v3.25.2
Borrowings
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Borrowings Borrowings
The following table presents the aggregate principal outstanding of all borrowings that are included in the condensed consolidated balance sheets:
December 31, 2024June 30, 2025
Warehouse credit facilities$195,605 $189,539 
Risk retention financing facility
— 29,731 
Convertible senior notes1,230,379 1,230,379 
Total payments due1,425,984 1,449,649 
Unamortized debt discount(23,816)(21,170)
Total borrowings$1,402,168 $1,428,479 
The following table summarizes the aggregate amount of maturities of all borrowings:
June 30, 2025
Remaining 2025$— 
2026299,129 
2027— 
2028189,539 
2029431,250 
2030500,000 
Thereafter29,731 
Total$1,449,649 
Warehouse Credit Facilities
The following table presents the details of the Company’s revolving warehouse credit facilities:
December 31, 2024June 30, 2025
Stated Interest Rate(1)
Termination and Maturity(2)
Total Borrowing Capacity(3)
Collateral(4)
Outstanding Borrowings
Collateral(4)
Outstanding Borrowings
Upstart Auto Warehouse Trust
Benchmark rate + 3.0%
April 2025$— $167,166 $23,228 $— $— 
Upstart Auto Warehouse Trust 2
Benchmark rate + 0% - 4.0%
August 2025 - August 2026
50,000 19,396 11,353 11 — 
Upstart Loan Trust
Benchmark rate + 2.4% - 3.8%
June 2027 - June 2028
325,000 74,541 34,217 181,728 115,232 
Upstart Small Dollar Loan Trust
Benchmark rate + 5.5%
June 2027 - June 2028100,000 108,980 61,807 134,723 74,307 
Upstart High Yield Loan Trust
Benchmark rate + 2.8%
December 2025 - December 2026
150,000 87,493 65,000 7 — 
Total$625,000 $457,576 $195,605 $316,469 $189,539 
_________
(1)The interest rates on our warehouse credit facilities are floating and designed as a reference rate plus a spread. Reference rates include the Compounded Secured Overnight Financing Rate, weighted-average cost of commercial paper notes issued by the lender, and the federal funds rate. The stated interest rate excludes unused commitment fees which range from 0.5% to 1.0%. The undrawn fee for Upstart Small Dollar Loan Trust is the dollar amount of interest and fees that would have been due if the daily average aggregate outstanding principal balance was equal to 75% of the then-applicable borrowing base.
(2)The first date represents the final date the Company may borrow up to the maximum capacity under the warehouse. The second date is the maturity date, when the outstanding principal amount, together with accrued and unpaid interest will be due and payable in full.
(3)Total capacity is as of June 30, 2025. All amounts are committed, except for Upstart High Yield Loan Trust of $150.0 million, Upstart Small Dollar Loan Trust of $100.0 million and Upstart Loan Trust for which $150.0 million of the $325.0 million total capacity is uncommitted. As of June 30, 2025, the Upstart Auto Warehouse Trust facility has been terminated.
(4)Represents the aggregate restricted cash and unpaid principal balance of loans pledged as collateral.

On June 14, 2024, Upstart Auto Warehouse Trust began its amortization period and on April 15, 2025, the facility was fully amortized and repaid in line with expectations. Following the full amortization and repayment, the Company terminated the facility.

On June 27, 2025, Upstart Auto Warehouse Trust 2 and Upstart Loan Trust amended their respective credit agreements to extend the maturity dates to August 8, 2026 and June 15, 2028, respectively. Additionally, the applicable margin on borrowing during the revolving period for Upstart Loan Trust was reduced to 2.4% from 2.8%. All other key terms of the agreements remain the same.

The Company’s warehouse credit facilities contain certain financial covenants. As of June 30, 2025, the Company was in breach of a certain covenant under the Upstart Small Dollar Loan Trust for the June 2025 reporting period. Subsequent to June 30, 2025, the Company obtained a waiver with respect to the identified breach and was in compliance with all covenants related to the Upstart Small Dollar Loan Trust effective July 14, 2025. As of
June 30, 2025, the Company was in compliance with all other applicable covenants under its warehouse credit facilities.
Risk Retention Financing Facility

In June 2025, the Company entered into a $100.0 million risk retention financing facility to finance certain securitization notes it retained in a capacity of the risk retention sponsor under applicable risk retention regulations. Under this facility, the Company pledged the securitization notes as collateral. The facility’s maturity aligns with the stated maturities of the underlying notes, which range from 2033 to 2035. The facility is accounted for as a secured borrowing.

As of June 30, 2025, the outstanding balance of the facility was $29.7 million, presented within borrowings on the condensed consolidated balance sheets, and the fair value of the securitization notes pledged was $29.9 million, which is presented within other assets on the condensed consolidated balance sheets. The financing bears interest at the weighted-average coupon of the pledged securities plus a 0.40% spread.

Pledged collateral levels are monitored and maintained at an agreed-upon percentage of the outstanding borrowings during the life of the borrowing. In the event of a decline in the fair value of the pledged collateral, the Company may be required to transfer cash or pledge additional securities under this facility.
Convertible Senior Notes

In August 2021, the Company issued $661.3 million in aggregate principal amount of 0.25% convertible senior notes due 2026 (the “2026 Notes”). In September 2024, the Company issued $431.3 million in aggregate principal amount of 2.00% convertible senior notes due 2029 (the “2029 Notes”). In November 2024, the Company issued $500.0 million in aggregate principal amount of 1.00% convertible senior notes due 2030 (the “2030 Notes,” together with the “2029 Notes” and 2026 Notes, the “Notes”). Concurrently with the issuance of the 2029 Notes, the Company used approximately $302.4 million of the proceeds to repurchase approximately $334.2 million in aggregate principal amount of the outstanding 2026 Notes in individually negotiated transactions. The Company additionally repurchased approximately $27.9 million of the outstanding 2026 Notes during the third quarter of 2024 through open market purchases.

The repurchases of the 2026 Notes were accounted for as a debt extinguishment. The difference between the consideration paid to repurchase the 2026 Notes and the carrying value of the 2026 Notes, resulted in a gain on debt extinguishment of $33.4 million separately reported on the condensed consolidated statement of operations and comprehensive loss during the third quarter of 2024. The partial extinguishment did not result in any changes to the terms of the 2026 Notes.

Each series of Notes is governed by its respective indenture (each, an “Indenture”), and represents senior unsecured obligations of the Company. The 2026 Notes mature on August 15, 2026, the 2029 Notes mature on October 1, 2029, and the 2030 Notes, mature on November 15, 2030 unless such Notes are earlier converted, redeemed, or repurchased in accordance with their terms. The Company may redeem for cash all or any portion of the Notes, at its option, on or after August 20, 2024, in the case of the 2026 Notes, on or after October 6, 2027, in the case of the 2029 Notes, and on or after November 20, 2027, in the case of the 2030 Notes, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price for the Notes of the applicable series then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption for the Notes of such series at a redemption price equal to 100% of the principal amount of the Notes of such series to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.
The following table presents details of the Notes:

Interest Rate
Initial Conversion Rate per $1,000 Principal
Initial Conversion Price
Conversion Date
2026 Notes
0.25%; payable semiannually on February 15 and August 15
3.5056$285.26May 15, 2026
2029 Notes
2.00%; payable semiannually on April 1 and October 1
21.9029$45.66July 1, 2029
2030 Notes
1.00%; payable semiannually on May 15 and November 15
10.8702$91.99August 15, 2030

Holders of the Notes may convert their Notes at their option any time prior to the close of business on the business day immediately preceding May 15, 2026, in the case of the 2026 Notes; July 1, 2029, in the case of the 2029 Notes; and August 15, 2030, in the case of the 2030 Notes, only under the following circumstances:

(1) during any calendar quarter commencing after December 31, 2021, in the case of the 2026 Notes, December 31, 2024, in the case of the 2029 Notes, and March 31, 2025, and in the case of the 2030 Notes, (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price for the respective Notes on each applicable trading day;

(2) during the five business-day period after any five consecutive trading-day period in which the trading price per $1,000 principal amount of the applicable series of Notes for each trading day of such five consecutive trading-day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate of the respective Notes on each such trading day;

(3) if the Company calls any or all of the Notes of the applicable series for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

(4) upon the occurrence of specified corporate events.

On or after May 15, 2026, in the case of the 2026 Notes; July 1, 2029, in the case of the 2029 Notes; and August 15, 2030, in the case of the 2030 Notes, holders of the Notes of the applicable series may surrender all or any portion of their Notes of such series for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable maturity date regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, either cash, shares of common stock or a combination of cash and shares of common stock, at its election.

The conversion price for each series of Notes will be subject to adjustment if certain events occur. In addition, following certain corporate events that may occur prior to the applicable maturity date or following the Company’s issuance of a notice of redemption for a series of Notes, the Company may be required to increase the conversion rate for the holder of the Notes of such series who elect to convert such Notes in connection with such corporate event or during the related redemption period in certain circumstances. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” pursuant to the applicable Indenture, holders of the applicable series of Notes may require the Company to repurchase for cash all or a portion of such Notes at a repurchase price equal to 100% of the principal amount of the Notes of such series to be redeemed plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Company accounted for the issuance of each series of the Notes as a single liability at par as the conversion feature of each series of Notes does not require bifurcation as a derivative under ASC 815 and the Notes were not issued at a substantial premium. Debt issuance costs related to the 2026 Notes, 2029 Notes, and the 2030 Notes, totaled $15.7 million, $10.4 million, and $11.8 million respectively, which are amortized to interest expense under the effective interest method over the contractual term. The effective interest rate of the 2026 Notes, 2029 Notes, and 2030 Notes, is 0.7%, 2.5%, and 1.4% respectively. The Company recorded immaterial and $7.2 million coupon interest expense related to the Notes for the three and six months ended June 30, 2025, respectively, and immaterial amortization of debt issuance costs within other income, net on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented. Accrued interest expenses related to the Notes were $3.3 million and immaterial as of December 31, 2024 and June 30, 2025, respectively.

The following table presents the components of the Notes as of December 31, 2024 and June 30, 2025:

December 31, 2024June 30, 2025
Principal Amount
Unamortized
Debt
Discount
Net
Carrying
Amount
Fair
Value
Principal Amount
Unamortized
Debt
Discount
Net
Carrying
Amount
Fair
Value
2026 Notes
$299,129 $(2,339)$296,790 $272,727 $299,129 $(1,640)$297,489 $285,668 
2029 Notes
431,250 (9,932)421,318 675,732 431,250 (8,936)422,314 710,535 
2030 Notes
500,000 (11,545)488,455 488,015 500,000 (10,594)489,406 518,640 
Total
$1,230,379 $(23,816)$1,206,563 $1,436,474 $1,230,379 $(21,170)$1,209,209 $1,514,843 

The estimated fair value represents Level 2 valuations in the fair value hierarchy and was determined based on the estimated or actual bids and offers of the Notes in an over-the-counter market.
Capped Call Transactions

In connection with the issuance of the 2026 Notes and the 2029 Notes, the Company entered into separate privately negotiated capped call instruments with certain financial institutions (the “2026 Capped Calls,” with respect to the 2026 Notes and the “2029 Capped Calls,” with respect to the 2029 Notes, and the 2026 Capped Calls together with the 2029 Capped Calls, the “Capped Calls”).

The Capped Calls are generally expected to offset the potential dilution to the Company’s common stock upon any conversion of the 2026 Notes and 2029 Notes, as applicable, and/or reduce any cash payments the Company is required to make in excess of the principal amount of such converted 2026 Notes and 2029 Notes, as the case may be, in the event the market price per share of the Company’s common stock, as measured under the terms of the Capped Calls, is greater than the strike price of the Capped Calls, with such offset and/or reduction subject to a cap. If, however, the market price per share of the common stock, as measured under the terms of the Capped Calls, exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be a reduction of such potential cash payments, in each case, to the extent that such market price per share of the Company’s common stock exceeds the cap price of the Capped Calls.
The following table sets forth other key terms for the Capped Calls related to each series of Notes:

Initial Strike Price per Share, Subject to Certain Adjustments
Initial Cap Price per Share, Subject to Certain Adjustments
Shares of Common Stock Covered, Subject to Anti-Dilution Adjustments
(in millions)
Final Expiration Date
2026 Capped Calls
$285.26$400.361.0August 15, 2026
2029 Capped Calls
$45.66$70.249.4September 27, 2029

The Capped Calls were determined to be freestanding financial instruments that meet the criteria for classification in equity; as such the Capped Calls were recorded as a reduction of additional paid-in capital within stockholders’ equity.