Upstart Holdings Q3 Earnings: Robust Growth Amid Caution

Upstart Holdings, Inc. ((UPST)) has held its Q3 earnings call. Read on for the main highlights of the call.

Upstart Holdings, Inc.’s recent Q3 earnings call painted a picture of robust financial health and strategic growth, tempered by cautious adjustments in response to macroeconomic conditions. The company demonstrated strong financial performance and significant growth in transaction volume, alongside progress in new product segments. However, conservative model adjustments led to reduced conversion rates and a slight shortfall in transaction revenue expectations.

Strong Revenue and Profit Growth

Upstart reported an impressive 71% year-on-year revenue growth, reaching $277 million for Q3 2025. The company’s GAAP net income grew by a factor of six over the prior quarter, with GAAP earnings per share at $0.23, underscoring a solid financial footing.

Surge in Transaction Volume and Applications

The company experienced an 80% year-on-year increase in transaction volume, with over 2 million applications submitted in Q3, marking a 30% increase from Q2. This quarter also recorded the highest application levels in more than three years, reflecting strong demand for Upstart’s offerings.

Growth in New Product Segments

Upstart’s newer products, including auto, home, and small-dollar loans, accounted for nearly 12% of originations and 22% of new borrowers in Q3. The transaction volume for these segments grew by approximately 300% year-on-year, showcasing the company’s successful expansion into new areas.

Expansion in Auto Retail Business

The auto retail business saw significant growth, more than doubling the number of live lending rooftops in Q3. Transaction volume in this segment grew over 70% sequentially, highlighting Upstart’s strategic focus on expanding its auto retail footprint.

Strong Position in Funding and Partnerships

Upstart strengthened its position by adding seven new bank and credit union partners and reaching a new all-time high in monthly available funding. The company also issued an oversubscribed securitization in September, demonstrating strong investor confidence.

Reduction in Conversion Rates

The approval rate on Upstart’s platform decreased from 23.9% in Q2 to 20.6% in Q3. This reduction was attributed to conservative adjustments in response to macroeconomic signals, impacting transaction revenue.

Impact of Model Conservatism

Upstart’s model exhibited conservatism due to macroeconomic signals, resulting in a transaction revenue that was marginally short of expectations. This cautious approach reflects the company’s strategy to navigate uncertain economic conditions.

Challenges in the Auto Segment

Despite growth in the auto segment, Upstart faced challenges related to broader market noise and fraud in the auto finance space. These issues could potentially extend timelines for partner deals, posing a challenge to the company’s expansion efforts.

Forward-Looking Guidance

Looking ahead, Upstart shared optimistic guidance for Q4, expecting total revenues of approximately $288 million. The company aims to leverage its AI capabilities to navigate the evolving macroeconomic landscape, setting the stage for a promising 2026. This forward-looking strategy underscores Upstart’s commitment to sustaining growth and innovation.

In summary, Upstart Holdings, Inc.’s Q3 earnings call highlighted a strong financial performance with significant growth in transaction volume and new product segments. While conservative model adjustments and macroeconomic caution led to reduced conversion rates, the company’s strategic initiatives and forward-looking guidance suggest a positive outlook for the future.