Upstart Holdings, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, Upstart generated total revenue of $162.1 million, a 20% increase from $134.6 million in Q3 2023. Revenue from fees, net rose to $167.6 million, up 14% from $146.8 million in the same quarter last year. For the nine months ended September 30, 2024, total revenue reached $417.6 million, compared to $373.3 million for the same period in 2023, marking an increase of 12%. The growth in revenue was attributed to improved transaction volume, which increased by 30% in Q3 2024 compared to Q3 2023, and a 13% increase for the nine-month period.

Despite the revenue growth, Upstart reported a net loss of $6.8 million for Q3 2024, significantly reduced from a net loss of $40.3 million in Q3 2023. For the nine months ended September 30, 2024, the net loss was $125.8 million, down from $197.7 million in the prior year. The improvement in net loss was accompanied by a decrease in the loss from operations, which was $45.2 million in Q3 2024 compared to $43.8 million in Q3 2023, and $168.1 million for the nine months ended September 30, 2024, compared to $209.0 million in the same period of 2023.

Upstart's total operating expenses for Q3 2024 were $207.3 million, up from $178.4 million in Q3 2023, while for the nine months, expenses slightly increased to $585.7 million from $582.3 million. The company also reported a worsening accumulated deficit of $(408.4 million) as of September 30, 2024, compared to $(282.6 million) at the end of 2023.

Strategically, Upstart has faced challenges due to macroeconomic conditions, including rising interest rates and increased borrower defaults, which have constrained loan funding from institutional investors. The company has implemented workforce reductions, cutting approximately 10% of its staff during the nine months ended September 30, 2024, incurring $3.8 million in related severance costs. Additionally, Upstart has focused on enhancing its AI models and expanding its product offerings, including auto loans and home equity lines of credit.

As of September 30, 2024, Upstart held $656.1 million in loans on its balance sheet, a decrease from $1.2 billion at the end of 2023. The company has also secured various capital arrangements to support loan funding, with a maximum exposure to losses under committed capital and co-investment arrangements of approximately $357.9 million.

Overall, Upstart's performance reflects a complex interplay of revenue growth, ongoing losses, strategic adjustments, and external economic pressures.