Upstart Holdings, Inc., a company leveraging artificial intelligence (AI) in consumer credit underwriting, reported a significant increase in Transaction Volume, both in dollars and the number of loans, for the quarter ended September 30, 2024. The company saw a 30% increase in Transaction Volume in dollars and a 64% increase in the number of loans compared to the same period in 2023. This growth was attributed to improvements in AI models and product initiatives, leading to a higher number of qualified borrowers. Despite the growth in Transaction Volume, Upstart faced challenges in the macroeconomic environment, leading to forecasted underperformance in core personal loans originated from Q1 2021 through Q4 2023 relative to their target returns. However, loans originated in Q1 2024 are expected to deliver returns in line with targets, indicating...Show More

Upstart Holdings, Inc., a company leveraging artificial intelligence (AI) in consumer credit underwriting, reported a significant increase in Transaction Volume, both in dollars and the number of loans, for the quarter ended September 30, 2024. The company saw a 30% increase in Transaction Volume in dollars and a 64% increase in the number of loans compared to the same period in 2023. This growth was attributed to improvements in AI models and product initiatives, leading to a higher number of qualified borrowers. Despite the growth in Transaction Volume, Upstart faced challenges in the macroeconomic environment, leading to forecasted underperformance in core personal loans originated from Q1 2021 through Q4 2023 relative to their target returns. However, loans originated in Q1 2024 are expected to deliver returns in line with targets, indicating a potential reversion in performance. Upstart's business development efforts included the launch of new loan products such as small dollar loans and HELOCs, and the expansion of auto secured personal loans. The company also secured multiple committed capital and co-investment arrangements with institutional investors to improve loan funding capacity. Looking ahead, Upstart plans to continue investing in AI model development and platform functionalities to drive growth and expand access to affordable credit. The company's strategy involves partnering with banks and credit unions to offer AI lending solutions and diversifying sources of capital to mitigate loan funding volatility. Upstart's financial performance and future plans reflect a commitment to innovation and growth in the digital lending space, despite the challenges posed by the current economic climate.