upstart q4 earnings date

I wanted to kind of ask a related question is we've seen the kind of normalization of the lending markets and borrowing markets, etc. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. As a result, we caution you against placing undue reliance on these forward-looking statements as we assume no obligation to update any forward-looking statements as a result of new information or future events, except as required by law. Now I would like to turn it over to Dave Girouard, CEO of Upstart. -0.11 (-0.31%) So it's really hard to say where that will go on balance. And obviously, we're feeling pretty bullish and optimistic about 2022. Upstart Holdings, Inc. is expected* to report earnings on 02/14/2023 after market close. Just as we get into early '22 here and now you've got your goals, is there anything we should think about in terms of where you see opportunity now and where that might cause a mix shift to occur over the course of this year? Thank you. If you do not, click Cancel. So we aren't banking on the sort of unnatural situation we're seeing in the market with respect to auto pricing either for new or used cars. So this is something that's more of a local phenomenon. Certainly, as supply chains sort of repair themselves and inventory levels on car dealerships, etc., begin to sort of return to normal, we think that will be a tailwind that will just further accelerate. And then, last question was on the reliance that we have on institutional investors and securitization markets, which I view to be a little bit differently. Zacks Rank Education -- Learn more about the Zacks Rank In some segments, our rates are getting to the point where they're already so much lower than the market that lowering them further doesn't really change the borrower's propensity to take the loan and then so more of our value capture ends up materializing its take rate. Our thanks once again to all the talented Upstarters who are helping to build this company. We don't exactly look like anybody else. And when that happens, we'll begin to pivot to a fee model that's more akin to our core business model, but that's still in front of us. And that does mean, as the economy is shifting, the environment shifting, that our models are keeping up with it as quickly as possible and trying to get -- stay as accurate as possible. Operator, back to you. So I think, each of those investors has maybe a different answer as to what kind of liquidity they need from the securitization markets behind them. In addition to reaching $1 billion in annualized revenue and record profits, Q4 was special for other reasons. Yes. And probably as important as anything is as we add subsequent channels, being able to cross-sell is going to be really important to us as well, and that becomes quite accretive to us. The Motley Fool has a disclosure policy. OK. Great. How should we interpret that? We sort of overbuilt in order to sort of build this business and ramp it quickly and make sure we have safety margin. We are seeing really great progress in digital, other channels that aren't nearly as targeted as you might see elsewhere and being competitive in prime is really helpful for us because it allows us to use those types of marketing channels. As we look to Q1, we highlight the seasonal contraction we have historically observed between Q4 and Q1, which we have traditionally associated with tax refund season. Thanks very much for taking my questions First one is maybe a few different questions on the auto side is -- one is -- how -- maybe can you talk about origination activity thus far, how many loans you have in your balance sheet? And then, my second question is just on the $1.5 billion auto goal. Transaction Volume and Conversion Rate. But that's what we expect to grow into as we scale. So I would say the reliance on securitization markets is less relevant to us directly. But just like in the personal loan world, for us, it comes down to our models improving as quickly as possible, us for moving friction, us getting better at finding distribution channels and acquisition channels, getting better at cross-selling. Information Providers, or gathered by Zacks Investment Research, Inc. from So that's what gives us some confidence in that market. And right now, as we sort of originate the auto loans and put them on balance sheet, there's no fees coming in, there's interest income. As I mentioned, digital has been very successful. Consequently, our balance of loans, notes and residuals at the end of the year was $261 million, up from $140 million in Q3 and reflecting the accelerated pace of R&D. Revenue from fees constituted $287 million of that amount, representing 94% of overall revenue and up 37% sequentially from last quarter. Upstart will host a conference call and webcast at 1:30 p.m. Pacific Time today. And then also, very fast growth in kind of organic users, which also, part of which are repeat borrowers, so that's also growing very quickly as we're kind of ramping up our life cycle marketing efforts. And then, the second component is we are actually profitable. So we're really pleased with the progress and we think we would expect to continue to accelerate adoption across rooftops through this year. And how if suddenly stimulus, there's a lot of relief stimulus added to that price appreciation. 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And so, each new business we get into, we're planning on getting into business lending, small business lending later this year, a small dollar lending. We believe in our core that AI lending isn't a one-category phenomenon, but will eventually transform virtually all flavors of credit. Were it not for the AI models at the core of Upstart, we would have little unique value to offer our bank partners. Viewed in this context, rising absolute default rates that are correctly predicted and priced are not a bug, but in fact, a feature of our platform and a trend we expect to see continue as we successfully progress against our core corporate mission of expanding access to credit. Most notably, auto lending has been funded since inception entirely from our own balance sheet. And so, we're going through that shift, but that's something that is new as of October or November. Great. Overall, the categories we're in today or expect to enter represent an addressable market of more than $6 trillion in annual originations. For their last quarter, Upstart (UPST) reported earnings of -$0.47 per share, beating the Zacks Consensus Estimate of $-0.82 per share. And so, you guys, given your models, were able to find opportunity in other parts of the market. In terms of your rooftop expansion, could you talk about the pace at which you can expand and sort of what, I guess, where you think you might end up to in this year? We'll take our next question from Ramsey El-Assal with Barclays. The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank. Operating expenses in Q4 were $244 million, growing 22% sequentially over the prior quarter. This is an estimated date of earnings release. Maybe 2023 is the year we get into home or mortgage. What's really exciting is that we're finding talent across the entire U.S. Well, I don't -- I can't say that we're seeing a trend one way or the other. With this as context, for Q1 of 2022, we are expecting revenues of $295 million to $305 million, representing a year-over-year growth rate of 148% at the midpoint; contribution margin of approximately 46%; net income of $18 million to $22 million; adjusted net income of $50 million to $52 million; adjusted EBITDA of $56 million to $58 million; and a diluted weighted average share count of approximately 95.9 million shares. Thanks, everybody. I would say, generally, if you looked at the numbers, and you can see them in the investment deck, we did see acceleration in the fourth quarter, which is nice. For the next earning release, we expect the company to report earnings of -$0.05 per share, reflecting a year-over-year decrease of 600%. The scores are based on the trading styles of Value, Growth, and Momentum. And just if the price goes up faster, is the loans less risky, if the price comes back fast, shouldn't the loans be much riskier? So these are the kind of dynamics that the 40-plus banks and credit unions in our platform have available to them and can make decisions on their own. Obviously, either or both of these investment decisions remain at our discretion and are susceptible to being revisited should any changes in our financial trajectory warrant it. Great. It's happening because we are expanding our universe of approval of borrowers over time. And we will be in touch with you all very soon. But even though channel development will require significant time and effort, the good news is that we're confident we're in a class by ourselves. And that's really what we're seeing as well. Thanks for all who have stuck with us through all this market turmoil, and we're looking forward to a great year. On the full year scoreboard, we tallied $849 million in net revenue in 2021, which was a 264% growth clip over 2020, a contribution margin of 50%, up 400 basis points from the prior year, and adjusted EBITDA of $232 million, representing a 27% adjusted EBITDA margin versus 13% a year earlier. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. I think, there -- we certainly get a lot of questions on how the performance of Upstart loans are comparable to that of other underwriting mechanisms, especially in a changing environment. Over the last 18 months or so, there's been such absolutely absurd appreciation in the used car market. We'll move on to Arvind Ramnani with Piper Sandler. And I'm really interested in the economics of the auto business. Stock Stock Quote & Chart Analyst Coverage Governance Governance Overview Leadership Board of Directors Committee Composition ESG Report IR Resources Investor FAQs Email Alerts RSS Feeds Contact IR UMI Events & Presentations PastEvents May 24, 2023 at 9:00 AM PDT Annual Meeting of Stockholders So I guess, I was just trying to maybe draw a distinction between two different things that often get conflated. It's a bit hard to sort of generalize the trend overall in the platform now. So we will certainly use the relationships and the expertise we have. Next, we'll move on to James Faucette with Morgan Stanley. Just a couple of questions on my end. 936133. And are you able to give us any color on sort of your kind of take rate, overall take rate as the year progressed? But I guess, equally importantly, all of the unit costs to originate an auto loan are currently subscale compared to personal lending. On the one hand, rates can get lowered for the borrowers and then volume increases. And that's our best view as to what we have sitting here in February. So I would say like put that aside. And with that, Dave and I are now happy to open the call to any questions. Good evening, guys. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Thank you. UPST's next earnings date is UNCONFIRMED for Tuesday 08/08/2023 After Market. This means that the savings that our borrower has realized, measured by the spread between our rates and the rates of the credit being refinanced, will remain reasonably constant. It's unusual to see a company -- you guys are so solidly in growth mode, it's unusually to see that sort of in the capital allocation mix. 2023, with a payment date of July 26, 2023. Just wondering, how do you see yourself performing more toward the prime end where cost of capital is more of a competitive edge there? As well as the Spanish product, which is still nascent for us, but I think is showing promises, way to just bring more people in the fold. And as of November, we believe we are seeing that normalization. I suspect by 2023, it will be accreting to the bottom line, not reducing our margins. Jason Schmidt -- Vice President, Investor Relations. For the fourth quarter, the company expects revenues between $255 million and $265 . I'm also pleased to report that we now have seven lenders on the Upstart platform with no minimum FICO score required. And I guess, we're just sharing that we have enough confidence to put a real number out there, a meaningful number and we're going to go to work and take that business as far as we can this year. Non-GAAP operating income was $6.2 billion, up 10% in USD and up 12% in constant currency. I'll just hop back in the queue. As I said in the prior remarks, we anticipate that happening over the next quarter or so. Thanks for taking my questions. But as I said, I think auto as it scales, if we get to the numbers that we're talking about, it should pull down the full year numbers by -- on the order of 5%. But I do think that, as I said, we know the playbook on these businesses now. But we have a long way to go, and it certainly depends on us continuing to make progress through the year. Let me state upfront that we're in a multi-decade mission to put affordable credit within reach of every American. We believe we can help forward-thinking banks succeed in their mission with better technology. And we believe that auto is going to go through a similar cycle, maybe a more accelerated one because we know the playbook now. One, the speed of the ramp-up in auto lending, which will reduce our overall contribution margin by about 5 percentage points until it attains mature scale in operations and customer acquisition; and two, the objective of growing our technical workforce by around 150% this year, which we view to be the most lucrative reinvestment opportunity for our corporate profits. Also building credibility with bank partners, with capital markets, investors, etc., that are necessary to make progress in those categories as well. See rankings and related performance below. Your operations are not finely tuned. We saw -- in the fourth quarter, we had unprecedented performance in direct mail, which has always been an important channel for us. Thanks very much. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. Today's conference is being recorded. And eventually, as a lot of people want to hear about the mortgage market, we just think that we're building the skills and the confidence. I think, each of the products are very different in the nature of the channel development, I think we'll be pretty unique to them. First, to transition into a multiproduct distributed company that can operate in parallel instead of in serial. And which one of those two it is in any particular segment, sort of depends on how elastic the demand for our loan is. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. Yeah, hey, Simon, great to hear from you. Discounted offers are only available to new members. Yeah, hey, Ramsey, this is Sanjay. But I think, in almost every case, the channels that we have some footprint in today in personal lending will be meaningful probably with different weightings, if you will. Just wondering if there's any detail there. Upstart (UPST) Earnings Date and Announcements. Also, the truth about a lot of marketing isn't as targeted as you'd like, meaning you can't always target a specific part of this credit spectrum, if you will, in marketing. To learn more, click here. That's helpful. Currently, Upstart Network can sell the securities it issues only to accredited investors on a confidential basis at their request for consideration. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. That's right -- theythink these 10stocks are even better buys. But as we've said, it's pretty much to our -- in our view, it's a direct line between the work that's being done on the technical side and the bottom line of our business because that's ultimately what's at the core of the value that we're creating as a business. If anything, we would certainly expect it to continue to expand. And the higher -- the more you get into the primary segment, the cost of funding becomes more dominant, but still ability to model better, having a more efficient process, not asking people for documents, instant approvals. And then, even when there is, as I said earlier, I think maybe more of it may be earned ratably over the life of the loan compared to personal loans, which is all earned on transaction. And so, if the world does normalize, presumably, our returns would go back to what you'd expect in a normal environment. We feel confident when building that product. Feb 14, 2022 12:11PM EST. And now, I would like to turn it over to Sanjay, our chief financial officer, to walk through our Q4 and full year 2021 financial results and guidance. Our view is that a moderate increase in rates will not have a meaningful impact on our business for two reasons. And then, of course, the newer products. And we will take Nat Schindler with Bank of America. Where are you seeing greater success? completeness, timeliness, or correct sequencing of any of the Information on Adjusted earnings per share for Q4 was $0.89 based on a diluted weighted average share count of 98.8 million. And as the models get better, the conversion funnel improves. Our profits are neither marginal nor ephemeral. . And now, we've done that, and we can sort of get to the place where we can get much smaller wins one at a time to really grow from here. If there's any mean reversion though and prices actually go down to go back -- to renormalize, not that this will happen. But what the consumer ends up experiencing in terms of prices is really a function of all that coming together. 2950 S. Delaware Street, San Mateo, CA 94403, Upstart Fourth Quarter & Full Year 2022 Earnings Presentation, Do not sell or share my personal information. Mix is one example of things that will change the overall take rate on the platform. So I don't think it was any single channel. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. And that certainly dissipated. The Motley Fool owns and recommends Upstart Holdings, Inc. The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Thank you. Visit www.zacksdata.com to get our data and content for your mobile app or website. And that's at a level where the contribution margins today are much lower. And then, on the cost side, consumer acquisition and operations are still things that are -- I would call them subscale. Upstart (UPST) Q1 2023 Earnings Call Transcript, Upstart (UPST) Q4 2022 Earnings Call Transcript, Upstart Holdings, Inc. (UPST) Q3 2022 Earnings Call Transcript, Upstart Holdings, Inc. (UPST) Q2 2022 Earnings Call Transcript, Upstart Holdings, Inc. (UPST) Q1 2022 Earnings Call Transcript, Cumulative Growth of a $10,000 Investment in Stock Advisor, Join Over Half a 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Their whole goal is model accuracy, nothing more or less. Delayed quotes by FIS. Cost basis and return based on previous market day close. Good. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. So we have targets for where we want them to get to, but not actual results yet. Hi, guys. And in the long run, I don't see why we would not sort of meet, if not exceed our current level of profitability as we scale multiple businesses. Hi. I'll come back to this topic in a moment. Yeah, Nat, I guess, maybe another way of putting it is that we're not -- maybe there's an analogy to where we are in sort of general lending on defaults. In addition, during today's call, unless otherwise stated, references to our results are provided as non-GAAP financial measures and are reconciled to our GAAP results, which can be found in the earnings release and supplemental tables. Can you just explain a bit where -- what marketing strategies you've expanded upon to drive increased eyeballs to the Upstart platform? So this isn't a capital structuring decision, it's economic opportunism. And that's just the dynamic. According to Zacks Investment Research, based. But that huge gain needs . So there are certainly scenarios where it could be better than that and some where we would be less than that. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. And as far as the cadence of the $1.5 billion over time, so we're not giving that split explicitly between refi and retail other than to say that refi is the program that's off the ground and up and running, and our retail program is still much earlier stage. So I guess, the shorter answer is we're still in the early days of this, and we don't see a place where bank demand is going to drop off in our platform. Could we expect Upstart to get back to 2021 margins in 2023? * When you check your rate, we check your credit report. Some quiet periods just feel longer than others. And so, the first point I was making was that's, in our view, not a bad thing. For the full year 2022, we expect revenue of approximately $1.4 billion, representing a growth rate of approximately 65% from the prior year; contribution margin of approximately 45%; adjusted EBITDA of approximately 17%; and an auto loan transaction volume of approximately $1.5 billion. Just going to wrap it up. But again, that's the primary job of that model. And next, we move on to John Hecht with Jefferies. Upstart Market Cap $2B Today's Change (-0.60%) -$0.18 Current Price $29.57 Price as of June 2, 2023, 4:00 p.m. An earnings presentation and link to the webcast are available at ir.upstart.com. Research, Inc. nor its Information Providers can guarantee the accuracy, So how -- I will say for sure, last year, there was a very severe need for loans out there, almost unprecedented in terms of excess deposits, lack of loans in the banking world last year. The securitization markets are almost more of an indirect thing for us because it's the loan buyers themselves that then securitize the loans. Returns as of 06/30/2023. They are rearchitecting our code base from a monolith into a suite of micro services. Hey, hi, thanks, and congrats for posting another terrific quarter. We are really happy with how 2021 turned out. Sure. And as to the cadence over time, we'll see. But can you just give us a little bit more detail? Yeah, Andrew, thanks. ET. The monthly returns are then compounded to arrive at the annual return. Any decrease in loan demand at the margin from borrowers reacting to higher-nominal interest rates will be more than offset by the growing demand for credit in the broader economy as stimulus evaporates, as evidenced by recovering credit card balances. I was wondering if you could share your early thoughts on the distribution strategy for the new products you'll be rolling out. $35.70 Live webcast. I suspect less of it will be upfront on transaction and maybe more earned ratably over the life of the loan. As we have consistently messaged, the fading of stimulus should presumably lead to a normalization in default rates. So there's probably seven or eight key inputs to that formula of how good does that business look come December. But if you think of like first one, 12 months from now, what do you think may drive kind of upside?
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