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Investing.com -- Upstart Holdings Inc . (NASDAQ:UPST) reported a significant earnings miss for the second quarter despite strong revenue growth, sending shares tumbling 13.8% as investors focused on the company’s profitability challenges.
The AI-powered lending marketplace posted a loss of -$0.17 per share for the quarter ended June 30, falling well short of analyst expectations for earnings of $0.24 per share. However, revenue surged to $257 million, exceeding the consensus estimate of $225.43 million and representing a 102% increase YoY.
Upstart’s transaction volume showed remarkable growth with 372,599 loans originated, up 159% YoY, while total originations exceeded $2.8 billion, representing a 154% increase from the same period last year.
"A year ago, you saw the first signs that Upstart was returning to growth mode - and today you can see it in full bloom," said Dave Girouard, Co-founder and CEO of Upstart. "In addition to achieving triple-digit revenue growth, we reached GAAP profitability a quarter sooner than expected and our newer businesses actually accelerated off their amazing growth in the first quarter."
The company provided an optimistic outlook, forecasting third-quarter revenue of approximately $280 million, above the consensus estimate of $268.7 million. For the full fiscal year 2025, Upstart expects revenue of approximately $1.055 billion, surpassing analyst projections of $1.01 billion.
Despite the revenue beat and positive guidance, the significant earnings miss appeared to weigh heavily on investor sentiment. The company did report GAAP net income of $5.6 million for the quarter, a substantial improvement from a loss of -$54.5 million in the second quarter of 2024.
Upstart’s contribution profit reached $141 million, up 85% YoY, while adjusted EBITDA improved to $53.1 million from -$9.3 million in the prior-year period.
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