v3.25.2
Revenue
 6 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
Revenue from Fees, Net

The Company disaggregates revenue from fees by type of service for the periods presented as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202520242025
Revenue from fees, net:
Platform and referral fees, net$98,595 $202,845 $202,454 $353,820 
Servicing and other fees, net31,937 37,932 66,146 72,432 
Total revenue from fees, net$130,532 $240,777 $268,600 $426,252 
Platform and Referral Fees, Net

Lending Partners. The Company enters into contracts with its lending partner customers, to provide access to a cloud-based artificial intelligence lending marketplace developed by the Company (the “Upstart platform”) to enable lending partners to originate unsecured personal and secured auto refinance loans. The Upstart platform includes a cloud-based application (through Upstart.com or a lending partner-branded program) for submitting loan
applications, verifying information provided within submitted applications, risk underwriting (through a series of proprietary technology solutions), delivery of electronic loan offers, and if the offer is accepted by the borrower, electronic loan documentation signed by the borrower. Lending partners can specify certain parameters of loans they are willing to originate. Under these contracts, lending partners can choose to use Upstart’s referral services, which allow them to access new borrowers through Upstart’s marketing channels.

After origination, Upstart-powered loans are either retained by lending partners, purchased by the Company for immediate resale to institutional investors under loan sale agreements, or purchased and held by the Company. For loans not retained by the lending partners, the Company pays the lending partners a one-time loan premium fee upon completion of the minimum contractual holding period and a monthly loan trailing fee based on the amount and timing of principal and interest payments made by the borrowers of the underlying loans. Both the loan premium fees and loan trailing fees are consideration payable to customers, which are our lending partners, and are recorded as a reduction to platform and referral fees, net, which is part of revenue from fees, net, in the condensed consolidated statements of operations and comprehensive income (loss). The Company recognized an immaterial amount and $4.4 million of loan premium fees and loan trailing fees as contra-revenue within platform and referral fees, net during the three and six months ended June 30, 2024, respectively, and an immaterial amount and $8.1 million during the three and six months ended June 30, 2025, respectively.

As of December 31, 2024 and June 30, 2025, the Company recognized $4.6 million and $5.0 million of loan trailing fee liability, respectively, which is recorded at fair value and included within accrued expenses and other liabilities on the Company’s condensed consolidated balance sheets. Refer to “Note 5. Fair Value Measurement” for additional information on changes in fair value associated with trailing fee liabilities.

The Company’s arrangements for platform and referral services typically consist of an obligation to provide one or both of these services to customers, on a when and if needed basis (a stand-ready obligation), and revenue is recognized as such services are performed. Additionally, the services have the same pattern and period of transfer, and when provided individually or together, are accounted for as a single combined performance obligation representing a series of distinct services.

Platform and referral services are typically provided under a fixed or variable price per unit based on a percentage of the value of loans originated each period with certain lending partners subject to minimum fees; however, pricing for these services may also be based on usage fees, calculated as a percentage of each loan originated. The nature of the Company’s promise is to stand-ready and provide continuous access to and process transactions through the platform. Platform and referral fees represent variable consideration as loan origination volume is not known at contract inception. These fees are determined each time a loan is originated. Fees for platform and referral services are generally billed and paid on a monthly basis, or settled on a daily basis. As such, the Company’s contracts with customers do not include a significant financing component.

Auto Dealerships. The Company enters into subscription agreements with auto dealerships to access Upstart Auto Retail software, a cloud-based solution that facilitates dealership operations and enables them to provide consumers with access to Upstart-powered auto loans. Subscription agreements generally have a contractual term of one to six months with evergreen monthly renewals. The Company bills these customers on a monthly basis. Subscription fees are recognized over the contract term as the performance obligation is satisfied, and is included within platform and referral fees, net in the condensed consolidated statements of operations and comprehensive income (loss). The Company recognized an immaterial amount and $2.7 million of subscription fee revenue for the three and six months ended June 30, 2024, respectively, and an immaterial amount of subscription fee revenue for both the three and six months ended June 30, 2025.

The Company had $19.0 million and $20.9 million of accounts receivable, excluding those that are settled on a daily basis, that are included in other assets on the condensed consolidated balance sheets related to contracts with customers as of December 31, 2024 and June 30, 2025, respectively. The standard payment terms on accounts
receivable are 30 days. The Company’s allowance for bad debt and bad debt expense were immaterial for the periods presented.

The Company capitalizes incremental costs of obtaining a contract with a customer, which are certain sales commissions paid to employees in connection with the acquisition of lending partners. Capitalized costs are amortized over the expected period of benefit, which we have determined, based on an analysis, to be three years. The Company applies the practical expedient to expense costs to obtain contracts with customers if the amortization period is one year or less. As of December 31, 2024 and June 30, 2025, the Company had $2.5 million and an immaterial amount, respectively, of contract costs capitalized within other assets on the condensed consolidated balance sheets. The Company amortized immaterial amounts of capitalized contracts costs to sales and marketing in the condensed consolidated statements of operations and comprehensive income (loss) for the periods presented.

Customers accounting for greater than 10% of total revenue were as follows:

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202520242025
Customer A*35%*31%
Customer B25%22%25%22%
Customer C35%10%37%*
Customer D10%*10%*
__________
* Less than 10%

Customers accounting for greater than 10% of accounts receivable were as follows:

December 31,June 30,
20242025
Customer E15%23%

Servicing and Other Fees, Net

The Company also enters into contracts with lending partners and institutional investors to provide loan servicing for the life of Upstart-powered loans. These services commence upon origination of these loans by lending partners and include collection, processing and reconciliations of payments received, institutional investor reporting and borrower customer support as well as distribution of funds to the holders of the loans. The Company charges the loan holder a monthly servicing fee calculated based on a predetermined percentage of the outstanding principal balance. Servicing fees also include certain ancillary fees charged on a per transaction basis for processing late payments and payments declined due to insufficient funds. Servicing fees are recognized in the period the services are provided.

The Company charges lending partners and institutional investors for collection agency fees related to their outstanding loan portfolio. The Company either performs borrower collection activities in-house, or outsources to third-party collection agencies particularly for loans that are more than 30 days past due or charged off. The Company has discretion in hiring the collection agencies and determining the scope of their work. As the principal in the arrangement, the Company recognizes gross revenue from collection agency fees in the period that the services are provided. Upstart also receives certain ancillary borrower fees inclusive of late payment fees and ACH fail fees. The total fees charged by collection agencies are recognized in the period incurred and reported as part of customer operations expenses.
Servicing and other fees, net also includes gains and losses on assets and liabilities recognized under loan servicing arrangements for loans retained by lending partners or loans sold to institutional investors. Such gains or losses are recognized based on whether the benefits of servicing are expected to be more or less than adequate compensation for servicing obligations performed by the Company. Servicing fees also include changes in fair value of loan servicing assets and liabilities. Refer to “Note 5. Fair Value Measurement” for additional information on changes in fair value associated with servicing assets and liabilities.

The following table presents the components of servicing and other fees, net as part of revenue from fees, net in the Company’s condensed consolidated statements of operations and comprehensive income (loss):

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202520242025
Servicing fees$21,951 $23,426 $45,193 $46,238 
Borrower fees6,356 6,664 13,515 13,324 
Collection agency fees4,117 3,714 8,713 7,506 
Other fees115 833 213 931 
Net gain (loss) on servicing rights and fair value adjustments(602)3,295 (1,488)4,433 
Total servicing and other fees, net$31,937 $37,932 $66,146 $72,432 
Interest Income, Interest Expense, and Fair Value Adjustments, Net

Interest income, interest expense, and fair value adjustments, net is comprised of interest income, interest expense and net changes in the fair value of financial instruments held in the Company’s normal course of business at fair value, including loans, derivatives, beneficial interests, notes receivable and residual certificates, trailing fee liabilities, payable to securitization note holders, and line of credit receivable.

The following table presents components of the interest income, interest expense, and fair value adjustments, net presented in the Company’s condensed consolidated statements of operations and comprehensive income (loss):

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202520242025
Interest income(1)
$52,883 $45,623 $104,054 $86,191 
Interest expense(1)
(11,470)(7,772)(22,184)(14,792)
Fair value and other adjustments, net:
Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net(1)
(31,949)(18,878)(61,542)(40,204)
Realized gain (loss) on sale of loans, net
(4,511)3,829 (11,615)1,838 
Fair value adjustments and realized gains (losses) on beneficial interests, net
(7,855)(6,288)(21,889)11,377 
Total fair value and other adjustments, net
(44,315)(21,337)(95,046)(26,989)
Total interest income, interest expense, and fair value adjustments, net$(2,902)$16,514 $(13,176)$44,410 
__________
(1) Includes interest income, interest expense and unrealized loss on loans, loan charge-offs, and other fair value adjustments, net related to the consolidated securitization as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202520242025
Interest income, interest expense, and fair value adjustments, net related to consolidated securitization:
Interest income$7,714 $4,465 $16,338 $9,577 
Interest expense(2,514)(1,668)(5,274)(3,517)
Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net(9,266)(3,238)(19,917)(7,018)
Total interest income, interest expense, and fair value adjustments, net$(4,066)$(441)$(8,853)$(958)
Interest Income

Interest income is recognized based on the terms of the underlying agreements with borrowers for loans and line of credit receivable held on the Company’s condensed consolidated balance sheets and is earned over the life of a loan or a line of credit receivable.

Interest income also includes accrued interest earned on outstanding loans and line of credit receivable but not collected. Generally, home equity lines of credit (“HELOCs”) that have reached a delinquency over 180 days and all other loans and line of credit receivable that have reached a delinquency over 120 days are charged off and do not accrue interest. The Company does not record an allowance for credit losses on accrued interest receivable. As of both December 31, 2024 and June 30, 2025, the Company has recorded $8.2 million of accrued interest income in loans on the condensed consolidated balance sheets. Accrued interest income on the line of credit receivable was immaterial as of both December 31, 2024 and June 30, 2025.
Interest Expense

Interest expense is primarily related to interest recorded on the Company’s borrowings on warehouse credit facilities and interest expense related to the consolidated securitization. Interest expense includes accrued interest incurred but not paid. Interest expense also includes changes in fair value of the interest rate caps. Accrued interest expenses for the warehouses were immaterial as of December 31, 2024 and June 30, 2025.
Fair Value and Other Adjustments, Net

Fair value and other adjustments, net include changes in fair value of financial instruments, other than loan servicing assets and liabilities and interest rate caps. These adjustments are recorded in the Company’s condensed consolidated statements of operations and comprehensive income (loss) and include both realized and unrealized changes to the value of related assets and liabilities. Refer to “Note 5. Fair Value Measurement” for additional information.

Fair value and other adjustments, net also includes amounts received from borrowers for previously charged-off loans held on the Company’s condensed consolidated balance sheets. These amounts are recognized in the period when amounts are received. Amounts received from borrowers for previously charged-off loans were $3.8 million and $7.1 million for the three and six months ended June 30, 2024, respectively, and were immaterial and $8.5 million for the three and six months ended June 30, 2025, respectively.