Upstart (NASDAQ:UPST) shares climbed 12.2% in pre-market trading after the AI-powered lending platform reported its strongest quarterly performance in several years, achieving its first GAAP profit since late 2021 and comfortably outperforming market expectations on revenue and loan originations.
The results, released after Tuesday’s closing bell, triggered a sharp rally in after-hours trading that continued into Wednesday’s pre-market session.
Revenue and loan volumes exceed expectations
Upstart generated quarterly revenue of $364.7 million, around 5% above analyst forecasts, while loan originations jumped 50% year over year to $4.2 billion.
Contribution profit reached a record $193 million, delivering a contribution margin of 55%. Adjusted EBITDA also exceeded expectations, rising to $77 million compared with the consensus estimate of $64.8 million.
Chief Executive Officer Paul Gu attributed the performance to continued momentum in the company’s core personal lending business and improvements in its artificial intelligence underwriting platform.
He said the business had achieved “re-accelerating growth in core personal loans” while returning to profitability with “an all-time-high Contribution Profit.”
Profit milestone outweighs softer guidance
Although the results were broadly positive, not every metric exceeded expectations.
Adjusted earnings per share came in at $0.16, slightly below the analyst consensus of $0.18. The company also forecast full-year 2026 revenue of approximately $1.4 billion, marginally below Wall Street expectations of $1.42 billion.
Despite those shortfalls, investors focused on the company’s return to GAAP profitability and record contribution margins, viewing them as a significant milestone in Upstart’s recovery.
Positive market backdrop supports rally
The broader market also provided a supportive environment for growth stocks. The S&P 500 gained around 0.3%, while the Nasdaq edged modestly higher.
Investor sentiment had already improved following a strong round of corporate earnings and easing geopolitical tensions during the previous trading session.
Attention is also turning to the release of the July US employment report, which could influence expectations for future Federal Reserve policy. The central bank has kept interest rates within a range of 3.50% to 3.75%, with higher borrowing costs continuing to weigh on interest rate-sensitive fintech companies.
The combination of Upstart’s return to GAAP profitability, record contribution margins and robust loan growth proved more important to investors than the modest earnings miss and slightly weaker revenue outlook, lifting the stock to $34.01 in pre-market trading, well above its previous closing price of $30.32 and comfortably above the 52-week low of $23.97 reached earlier this year.
Upstart Holdings stock price
