Upstart prices $600 million convertible notes offering

SAN MATEO, Calif. - Upstart Holdings, Inc. (NASDAQ:UPST), a fintech company that has demonstrated strong revenue growth of 53.62% over the last twelve months, announced on Monday the pricing of $600 million in 0% Convertible Senior Notes due 2032 in a private offering to qualified institutional buyers. The offering was increased from the previously announced $500 million, and includes an option for initial purchasers to buy an additional $90 million in notes within a 13-day period. According to InvestingPro data, the company maintains a healthy current ratio of 15.74, indicating strong ability to meet short-term obligations.

The notes will not bear regular interest and will mature on February 15, 2032. They will be convertible at an initial rate of 12.1215 shares of Upstart’s common stock per $1,000 principal amount, equivalent to a conversion price of approximately $82.50 per share, representing a 30% premium to Monday’s closing price of $63.46. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its Fair Value, despite showing an impressive 85.66% return over the past year.

Upstart expects net proceeds of approximately $587.3 million from the offering, or $675.5 million if the additional purchase option is fully exercised. The company plans to use $48 million to pay for capped call transactions, which are designed to reduce potential dilution to common stock upon conversion of the notes.

Additionally, Upstart intends to use approximately $224.4 million to repurchase about $232.6 million of its outstanding 0.25% Convertible Senior Notes due 2026 in privately negotiated transactions. The remainder will be used for general corporate purposes, including potential future repurchases or retirement of existing debt.

The settlement of the notes is expected to occur on August 14, subject to customary closing conditions. The notes were offered only to qualified institutional buyers and have not been registered under the Securities Act, limiting their resale unless registered or exempted from registration requirements.

This information is based on a press release statement from Upstart Holdings. For deeper insights into Upstart’s financial health, valuation metrics, and expert analysis, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, along with 12 additional ProTips and extensive financial metrics.

In other recent news, Upstart Holdings Inc. reported a strong second quarter for 2025, surpassing earnings expectations and achieving its first profitable quarter since 2022. The company’s earnings per share (EPS) were $0.36, significantly above the projected $0.24, while revenue reached $257 million, exceeding forecasts by 14%. Following these results, Needham raised its price target for Upstart to $82, up from $70, and maintained a Buy rating, citing the company’s GAAP profitability as a key factor. In addition to its financial performance, Upstart announced plans to offer $500 million in Convertible Senior Notes due 2032 in a private offering. The company also plans to grant initial purchasers an option to buy up to an additional $75 million in notes. These notes will be senior, unsecured obligations with semi-annual interest payments, set to mature on February 15, 2032. These developments highlight Upstart’s strategic financial maneuvers and positive market reception.

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