Upstart’s first quarter saw strong top-line growth, but the market reacted negatively due to profitability shortfalls. Management pointed to a combination of rapid expansion in auto and home lending products, continued investment in talent, and seasonality as factors shaping the quarter. CEO Paul Gu emphasized that improvements in Upstart’s AI-powered underwriting models and stronger performance in core personal loans and new product segments helped drive originations growth. However, CFO Andrea Blankmeyer acknowledged that increased marketing and operational costs, along with a front-loaded investment cycle, contributed to a year-over-year decline in profit.
Is now the time to buy UPST? Find out in our full research report (it’s free for active Edge members).
Upstart (UPST) Q1 CY2026 Highlights:
- Revenue: $308.2 million vs analyst estimates of $303.1 million (44.4% year-on-year growth, 1.7% beat)
- Adjusted EPS: $0.30 vs analyst expectations of $0.43 (29% miss)
- Adjusted Operating Income: -$7.52 million vs analyst estimates of $12.76 million (-2.4% margin, significant miss)
- The company reconfirmed its revenue guidance for the full year of $1.4 billion at the midpoint
- Operating Margin: -2.4%, in line with the same quarter last year
- Market Capitalization: $2.75 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Upstart’s Q1 Earnings Call
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Mihir Bhatia (Bank of America) asked how management balances near-term profitability with reinvestment. CEO Paul Gu responded that capital efficiency is prioritized, but reinvestment in growth remains essential to long-term value creation.
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Kyle David Peterson (Needham) questioned whether expenses related to the bank charter application were material in Q1. CFO Andrea Blankmeyer clarified that such costs were not significant yet and are accounted for in future expense guidance.
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Simon Alistair Clinch (Rothschild and Company Redburn) inquired about changes in risk-sharing terms for new funding agreements. Gu stated that deal terms have been stable or improving and that risk-sharing remains a small, strategic portion of Upstart’s capital structure.
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James Eugene Faucette (Morgan Stanley) pressed for details on HELOC product advantages. Gu indicated that faster closing times and higher automation are driving better conversion and lower customer acquisition costs, with cross-sell from the personal loan base playing a growing role.
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Patrick Moley (Piper Sandler) asked about the expected timeline and operational impact of the bank charter. Gu explained that regulatory timing is uncertain but expects the charter to unlock market access and reduce costs over several years.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be monitoring (1) progress in improving margins for auto and home loan products, (2) the pace at which operating expenses moderate and profitability improves, and (3) milestones in the regulatory review process for Upstart’s national bank charter application. The ongoing adoption rate for new products like Cashline and continued funding stability will also be important markers of execution.
Upstart currently trades at $28.71, down from $31.17 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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