continued strong credit demand and seasonal patterns.
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Unidentified Analyst (Needham & Company): Asked about funding mix and take rate trends. Datta explained that committed partnerships provide funding resilience, and lower take rates in super prime reflect increased competition but enable market expansion.
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Rob Wildhack (Autonomous Research): Questioned why new funding deals did not raise full-year guidance further. Girouard explained that growth is primarily limited by borrower acquisition economics, not funding availability.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch for (1) measurable progress in AI-powered underwriting and automation, especially in new lending categories, (2) the impact of funding partnerships and the Walmart channel on loan volume and customer mix, and (3) margin evolution as product mix shifts toward super prime and newer products. Developments in credit demand and regulatory or trade policy changes will also be key indicators.
Upstart currently trades at $63.71, up from $51.42 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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