SAN MATEO, Calif. - Upstart Holdings, Inc. (NASDAQ:UPST) saw its shares plunge 18% in after-hours trading Tuesday despite reporting first quarter earnings and revenue that beat analyst expectations, as investors focused on the company’s declining margins.
The AI lending platform posted adjusted earnings per share of $0.30, surpassing the $0.17 consensus estimate. Revenue rose 67% year-over-year to $213.4 million, also topping expectations of $201.13 million.
However, Upstart’s contribution margin fell to 55% from 59% in the year-ago quarter, signaling rising costs.
"With an unparalleled pace of innovation, we continue to raise the bar in AI-enabled lending," said Dave Girouard, Co-founder and CEO of Upstart. "In this foundational aspect of our economy, AI is clearly living up to its promise of delivering a radically better product for consumers."
For the second quarter, Upstart forecast revenue of $225 million, slightly below the $227.8 million analysts were expecting. The company raised its full-year 2025 revenue outlook to $1.01 billion, just above the $1 billion consensus.
Transaction (JO:NTUJ) volume more than doubled YoY to 240,706 loans originated in Q1. The company’s conversion rate improved to 19.1% from 14% a year earlier.
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