New York, NY – August 7, 2025 – Upstart Holdings, Inc. (NASDAQ: UPST) has announced outstanding financial results for the second quarter of 2025, demonstrating significant growth and a swift return to profitability. The artificial intelligence (AI) lending platform reported a remarkable 102% increase in year-over-year revenue, reaching $257.3 million and comfortably beating analyst expectations.
The positive news was further bolstered by the company achieving GAAP profitability a full quarter earlier than anticipated, posting a net income of $5.61 million, a substantial turnaround from a $54.47 million loss in the same period last year. Adjusted earnings per share stood at $0.36, significantly higher than the forecasted $0.24. In a show of confidence, Upstart has raised its full-year 2025 revenue forecast to approximately $1.055 billion.The driving force behind these impressive numbers is a massive 154% year-over-year surge in loan originations, which amounted to over $2.82 billion for the quarter. The company’s conversion rate also saw a significant improvement, rising to 23.9%. CEO David Girouard credited the strong performance to enhancements in the company’s AI models. These advancements have not only improved efficiency but have also enabled Upstart to offer smaller loans to a wider range of consumers. This is part of a broader strategy to increase market share, with the company seeing accelerated growth in its auto and home loan businesses.
Despite the strong financial report, Upstart’s stock experienced a drop in trading. Analysts suggest this reaction is linked to an increase in the total value of loans held on the company’s balance sheet, which grew to $1.02 billion, and a revised forecast for net interest income. Investors typically prefer that Upstart moves loans off its balance sheet.
Company executives have addressed these concerns, with CEO David Girouard explaining that the loans held are associated with the development of new products. He stated that the company’s goal is to move the funding for these newer products off its balance sheet by the end of 2025.
Several financial analysts believe the market’s response to the balance sheet figures is an overreaction given the company’s strong performance. Some, like those at Needham, have reiterated a “Buy” rating on the stock, viewing the price drop as a “buying opportunity” because of the “strong underlying momentum in the business.” Morgan Stanley’s James Faucette suggested the stock’s decline was more of an issue of lofty expectations. Jefferies analyst John Hecht also expressed encouragement regarding the company’s strategy to broaden its market capture.
With record loan originations, a confident outlook, and a return to profitability, Upstart’s foundational business appears strong. While keeping an eye on the balance sheet, many analysts remain optimistic about the AI lender’s long-term strategic direction.
