**Bullish Points:**
1. **Net Profit**: The company reported a net income of $53.6 million for the fiscal year ended December 31, 2025, compared to a net loss of $128.6 million in 2024, indicating a significant turnaround.
2. **Revenue Growth**: Total revenue increased by 64% to $1.04 billion in 2025 from $636.5 million in 2024, driven by a 49% increase in revenue from fees and improvements in interest income and fair value adjustments.
3. **Transaction Volume**: Transaction volume in dollars increased by 86% to $11 billion, and the number of loans rose by 115% to 1.5 million, reflecting higher borrower demand and improved underwriting models.
4. **Adjusted EBITDA**: Adjusted EBITDA improved significantly to $230.5 million in 2025 from $10.6 million in 2024, with an Adjusted EBITDA Margin of 22%, driven by revenue growth and operational efficiencies.
5. **Fair Value Adjustments**: Positive fair value adjustments on loans and beneficial interests contributed to revenue, with a $66.1 million reduction in unfavorable adjustments compared to 2024.
6. **Stock-Based Compensation**: Stock-based compensation expense decreased slightly to $132.0 million in 2025 from $133.4 million in 2024, indicating controlled employee stock option grants.
**Bearish Points:**
1. **Operating Costs**: Operating expenses increased by 24% to $1 billion in 2025, with significant increases in sales and marketing expenses (up 81%) and customer operations expenses (up 19%), reflecting higher borrower acquisition and servicing costs.
2. **Contribution Margin**: Contribution Margin decreased to 56% in 2025 from 60% in 2024, indicating higher borrower acquisition and servicing costs relative to revenue growth.
3. **Macroeconomic Impact**: The Upstart Macro Index (UMI) remained elevated at 1.39, indicating a 39% incremental risk to loan repayment performance due to macroeconomic conditions.
4. **Debt and Liquidity**: Total borrowings increased to $1.83 billion as of December 31, 2025, and the company issued $395.8 million in 2032 Notes while repurchasing $224.2 million of 2026 Notes.
5. **Key Risks**: The company remains exposed to macroeconomic risks, including interest rate fluctuations and credit risk, which could impact loan performance and funding availability.
**Summary:**
Upstart Holdings, Inc. (UPST) demonstrated a strong financial performance in 2025, with significant improvements in net profit, revenue growth, transaction volume, and adjusted EBITDA. However, the company also faced increased operating costs, a decrease in contribution margin, and heightened macroeconomic risks. The increase in total borrowings and exposure to interest rate fluctuations and credit risk are notable concerns. Overall, while the financial results show positive growth and operational efficiency, the company must manage its rising costs and macroeconomic challenges to sustain its performance.
For more information, you can read the original text of Upstart Holdings, Inc.'s financial report .
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