Startup Q4 guidance disappoints

Alex

Upstart Holdings (NASDAQ:UPST) on Monday issued guidance for the fourth quarter that was weaker than consensus on the street as rising interest rates hit demand for loans.

A company that provides AI-driven Bank lending platform Fourth quarter revenue is expected to be between $125 million and $145 millionbelow the visible alpha consensus of $12.7 million against consensus of $185.3 million and adjusted EBITDA of -$35 million.

Third-quarter revenue of $157 million followed consensus of $169 million, down from $228 million in the second quarter and $228.5 million in the year-ago quarter.

Adjusted EBITDA for the third quarter was -$14.4 million, down from $5.5 million in the prior quarter and $59.1 million in the same period last year, against a visible alpha consensus of $700,000.

Adjusted EPS for Q3 was -$0.24 to -$0.8 consensus, down from $0.1 in Q2 and $0.60 in Q3 2021.

During the quarter, Upstart’s (UPST) banking partners initiated 188,519 loans across platforms for a total of $1.9 billion, compared with 321,138 loans totaling $3.3 billion in the previous quarter. Rate request conversions decreased from 13% in Q2 to 10%.

Upstart’s contribution margin of $96 million decreased from $120.9 million in the prior quarter and increased from $95.9 million in the year-ago quarter. The contribution was 54%, up from 47% in the second quarter and 46% in the same period last year.

Total operating expenses in the third quarter were $215.3 million, up from $157.7 million in the prior quarter and up from $199.9 million in the prior quarter.

meeting phone 4:30 p.m. ET.

Earlier this month, UPST said: Approximately 7% of employees are laid off Because of the lower limit of the loan.

Previously, upstart (UPST) Non-GAAP EPS at -0.24, Miss $0.16, $157.2 million in miss revenue, $12.21 million

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