Upstart reported Q2 2026 after the close on August 4: revenue of $364.7M, up 41.7% year over year, net income of $16.5M, and diluted EPS of $0.16 against $0.05 a year ago. Originations reached $4.2 billion, up 50%, on 558,014 loans.
The stock rose about 11% in after-hours trading. This is the first piece we have published on Upstart's Q2, so there is no call of ours to grade — which makes it a good quarter to be precise about what "beat" meant, because the headline and the print disagree.
The beat was on revenue; EPS missed
Revenue of $364.7M came in above the $352.3M FactSet consensus. Diluted EPS of $0.16 came in below the $0.19 FactSet consensus. Both are true of the same release, and most of the coverage picked one.
The rally is not hard to explain against the record. Upstart's own comparison base is a business that lost money for eight of the twelve quarters before this one; a quarter with 50% origination growth, an all-time-high contribution profit and a positive GAAP bottom line is a genuine change of direction whether or not it cleared a consensus EPS number that had moved around all summer.
The Rule of 40, recomputed
Upstart's Rule of 40 score for Q2 2026 is 3.72 — 41.75 of revenue growth minus 38.03 of free-cash-flow margin. Last quarter it was 0.31.
| Quarter | Revenue | FCF | FCF margin | Diluted EPS | Revenue YoY | R40 |
|---|---|---|---|---|---|---|
| 2025 Q2 | $257.3M | −$144.2M | −56.0% | $0.05 | +101.6% | 45.56 |
| 2025 Q3 | $277.1M | −$270.8M | −97.7% | $0.23 | +70.9% | −26.81 |
| 2025 Q4 | $296.0M | +$104.6M | +35.3% | $0.17 | +35.2% | 70.50 |
| 2026 Q1 | $308.2M | −$136.1M | −44.1% | −$0.07 | +44.5% | 0.31 |
| 2026 Q2 | $364.7M | −$138.7M | −38.0% | $0.16 | +41.75% | 3.72 |
Look down the FCF column rather than at any single row. Four of the last five quarters are negative, the one positive quarter is an outlier of the same magnitude as the negatives, and the swing between adjacent quarters has twice exceeded the entire quarter's revenue. On a trailing-twelve-month basis Upstart grew revenue 46.28% and generated −$440.9M of free cash flow, a −35.39% margin, for a score of 10.90.
That is the shape of a lender, not the shape of a software platform, and it is the single most useful thing the score says about this company.
Why the cash line looks like that
Upstart's operating cash flow was −$136.6M in the quarter; capital expenditure was $2.1M. Almost none of the cash movement is capex — it is the loan book.
Inside operating activities for the six months sits $6.05 billion of purchases and originations of loans held-for-sale, offset by proceeds from selling them. When Upstart holds more loans on its own balance sheet at quarter-end than it did at the start — because a funding partner was slower, or because it chose to warehouse a vintage — operating cash flow goes deeply negative in a quarter where nothing about the business got worse. When the book unwinds, it goes positive, as in Q4 2025.
This is the same definitional argument we worked through with Grab's loan book, and it resolves the same way. The house definition is operating cash flow minus capital expenditure, applied identically to all 66 companies on this site, because that identical application is the only reason the scores can sit in one table. For a balance-sheet lender the resulting number is volatile and it is still the honest one: the cash really did leave, and whether it comes back depends on credit performance rather than on an accounting preference.
Read Upstart's score as a range across a cycle, not as a quarterly reading. Ten points on the trailing-twelve-month view is the number to carry.
What improved, on the company's own metrics
- Contribution profit $193.1M, an all-time high, up 37%.
- Contribution margin 55%, down from 58% a year ago — profit growing more slowly than the fee revenue behind it.
- Adjusted EBITDA $76.9M, up 45%, margin unchanged at 21%.
- Revenue from fees $348.0M, up 45% — growing faster than total revenue, so the fee engine is doing more of the work.
- Secured lending (auto and home) contribution margin −35%, from −96% in Q1 and −176% a year ago.
The secured line is the most improved number in the release and still a loss-maker; CEO Paul Gu's framing — moving the secured products "rapidly toward profitability" — is supported by the trajectory rather than by the level.
Two metrics went the other way. Conversion rate fell to 19.7% from 21.0%, so the 50% origination growth came with more rate inquiries per funded loan, and borrower acquisition costs rose to $102.3M from $60.9M, a 68% increase against 45% fee growth. Upstart also said it will stop reporting conversion rate from Q1 2027 — worth noting when a metric that is deteriorating is scheduled to disappear, without implying that is why.
Guidance
Upstart reaffirmed full-year 2026 revenue of approximately $1.4 billion, fee revenue of approximately $1.3 billion, and adjusted EBITDA of approximately $294 million at a 21% margin. The revenue figure sits slightly below the $1.42 billion FactSet was carrying — a reaffirmation into a Street number that had drifted above it.
Against the first half's $673M of revenue, the full-year guide implies roughly $727M in the second half, about 8% more than the first — a marked deceleration from the 42% year-over-year pace just posted, if the guide is taken at face value rather than as the conservative floor a reaffirmation usually is.
The bottom line
The quarter is a real improvement on every operating measure Upstart controls and a miss on the one number the Street had written down. Both facts survived the print; the stock priced the first.
What has not changed is the thing this site measures. Upstart's growth is not in question at 41.75% — its cash is, and the cash half has now been negative in four of five quarters while the business scaled originations 50%. The Rule of 40 score of 3.72 is not a verdict on the franchise. It is a statement that a company funding a growing loan book out of its own balance sheet cannot be scored on the same axis as a software company, and that the trailing view — ten points, not four — is the one worth arguing about.
Upstart figures are from the company's Q2 2026 earnings press release, filed August 4, 2026 as Exhibit 99.1 to an 8-K (accession 0001647639-26-000062), captured in our release notes: total revenue $364,708K, revenue from fees $348,019K, net income $16,539K, diluted EPS $0.16 on 109,720,846 weighted-average diluted shares, contribution profit $193,131K, adjusted EBITDA $76,905K, six-month operating cash flow −$269,929K and six-month purchases of property and equipment $4,808K. The quarterly operating-cash-flow and capex figures are the six-month totals less our stored 2026 Q1 values (−$133,300K and $2,750K), because the release and the 10-Q report cash flow year-to-date only. Prior quarters are from our stored Upstart series. Rule of 40 uses the house definition in our Rule of 40 explainer. Consensus figures ($352.3M revenue, $0.19 EPS, $1.42B full-year revenue) are the FactSet numbers reported alongside the print, not values stored in this repo.