What happened
Fintech company Upstart Holdings (NASDAQ: UPST), which provides an artificial intelligence-powered lending platform to help banks make smarter decisions, reported its second-quarter results Tuesday afternoon. And it would be fair to say investors are impressed with the results.
As of 10 a.m. EDT Wednesday, Upstart was higher by about 25%, handily outpacing the major market averages.
Image source: Getty Images.
So what
To put it mildly, Upstart shattered the market's expectations. The company posted revenue of $194 million for the quarter, more than 10 times what it produced in the pandemic-stricken second quarter of 2020 and well ahead of the $158 million analysts had been looking for. And unlike many fintechs, Upstart is quite profitable. For the quarter, Upstart earned $0.62 per share, more than doubling the $0.25 expected by analysts.
Going beyond the headline numbers, it's even more impressive. Upstart's bank partners originated $2.8 billion of loans on the platform, a 62% quarter-over-quarter increase.
Now what
Upstart also increased its guidance, which is likely fueling today's move just as much as the second-quarter numbers. The company now expects third-quarter revenue of $205 million to $215 million, while analysts had been expecting about $162 million.
For the full year, Upstart now expects about $750 million in revenue, a significant bump from the previous guidance of $600 million. Plus, Upstart's adjusted EBITDA margin is now forecast to be about 17% as opposed to the 10% the company had previously been guiding for.
The bottom line is that Upstart's second-quarter earnings was an absolute blowout in pretty much every possible way. The company's AI-powered lending platform is catching on quickly, and if the company can keep this momentum alive, things could get very interesting.
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Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Upstart Holdings, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
