Upstart Holdings, Inc. reported net income of $31.8 million for the three months ended September 30, 2025, a significant increase compared to the net loss of $6.8 million for the same period in 2024. Total revenue increased to $277.1 million, up from $162.1 million in the prior year, driven primarily by a rise in revenue from fees, net, which reached $258.5 million compared to $167.6 million in 2024. The company's financial performance reflects growth in its AI lending marketplace, with platform and referral fees contributing substantially to the revenue increase. Operating expenses also saw an increase, totaling $253.4 million compared to $207.3 million in the previous year, mainly due to higher sales and marketing costs.
For the nine months ended September 30, 2025, Upstart reported net income of $35.0 million, a substantial improvement from the net loss of $125.8 million for the same period in 2024. Total revenue for the nine-month period reached $747.8 million, compared to $417.6 million in 2024. Revenue from fees, net, increased to $684.8 million, up from $436.2 million in the prior year. The company's performance was bolstered by a gain on debt extinguishment of $7.2 million, although this was lower than the $33.4 million gain recorded in the same period of 2024. Operating expenses for the nine-month period totaled $724.1 million, compared to $585.7 million in 2024, with sales and marketing expenses being a significant contributor to the increase.
Operationally, Upstart's key metrics showed positive trends. Transaction volume in dollars increased to $2.9 billion for the three months ended September 30, 2025, up from $1.6 billion in the same period of 2024. The number of loans transacted also increased significantly, reaching 428,056 compared to 188,149 in the prior year. The conversion rate, defined as the number of loans transacted divided by the number of rate inquiries, improved to 20.6% from 16.3% in 2024. Notably, 91% of loans were fully automated, indicating a high level of efficiency in the company's operations. The company's balance sheet also reflects significant changes, with loans at fair value increasing to $1.2 billion as of September 30, 2025, compared to $806.3 million as of December 31, 2024.
Upstart's financial outlook includes forward-looking statements regarding future financial performance, AI model improvements, loan funding strategies, and macroeconomic events. The company emphasizes its ability to adjust its AI models and services in response to changing market conditions. However, these forward-looking statements are subject to risks and uncertainties, including those related to regulatory compliance, competition, and the integration of acquired operations. The company's capital allocation plans include funding loans through its balance sheet and potential share repurchases. Upstart acknowledges the potential impact of disruption in the banking industry and macroeconomic events on its business and industry.
About Upstart Holdings, Inc.
Upstart Holdings, Inc. operates an AI-driven lending marketplace connecting consumers with banks, credit unions, auto dealers, and institutional investors. It offers unsecured personal loans, auto loans, and HELOCs, utilizing advanced machine learning models to improve approval rates and lower interest costs. The platform emphasizes automation, data security, and regulatory compliance, providing a digital, efficient alternative to traditional credit scoring for a broad customer base.
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