# Upstart Holdings, Inc. (UPST) Informational only - not investment advice. CIK: 0001647639 SIC: 6199 Finance Services SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [SIC Major Group 61](/major-group/61/) > [SIC 6199 Finance Services](/industry/6199/) Latest 10-K filed: 2026-02-10 SEC page: https://www.sec.gov/edgar/browse/?CIK=1647639 Filing source: https://www.sec.gov/Archives/edgar/data/1647639/000164763926000027/upst-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1043857000 | USD | 2025 | 2026-02-10 | | Net income | 53601000 | USD | 2025 | 2026-02-10 | | Assets | 2974805000 | USD | 2025 | 2026-02-10 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001647639.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 164,189,000 | 233,416,000 | 848,589,000 | 842,444,000 | 513,562,000 | 636,528,000 | 1,043,857,000 | | Net income | -466,000 | 5,983,000 | 135,443,000 | -108,665,000 | -240,132,000 | -128,581,000 | 53,601,000 | | Operating income | -4,575,000 | 11,765,000 | 140,881,000 | -113,863,000 | -256,525,000 | -172,856,000 | 42,631,000 | | Diluted EPS | -0.03 | 0.00 | 1.43 | -1.31 | -2.87 | -1.44 | 0.45 | | Operating cash flow | 31,582,000 | 15,697,000 | 168,353,000 | -657,860,000 | -111,712,000 | 186,331,000 | -147,725,000 | | Capital expenditures | 4,004,000 | 1,355,000 | 8,427,000 | 8,825,000 | 1,527,000 | 837,000 | 347,000 | | Share buybacks | | | 0.00 | 177,883,000 | 0.00 | 0.00 | | | Assets | | 477,255,000 | 1,820,455,000 | 1,936,054,000 | 2,017,100,000 | 2,366,958,000 | 2,974,805,000 | | Liabilities | | 177,003,000 | 1,013,377,000 | 1,263,619,000 | 1,381,795,000 | 1,733,740,000 | 2,175,990,000 | | Stockholders' equity | -61,688,000 | 300,252,000 | 807,078,000 | 672,435,000 | 635,305,000 | 633,218,000 | 798,815,000 | | Cash and cash equivalents | | | | | 368,405,000 | 788,422,000 | 652,388,000 | | Free cash flow | 27,578,000 | 14,342,000 | 159,926,000 | -666,685,000 | -113,239,000 | 185,494,000 | -148,072,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | -0.28% | 2.56% | 15.96% | -12.90% | -46.76% | -20.20% | 5.13% | | Operating margin | -2.79% | 5.04% | 16.60% | -13.52% | -49.95% | -27.16% | 4.08% | | Return on equity | | 1.99% | 16.78% | -16.16% | -37.80% | -20.31% | 6.71% | | Return on assets | | 1.25% | 7.44% | -5.61% | -11.90% | -5.43% | 1.80% | | Liabilities / equity | | 0.59 | 1.26 | 1.88 | 2.18 | 2.74 | 2.72 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001647639.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | -0.36 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | -0.69 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -1.58 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 135,766,000 | -28,165,000 | -0.34 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 134,557,000 | -40,315,000 | -0.48 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 140,312,000 | -42,398,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 127,794,000 | -64,598,000 | -0.74 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 127,630,000 | -54,470,000 | -0.62 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 162,140,000 | -6,758,000 | -0.07 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 218,964,000 | -2,755,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 213,371,000 | -2,447,000 | -0.03 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 257,291,000 | 5,607,000 | 0.05 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 277,105,000 | 31,805,000 | 0.23 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 296,090,000 | 18,636,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 308,214,000 | -6,646,000 | -0.07 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1647639/000164763926000046/upst-20260331.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-05 Report date: 2026-03-31 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview Upstart is the leading artificial intelligence (“AI”) lending marketplace. We aim to radically reduce the cost and complexity of borrowing for all Americans by using our proprietary AI models to remake the entire lending process. Today, Upstart’s marketplace supports personal loans, including small dollar “relief” loans, auto loans, including retail, refinance, and auto secured personal loans, and home loans in the form of home equity lines of credit (“HELOCs”). Long-term, our vision is to become the always-on, everything-store for credit, where we can automatically approve borrowers at the right prices – instantly and effortlessly. Our platform applies AI to more accurately quantify the true risk of a loan, a capability we refer to as “risk separation.” This differentiated approach to underwriting has generally led to higher approvals and lower interest rates relative to traditional lending practices, with more predictable returns to our capital partners including banks and credit unions (collectively our “lending partners”) and institutional investors. With this as the foundation, we’ve added layers of automation, macroeconomic calibration, and personalization that can support increasing scale and greater business resilience over time. Beyond core underwriting, we apply our proprietary AI models to other areas of our business, such as income and identity verification, fraud detection, and identifying loan stacking behavior, among others. The result is an exceptional digital-first experience with significant levels of automation. For example, during the three months ended March 31, 2026, 91% of loans on our platform were fully automated, with no human intervention by Upstart. Consumer acquisition is another area where we apply our AI, making these activities increasingly efficient. Consumers primarily access Upstart-powered loans through Upstart.com and, for automotive retail in particular, through auto dealerships that use Upstart’s Auto Finance software. Our dynamic marketplace allows us to serve borrowers across the credit spectrum. Loans issued through our marketplace are purchased by our network of institutional investors, retained or purchased by our lending partners, or in certain instances, held on our balance sheet. Out of the total principal of loans transacted on our marketplace during the three months ended March 31, 2026, 55% were purchased by institutional investors, 33% were retained or purchased by our lending partners, and 12% were held on our balance sheet. Investors may also invest in securities collateralized by Upstart-powered loans through our pass-through and securitization programs. Institutional investors play an important role in our lending marketplace by providing capital for higher risk loans that may not be economically feasible for traditional banks and credit unions to hold. Today, more than 50% of the loan funding on our platform is through committed capital and other co-investment arrangements with institutional investors and lending partners, which provide valuable stability and resilience on the funding side of our platform. We retain certain loans on our balance sheet for research and development purposes (“R&D Loans”), including to test and evaluate our AI models for newer products, to fill gaps in investor demand, and to aid in price discovery. As of March 31, 2026, 62% of loans held on our balance sheet were for R&D purposes, primarily related to our auto refinance and auto retail loan products, small dollar loans and HELOCs. 58 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Credit Performance We consider credit performance of Upstart-powered loans to be one of the most important measures of the effectiveness of our AI models. However, credit performance is impacted by multiple factors, including factors that our models do not predict, such as macroeconomic conditions. We evaluate the credit performance of our loans by comparing the target returns expected at the time of origination to the returns received by our lending partners, institutional investors, or us. The target return, a critical component of our loan pricing, is calculated using estimated cash flows, which are developed based on a number of factors, including credit losses and prepayment rates. While target returns across our lending partners and institutional investors vary depending on their programs’ objectives and risk tolerance, overall performance is calculated based on the variance between the initially expected returns and the actual return on capital invested in Upstart-powered loans. An equal investment in all vintages of Upstart-powered personal loans (excluding small dollar loans) originated in the first quarter of 2024 through the fourth quarter of 2025 is currently expected to deliver annual returns in line with a blended target of approximately 11.3% after servicing fees. Looking at performance over a longer period, an equal investment in all vintages of Upstart-powered personal loans (excluding smaller dollar loans) originated in the first quarter of 2023 through the fourth quarter of 2025 is currently expected to deliver annual returns in line with a blended target of approximately 10.8% after servicing fees. At a more granular level, the quarterly vintages originated in the first quarter of 2023 through the first quarter of 2024 are currently forecasted to underperform relative to their target returns and quarterly vintages originated in the second quarter of 2024 or later are currently forecasted to deliver returns in line with target yields. This reversion in performance to target yields reflects a combination of factors including increased conservatism in underwriting, the relative stabilization of macroeconomic conditions, and improvements in our more recent models. Impact of Macroeconomic Environment In addition to impacting credit performance, the macroeconomic environment has a direct and indirect impact on our business financial condition, and results of operation. In an economic downturn, we believe consumer lending will generally contract. Lending partners and institutional investors will generally require higher rates of return, which in turn increases the interest rates offered to borrowers, leading to lower borrower demand. Macroeconomic factors can also cause fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors. We expect these dynamics would generally invert in an economic upswing. For example, loan funding provided by institutional investors started to become constrained in 2022, largely due to concerns about the macroeconomic environment. Rising interest rates also led to more expensive loan offers across borrower categories, which decreased borrower demand. In order to create greater stability for our business, we began securing committed capital and co-investment arrangements with institutional investors and other third parties that provide loan funding over longer durations. While we believe that the macroeconomic environment started to improve in 2024, disruption in financial markets could once again lower borrower demand or impair our lending partners and result in constrained funding, which would adversely impact our business, financial condition and operating results. To respond to macroeconomic changes and provide relevant and up-to-date information to our lending partners, we introduced a new metric, the Upstart Macro Index (“UMI”), in 2023. As of March 31, 2026, UMI remained elevated, measured at approximately 1.38, meaning that current macroeconomic conditions contributed an incremental risk of approximately 38% to the repayment performance of an Upstart-powered unsecured personal loan, compared to the baseline measurement of 1.0. 59 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Key Operating and Non-GAAP Financial Metrics We focus on several key operating and Non-GAAP financial metrics to measure the performance of our business and help determine strategic direction. The following presents our key operating and financial metrics: Three Months Ended March 31, 2025 2026 Transaction Volume, Dollars $ 2,133,608 $ 3,445,142 Transaction Volume, Number of Loans(1) 240,706 425,356 Conversion Rate(2) 17.5% 18.5% Percentage of Loans Fully Automated(3) 92% 91% Contribution Profit(4) $ 102,372 $ 137,274 Contribution Margin(4) 55% 50% Adjusted EBITDA(4) $ 42,577 $ 40,469 Adjusted EBITDA Margin(4) 20% 13% _______ (1)Transaction Volume, Number of Loans, is shown in ones for the periods presented. (2)Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Conversion Rate. Prior period figures have been recast to conform to the new definition and methodology. For additional information regarding this change, see “Key Operating and Non-GAAP Financial Metrics” in our Annual Report on Form 10-K for the year ended December 31, 2025. (3)Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Percentage of Loans Fully Automated. Prior periods have not been adjusted, as the impact was immaterial. For additional information regarding this change, see “Key Operating and Non-GAAP Financial Metrics” in our Annual Report on Form 10-K for the year ended December 31, 2025. (4)Represents a non-GAAP financial measure. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for further information. Transaction Volume We define Transaction Volume, Dollars as the total principal of loan originations (or committed amounts for HELOCs) facilitated on our marketplace during the periods presented. We define Transaction Volume, Number of Loans as the number of loan originations (or commitments issued for HELOCs) facilitated on our marketplace during the periods presented. We believe these metrics are good proxies for our overall scale and reach as a marketplace. Transaction Volume is driven by improvements in our AI models and technology, including our ability to streamline and automate the loan application and origination process. Transaction Volume can also be driven by several other factors, including borrower acceptance rates and their sensitivity to the interest rates offered through our platform. Transaction Volume is dependent on the availability of platform funding which is influenced by factors such as volatility in the capital markets and macroeconomic conditions. Transaction Volume, Dollars increased 61% in the three months ended March 31, 2026 compared to the same period of 2025 and Transaction Volume, Number of Loans increased 77% in the three months ended March 31, 2026 compared to the same [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview Upstart is the leading artificial intelligence (“AI”) lending marketplace. We aim to radically reduce the cost and complexity of borrowing for all Americans by using our proprietary AI models to remake the entire lending process. Today, Upstart’s marketplace supports personal loans, including small dollar “relief” loans, auto loans, including retail, refinance, and auto secured personal loans, and home loans in the form of home equity lines of credit (“HELOCs”). Long-term, our vision is to become the always-on, everything-store for credit, where we can automatically approve borrowers at the right prices – instantly and effortlessly. Our platform applies AI to more accurately quantify the true risk of a loan, a capability we refer to as “risk separation.” This differentiated approach to underwriting has generally led to higher approvals and lower interest rates relative to traditional lending practices, with more predictable returns to our capital partners including banks and credit unions (collectively our “lending partners”) and institutional investors. With this as the foundation, we’ve added layers of automation, macroeconomic calibration, and personalization that can support increasing scale and greater business resilience over time. Beyond core underwriting, we apply our proprietary AI models to other areas of our business, such as income and identity verification, fraud detection, and identifying loan stacking behavior among others. The result is an exceptional digital-first experience with significant levels of automation. For example, during the year ended December 31, 2025, 91% of loans on our platform were fully automated, with no human intervention by Upstart. Consumer acquisition is another area where we apply our AI, making these activities increasingly efficient. Consumers primarily access Upstart-powered loans through Upstart.com and, for automotive retail in particular, through auto dealerships that use Upstart’s Auto Finance software. Our dynamic marketplace allows us to serve borrowers across the credit spectrum. Loans issued through our marketplace are purchased by our network of institutional investors, retained or purchased by our lending partners, or in certain instances, held on our balance sheet. Out of the total principal of loans transacted on our marketplace during the year ended December 31, 2025, 64% were purchased by institutional investors, 26% were retained or purchased by our lending partners, and 10% were held on our balance sheet. Investors may also invest in securities collateralized by Upstart-powered loans through our pass-through and securitization programs. Institutional investors play an important role in our lending marketplace by providing capital for higher risk loans that may not be economically feasible for traditional banks and credit unions to hold. Today, more than 50% of the loan funding on our platform is through committed capital and other co-investment arrangements with institutional investors and lending partners, which provide valuable stability and resilience on the funding side of our platform. We retain certain loans on our balance sheet for research and development purposes (“R&D Loans”), including to test and evaluate our AI models for newer products, to fill gaps in investor demand, and to aid in price discovery. As of December 31, 2025, 66% of loans held on our balance sheet were for R&D purposes, primarily related to our auto refinance and auto retail loan products, small dollar loans and HELOCs. 56 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Credit Performance We consider credit performance of Upstart-powered loans to be one of the most important measures of the effectiveness of our AI models. However, credit performance is impacted by multiple factors, including factors that our models do not predict, such as macroeconomic conditions. We evaluate the credit performance of core personal loans by comparing the target returns expected at the time of origination to the returns received by our lending partners, institutional investors, or us. The target return, a critical component of our loan pricing, is calculated using estimated cash flows, which are developed based on a number of factors, including credit losses and prepayment rates. While target returns across our lending partners and institutional investors vary depending on their programs’ objectives and risk tolerance, overall performance is calculated based on the variance between the initially expected returns and the actual return on capital invested in Upstart-powered loans. An equal investment in all vintages of Upstart-powered core personal loans originated in the fourth quarter of 2023 through the third quarter of 2025 is currently expected to deliver annual returns in line with a blended target of approximately 11.3% after servicing fees. At a more granular level, all quarterly vintages of core personal loans originated in the fourth quarter of 2023 and the first quarter of 2024 are currently forecasted to underperform relative to their target returns. Even though our underwriting models have over time utilized more variables and data points about borrowers, which has improved model performance, they were not designed to predict the severe impact changing macroeconomic conditions, credit market volatility and interest rate fluctuations that occurred following the COVID-19 pandemic, all of which were (and still are) beyond our control. The forecasted underperformance for these vintages reflects the impact of a combination of factors that occurred during that period, including the elimination of government stimulus measures and the worsening of the macroeconomic environment, via rising inflation and the resulting sharply higher interest rates. The core personal loans originated in the second quarter of 2024 or later are currently forecasted to deliver returns in line with target yields. This reversion in performance reflects a combination of factors including increased conservatism in underwriting, the relative stabilization of macroeconomic conditions, and improvements in our more recent models. Impact of Macroeconomic Environment In addition to impacting credit performance, the macroeconomic environment has a direct and indirect impact on our business financial condition, and results of operation. In an economic downturn, we believe consumer lending will generally contract. Lending partners and institutional investors will generally require higher rates of return, which in turn increases the interest rates offered to borrowers, leading to lower borrower demand. Macroeconomic factors can also cause fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors. We expect these dynamics would generally invert in an economic upswing. For example, loan funding provided by institutional investors started to become constrained in 2022, largely due to concerns about the macroeconomic environment. Rising interest rates also led to more expensive loan offers across borrower categories, which decreased borrower demand. In order to create greater stability for our business, we began securing committed capital and co-investment arrangements with institutional investors and other third parties that provide loan funding over longer durations. While we believe that the macroeconomic environment started to improve in 2024, disruption in financial markets could once again lower borrower demand or impair our lending partners and result in constrained funding, which would adversely impact our business, financial condition and operating results. To respond to macroeconomic changes and provide relevant and up-to-date information to our lending partners, we introduced a new metric, the Upstart Macro Index (“UMI”), in 2023. As of December 31, 2025, UMI 57 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) remained elevated, measured at approximately 1.39, meaning that current macroeconomic conditions contributed an incremental risk of approximately 39% to the repayment performance of an Upstart-powered unsecured personal loan, compared to the baseline measurement of 1.0. Key Operating and Non-GAAP Financial Metrics We focus on several key operating and Non-GAAP financial metrics to measure the performance of our business and help determine strategic direction. The following presents our key operating and financial metrics: Year Ended December 31, 2023 2024 2025 Transaction Volume, Dollars $ 4,645,669 $ 5,930,029 $ 11,003,995 Transaction Volume, Number of Loans(1) 437,659 697,092 1,497,149 Conversion Rate(2) 9.8% 15.1% 19.4% Percentage of Loans Fully Automated(3) 87% 91% 91% Contribution Profit(4) $ 353,294 $ 381,533 $ 531,094 Contribution Margin(4) 63% 60% 56% Adjusted EBITDA(4) $ (17,217) $ 10,594 $ 230,486 Adjusted EBITDA Margin(4) (3)% 2% 22% _______ (1)Transaction Volume, Number of Loans, is shown in ones for the years presented. (2)Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Conversion Rate. Prior period figures have been recast to conform to the new definition and methodology. See discussion of “Conversion Rate” below for further information. (3)Beginning in the fourth quarter of 2025, we revised the definition and underlying calculation methodology of Percentage of Loans Fully Automated. Prior periods have not been adjusted, as the impact was immaterial. See discussion of “Percentage of Loans Fully Automated” below for further information. (4)Represents a non-GAAP financial measure. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for further information. Transaction Volume We define Transaction Volume, Dollars as the total principal of loan originations (or committed amounts for HELOCs) facilitated on our marketplace during the periods presented. We define Transaction Volume, Number of Loans as the number of loan originations (or commitments issued for HELOCs) facilitated on our marketplace during the periods presented. We believe these metrics are good proxies for our overall scale and reach as a marketplace. Transaction Volume is driven by improvements in our AI models and technology, including our ability to streamline and automate the loan application and origination process. Transaction Volume can also be driven by several other factors, including borrower acceptance rates and their sensitivity to the interest rates offered through our platform. Transaction Volume is dependent on the availability of platform funding which is influenced by factors such as volatility in the capital markets and macroeconomic conditions. Transaction Volume, Dollars increased 86% in the year ended December 31, 2025 compared to the prior year and Transaction Volume, Number of Loans increased 115% in the year ended December 31, 2025 compared to the prior year. These increases were primarily due to model improvements and product initiatives, which resulted in an increase in the number of qualified borrowers and more attractive loan offers. The increase in Transaction Volume, Number of Loans was higher than the increase in Transaction Volume, Dollars due to the decrease in 58 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) average loan size, primarily as underwriting model improvements drove higher approval rates in smaller dollar categories of loans. Conversion Rate We define Conversion Rate as the Transaction Volume, Number of Loans in a period divided by the total number of rate inquiries received that we estimate to be legitimate, which we record when a borrower actively requests a loan offer on our platform. We track this metric to understand the impact of improvements to the efficiency of our borrower funnel on our overall growth. Beginning in the fourth quarter of 2025, we made two adjustments to revise the definition and underlying calculation methodology of Conversion Rate to better align with how management evaluates the efficiency of our borrower funnel and to better support our multi-product business. First, under the new methodology, an application that does not qualify for an offer for one product but is automatically priced for a different product would count as one rate inquiry during that period rather than two rate inquiries under the old methodology. Second, multiple unfunded applications submitted by a single borrower for the same product across multiple quarters are now considered separate inquiries in each quarter under the new methodology, rather than being consolidated as one inquiry under the old methodology. These changes in aggregate resulted in a net decrease in historical Conversion Rates by 0 to 3 percentage points during 2023 and 2024. Prior period Conversion Rate metrics have been recast to conform to the revised definition and methodology to ensure comparability across periods. Historically, our Conversion Rate has benefited from improvements to our technology, which have made our evaluation of risk more accurate and our verification process more automated, or from the addition of capital partners that have made our offers more competitive. However, our Conversion Rate can be impacted by a variety of internal factors such as changes in the amount of platform and referral fees that we charge or changes in the rate of returns we target for our lending partners and institutional investors. External factors such as shifts in macroeconomic conditions, including interest rate changes, also impact our Conversion Rate. Our ability to continue to improve our Conversion Rate depends in part on our ability to continue to improve our AI models and Percentage of Loans Fully Automated and the mix of marketing channels in any given period. Our Conversion Rate increased to 19.4% in the year ended December 31, 2025 from 15.1% in the year ended December 31, 2024, primarily driven by underwriting model improvements and product and pricing initiatives, coupled with continued optimization in our acquisition channels. Percentage of Loans Fully Automated A driver of our Contribution Margin and operating efficiency is the Percentage of Loans Fully Automated, which is defined as the total number of loans in a given period originated end-to-end with no human involvement required by the Company divided by the Transaction Volume, Number of Loans in the same period. Under this definition, “originated end-to-end” means (i) from initial rate request to final funding for personal loans, including small dollar loans, and (ii) from initial rate request to loan approval for auto loans and HELOCs, due to certain jurisdictions’ local requirements and external dependencies that require human action prior to funding. Beginning in the fourth quarter of 2025, we revised the definition of Percentage of Loans Fully Automated to include HELOCs, which were not included under the prior definition. The impact of this change on metrics reported for prior periods was immaterial; accordingly, prior-period metrics have not been recast, and the change was applied prospectively. We have been successful in increasing the level of loan automation on the platform over the past few years while simultaneously holding fraud rates at very low levels. We believe our growth over the last several years has been driven in part by our ability to rapidly streamline and automate the loan application and origination process on our platform. As we expand our loan offerings, this percentage may fluctuate from period to period depending on the loan offering mix and other external factors. Our Percentage of Loans Fully Automated remained flat at 91% for the years ended December 31, 2024 and 2025. 59 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Contribution Profit and Contribution Margin We use Contribution Profit and Contribution Margin as part of our overall assessment of performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance. We believe Contribution Profit and Contribution Margin are useful to investors for year-to-year comparisons of our business and in evaluating and understanding our operating results and ability to scale. Contribution Profit and Contribution Margin are also useful to investors because our management uses Contribution Profit and Contribution Margin, in conjunction with financial measures prepared in accordance with GAAP, to evaluate our operating results and financial performance and the effectiveness of our strategies. Contribution Profit and Contribution Margin have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Contribution Profit and Contribution Margin are not GAAP financial measures of, nor do they imply, profitability. Even if our revenue exceeds variable expenses over time, we may not be able to achieve or maintain profitability, and the relationship of revenue to variable expenses is not necessarily indicative of future performance. Contribution Profit and Contribution Margin reflect all expenses that we consider to be variable, which may involve some judgment and discretion around what costs vary directly with loan volume. Other companies that present contribution profit and contribution margin may calculate it differently and, therefore, similarly titled measures presented by other companies may not be directly comparable to ours. To derive Contribution Profit, we subtract the sum of borrower acquisition costs as well as borrower verification and servicing costs from revenue from fees, net. To calculate Contribution Margin we divide Contribution Profit by revenue from fees, net. The following table provides a calculation of Contribution Profit and Contribution Margin: Year Ended December 31, 2023 2024 2025 Revenue from fees, net $ 560,431  $ 635,466  $ 950,011  Borrower acquisition costs(1) (90,517) (125,017) (256,237) Borrower verification and servicing costs(2) (116,620) (128,916) (162,680)    Total direct expenses (207,137) (253,933) (418,917)    Contribution Profit $ 353,294  $ 381,533  $ 531,094  Contribution Margin 63  % 60  % 56  % _______ (1)Borrower acquisition costs consist of our sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for our business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses. (2)Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of our customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income (loss) from operations to Contribution Profit. 60 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Adjusted EBITDA and Adjusted EBITDA Margin We believe that Adjusted EBITDA and Adjusted EBITDA Margin are useful for investors to use in comparing our financial performance with the performance of other companies for the following reasons: •Adjusted EBITDA and Adjusted EBITDA Margin are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation, and interest expense, that can vary substantially from company to company depending upon their financing and capital structures, and the method by which assets were acquired; and •Adjusted EBITDA and Adjusted EBITDA Margin eliminate the impact of certain items such as stock-based compensation expense and certain payroll tax expense, expense on convertible notes, gain on debt extinguishment, net gain on lease modification and reorganization expenses that may obscure trends in the underlying performance of our business; and •Adjusted EBITDA and Adjusted EBITDA Margin provide consistency and comparability with our past financial performance, and facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. We calculate Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense and certain payroll tax expenses, depreciation and amortization, expense on convertible notes, provision for income taxes, gain on debt extinguishment, net gain on lease modification and reorganization expenses. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. Adjusted EBITDA and Adjusted EBITDA Margin includes interest expense from corporate debt and warehouse credit facilities which is incurred in the course of earning corresponding interest income. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share Effective as of December 31, 2025, we discontinued reporting Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share as non-GAAP financial measures. These measures were last presented for the three and nine months ended September 30, 2025. These non-GAAP measures are no longer used by management to monitor the performance of our business and this change reflects our view that these are no longer useful measures for investors in evaluating our financial performance. Prior-period disclosures of these measures, as well as reconciliation of net income (loss) to Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share, are not included in this Annual Report on Form 10-K and will not be disclosed going forward. Components of Results of Operations Revenue from Fees, Net Platform and Referral Fees, Net We charge our lending partners platform fees in exchange for usage of our AI lending marketplace, which includes collection of loan application data, underwriting of credit risk, verification and fraud detection, and the delivery of electronic loan offers and associated documentation. We also charge referral fees to our lending partners in exchange for the referral of borrowers from Upstart.com. Referral fees are charged to lending partners on a per borrower basis upon origination of a loan. These fees are charged net of any fees the lending partner charges Upstart. Upstart pays these lending partners a one-time loan premium fee upon completion of the minimum holding periods. Upstart also pays certain lending partners monthly loan trailing fees based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. 61 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) The Company also recognizes fees in relation to contracts with auto dealers for the use of Upstart Auto Finance software, a cloud-based solution that facilitates dealership operations and enables them to provide consumers with access to Upstart-powered auto loans. Refer to “Note 2. Revenue” in Part II, Item 8 of this Annual Report on Form 10-K for more information. Servicing and Other Fees, Net Servicing fees are calculated as a percentage of outstanding principal and are charged monthly to any entities holding loans facilitated through our marketplace, to compensate us for activities we perform throughout the loan term, including collection, processing and reconciliations of payments received, institutional investor reporting and borrower customer support. Servicing fees are recorded net of any gains, losses or changes to fair value recognized in the underlying servicing rights and obligations, which are carried as assets and liabilities on our consolidated balance sheets. Upstart currently acts as loan servicer for substantially all outstanding loans facilitated through the Upstart marketplace. Borrower payment collections for loans that are more than 30 days past due or charged off are generally outsourced to third-party collection agencies. Upstart charges lending partners and institutional investors for collection agency fees related to their outstanding loan portfolio. Upstart also receives certain ancillary fees on a per transaction basis inclusive of late payment fees and ACH fail fees. Interest Income, Interest Expense, and Fair Value Adjustments, Net Interest income, interest expense, and fair value adjustments, net is comprised of interest income, interest expense and net changes in the fair value of financial instruments held on our consolidated balance sheets as part of our ongoing operating activities, excluding loan servicing assets and liabilities. Interest income, interest expense, and fair value adjustments, net also includes realized gain or loss on the sale of loans. Interest income, interest expense, and fair value adjustments, net can fluctuate based on the fair value of financial instruments held on our consolidated balance sheets. This amount has historically been a small percentage of our total revenue, and we do not manage our business with a focus on growing this component of revenue. Sales and Marketing Sales and marketing expenses primarily consist of costs incurred across various advertising channels, including expenses for partnerships with third parties providing borrower referrals, direct mail and digital advertising campaigns, as well as other expenses associated with building overall brand awareness and experiential marketing costs. Sales and marketing expenses also include payroll and other personnel-related costs, including stock-based compensation expense. These costs are recognized in the period incurred. We expect that our sales and marketing expenses will generally fluctuate as a percentage of our total revenue from period to period and may increase as we hire additional sales and marketing personnel, increase our marketing activities and build greater brand awareness. Customer Operations Customer operations expenses include payroll and other personnel-related expenses, including stock-based compensation expense, for personnel engaged in borrower onboarding, loan servicing, customer support and other operational teams. These costs also include systems, third-party services and tools we use as part of loan servicing, information verification, fraud detection and payment processing activities. These costs are recognized in the period incurred. We expect that our customer operations expenses will generally fluctuate as a percentage of our total revenue from period to period, and may increase in absolute dollars as we expand our portfolio. Engineering and Product Development Engineering and product development expenses primarily consist of payroll and other personnel-related expenses, including stock-based compensation expense, for the engineering and product development teams as well as the costs of systems and tools used by these teams. These costs are recognized in the period incurred. We expect 62 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) that our engineering and product development expenses will generally fluctuate as a percentage of our total revenue from period to period, and may increase in absolute dollars as we expand our engineering and product development team to continue to improve our AI models and develop new products and product enhancements. General, Administrative and Other General, administrative and other expenses consist primarily of payroll and other personnel-related expenses, including stock-based compensation expense, for legal and compliance, finance and accounting, human resources and facilities teams, as well as depreciation and amortization of property, equipment, software, and intangibles, professional services fees, facilities and travel expenses. These costs are recognized in the period incurred. We expect to increase the size of our general and administrative function to support the further growth of our business. As a result, we expect that our general, administrative and other expenses will increase in absolute dollars but may fluctuate as a percentage of our total revenue from period to period. Other Income, Net Other income, net primarily consists of dividend income earned by the Company on its cash, cash equivalents and restricted cash balances. Expense on Convertible Notes Expense on convertible notes is comprised of coupon interest expense and amortization of issuance costs on our 2026 Notes, 2029 Notes, 2030 Notes and 2032 Notes (collectively, the “Notes”). Gain on Debt Extinguishment Gain on debt extinguishment consists of the gain recognized from the repurchases of a portion of the outstanding 2026 Notes,. Refer to “Note 8. Borrowings” in Part II, Item 8 of this Annual Report on Form 10-K for further details on our Notes. 63 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Results of Operations The following table summarizes our historical consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2023 2024 2025 Revenue: Revenue from fees, net $ 560,431  $ 635,466  $ 950,011  Interest income, interest expense, and fair value adjustments, net: Interest income 168,996  186,360  204,230  Interest expense (34,894) (40,433) (31,664) Fair value and other adjustments, net (180,971) (144,865) (78,720) Total interest income and fair value adjustments, net (46,869) 1,062  93,846  Total revenue 513,562  636,528  1,043,857  Operating expenses(1): Sales and marketing 127,143  166,800  301,507  Customer operations 150,418  157,996  188,377  Engineering and product development 280,138  253,653  257,602  General, administrative, and other 212,388  230,935  253,740  Total operating expenses 770,087  809,384  1,001,226  Income (loss) from operations (256,525) (172,856) 42,631  Other income, net 21,206  18,793  24,324  Expense on convertible notes (4,706) (7,694) (19,872) Gain on debt extinguishment —  33,361  7,246  Net income (loss) before income taxes (240,025) (128,396) 54,329  Provision for income taxes 107  185  728  Net income (loss) $ (240,132) $ (128,581) $ 53,601  ________ (1)Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2024 2025 Sales and marketing $ 8,166  $ 11,705  $ 12,679  Customer operations 10,683 7,038 7,200 Engineering and product development 110,381 70,786 65,691 General, administrative, and other 45,809 43,871 46,380 Total stock-based compensation $ 175,039  $ 133,400  $ 131,950  Revenue Revenue from Fees, Net The following table sets forth our revenue from fees, net in the years presented: 64 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Year Ended December 31, Change 2024 2025 $ % Platform and referral fees, net $ 502,411  $ 792,979  $ 290,568  58  % Servicing and other fees, net 133,055  157,032  23,977 18  % Total revenue from fees, net $ 635,466  $ 950,011  $ 314,545  49  % Revenue from fees, net increased $314.5 million, or 49%, in the year ended December 31, 2025, compared to the prior year, due to a $290.6 million increase in revenue from platform and referral fees, net and a $24.0 million increase in servicing and other fees, net. The increase of the platform and referral fees, net was primarily driven by a 86% increase in the Transaction Volume, Dollars from $5,930 million in the year ended December 31, 2024 to $11,004 million in the year ended December 31, 2025, partially offset by lower fee rates, including those related to prime borrowers. The increase in servicing fees was primarily due to an increase in net gain on servicing rights upon loan sales as well as the increase in outstanding principal of serviced loans. Interest Income, Interest Expense, and Fair Value Adjustments, Net Year Ended December 31, Change 2024 2025 $ % Operating entities(1): Interest income $ 157,392  $ 187,637  $ 30,245  19  % Interest expense (30,835) (25,351) 5,484  18  % Fair value adjustments, net (115,469) (67,606) 47,863  41  % Consolidated securitization entities: Interest income $ 28,968  $ 16,593  $ (12,375) (43) % Interest expense (9,598) (6,313) 3,285  34  % Fair value adjustments, net (29,396) (11,114) 18,282  62  % Total Company: Interest income $ 186,360  $ 204,230  $ 17,870  10  % Interest expense (40,433) (31,664) 8,769  22  % Fair value adjustments, net (144,865) (78,720) 66,145  46  % Total interest income, interest expense, and fair value adjustments, net $ 1,062  $ 93,846  $ 92,784  8,737  % _________ (1)Consists of balances recognized by entities participating in ongoing operating activities of the Company, excluding entities associated with the UPST 2023-2 consolidated securitization. Interest income, interest expense, and fair value adjustments, net increased $92.8 million, or 8,737%, in the year ended December 31, 2025, compared to the prior year. The increase was driven by a $66.1 million decrease in unfavorable fair value adjustments, net, a $17.9 million increase in interest income, and an $8.8 million decrease in interest expense. The decrease in unfavorable fair value adjustments, net is primarily attributable to a $34.3 million increase in fair value gain on beneficial interests, a $28.1 million decrease in unrealized losses and loan charge-offs, and a $3.7 million decrease in realized loss on loan sales. The increase in interest income was primarily driven by a $30.2 million increase in interest income recognized by operating entities, partially offset by a $12.4 million decrease in interest income recognized by consolidated securitization entities. Such increase and decrease of interest income is consistent with the increase and decrease of outstanding principal balance of loans held by operating entities and consolidated securitization, respectively, during the period. In addition, interest income by operating entities further increased due to loan premium amortization and an increase in the outstanding principal balance of the line of credit. The decrease in interest expense resulted from the decrease in average borrowings during the 65 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) period, including a $3.3 million decrease in interest expense recognized by consolidated securitization entities due to lower payable to securitization note holders during the period. Operating Expenses Sales and Marketing Year Ended December 31, Change 2024 2025 $ % Sales and marketing $ 166,800  $ 301,507  $ 134,707  81  % % of revenue 26  % 29  % Sales and marketing expenses increased by $134.7 million, or 81%, in the year ended December 31, 2025 compared to the prior year. The increase was primarily due to a $131.2 million increase in advertising and borrower acquisition costs, a $2.2 million increase in marketing operation expense, and a $1.3 million increase in payroll and other personnel related expenses. As a percentage of total revenue, sales and marketing expenses increased from 26% to 29%. Customer Operations Year Ended December 31, Change 2024 2025 $ % Customer operations $ 157,996  $ 188,377  $ 30,381  19  % % of revenue 25  % 18  % Customer operations expenses increased by $30.4 million, or 19%, in the year ended December 31, 2025, compared to the prior year. The increase was primarily due to a $24.1 million increase in information verification and systems expenses and a $7.2 million increase in servicing expenses, partially offset by a $0.9 million decrease in payroll and other personnel-related expenses. As a percentage of total revenue, customer operations expenses decreased from 25% to 18%. Engineering and Product Development  Year Ended December 31, Change 2024 2025 $ % Engineering and product development $ 253,653  $ 257,602  $ 3,949  2  % % of revenue 40  % 25  % Engineering and product development expenses increased by $3.9 million, or 2%, for the year ended December 31, 2025, compared to the prior year. The increase was primarily due to a $14.1 million increase in other engineering operating expenses driven by data and infrastructure costs, partially offset by a $10.1 million decrease in payroll and other personnel-related expenses from capitalization of internal-use software development costs. As a percentage of total revenue, engineering and product development expenses decreased from 40% to 25%. 66 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) General, Administrative, and Other  Year Ended December 31, Change 2024 2025 $ % General, administrative, and other $ 230,935  $ 253,740  $ 22,805  10  % % of revenue 36  % 24  % General, administrative, and other expenses increased by $22.8 million, or 10%, for the year ended December 31, 2025, compared to the prior year. The increase was primarily due to a $15.0 million increase in payroll and personnel-related costs, a $6.2 million increase in office and administrative operation and other facility related costs, a $4.3 million increase in amortization and depreciation expenses, and a $4.2 million increase in professional fees. The increase was partially offset by a $7.0 million decrease in legal and compliance expenses. As a percentage of total revenue, general, administrative, and other expenses decreased from 36% to 24%. Other Income, Net Year Ended December 31, Change 2024 2025 $ % Other income, net $ 18,793  $ 24,324  $ 5,531  29% Other income, net increased by $5.5 million, or 29%, in the year ended December 31, 2025 compared to the prior year. The increase was primarily due to a $5.1 million increase in dividend income earned on higher eligible cash, cash equivalents and restricted cash balances. Expense on Convertible Notes  Year Ended December 31, Change 2024 2025 $ % Expense on convertible notes $ 7,694  $ 19,872  $ 12,178  158  % In the year ended December 31, 2025, expense on convertible notes increased by $12.2 million, or 158%, compared to the prior year. The increase was primarily due to higher outstanding convertible note balances resulting from the issuance of 2029 Notes and 2030 Notes during the latter half of 2024 as well as higher amortization of issuance costs from the issuance of 2029 Notes, 2030 Notes, and 2032 Notes. Gain on Debt Extinguishment Year Ended December 31, Change 2024 2025 $ % Gain on debt extinguishment $ 33,361  $ 7,246  $ (26,115) (78) % In the year ended December 31, 2025, gain on debt extinguishment decreased by $26.1 million, or 78%, compared to the prior year due to a smaller amount of the 2026 Notes repurchased and at a higher price relative to the prior year. During the year ended December 31, 2024 and 2025, the Company used approximately $325.3 million and $224.2 million to repurchase $362.1 million and $232.6 million in aggregate principal amount outstanding of the 2026 Notes, respectively. 67 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Reconciliation of Non-GAAP Financial Measures To supplement our consolidated financial statements prepared and presented in accordance with GAAP, we use the non-GAAP financial measures of Contribution Profit, Contribution Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to provide investors with additional information about our financial performance and to enhance the overall understanding of our past performance and future prospects. We are presenting these non-GAAP financial measures because we believe they provide an additional tool for investors to use in comparing our core financial performance over multiple years with the performance of other companies. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with GAAP. In particular, some of the limitations with respect to Adjusted EBITDA and Adjusted Margin are as follows: •Although depreciation expense is a non-cash charge, the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; •Adjusted EBITDA and Adjusted EBITDA Margin exclude stock-based compensation expense and certain employer payroll taxes on employee stock transactions. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy. The amount of employer payroll tax-related expense on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business; •Adjusted EBITDA and Adjusted EBITDA Margin do not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us; and •The expenses and other items that we exclude in our calculation of Adjusted EBITDA and Adjusted EBITDA Margin may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA and adjusted EBITDA margin when they report their operating results. To address these limitations, we provide a reconciliation of Contribution Profit, Contribution Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to income (loss) from operations and net income (loss). We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Contribution Profit, Contribution Margin, Adjusted EBITDA, and Adjusted EBITDA Margin in conjunction with their respective related GAAP financial measures. Contribution Profit and Contribution Margin The following table presents a reconciliation of income (loss) from operations to Contribution Profit and Contribution Margin. We define Operating Margin as our income (loss) from operations divided by revenue from fees, net. 68 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Year Ended December 31, 2023 2024 2025 Revenue from fees, net $ 560,431  $ 635,466  $ 950,011  Income (loss) from operations (256,525) (172,856) 42,631  Operating Margin (46) % (27) % 4  % Sales and marketing, net of borrower acquisition costs(1) $ 36,626  $ 41,783  $ 45,270  Customer operations, net of borrower verification and servicing costs(2) 33,798  29,080  25,697  Engineering and product development 280,138  253,653  257,602  General, administrative, and other 212,388  230,935  253,740  Interest income, interest expense, and fair value adjustments, net 46,869  (1,062) (93,846) Contribution Profit $ 353,294  $ 381,533  $ 531,094  Contribution Margin 63  % 60  % 56  % _________ (1)Borrower acquisition costs were $90.5 million, $125.0 million, and $256.2 million for the years ended December 31, 2023, 2024 and 2025, respectively. Borrower acquisition costs consist of our sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for our business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses. (2)Borrower verification and servicing costs were $116.6 million, $128.9 million, and $162.7 million for the years ended December 31, 2023, 2024 and 2025, respectively. Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of our customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses. Adjusted EBITDA and Adjusted EBITDA Margin The following table provides a reconciliation of net income (loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin. We define Net Income (Loss) Margin as net income (loss) divided by total revenue. Year Ended December 31, 2023 2024 2025 Total revenue $ 513,562  $ 636,528  $ 1,043,857  Net income (loss) (240,132) (128,581) 53,601  Net Income (Loss) Margin (47) % (20) % 5  % Adjusted to exclude the following: Stock-based compensation and certain payroll tax expenses(1) $ 178,400  $ 139,726  $ 138,696  Depreciation and amortization 24,903  20,549  24,835  Reorganization expenses 15,536  4,382  —  Expense on convertible notes 4,706  7,694  19,872  Gain on debt extinguishment —  (33,361) (7,246) Net gain on lease modification (737) —  —  Provision for income taxes 107  185  728  Adjusted EBITDA $ (17,217) $ 10,594  $ 230,486  Adjusted EBITDA Margin (3) % 2  % 22  % _________ (1)Payroll tax expenses include the employer payroll tax-related expense on employee stock transactions, as the amount is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business. 69 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Liquidity and Capital Resources Sources and Uses of Cash and Cash Equivalents As of December 31, 2025, our primary source of liquidity was cash and cash equivalents of $652.4 million. Changes in the balance of cash and cash equivalents are generally a result of working capital fluctuations and the timing of purchases and sales of loans facilitated through our marketplace. To finance purchases of certain loans facilitated through our lending marketplace, we rely on our warehouse credit facilities through special-purpose trusts and corporate cash. We entered into an “at the market” offering program pursuant to which we may offer and sell, from time to time, shares of our common stock with an aggregate offering price of up to $500.0 million, as described in the prospectus supplement dated February 14, 2025 filed with the U.S. Securities and Exchange Commission. As of December 31, 2025, no shares were issued under the program. Our convertible senior notes have an aggregate principal balance of $1,687.8 million and bear interest at a rate of 0.25% per year in the case of the 2026 Notes, 2.00% per year in the case of the 2029 Notes, and 1.00% per year in the case of the 2030 Notes, in each case payable semiannually. The 2032 Notes do not bear regular interest. The Notes mature between 2026 to 2032, unless earlier converted, redeemed, or repurchased in accordance with their terms. The 2026 Notes have a principal balance of $66.5 million and are current and due August 2026. Refer to “Note 8. Borrowings” in Part II, Item 8 of this Annual Report on Form 10-K for further details on our Notes. Our warehouse credit facilities, which mature between August 2027 and June 2028, allow us to borrow up to an aggregate of $325.0 million to purchase unsecured personal loans, $100.0 million to purchase small dollar loans, and up to $150.0 million to purchase auto loans. Our risk retention financing facility, which allows us to borrow up to $100.0 million, has a maturity which aligns with the stated maturities of the underlying securitization notes receivable pledged as collateral, which range from 2026 to 2035. As of December 31, 2025, we have drawn an aggregate of $97.3 million on our warehouse credit facilities and $75.6 million on our risk retention financing facility. Refer to “Note 8. Borrowings” in Part II, Item 8 of this Annual Report on Form 10-K for further details on our borrowings. We lease office facilities under operating lease agreements which expire between 2026 and 2029. Our cash requirements related to these lease agreements are $23.6 million, of which $10.6 million is expected to be paid within the next 12 months. Our cash requirements related to leases entered into that have not yet commenced is $66.2 million, none of which is expected to be paid within the next 12 months. Refer to “Note 10. Leases” in Part II, Item 8 of this Annual Report on Form 10-K for further details on our operating lease obligations. We have committed to purchase loans from certain lending partners at the conclusion of the required holding period, which is generally equal to three business days. As of December 31, 2025, the total loan purchase commitment was $116.9 million. The Company also has commitments to fund future advances on HELOCs. As of December 31, 2025, these commitments were $18.0 million, however since we can limit these commitments under certain conditions or these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. See “Note 11. Commitments and Contingencies” in Part II, Item 8 of this Annual Report on Form 10-K for further details on our commitments. In connection with our committed capital and other co-investment arrangements, we are obligated to put a certain amount of our assets at risk in relation to the credit performance of the underlying loans. The risk in these arrangements is subject to a dollar cap, which represents the Company’s maximum exposure to losses in a particular arrangement under severe, hypothetical circumstances, for which the Company believes the possibility is remote. As of December 31, 2025, the Company’s aggregate maximum exposure to losses was $931.8 million. Refer to “Note 4. Beneficial Interests” in Part II, Item 8 of this Annual Report on Form 10-K for further details. Our cash requirements 70 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) for the next 12 months related to investments in these existing arrangements is estimated to be up to $123.3 million from cash and cash equivalents and up to $15.1 million from restricted cash. While we believe that our cash and cash equivalents on hand will be sufficient to meet our liquidity needs for at least the next 12 months, our future capital requirements will depend on multiple factors, including our revenue growth, working capital requirements, volume of loan purchases for product development purposes or during market downturns, and our capital expenditures. We may decide to raise additional capital through the sale of equity, equity-linked or debt securities or other debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt or equity financing that we raise may contain terms that are not favorable to us or our stockholders. Further, if we are unable to raise additional capital when our cash and cash equivalents balances and cash generated by operations are insufficient to satisfy liquidity needs, our results of operations and financial condition would be materially and adversely impacted. Cash Flows The following table summarizes our cash flows during the years indicated: Year Ended December 31, 2024 2025 Net cash provided by (used in) operating activities $ 186,331  $ (147,725) Net cash used in investing activities (237,726) (177,171) Net cash provided by financing activities 559,871  405,645  Change in cash, cash equivalents and restricted cash $ 508,476  $ 80,749  Net Cash from Operating Activities Our main sources of cash provided by operating activities is revenue from fees earned under contracts with lending partners and institutional investors and interest income we receive for loans held on our balance sheet. Our main uses of cash in our operating activities include payments to marketing partners, vendor payments, payroll and other personnel-related expenses, payments for facilities, and other general business expenditures. Net cash used in operating activities was $147.7 million for the year ended December 31, 2025, which consisted of $162.8 million change in net changes in operating assets and liabilities, net income of $53.6 million, and adjustments for non-cash items of $38.5 million. The decrease in non-cash adjustments was primarily related to $113.7 million of changes in fair value of loans, $49.1 million loan premium amortization from the Company’s small dollar loan portfolio, and $7.2 million gain related to the partial extinguishment of the 2026 Notes, partially offset by $132.0 million stock-based compensation expense. The decrease in net changes in operating assets and liabilities was primarily related to $393.4 million of net payments from purchase and sale of loans held-for-sale, $21.6 million of settlements of beneficial interest liabilities (derivatives), and $10.8 million of changes in other assets, partially offset by $187.7 million in principal payments received for loans held-for-sale, $39.6 million decrease in accrued expenses and other liabilities, and $37.9 million in principal payments received for loans held in consolidated securitization. Net Cash from Investing Activities Net cash used in investing activities was $177.2 million for the year ended December 31, 2025 as a result of $637.3 million of net payments from purchase and sale of loans held-for-investment, partially offset by $320.4 million of principal payments received for loans held-for-investment and $142.9 million of proceeds from beneficial interest assets (hybrid instruments). 71 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Net Cash from Financing Activities Net cash provided by financing activities was $405.6 million for the year ended December 31, 2025 primarily due to $395.8 million proceeds received from the issuance of the 2032 Notes, net of debt issuance costs, purchase of capped calls, and partial repurchase of the 2026 Notes. Composition of Balance Sheet Loan Portfolio As of December 31, 2025, we held $984.6 million of loans on our consolidated balance sheet. $647.2 million of these loans were originated for research and development purposes, primarily in support of our auto lending products, HELOCs, and expansion of our unsecured personal loan product to new categories of borrowers. We also held $283.6 million of core personal loans, the majority of which would otherwise be purchased by institutional investors, and $53.8 million of such loans held by the consolidated securitization. We will continue to utilize our capital to support research and development activities and, at times, as a funding source for core personal loans during periods of marketplace funding constraints. The extent and timing of utilizing our capital as a funding source for loans will largely depend on the availability of capital in our marketplace relative to the demand from qualified borrowers and our business priorities. We plan to sell loans held on our balance sheet to lending partners and institutional investors over time in the form of secondary sales or securitizations and pass through issuances. Off-Balance Sheet Arrangements In the ordinary course of business, we engage in activities that are not reflected on our consolidated balance sheets, generally referred to as off-balance sheet arrangements. These activities involve transactions with unconsolidated VIEs, including sale of whole loans, committed capital and other co-investment arrangements, and securitization transactions, which we contractually service. We use these transactions to provide a source of liquidity to finance our business and to diversify our institutional investor base. If we are the retaining sponsor of a securitization transaction, we are required by law to retain at least 5% of the credit risk of the securities issued in these securitizations. We provide additional information regarding transactions with unconsolidated VIEs in “Note 3. Variable Interest Entities” in Part II, Item 8 of this Annual Report on Form 10-K. Critical Accounting Policies and Estimates The preparation of our consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our significant accounting policies are described in “Note 1. Description of Business and Significant Accounting Policies” in Part II, Item 8 of this Annual Report on Form 10-K. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determination requires the selection and use of valuation techniques and inputs subject to judgments and estimates that can significantly affect the amounts reported in the financial statements. The Company considers determination of fair value of loans, payable to securitization note holders, and beneficial interests as critical accounting policies. We use a discounted cash flow model to estimate the fair value of these financial instruments based on the present value of estimated future cash flows. The model uses observable and unobservable inputs and reflects our best estimates of the assumptions a market participant would use to calculate fair value. Fair value of loans and payable to securitization note holders is based on inputs, such as 72 Table of Contents Upstart Holdings, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) discount rates, credit risk rates, and expected prepayment rates. These inputs are based on historical performance of loans facilitated through our platform, as well as the consideration of market participant requirements and use of observable market data for notes payable held in consolidated securitization. Fair value of beneficial interests, which represent the Company’s right to receive cash payments or an obligation to make cash payments as part of its committed capital and other co-investment arrangements with third parties, is based on discount rates, credit risk rate spreads, and prepayment rate spreads. Credit risk rate spreads and prepayment rate spreads are the measurement of estimated credit performance and principal prepayments, respectively, of the underlying loan portfolios as of the reporting date against set expectations. For further information on fair value measurement refer to “Note 5. Fair Value Measurement” in Part II, Item 8 of this Annual Report on Form 10-K.