Highlights

  • Second quarter revenue rose 42% to $364.7 million, and net income reached $16.5 million, or $0.16 per diluted share.
  • Originations grew 50% to $4.23 billion, though non-GAAP contribution margin eased to 55% from 58% a year earlier.
  • The company repurchased 3.2 million shares for $100.1 million in the first half, and $122.1 million of authorization remains.
  • Convertible senior notes totaled $1,687.8 million in principal, and operating activities used $269.9 million of cash in six months.

Upstart Holdings (NASDAQ:UPST) shares were trading near their 52-week low at USD 23.70 on October 21, 2026, up 0.23%. The AI lending marketplace reported second quarter 2026 results in a Form 10-Q filed August 4, with revenue up 42%, originations up 50% and net income of $16.5 million, while also disclosing pending securities litigation and $1,687.8 million of convertible notes.

Based in Burlingame, California, Upstart is a Delaware corporation that calls itself the leading AI lending marketplace. Its proprietary models underwrite and price unsecured loans, including personal loans, small dollar loans and a revolving credit product called Cash Line, as well as secured auto loans and home equity lines of credit. Loans are bought by institutional investors, retained or purchased by bank and credit union partners, or held on Upstart's balance sheet, and 91% of loans in the first half of 2026 were fully automated. Its fiscal year ends December 31.

Second Quarter Revenue Up 42% With Originations Up 50%

For the quarter ended June 30, 2026, total revenue was $364.7 million, compared with $257.3 million a year earlier. Revenue from fees, net rose 45% to $348.0 million.

Originations were $4,227.2 million, up from $2,820.4 million, and the number of loans rose 50% to 558,014. Operating expenses rose to $350.1 million from $252.7 million, led by sales and marketing. Income from operations was $14.6 million against $4.5 million, and net income was $16.5 million against $5.6 million. Adjusted EBITDA, a non-GAAP measure, was $76.9 million, up from $53.1 million, for a 21% margin.

Several operating indicators moved the other way. Contribution profit, also non-GAAP, rose to $193.1 million but its margin narrowed to 55% from 58%, the conversion rate slipped to 19.7% from 21.0% and the share of fully automated loans edged down to 91% from 92%. For six months, revenue was $672.9 million, up 43%, and net income was $9.9 million.

Credit Performance, Funding Mix and Balance Sheet Loans

Upstart said a blend of personal loans originated from the second quarter of 2023 through the first quarter of 2026 is expected to return about 10.8% a year after servicing fees. It also said the quarterly vintages from the second quarter of 2023 through the first quarter of 2024, and the fourth quarter of 2024, are forecast to fall short of their target returns, while the other vintages are on target. Its macroeconomic index stood near 1.50, which management described as elevated.

In the first half, institutional investors bought 61% of loan principal, lending partners 31% and Upstart's own balance sheet 8%. More than half of platform funding comes from committed capital and co-investment arrangements, and Upstart's maximum exposure to losses under them was $1,294.4 million. At June 30, it held $1,064.2 million of loans, including $540.3 million of research and development loans used to test models and discover prices, and plans to sell loans from its balance sheet over time.

Capital, Liquidity and Legal Matters

Cash and cash equivalents were $456.0 million. Warehouse facilities allow borrowing of up to $650.0 million, with $251.8 million drawn, and a risk retention facility had $92.0 million drawn of $200.0 million. Convertible notes mature between 2026 and 2032, including $66.5 million due in August 2026. An at-the-market program of up to $500.0 million had issued no shares as of June 30.

A securities class action alleging misleading statements about the company's business continues, with class certification granted on March 27, 2025, alongside several derivative suits, some of them stayed. The company says the remaining claims lack merit and cannot estimate a possible loss. Six-month operating cash flow was negative $269.9 million, mainly from $517.7 million of net purchases and originations of loans held for sale.

Outlook and Liquidity Statement

The 10-Q gives no numerical revenue or earnings guidance. Management said cash on hand should meet liquidity needs for at least the next 12 months, while noting it may raise capital through equity, equity-linked or debt financing, which could dilute stockholders. It also said it may keep repurchasing shares.