Upstart Reports Strong Q4 2024 Earnings Growth

Upstart shines in Q4 2024 with exceptional improvements. The company's origination volume grew by 33%, while revenue saw a 35% sequential increase, positioning it favorably for the future.

Date: 12-02-2025

AI Rating: 7

Overview of Financial Performance

Upstart's Q4 2024 results indicate a strong financial recovery following a challenging start to the year. The origination volume surged by 33% and revenue increased by 35% on a sequential basis. Year-over-year, originations grew 68% and revenue 56%. This robust growth demonstrates significant consumer demand and successful product implementation.

Key Financial Metrics

1. **Adjusted EBITDA**: Upstart achieved adjusted EBITDA at levels not seen since the first quarter of 2022, indicating an ability to move towards profitability.

2. **Revenue Growth**: The company's revenue rose to $199 million in Q4, reflecting a 30% increase year-over-year, and a 19% sequential rise. This increase is driven by model enhancements, improved conversion rates, and a beneficial external macro environment.

3. **Net Income and EPS**: Although the GAAP net loss was $2.8 million for Q4, this was better than expectations, signaling progress towards achieving profitability. Adjusted earnings per share reached $0.26, showing positive developments in earnings despite the loss.

Product Performance and Market Dynamics

Upstart’s expansion into various product categories—specifically auto loans and HELOCs—delivered impressive growth rates of 60% and 60% respectively, both sequentially. The introduction of new machine learning models further increased loan approval rates and improved risk assessments, contributing to enhanced profitability margins.

The small dollar relief product also exhibited a remarkable growth of over 100% quarter on quarter, indicating Upstart's strategy to capture a wider segment of the lending market.

Conclusion and Investor Implications

With expectations for continued strong revenue growth in 2025, projected at approximately $1 billion, investors might view Upstart as returning to a solid growth trajectory. The management's confidence in achieving GAAP profitability in the latter half of 2025 could bolster investor sentiment, despite some concerns regarding the potential volatility in macroeconomic conditions.

Stocks: UPST