Upstart reported a sharply higher volume of lending in the third quarter, with revenue, operating income and net income all above year-earlier levels. The AI lending marketplace also posted record contribution profit and said its auto and home lending products reached positive contribution margin ahead of schedule.
Management said macroeconomic conditions are weighing on the near-term outlook, but gave no specific forecast figures in the announcement. CEO Paul Gu said technology and marketing improvements helped drive the quarter’s results and that the platform supported growth with proportionately less equity capital.
Key details
- Lending volume grew: Upstart originated $4.1 billion in loans, up 44% from a year earlier. The 574,089 loans originated were a quarterly record and up 34%.
- Revenue increased: Total revenue was $371 million, up 34%. Revenue from fees reached a record $364 million, up 41%.
- Profitability improved: Operating income was $36.0 million, compared with $23.7 million a year earlier. Net income rose 15% to $36.6 million, and diluted earnings per share increased to $0.33 from $0.23.
- Contribution profit set a record: It reached $218 million, up 48%. Contribution margin—the company’s measure of contribution profit relative to revenue—was 60%, compared with 57% a year earlier.
- Adjusted EBITDA rose, while its margin narrowed: Adjusted EBITDA, a non-GAAP measure, increased 26% to $89.3 million. Its margin was 24%, down from 26% in the third quarter of 2025.
- Unsecured lending remained the largest product category: Fee revenue from unsecured loans was $330 million, up 30%. Contribution profit rose 35% to $212 million, and contribution margin increased to 64% from 62% both a year earlier and in the second quarter.
- Auto and home products reached positive contribution margin: The combined secured-loan margin was 17%, compared with negative 179% a year earlier and negative 35% in the second quarter. Upstart said this was one quarter ahead of its target.
What changes for investors
The results show broad year-over-year growth, with contribution profit increasing faster than revenue and secured lending moving into positive contribution margin. At the same time, adjusted EBITDA margin declined, and management flagged macroeconomic pressure on the near-term outlook without quantifying it.