UPST · Forward model

Upstart's own name for its engine: personal loans to borrowers below a 720 FICO, where an AI model that reads more than a credit score is supposed to have the biggest edge over a bank. $2,496M of originations in the basis quarter, 69% of unsecured volume, re-accelerating 27% sequentially after two flat quarters and a decline. Management calls this the superpower and credits it for the contribution margin recovering to 62%. It is the largest line in this model and the one that has to keep working.

Personal loans to borrowers at 720 FICO and above: $1,013M of originations, 28% of unsecured volume, up 45% year over year and now roughly a third of the personal-loan book against 27% two quarters ago. This is the volume-and-brand line - Upstart competing for borrowers a traditional lender would also want, at a lower fee. It is growing faster than Core, and because it earns less per dollar, a rising share of it dilutes the unsecured margin. That is the tension management keeps addressing by pointing at Core re-acceleration.

The funnel: small-dollar loans and Cash Line, Upstart's unsecured revolving product. $130M of originations, under 4% of unsecured volume, and the most erratic line on the page - it has gone 79, 111, 138, 111, 76, 130 across six quarters with no trend. Its job is acquisition rather than profit: a borrower who arrives for a few hundred dollars can be sold a personal loan later. Upstart excludes Cash Line from its automation and conversion metrics because repeat draws are not new decisions.

The fastest-growing line Upstart has: $426M of originations, up roughly four times year over year and 62% sequentially, on 20,023 loans against 5,058 a year ago. Auto retail and auto-secured personal loans, after auto refinance was sunset during the quarter. Still loss-making on contribution, but the secured margin it dominates has closed 141 points in four quarters and management has put breakeven in the fourth quarter of 2026 on the record. This is the line the bull case is actually about: a much larger market than personal loans, addressed with the same underwriting stack.

Home equity lines of credit: $163M of committed amounts in the basis quarter, roughly double a year ago, on 2,800 loans. The smallest and least mature of the five product lines, and the deepest under water on contribution. Tickets are large - a HELOC commitment averages about $58,000 against roughly $21,000 for an auto loan - so a handful of loans move the line, and origination is a committed amount rather than a drawn balance. It is the second half of the secured optionality and it is behind auto on every dimension except ticket size.

Not a product Upstart sells - the line that makes its GAAP results jump around. Interest income on the roughly $1.06B of loans it holds at fair value, less interest expense on the $2.0B of borrowings that fund them, plus the mark-to-market on both. It contributed $16.7M in the basis quarter and $31.2M the quarter before, with no cost allocated against it, so it drops almost entirely to operating income. The book is more secured than the fee mix suggests: $338.1M of auto loans and $229.0M of HELOCs, held to seed products Upstart cannot yet sell in volume.