Upstart Holdings, Inc.

Good afternoon, and welcome to the Upstart First Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode to prevent any background noise. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Sonia Banerjee, Head of Investor Relations. Sonia, please go ahead.

Thank you. Welcome to the Upstart Earnings Call for the First Quarter of 2026. Joining me today are Paul Gu, our co-founder and CEO, and Andrea Blankmeyer, our CFO. During today's call, we will make forward-looking statements, which include statements about our outlook and business strategy. These statements are based on our expectations and beliefs as of today, which are subject to a variety of risks, uncertainties, and assumptions, and should not be viewed as a guarantee of future performance. Actual results may differ materially as a result of various risk factors that have been described in our SEC filings. We assume no obligation to update any forward-looking statements as the result of new information or future events, except as required by law. Our discussion will include non-GAAP financial measures, which are not a substitute for our GAAP results. Reconciliations of our historical gaps to non-gap results can be found in our earnings materials, which are available on our IR website. With that, Paul, over to you.

Thank you, Sonia, and thank you everyone for joining us today. I want to start my first official earnings call as CEO by stating simply that the Upstart leadership team and I are here to build a high growth and high return business. I'm the founder at heart. I dropped out of college at 20 to start something. And now after 14 years, I wouldn't be doing this if I didn't believe the upside ahead for Upstart was as good as that of any startup. In recent decades, there's been a growing trend for the fastest growing companies to stay private. And as a result, public companies are typically past their high growth years. We believe Upstart is not. As reflected in our three-year outlook of 35% annualized revenue growth, we expect to be one of the fastest multi-year compounders at our scale. Consumer credit is arguably the oldest, most economically foundational business there is, and today is the perfect time to reimagine it. Unlike in some areas, the application of AI to credit is an unambiguous good for the consumer, saving them time and money to use on the parts of life that really matter. For lenders, AI will transform credit from a structurally commodity-like business to one where the player who wins the technology and modeling race wins the market. With a decade-long head start, we believe that race is ours to lose. Capitalizing on this enormous market opportunity will require some investment. Fortunately, we have just the right business to fund it. Core personal loans, unsecured installment loans to consumers not conventionally considered super prime. Our significant and growing lead in technology built up over that decade plus gives our product there the best rates and best process in the market. making room for unusually high margins while still delivering the best product to the customer. You're going to hear me talk a lot more about this as CEO. Our core personal loan business makes a lot of money, and my first priority is to do a lot more of it. Businesses in today's world, especially in lending, can too easily put up big numbers that depend on even bigger equity bases. At Upstart, we have always treated equity as a real cost, and I intend to double down on that rigor. Our operating strategy is to reinvest the profits from core personal loans into building the best product and most trusted brand across every category of consumer credit. This approach allows us to simultaneously maximize earnings over the long run while running an extremely capital efficient business. Similarly, our funding strategy for loans will continue to be one that relies primarily on third party capital. As they say, the market is a weighing machine in the long run. And my bet is that the businesses with the most profits and the least dilution will weigh the most. Now I'd like to turn to Q1 and where we stand today. Originations grew 61% year over year and revenue grew 44% while profit declined marginally. These are strong results and put us comfortably on track to meet our full year guidance on both the top and bottom lines. These numbers reflect a mix of four factors. Secular improvements to technology and marketing, strong momentum in newer products in the super prime segment, the usual Q1 seasonal headwinds in borrower demand and annual employee-related expenses, and some planned investments. I'll focus on our platform and product strategy, and Andrea will walk through the numbers. As always, our most important growth lever is improving our underwriting model. In Q1, we increased the accuracy lead of our personal loans model over benchmark by 1.4 percentage points. Our model to manage now stands at 173.6%, while 87.4% of the total inaccuracy remains to be solved. This quarter, we extended the scope of our models to predict post-default recoveries, replacing the assumptions we'd used historically with the full strength of our AI models. This fuller view of loan economics lets us serve more creditworthy borrowers which drove approximately 3.5% more originations at equivalent risk levels relative to our prior model. Simply put, our lead over traditional credit scoring continues to grow. We're also moving quickly to maximize use of AI across every part of the business. In servicing and collections, we doubled daily AI assisted borrower conversation volume, brought that capability to our mobile app, and expanded our AI powered payment features. We also deployed AI driven quality assurance tools to review customer service calls, giving us a scalable, consistent way to continuously improve the borrower experience. Across our platform, we originated more than 425,000 loans in Q1. We believe more Americans are choosing to borrow from us than any pure FinTech platform. With well over 20 million unique consumers having created accounts to check their rate with Upstart, we are rapidly building towards being the most trusted brand in consumer credit. In auto, originations grew more than 300% year-over-year and 30% sequentially. Auto retail was a standout, with originations up roughly 13 times year-over-year and nearly doubling sequentially, driven by a rapidly expanding active dealer network. Our work to reduce friction for dealers is paying off. About a quarter of retail transactions in Q1 used the remote signature capability we launched late last year. We also rolled out a new feature that lets dealers generate firm AI-powered offers across multiple vehicles from a single customer application. And we deepened integrations with dealers' existing compliance and CRM tools, embedding Upstart more naturally into how they already work. Home originations grew approximately 250% year-over-year and 16% sequentially, driven by better marketing reach and efficiency. In Q1, more than one quarter of these loans were fully automated, and we achieved an average time to close of just six days from application to signing, a new record for us, and a fraction of the industry average of roughly 40 days. In early April, we also added richer bank account data to our HELOC income verification process, improving accuracy and the saleability of these loans to capital market partners. This progress in auto and home has set us well on our way to serving the full range of consumer credit needs. With growth strong and technology advancing rapidly, The time is now right for both products to begin shifting some of their focus from pure growth to unit economics. Last month, we also launched Cashline, our first unsecured revolving credit product. This is an important step toward our vision of always-on credit for every borrower, and we're thrilled by the early results. Looking forward, the next area we're focusing our product and growth efforts on is none other than core personal loans. I said earlier that the profits from this business are central to our strategy, and we have already begun taking action to grow it. While we would normally expect originations to decline sequentially in Q1, core personal loans were flat to Q4. That stronger than seasonal performance signals the early stages of the reacceleration we expect to continue through the rest of the year. Now I want to turn to the capital side of the business. Funding supply for loans is strong. Thanks to the pioneering work Sanjay and the capital team have done, well over half of our capital is committed. Year to date, we've expanded and deepened our forward flow relationships, securing over $4 billion in new committed capital. That includes about $2 billion in new commitments from Altura, Centerbridge, and Wafra, alongside renewals from Fortress and Blue Owl. Notably, we've closed a 24-month commitment, which is our longest deal term yet, designed to provide durable capital through market cycles. I'm also proud to share that this continues our track record of a 100% renewal rate with every partner since our first deal in 2022. Additionally, our recent securitizations totaling approximately $1 billion were multiple times oversubscribed with the most recent transaction upsized. This reflects strong secondary liquidity for our loans, even amid broader market volatility. We also included auto-secured personal loans in a securitization for the first time, an important milestone when it comes to new product funding. These results happening against the backdrop of market volatility in other areas of credit are a clear vote of confidence in our platform. We take the trust our capital partners have given us seriously and always treat credit performance as an uncompromising first priority. The average return of our last 12 quarterly vintages of loans exceeds U.S. Treasuries by 651 basis points. with every individual vintage exceeding Treasuries by at least 385 basis points. Finally, the bank charter. In March, we announced our application for a national bank charter. As I said earlier, our strategy for funding loans is to rely primarily on third-party capital, and the bank charter doesn't change that. We expect banks, credit unions, and institutional investors to continue to purchase the vast majority of loans originated on our platform. Bank Charter will, however, bring significant regulatory benefits to Upstart, including by expanding our addressable market across all 50 states, reducing the operational and financial cost of originating loans, and accelerating our technology velocity by enabling us to interface with regulators directly. These benefits directly support our growth and profit goals and will show up over the next few years. Now, I want to close by welcoming Andrea, who joined us as CFO in March. Andrea is an incredibly talented finance leader with a background in complex, novel business models. She's learning the ropes here faster than I could have hoped for and is already making an impact on how we plan, prioritize, and execute. It is now my great privilege to turn the call over to her for a discussion of our financial results.