$UPST · Upstart Holdings, Inc.
Upstart Holdings filed its Q3 FY2026 10-Q, reporting total revenue of $370.5M (+33.7% YoY) and net income of $36.6M ($0.33 diluted EPS). Revenue from fees, net climbed 41% to $364.0M on a 51% surge in origination dollars to $11.8B over nine months, but fair value losses widened to $37.2M and operating expenses grew 32% to $334.5M.
- Revenue from fees, net rose 41% YoY to $364.0M, driven by a 51% increase in origination dollars to $11.8B over nine months.
- Net income was $36.6M ($0.33 diluted EPS), up from $31.8M a year ago but GAAP EPS of $0.33 missed the implied consensus.
- Fair value and other adjustments, net swung to a $37.2M loss in Q3, a 25% worsening from $29.8M a year ago.
- Total operating expenses surged 32% YoY to $334.5M, with stock-based compensation hitting $40.0M for the quarter.
- Diluted share count ballooned to 125.4M shares from 109.7M, reflecting convertible note dilution and equity grants.
Extended-hours trading shows shares at $20.10, down 12.68% from the filing-time price of $23.02 and 5.68% below the regular close of $21.31. The $2.07B market cap is absorbing a sharp selloff as the market digests widening fair value losses and expense growth that undercut the strong headline revenue beat.
Upstart's 41% fee revenue growth and 51% origination surge show AI lending momentum, but widening fair value losses and a 14% jump in diluted shares expose the cost of balance-sheet-heavy growth.
Upstart's 41% fee revenue growth and 51% origination dollar surge contrast with traditional consumer lenders facing tepid loan demand. However, the widening gap between GAAP net income ($36.6M) and fair value losses ($37.2M) highlights the balance-sheet risk embedded in AI-driven marketplace models that retain loan exposure.
Fair value adjustments on loans and beneficial interests continue to deteriorate, with net fair value losses widening 25% YoY to $37.2M in Q3. Rising interest expense (+46% YoY to $12.9M) and a ballooning diluted share count (+14% YoY) pressure per-share economics even as origination volumes grow.