Upstart posts diluted EPS of $0.33 and record quarterly fee revenue
Key Facts
Upstart reported net income of $36.6 million in the third quarter of 2026, up 15% year over year, while diluted earnings per share under U.S. accounting standards rose to $0.33 from $0.23 in the same period of 2025. Results data showed the company’s revenue reached $371 million, up 34% from a year earlier, while fee revenue hit a record $364 million, up 41%. Earnings per share exceeded analysts’ estimate of $0.21, and revenue of $370.52 million also topped the average forecast of $365.86 million, according to Investing.com. The results come as the company seeks to expand lending through its platform and turn loan-volume growth into profits. Chief Executive Paul Gu said, "Progress in technology and marketing helped deliver a record level of contribution profit."
Loans originated through the platform rose to $4.1 billion in the quarter, up 44% from the same period last year. The number of loans reached 574,089, a quarterly record, and grew 34% year over year. The broader activity reflects faster growth in the total value of loans than in their number, while fee revenue remained the main revenue driver, according to company figures. Contribution profit, the metric the company reported alongside revenue, reached a record $218 million, up 48% year over year. The contribution margin also rose to 60% from 57% in the third quarter of 2025, indicating improvement in the metric alongside business growth.
The shift in secured products, which include auto and home loans, stood out, with their combined contribution margin turning positive at 17% in the third quarter. The margin was negative 179% in the third quarter of 2025 and negative 35% in the second quarter of 2026. The company said the category reached a positive margin one quarter ahead of its target. Gu linked the record contribution profit to progress in technology and marketing, and also noted that secured products had begun making a positive contribution. In the second quarter, Gu said the company had reaccelerated growth in its core personal loans, moved secured products toward profitability and returned to profitability under U.S. accounting standards, while loans originated rose year over year.
But growth in adjusted earnings came alongside a decline in the adjusted EBITDA margin to 24% from 26% a year earlier. The metric was $89.3 million, up 26% year over year from $71.2 million in the third quarter of 2025. That leaves the profitability indicators moving in opposite directions: the contribution margin rose to 60%, while the adjusted EBITDA margin fell. Management also said macroeconomic conditions were weighing on the near-term outlook, without changing its stated full-year guidance. Loans originated had risen 50% year over year in the second quarter, according to Gu’s comments at the time, before the increase recorded in the third quarter.
In the market, UPST shares closed at $21.31 on Nov. 2, the eve of the results announcement. Investing.com said the stock had fallen 31.46% over the previous three months and 53.91% over 12 months through Nov. 3. Verified session figures for the high and low were not available, while the recorded close provides a reference point for the stock before the results were released. This backdrop reflects a divergence between improving revenue and reported operating earnings and the stock’s performance over a longer period. The available data do not include a subsequent closing price that could be linked to the market’s reaction after the results.
Upstart expects fiscal 2026 fee revenue of about $1.32 billion and total revenue of about $1.35 billion. It also targets adjusted EBITDA of about $260 million, equivalent to 19% of total revenue. Among upcoming events, the company said its third-quarter earnings call and webcast will be held on Nov. 3 at 5:00 a.m. Pacific time, or 8:00 a.m. Eastern time. It said a recording of the webcast will remain available for one year. The company also listed a conversation with its chief executive at Citi’s annual fintech conference on Nov. 10 at 10:30 a.m. Pacific time.