Digital lender posted $4.2B in originations and record 558K loans. CEO Gu called personal loans the company's "superpower" as OCC approval for Upstart Bank, N.A. nears launch.
Alpha Score of 26 reflects poor overall profile with poor momentum, poor value, strong quality. Based on 3 of 4 signals — score is capped at 90 until remaining data ingests.
Upstart Holdings posted a 50% jump in loan originations last quarter, hitting $4.2 billion as the digital lender moves toward launching its own bank.
Revenue came to $365 million, up 42% from the year-ago period. The company originated a record 558,000 loans during the quarter.
CEO Paul Gu told analysts on the earnings call that the results reflect Upstart's technology edge, repeating his line that "core personal loans are our superpower." He said the technology generates "unusually strong margins."
The company is shifting away from one-off loan transactions toward managing a borrower's full lifecycle. Roughly 1 in 13 American adults now holds an Upstart account, management said. Gu added that the company is de-emphasizing FICO scores as a lending benchmark.
"We're really serving a pretty full spectrum of people that are just new to credit or trying to repair their credit, all the way to people who are really prime and can qualify for really great rates, have a home," he said.
Upstart plans to sunset its conversion-rate metric, Gu said, because it is "so sensitive to the mixes that it's a little hard to interpret."
On the technology side, the company moved its underwriting to a new distributed inference platform that processes applications 65% faster. Gu said Upstart's models are 2.74 times as accurate as traditional credit scoring benchmarks.
The automation push extends to more complex products. Upstart can now close a home equity line of credit in six days, Gu said, versus the weeks or months traditional banks typically take.
The earnings follow last month's news that Upstart received conditional approval from the Office of the Comptroller of the Currency to establish a bank called Upstart Bank, N.A.
CFO Andrea Blankmeyer said the lender expects to "pretty quickly move the bulk to all of our originations through to Upstart Bank from the current partners that we're originating with today." She added that "the core elements of the operations of the bank" should be running shortly after launch.
Upstart's stock page carries an Alpha Score of 26, labeled Weak, in the Technology sector.
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