Upstart Holdings (UPST - Free Report) reported fourth-quarter 2021 earnings of 61 cents per share, which surpassed the Zacks Consensus Estimate of 18 cents. The company reported break-even earnings in the year ago quarter.
Revenues of $305 million significantly increased from $86.7 million reported in the year-ago quarter and beat the consensus mark by 16.35%.
The top-line growth was driven by the continual improvement of artificial intelligence-based models.
Quarter Details
Revenues from fees (accounting for 94% of total revenues) were $287 million, much higher than $84.4 million reported in the year-ago quarter.
Other revenues (5.7% of total revenues) soared from $2.3 million a year ago to $17.46 million.
For the reported quarter, bank partners originated 495,000 loans totaling $4.1 billion, significantly up from 123,396 loans in the year-ago quarter.
The massive increase in the volume of loans generated can be attributable to the participation of over 400,000 new borrowers across various borrowing segments.
Operating Results
Sales & marketing expenses were $11.36 million for the fourth quarter, up from $2.3 million in the year-ago quarter.
Customer operations surged from $1.99 million in the year-ago quarter to $6.59 million.
Engineering & product development expenses rose from $14.15 million year over year to $46.49 million for the reported quarter.
General, administrative & other expenses soared from $14.83 million year over year to $42.07 million.
As a percentage of revenues, sales & marketing expanded 110 basis points (bps), while customer operations, engineering & product development expenses and general, administrative & other expenses contracted 10 bps, 110 bps and 330 bps year over year, respectively.
Contribution margin was 52%, which expanded 300 bps from the year-ago quarter.
Adjusted EBITDA margin was $91 million for the reported quarter, up from $15.5 million in the year-ago quarter.
Operating income was $60.4 million for the fourth quarter compared with $10.4 million in the year-ago quarter.
Balance Sheet
As of Dec 30, 2021, total cash, including restricted cash remains unchanged at $1.2 billion compared with the third quarter ending Sep 30, 2021.
Guidance
For the first quarter of 2022, Upstart expects revenues between $295 million and $305 million. The Zacks Consensus Estimate for the same is pegged at $271.03 million indicating year over year growth of 123.34%.
Contribution margin is expected to be 46%. Adjusted EBITDA is anticipated between $56 million and $58 million.
Zacks Rank & Stocks to Consider
Upstart Holdings currently carries a Zacks Rank #4 (Sell).
The company’s shares have returned 25% against the Zacks Computer and Technology sector’s decline of 1.6% in the past year.
Some better-ranked stocks in the same sector are Analog Devices (ADI - Free Report) , Veeco Instruments (VECO - Free Report) and Agilent Technologies (A - Free Report) .
Analog Devices, Agilent Devices and Veeco Instruments carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog shares have returned 4.4% against the Zacks Computer and Technology sector’s decline of 1.6% in the past year.
ADI is slated to report first-quarter 2021 results on Feb 16.
Veeco Instruments shares have rallied 29.6% in the past year.
VECO is slated to report fourth-quarter 2021 results on Feb 16.
Agilent Technologies’ shares have surged 4.4% in the past year.
Agilent is scheduled to report first-quarter 2022 results on Feb 22.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Upstart Holdings (UPST - Free Report) reported fourth-quarter 2021 earnings of 61 cents per share, which surpassed the Zacks Consensus Estimate of 18 cents. The company reported break-even earnings in the year ago quarter.
Revenues of $305 million significantly increased from $86.7 million reported in the year-ago quarter and beat the consensus mark by 16.35%.
The top-line growth was driven by the continual improvement of artificial intelligence-based models.
Quarter Details
Revenues from fees (accounting for 94% of total revenues) were $287 million, much higher than $84.4 million reported in the year-ago quarter.
Other revenues (5.7% of total revenues) soared from $2.3 million a year ago to $17.46 million.
For the reported quarter, bank partners originated 495,000 loans totaling $4.1 billion, significantly up from 123,396 loans in the year-ago quarter.
The massive increase in the volume of loans generated can be attributable to the participation of over 400,000 new borrowers across various borrowing segments.
Operating Results
Sales & marketing expenses were $11.36 million for the fourth quarter, up from $2.3 million in the year-ago quarter.
Customer operations surged from $1.99 million in the year-ago quarter to $6.59 million.
Engineering & product development expenses rose from $14.15 million year over year to $46.49 million for the reported quarter.
General, administrative & other expenses soared from $14.83 million year over year to $42.07 million.
As a percentage of revenues, sales & marketing expanded 110 basis points (bps), while customer operations, engineering & product development expenses and general, administrative & other expenses contracted 10 bps, 110 bps and 330 bps year over year, respectively.
Contribution margin was 52%, which expanded 300 bps from the year-ago quarter.
Adjusted EBITDA margin was $91 million for the reported quarter, up from $15.5 million in the year-ago quarter.
Operating income was $60.4 million for the fourth quarter compared with $10.4 million in the year-ago quarter.
Balance Sheet
As of Dec 30, 2021, total cash, including restricted cash remains unchanged at $1.2 billion compared with the third quarter ending Sep 30, 2021.
Guidance
For the first quarter of 2022, Upstart expects revenues between $295 million and $305 million. The Zacks Consensus Estimate for the same is pegged at $271.03 million indicating year over year growth of 123.34%.
Contribution margin is expected to be 46%. Adjusted EBITDA is anticipated between $56 million and $58 million.
Zacks Rank & Stocks to Consider
Upstart Holdings currently carries a Zacks Rank #4 (Sell).
The company’s shares have returned 25% against the Zacks Computer and Technology sector’s decline of 1.6% in the past year.
Some better-ranked stocks in the same sector are Analog Devices (ADI - Free Report) , Veeco Instruments (VECO - Free Report) and Agilent Technologies (A - Free Report) .
Analog Devices, Agilent Devices and Veeco Instruments carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog shares have returned 4.4% against the Zacks Computer and Technology sector’s decline of 1.6% in the past year.
ADI is slated to report first-quarter 2021 results on Feb 16.
Veeco Instruments shares have rallied 29.6% in the past year.
VECO is slated to report fourth-quarter 2021 results on Feb 16.
Agilent Technologies’ shares have surged 4.4% in the past year.
Agilent is scheduled to report first-quarter 2022 results on Feb 22.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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