Upstart's Business Surged Back in Q4

Upstart Holdings, Inc. (NASDAQ: UPST), the leading AI-driven lending marketplace, reported impressive results for the fourth quarter and full year 2024, marking a significant turnaround from recent volatility. The company's shares spiked 22% in after-hours trading following the earnings release, reflecting investors' confidence in Upstart's recent success and future prospects.

Upstart's revenue rocketed up 56% year-over-year (YoY) in the fourth quarter, reaching $219 million, driven by a 68% increase in loan originations. The company originated 245,663 loans totaling $2.1 billion, up from 129,664 loans totaling $1.3 billion in the same quarter last year. This growth was fueled by solid expansion in small-dollar loans, loans originated by Upstart's bank and credit union partners, auto loans, and home equity loans (HELOCs).

Upstart's financial trends also improved significantly. The company's net loss in Q4 2024 was $2.8 million, compared to a $42.4 million loss in Q4 2023. The operating loss shrank from $48 million to $4.8 million YoY, and the full-year operating loss was reduced by 33%. Upstart's adjusted EBITDA margin also improved to 18% in Q4 2024, up from 0% in the same quarter last year.

Upstart's AI-driven lending platform and risk assessment tools have been instrumental in its recent success and lender trust. The company added 28 banks and credit union partners in 2024, bringing its total number of partners to over 100. This growth in partnerships indicates that lenders are increasingly trusting Upstart's platform and risk assessment tools. Additionally, Upstart's conversion rate, which measures the percentage of loan applicants who are approved and funded, increased from 11.6% in Q4 2023 to 19.3% in Q4 2024. This improvement suggests that Upstart's AI-driven risk assessment tools are becoming more effective at identifying creditworthy borrowers.

Upstart's expansion into new loan categories, such as auto loans and HELOCs, has also contributed to its recent success. Originations in these categories increased 61% and 59% sequentially, respectively, demonstrating that Upstart's AI-driven lending platform can effectively assess risk across various loan types.

Upstart's positive market reaction and strong financial performance indicate that the company is well-positioned for continued growth in 2025. The company expects revenue of approximately $200 million in the first quarter, with full-year revenue projected to reach $1 billion, up 57% from last year. Upstart also expects to be "at least" break even on GAAP profitability and to generate $180 million in adjusted EBITDA.



In conclusion, Upstart's business surged back in Q4, driven by strong revenue growth, improved financial trends, and increased lender trust in its AI-driven lending platform and risk assessment tools. The company's positive market reaction and strong financial performance indicate that Upstart is well-positioned for continued growth in 2025. Investors should consider Upstart as a compelling long-term investment opportunity in the AI-driven lending space.