Upstart cuts 2026 adjusted earnings forecast to $260 million
Key Facts
Upstart reported results for the third quarter ended September 30 on November 3, 2026, and cut its full-year estimate for adjusted earnings before interest, taxes, depreciation and amortization to about $260 million. At the same time, the company raised its 2026 fee revenue forecast to about $1.32 billion and estimated total revenue at about $1.35 billion. The adjusted earnings estimate equals 19% of projected total revenue. The update pairs strong quarterly activity growth with an annual earnings forecast below the company’s previous target. Chief Executive and co-founder Paul Gu said, "Macroeconomic conditions are weighing on our near-term outlook."
Compared with the guidance issued after second-quarter results, the update shows a divergence between fee revenue and the other annual estimates. Upstart had expected total revenue of about $1.4 billion, fee revenue of about $1.3 billion and adjusted earnings before interest, taxes, depreciation and amortization of about $294 million, or about 21% of revenue. The total revenue estimate is now $1.35 billion, while the fee revenue estimate has risen to $1.32 billion. Expected adjusted earnings have fallen to about $260 million, and the margin to 19%. That means the company expects lower total revenue and adjusted earnings than in its previous estimate, alongside slightly higher fee revenue.
In the third quarter, fee revenue reached a record $364 million, up 41% year over year, while total revenue was $371 million, up 34%. Loans originated rose to $4.1 billion, an annual increase of 44%. The company also originated a record 574,089 loans, up 34% from the same period last year. Net income was $36.6 million, up 15% from $31.8 million in the third quarter of 2025. Diluted earnings per share reached $0.33, compared with $0.23 a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization were $89.3 million for the quarter, up 26% year over year from $71.2 million. But the margin fell to 24% from 26% in the third quarter of 2025, despite growth in the overall earnings figure. In another measure of operating profitability, contribution profit reached a record $218 million, up 48% year over year. The contribution margin rose to 60%, compared with 57% a year earlier. Gu said advances in technology and marketing helped deliver record contribution profit, linking improved operating performance with near-term forecast pressures.
Unsecured lending generated about $330 million in fee revenue, up 30% from the year-earlier quarter. Its contribution margin was 64%, up two percentage points from 62% in the third quarter of 2025 and the second quarter of 2026. In secured auto and home products, the combined contribution margin turned positive at 17%. 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 contribution margin one quarter ahead of its target.
On lending metrics, the conversion rate fell to 18.6% in the third quarter from 19.4% in the year-earlier period. The share of fully automated loans was 90%, compared with 91% a year earlier. In its second-quarter comments, the company had said the Upstart Macro Index stood at 1.50 in August 2026, at the upper end of the 1.4 to 1.5 range underpinning its initial annual guidance in February. That guidance assumed the index would remain near that level for the rest of the year. In the November 2 session, Upstart shares closed at $21.31, according to EL7 data.
The company had announced that its live earnings call and webcast to discuss the results would take place on November 3 at 8:00 a.m. U.S. Eastern time. It said a replay would be available on its investor relations website. The replay gives followers an opportunity to review the results in detail after the call. The company’s statement focused on growth in fee revenue, loan volume and contribution profit, alongside the annual forecast update. Macroeconomic pressures remain a factor in its near-term outlook, Gu said.