0001647639-23-000035 | 10-Q | XBRL Viewer

Stockholders’ Equity (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Shares and Warrants Reserved for Issuance

In December 2020, the Company's amended and restated certificate of incorporation became effective, which authorizes the issuance of 700,000,000 shares of common stock with a par value of $0.0001 per share. Shares of common stock reserved for issuance, on an as-converted basis, are as follows:


	December 31,	March 31,
	2022	2023
Options issued and outstanding	12,547,010	13,929,917
RSUs outstanding	6,046,796	8,222,931
PRSUs outstanding	687,500	—
Shares available for future issuance under 2020 plan	5,842,057	6,004,507
Shares available for issuance under ESPP	2,543,089	3,043,551
Total	27,666,452	31,200,906

Schedule of Stock Option Activity

The following table summarizes stock option activity for the three months ended March 31, 2023:


	Number of Options	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Balances at December 31, 2022	12,547,010	$	14.65	6.6	$	77,289

Options granted	2,065,794	15.23
Options exercised	(331,093)	4.64
Options cancelled and forfeited	(351,794)	18.81
Balances at March 31, 2023	13,929,917	14.87		6.8	96,888
Options exercisable – March 31, 2023	8,251,381	6.94		5.1	88,402
Options vested and expected to vest – March 31, 2023	13,881,292	$	14.81	6.8	$	96,844

Schedule of Restricted Stock Units and Restricted Stock

The following table summarizes RSU activity for the three months ended March 31, 2023:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	6,046,796	$	51.28
RSUs granted	3,409,843	17.44
RSUs vested	(698,173)	42.10
RSUs cancelled and forfeited	(535,535)	74.43
Unvested at March 31, 2023	8,222,931	$	36.52

The following table summarizes Restricted Stock activity for the three months ended March 31, 2023:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	10,271	$	123.33

Vested	(5,138)	123.33
Unvested at March 31, 2023	5,133	$	123.33

Schedule of Stock Options Fair Value Assumptions

The following assumptions were used to estimate the fair value of options granted:

Three Months Ended March 31,

2022

2023

Expected term (in years)

5.2 – 7.0

5.3 – 7.0

Expected volatility

47.58% – 48.72%

50.96% – 52.89%

Risk-free interest rate

1.70% – 2.16%

3.45% – 3.45%

Dividend yield

—%

Schedule of Employee Stock Purchase Plan Fair Value Assumptions

The following assumptions were used to estimate the fair value of the February 2022 PRSUs granted:



Expected term (in years)			6.9
Expected volatility			48.43%
Risk-free interest rate			1.89%
Dividend yield			0%

The following assumptions were used to estimate the fair value of ESPP purchase rights:


	Three Months Ended March 31,
	2022	2023
Expected term (in years)	0.5	0.5
Expected volatility	91.98%	97.74%
Risk-free interest rate	0.72%	4.97%
Dividend yield	—%	—%

Schedule of Stock-based Compensation Expense

The Company recorded stock-based compensation in the following expense categories in its condensed consolidated statements of operations and comprehensive income (loss) for employees and nonemployees:


	Three Months Ended March 31,
	2022		2023
Sales and marketing	$	2,238	$	3,372
Customer operations	1,619		2,882
Engineering and product development	13,634		56,660
General, administrative, and other	7,559		11,195
Total	$	25,050	$	74,109

Stockholders’ Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Number of Options
Beginning balance (in shares)	12,547,010
Options granted (in shares)	2,065,794
Options exercised (in shares)	(331,093)
Options cancelled and forfeited (in shares)	(351,794)
Ending balance (in shares)	13,929,917	12,547,010
Options exercisable (in shares)	8,251,381
Options vested and expected to vest (in shares)	13,881,292
Weighted-Average Exercise Price Per Share
Options outstanding (in dollars per share)	$ 14.65
Options granted (in dollars per share)	15.23
Options exercised (in dollars per share)	4.64
Options cancelled and forfeited (in dollars per share)	18.81
Options outstanding (in dollars per share)	14.87	$ 14.65
Options exercisable, Weighted average exercise price per share (in dollars per share)	6.94
Options vested and expected to vest, Weighted Average Exercise Price Per Share (in dollars per share)	$ 14.81
Weighted-Average Remaining Contractual Life (years)
Options outstanding	6 years 9 months 18 days	6 years 7 months 6 days
Options exercisable	5 years 1 month 6 days
Options vested and expected to vest	6 years 9 months 18 days
Aggregate Intrinsic Value
Balances aggregate intrinsic value	$ 96,888	$ 77,289
Options exercisable	88,402
Options vested and expected to vest	$ 96,844

Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)
Beginning balance (in shares) at Dec. 31, 2021		83,659,665
Beginning balance at Dec. 31, 2021	$ 807,078	$ 8	$ 740,849	$ 66,221
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		888,961
Issuance of common stock upon exercise of stock options	5,626	$ 1	5,625
Issuance of common stock upon settlement of restricted stock units (in shares)		80,226
Stock-based compensation expense	26,677		26,677
Issuance of common stock under employee stock purchase plan (in shares)		47,894
Issuance of common stock under employee stock purchase plan	4,431		4,431
Net income (loss)	32,692			32,692
Ending balance (in shares) at Mar. 31, 2022		84,676,746
Ending balance at Mar. 31, 2022	$ 876,504	$ 9	777,582	98,913
Beginning balance (in shares) at Dec. 31, 2022	81,259,676	81,259,676
Beginning balance at Dec. 31, 2022	$ 672,435	$ 8	714,871	(42,444)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)	331,093	331,093
Issuance of common stock upon exercise of stock options	$ 1,537		1,537
Issuance of common stock upon settlement of restricted stock units (in shares)		698,173
Shares withheld related to net share settlement of restricted stock units (in shares)		(328)
Shares withheld related to net share settlement of restricted stock units	(5)		(5)
Stock-based compensation expense	76,767		76,767
Issuance of common stock under employee stock purchase plan (in shares)		312,134
Issuance of common stock under employee stock purchase plan	5,728		5,728
Net income (loss)	$ (129,254)			(129,254)
Ending balance (in shares) at Mar. 31, 2023	82,600,748	82,600,748
Ending balance at Mar. 31, 2023	$ 627,208	$ 8	$ 798,898	$ (171,698)

Fair Value Measurement - Sensitivity of Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Loans (at fair value)
Discount rates
100 basis point increase	$ (11,508)	$ (11,979)
200 basis point increase	(22,790)	(23,720)
Expected credit loss rates on underlying loans
10% adverse change	(11,686)	(11,927)
20% adverse change	(23,375)	(23,852)
Expected prepayment rates
10% adverse change	(2,238)	(2,284)
20% adverse change	(4,435)	(4,530)
Fair Value, Inputs, Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of loans	982,229	1,010,421
Fair Value, Inputs, Level 3 \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of loans	$ 982,229	$ 1,010,421

Description of Business and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K. Certain prior period amounts have been reclassified or disaggregated where appropriate to conform to the current period presentation of such amounts. In the opinion of management, the accompanying financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Basis of Consolidation	The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K. Certain prior period amounts have been reclassified or disaggregated where appropriate to conform to the current period presentation of such amounts. In the opinion of management, the accompanying financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Use of Estimates	Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements, which Management believes are critical in understanding and evaluating the Company’s reported financial results include: (i) fair value determinations; (ii) stock-based compensation; (iii) consolidation of VIEs; and (iv) the evaluation for impairment of goodwill and acquired intangible assets. The Company bases its estimates on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods.
Derivative Financial Instruments	Derivative Financial InstrumentsThe Company evaluates its contracts and financial instruments to determine if these contracts and instruments or their parts meet the definition of derivatives in accordance with the requirements of FASB Accounting Codification (ASC) 815, Derivatives and Hedging. Derivatives are recorded on the condensed consolidated balance sheets at fair value with changes in the value recorded in earnings as part of interest expense or fair value adjustments in the condensed consolidated statements of operations and comprehensive income (loss). The Company does not employ derivatives for trading or speculative purposes and has no derivatives classified as accounting hedges.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which was issued by the Financial Accounting Standards Board (“FASB”) in October 2021. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. Under the previous business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The ASU will be applied prospectively to business combinations occurring after the adoption date. The adoption of this new standard did not have an impact on the Company's condensed consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting followed by ASU 2021-01, Reference Rate Reform, Scope issued in January 2021. ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The optional guidance in ASU 2020-04 and ASU 2021-01 and ASU 2022-06 is effective for a limited period of time through December 31, 2024 and may be applied prospectively to contract modifications and hedging relationships. The Company does not expect the adoption of this guidance will have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
Variable Interest Entities	Consolidated VIEs The Company consolidates variable interest entities (“VIEs”) in which the Company has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Company has a variable interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Company continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Company is involved with the VIE. The Company also determines whether decision-maker or service-provider fees are variable interests. Decision-maker or service-provider fees are not considered variable interests when the arrangement does not expose the Company to risks of loss that a potential VIE was designed to pass on to its variable interest holders, the fees are commensurate, the arrangement is at market, and the Company does not have any other interests (including direct interests and certain indirect interests held through related parties) that absorb more than an insignificant amount of a VIE’s potential variability. This determination can have a significant impact on the Company’s consolidation analysis, as it could affect whether a legal entity is a VIE and whether the Company is the primary beneficiary of a VIE. When the Company’s decision-maker or service-provider fee is not a variable interest, the Company is viewed as acting as a fiduciary for the potential VIE. Unconsolidated VIEs The Company’s transactions with unconsolidated VIEs include securitizations of unsecured personal whole loans and sales of whole loans to VIEs. While the Company continues to be involved with the unconsolidated VIEs in its role as the sponsor and the servicer of these transactions, the Company does not hold a significant economic interest in these entities and has determined that it is not the primary beneficiary of these entities. The Company’s unconsolidated VIEs include entities established as the issuers and grantor trusts for various securitization transactions. In cases where the VIEs are not consolidated and the transfer of the loans from the Company to the securitization trust meets sale accounting criteria, the Company recognizes a gain or loss on sales of loans. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction. The assets are transferred into a trust such that the assets are legally isolated from the creditors of the Company and are not available to satisfy obligations of the Company. These assets can only be used to settle obligations of the underlying securitization trusts.
Off-Balance Sheet Loans	Off-Balance Sheet Loans Off-balance sheet loans relate to securitization transactions for which the Company has some form of continuing involvement, including as servicer. For a loan related to securitization transactions where servicing is the only form of continuing involvement, the Company would only experience a loss if it were required to repurchase such a loan due to a breach in representations and warranties associated with its loan sale or servicing contracts. The Company routinely contributes loans to securitization transactions which it co-sponsors as a non-retaining sponsor. As a non-retaining sponsor and a servicer of these transactions, the Company does not retain economic risk in these transactions. Contributions of loans to these securitizations are recognized as transfers under ASC 860, Transfers and Servicing

Reorganization Expenses (Details) - January 2023 Plan $ in Millions		3 Months Ended
	Jan. 31, 2023 employee	Mar. 31, 2023 USD ($)
Restructuring Cost and Reserve [Line Items]
One-time non-cash savings amount		$ 2.9
Employee Severance
Restructuring Cost and Reserve [Line Items]
Expected reduction in workforce, percent	20.00%
Expected reduction in workforce, number of employees \| employee	365
Reorganization expenses		15.5
Payments for reorganization expenses		12.7
Impairment Of Intangible Assets
Restructuring Cost and Reserve [Line Items]
Reorganization expenses		$ 2.6

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue by Type of Service

The Company disaggregates revenue from fees by type of service for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Revenue from fees, net:
Platform and referral fees, net	$	271,812	$	77,657
Servicing and other fees, net	42,170		39,484
Total revenue from fees, net	$	313,982	$	117,141

Schedule of Customers Accounting for Greater Than 10% of Accounts Receivable

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


	March 31,
		2022	2023
Customer A		46%	30%
Customer B		31%	18%
Customer C		*	10%

* Less than 10%

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


	March 31,
	2022	2023
Customer C	38%	35%

Schedule of Gain (loss) on Loan Servicing Rights

The Company recognized a net gain related to loan servicing rights upon loan sales for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Net gain related to loan servicing rights	$	8,705	$	3,613

Schedule of Collection Agency and Borrower Fees

The Company recognized collection agency fees and borrower fees, which are included in servicing and other fees, net for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Collection agency fees	$	1,990	$	3,916
Borrower fees	$	5,230	$	7,737

Schedule of Components of Interest Income and Fair Value Adjustments, Net

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


	Three Months Ended March 31,
	2022		2023

Interest income	$	15,134	$	45,315
Interest expense	(959)		(7,132)
Fair value and other adjustments
Unrealized loss, charge-offs, and other adjustments, net	(19,309)		(44,544)
Realized gain (loss) on sale of loans, net	1,288		(7,853)
Total fair value and other adjustments	(18,021)		(52,397)

Total interest income and fair value adjustments, net	$	(3,846)	$	(14,214)

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Effective Tax Rates

The Company’s effective tax rates for the three months ended March 31, 2022 and 2023, are as follows:


	Three Months Ended March 31,
	2022			2023
Provision for income taxes	$	19		$	16
Effective tax rate	0.06		%	(0.01)		%

Stockholders’ Equity - Reserved Shares of Common Stock for Issuance (Details) - shares	Mar. 31, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	31,200,906	27,666,452
Shares available for future issuance under 2020 plan \| Common stock
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	6,004,507	5,842,057
Options issued and outstanding
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	13,929,917	12,547,010
RSUs outstanding
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	8,222,931	6,046,796
PRSUs outstanding
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	0	687,500
Shares available for issuance under ESPP
Class of Stock [Line Items]
Shares reserved of common stock for issuance (in shares)	3,043,551	2,543,089

Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 16	$ 19
Effective tax rate	(0.01%)	0.06%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Leases - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)
Leases [Abstract]
Letter of credit outstanding	$ 3.4

Revenue - Loan Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Net gain related to loan servicing rights	$ 3,613	$ 8,705

Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
Revenue - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Trailing fee liabilities	$ 4,400		$ 4,900
Servicing fees and other receivables	42,943		46,652
Contract costs capitalized	$ 2,600		2,600
Loans on non-accrual status	120 days
Accrued interest income	$ 13,900		12,800
Customer A \| Customer Concentration Risk \| Revenue Benchmark
Disaggregation of Revenue [Line Items]
Concentration risk (in percent)	30.00%	46.00%
Customer B \| Customer Concentration Risk \| Revenue Benchmark
Disaggregation of Revenue [Line Items]
Concentration risk (in percent)	18.00%	31.00%
Customer C \| Customer Concentration Risk \| Revenue Benchmark
Disaggregation of Revenue [Line Items]
Concentration risk (in percent)	10.00%
Customer C \| Customer Concentration Risk \| Accounts Receivable
Disaggregation of Revenue [Line Items]
Concentration risk (in percent)	35.00%	38.00%
Platform and referral fees, net
Disaggregation of Revenue [Line Items]
Loan premium and loan trailing fees recognized	$ 1,400	$ 8,700
Servicing fees and other receivables	$ 29,200		$ 31,100
Capitalized cost amortization term	3 years

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Acquired Intangible Assets

Acquired intangible assets subject to amortization consist of developed technology and customer relationships, and are recorded net of amortization on the condensed consolidated balance sheets. The gross and net carrying values and accumulated amortization are as follows:

Developed Technology


	December 31, 2022		March 31, 2023
Gross carrying amount	$	9,400	$	9,400
Accumulated amortization	(5,483)		(6,267)
Net carrying value	$	3,917	$	3,133
Weighted-Average Remaining Useful Life (Years)	1.3		1.0

Customer Relationships


	December 31, 2022		March 31, 2023
Gross carrying amount	$	13,700	$	13,700
Accumulated amortization	(1,998)		(2,283)
Net carrying value	$	11,702	$	11,417
Weighted-Average Remaining Useful Life (Years)	10.3		10.0

Schedule of Expected Future Amortization Expense

Expected future amortization expense for intangible assets as of March 31, 2023 is as follows:


Fiscal Years:
Remaining 2023	$	3,206
2024	1,925
2025	1,142
2026	1,142
2027	1,142
Thereafter	5,993
Total	$	14,550

Fair Value Measurement - Loans at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Fair value	$ 982,229	$ 1,010,421
Loans (at fair value)
Financing Receivable, Past Due [Line Items]
Outstanding principal balance	1,040,562	1,047,714
Net fair value and accrued interest adjustments	(58,333)	(37,293)
Fair value	982,229	1,010,421
Loans (at fair value) \| Auto Loans
Financing Receivable, Past Due [Line Items]
Fair value	401,100	397,700
Loans > 90 Days Past Due \| Loans (at fair value)
Financing Receivable, Past Due [Line Items]
Outstanding principal balance	11,341	9,006
Net fair value and accrued interest adjustments	(9,864)	(7,006)
Fair value	$ 1,477	$ 2,000

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-Section 55
-Paragraph 79
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1404
-Paragraph (a)

+ Details

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Future Minimum Lease Payments

As of March 31, 2023, future minimum lease payments are as follows:


	Operating Leases
Remaining 2023	$	11,426
2024	17,054
2025	17,544
2026	18,055
2027	17,745
Thereafter	34,816
Total undiscounted lease payments	116,640
Less: Tenant improvement receivables	(2,375)
Less: Present value adjustment	(15,215)
Operating lease liabilities	$	99,050

Schedule of Operating Lease Expense and Supplemental Cash and Non-cash Information

Operating lease expense was as follows:


	Three Months Ended March 31,
	2022		2023
Rent expense	$	3,932	$	4,038
Variable lease payments	$	866	$	976

Supplemental cash flow and non-cash information related to the Company’s operating leases was as follows:


	Three Months Ended March 31,
	2022		2023

Cash paid for amounts included in the measurement of lease liabilities	$	2,063	$	3,665

Supplemental balance sheet information related to the Company’s operating leases was as follows:


									March 31,
									2023
Weighted-average remaining lease term (in years)									7.08
Weighted-average discount rate									3.85%

Fair Value Measurement - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans on non-accrual status	120 days
Charges-off loans	120 days
Notes receivable and residual certificates	$ 5,000
Average effect of fair value of hypothetical 20% adverse change in expected credit loss rates	(34.00%)
Upstart-powered personal loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Changes in fair value recorded in earnings	$ (17,000)
Fair Value, Inputs, Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans held-for-sale	839,500		$ 882,800
Loans held-for-investment	142,700		127,600
Notes receivable and residual certificates	$ 5,009		$ 6,181
Fair Value, Inputs, Level 3 \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Average effect on fair value of a 100 basis point increase in discount rates	1.03%		1.10%
Average effect on fair value of a 200 basis point increase in discount rates	2.05%		2.18%
Fair Value, Inputs, Level 3 \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Changes in fair value recorded in earnings	$ (48,161)	$ (19,511)
Fair Value, Inputs, Level 3 \| Minimum \| Discount rate \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trailing fees liability, measurement input	6.36%
Fair Value, Inputs, Level 3 \| Minimum \| Discount rate \| Notes Receivable \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	8.98%		8.42%
Fair Value, Inputs, Level 3 \| Minimum \| Discount rate \| Loans (at fair value) \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	6.36%		6.36%
Fair Value, Inputs, Level 3 \| Minimum \| Credit risk rate \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trailing fees liability, measurement input	0.01%
Fair Value, Inputs, Level 3 \| Minimum \| Credit risk rate \| Notes Receivable \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	0.59%		0.59%
Fair Value, Inputs, Level 3 \| Minimum \| Credit risk rate \| Loans (at fair value) \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	0.01%		0.01%
Fair Value, Inputs, Level 3 \| Maximum \| Discount rate \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trailing fees liability, measurement input	22.67%
Fair Value, Inputs, Level 3 \| Maximum \| Discount rate \| Notes Receivable \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	22.66%		22.27%
Fair Value, Inputs, Level 3 \| Maximum \| Discount rate \| Loans (at fair value) \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	22.67%		22.28%
Fair Value, Inputs, Level 3 \| Maximum \| Credit risk rate \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Trailing fees liability, measurement input	93.05%
Fair Value, Inputs, Level 3 \| Maximum \| Credit risk rate \| Notes Receivable \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	50.69%		50.69%
Fair Value, Inputs, Level 3 \| Maximum \| Credit risk rate \| Loans (at fair value) \| Valuation Technique, Discounted Cash Flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	93.05%		93.09%

Variable Interest Entities - Assets and Liabilities (Details) - USD ($)
$ in Thousands

Mar. 31, 2023

Dec. 31, 2022

Mar. 31, 2022

Dec. 31, 2021

Variable Interest Entity [Line Items]

Assets

^[1]

$ 1,821,720

$ 1,936,054

Liabilities

^[1]

1,194,512

1,263,619

Net Assets

627,208

672,435

$ 876,504

$ 807,078

Variable Interest Entity, Primary Beneficiary

Variable Interest Entity [Line Items]

Assets

995,857

984,481

Liabilities

351,478

337,830

Net Assets

644,379

646,651

Variable Interest Entity, Not Primary Beneficiary | Securitizations and other

Variable Interest Entity [Line Items]

Assets

312,600

364,013

Liabilities

223,703

265,040

Net Assets

88,897

98,973

Maximum Exposure to Losses

$ 12,138

$ 13,311

[1]

The following table presents information on assets and liabilities related to variable interest entities (“VIEs”) that are consolidated by Upstart Holdings, Inc. at December 31, 2022 and March 31, 2023. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The holders of the beneficial interests do not have recourse to the general credit of Upstart Holdings, Inc. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation.


	December 31,		March 31,
	2022		2023
Assets
Cash	$	838	$	13,802
Restricted cash	13,147		18,401
Loans (at fair value)	958,822		952,445

Other assets (includes $2,244 and $1,456 at fair value as of December 31, 2022 and March 31, 2023, respectively)	11,674		11,209
Total assets	$	984,481	$	995,857

Liabilities


Borrowings	$	336,452	$	350,164

Accrued expenses and other liabilities	1,378		1,314
Total liabilities	337,830		351,478
Total net assets	$	646,651	$	644,379

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders

Basic net income (loss) attributable to Upstart Holdings, Inc. common stockholders per common share is based on the weighted-average common shares outstanding during the relevant period. Diluted net income (loss) attributable to Upstart Holdings, Inc. common stockholders per share is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards and convertible debt.

For periods in which the Company reports net losses, basic and diluted net loss per share are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.


	Three Months Ended March 31,
		2022		2023
Numerator:
Net income (loss)		$	32,692	$	(129,254)






Denominator:
Weighted-average common shares outstanding used to calculate net income (loss) per share, basic		84,230,445		81,911,433
Weighted-average effect of dilutive securities		11,227,331		—
Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted		95,457,776		81,911,433

Net income (loss) per share, basic		$	0.39	$	(1.58)
Net income (loss) per share, diluted		$	0.34	$	(1.58)

The following securities were excluded from the computation of diluted net income (loss) attributable to Upstart Holdings, Inc. common stockholders per share for the periods presented, due to their anti-dilutive effect. These amounts represent the number of instruments outstanding at the end of each respective quarter:


	Three Months Ended March 31,
	2022	2023

Options to purchase common stock	718,911	13,881,292
Unvested RSUs	1,077,703	8,222,931
Unvested PRSUs	687,500	—
Purchase rights committed under the ESPP	2,620	174,543

Convertible debt	2,318,078	2,318,078

Total	4,804,812	24,596,844

Balance Sheet Components - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Other Assets [Abstract]
Accrued expenses	$ 19,600	$ 23,506
Accrued payroll	12,824	21,825
Loan servicing liabilities (at fair value)	3,142	3,968
Trailing fee liability (at fair value)	4,449	4,852
Other liabilities	6,976	12,795
Total accrued expenses and other liabilities	$ 46,991	$ 66,946

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Mar. 31, 2023

Dec. 31, 2022

Assets

Cash

$ 386,942

$ 422,411

Restricted cash

64,917

110,056

Loans (at fair value)

982,229

1,010,421

Property, equipment, and software, net

46,977

44,168

Operating lease right of use assets

83,382

86,335

Non-marketable equity securities

41,250

Goodwill

67,062

Intangible assets, net

14,562

15,631

Other assets (includes $42,648 and $44,096 at fair value as of December 31, 2022 and March 31, 2023, respectively)

134,399

138,720

Total assets

^[1]

1,821,720

1,936,054

Liabilities:

Accounts payable

6,553

18,715

Payable to investors

41,047

90,777

Borrowings

1,000,871

986,394

Accrued expenses and other liabilities (includes $8,820 and $7,591 at fair value as of December 31, 2022 and March 31, 2023, respectively)

46,991

66,946

Operating lease liabilities

99,050

100,787

Total liabilities

^[1]

1,194,512

1,263,619

Stockholders’ equity:

Common stock, $0.0001 par value; 700,000,000 shares authorized; 81,259,676 and 82,600,748 shares issued and outstanding as of December 31, 2022 and March 31, 2023, respectively

Additional paid-in capital

798,898

714,871

Accumulated deficit

(171,698)

(42,444)

Total stockholders’ equity

627,208

672,435

Total liabilities and stockholders’ equity

$ 1,821,720

$ 1,936,054

[1]


	December 31,		March 31,
	2022		2023
Assets
Cash	$	838	$	13,802
Restricted cash	13,147		18,401
Loans (at fair value)	958,822		952,445

Other assets (includes $2,244 and $1,456 at fair value as of December 31, 2022 and March 31, 2023, respectively)	11,674		11,209
Total assets	$	984,481	$	995,857

Liabilities


Borrowings	$	336,452	$	350,164

Accrued expenses and other liabilities	1,378		1,314
Total liabilities	337,830		351,478
Total net assets	$	646,651	$	644,379

Borrowings (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Aggregate Principal Outstanding of All Loans

The following table presents the aggregate principal outstanding of all loans mentioned in this note that are included in the condensed consolidated balance sheets:


	Borrowings
	December 31,		March 31,
	2022		2023
Warehouse credit facilities	$	336,452	$	350,163

Convertible senior notes	661,250		661,250
Total payments due	997,702		1,011,413
Unamortized debt discount	(11,308)		(10,542)
Total borrowings	$	986,394	$	1,000,871

Schedule of Assets Pledge as Collateral

The following table includes the aggregate balances held by ULT that were pledged as collateral for the ULT Warehouse Credit Facility and included in loans at fair value and restricted cash in the condensed consolidated balance sheets:


	ULT Warehouse Credit Facility
	December 31, 2022		March 31, 2023
Outstanding borrowings	$	163,773	$	151,733
Aggregate outstanding principal of loans pledged as collateral	228,895		210,383
Aggregate fair value of loans purchased and held by ULT	256,024		253,336
Restricted cash pledged as collateral	$	8,547	$	10,962

The following table includes the aggregate balances held by UAWT that were pledged as collateral for the UAWT Warehouse Credit Facility and included in loans at fair value and restricted cash in the condensed consolidated balance sheets as of December 31, 2022 and March 31, 2023.


	UAWT Warehouse Credit Facility
	December 31, 2022		March 31, 2023
Outstanding borrowings	$	172,679	$	198,430
Aggregate outstanding principal of loans pledged as collateral	221,847		298,158
Aggregate fair value of loans purchased and held by UAWT	216,539		291,621
Restricted cash pledged as collateral	$	843	$	490

Schedule of Maturities of All Borrowings

The following table summarizes the aggregate amount of maturities of all borrowings as of March 31, 2023:


	March 31, 2023
Remaining 2023	$	—
2024	151,733
2025	198,430
2026	661,250
2027	—
Thereafter	—
Total	$	1,011,413

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net income (loss)	$ (129,254)	$ 32,692
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of financial instruments	59,046	18,356
Stock-based compensation	74,109	25,050
Gain on loan servicing arrangement, net	(3,613)	(8,705)
Depreciation and amortization	6,441	2,781
Non-cash interest expense	766	776
Other	(974)	0
Net changes in operating assets and liabilities:
Purchase of loans held-for-sale	(510,003)	(3,457,784)
Proceeds from sale of loans held-for-sale	449,339	3,065,358
Principal payments received for loans held-for-sale	57,949	20,328
Other assets	306	7,287
Operating lease liability and right-of-use asset	1,216	2,584
Accounts payable	(12,170)	3,371
Payable to investors	(49,730)	32,204
Accrued expenses and other liabilities	(19,155)	(11,093)
Net cash used in operating activities	(75,727)	(266,795)
Cash flows from investing activities
Purchase of loans held-for-investment	(46,382)	0
Principal payments received for loans held-for-investment	24,422	9,397
Principal payments received for notes receivable and repayments of residual certificates	1,566	2,067
Purchase of non-marketable equity securities	0	(1,000)
Purchase of property and equipment	(1,111)	(1,629)
Capitalized software costs	(4,347)	(3,658)
Net cash provided by (used in) investing activities	(25,852)	5,177
Cash flows from financing activities
Proceeds from borrowings	60,673	80,004
Repayments of borrowings	(46,962)	(6,990)
Proceeds from issuance of common stock under employee stock purchase plan	5,728	4,431
Proceeds from exercise of stock options	1,537	5,626
Taxes paid related to net share settlement of equity awards	(5)	0
Net cash provided by financing activities	20,971	83,071
Change in cash and restricted cash	(80,608)	(178,547)
Cash and restricted cash at beginning of period	532,467	1,191,241
Cash and restricted cash at end of period	451,859	1,012,694
Supplemental disclosures of cash flow information
Cash paid for interest	7,959	1,763
Cash (received) paid for income taxes, net	(1,153)	18
Supplemental disclosures of non-cash investing and financing activities
Capitalized stock-based compensation expense	2,658	1,627
Reclassification of loans	0	109,792
Cash and Restricted Cash
Cash	386,942
Restricted cash	64,917
Total cash and restricted cash	$ 451,859	$ 1,012,694

Borrowings - Assets Pledged as Collateral (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Borrowings [Line Items]
Outstanding borrowings	$ 1,011,413	$ 997,702
Restricted cash pledged as collateral	64,917	110,056
Variable Interest Entity, Primary Beneficiary
Schedule of Borrowings [Line Items]
Restricted cash pledged as collateral	18,401	13,147
ULT Warehouse Credit Facility \| Revolving Credit Facility \| Variable Interest Entity, Primary Beneficiary
Schedule of Borrowings [Line Items]
Outstanding borrowings	151,733	163,773
ULT Warehouse Credit Facility \| Revolving Credit Facility \| Variable Interest Entity, Primary Beneficiary \| Asset Pledged as Collateral
Schedule of Borrowings [Line Items]
Aggregate outstanding principal of loans pledged as collateral	210,383	228,895
Aggregate fair value of loans purchased and held by UAWT	253,336	256,024
Restricted cash pledged as collateral	10,962	8,547
UAWT Warehouse Credit Facility \| Revolving Credit Facility \| Variable Interest Entity, Primary Beneficiary
Schedule of Borrowings [Line Items]
Outstanding borrowings	198,430	172,679
Aggregate outstanding principal of loans pledged as collateral	298,158	221,847
Aggregate fair value of loans purchased and held by UAWT	291,621	216,539
Restricted cash pledged as collateral	$ 490	$ 843

Derivative Financial Instruments	3 Months Ended
Derivative Financial Instruments	Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments In February 2023, UAWT entered into a $198.7 million notional amortizing interest rate cap agreement with a strike rate of 3.0% and a premium of $5.6 million in relation to the $200 million UAWT Warehouse Credit Facility, which uses a 1-month Secured Overnight Financing Rate (“SOFR”) as the underlying variable rate for the interest rate on the borrowings under the facility. This cap provides protection to UAWT against exposure to changes in cash flows to the extent 1-month SOFR exceeds 3.0%. This agreement also ensures that the Company remains compliant with the covenants of the Warehouse Credit Agreement. The interest rate cap has a maturity date of April 2029. The interest rate cap meets the definition of a derivative and is reported at fair value as part of other assets on the condensed consolidated balance sheets. It is classified as Level 2 under the fair value hierarchy as the inputs to the derivative pricing model are generally observable and do not contain a high level of subjectivity. The fair value of the interest rate cap is determined based on the present value of the estimated future cash flows over the contract term using implied interest rates as of the valuation date. The Company recorded an immaterial loss within interest expense on the condensed consolidated statements of operations and comprehensive income (loss) for the quarter ended March 31, 2023. In March 2023, in connection with a loan sale agreement, we entered into an arrangement under which we are obligated to make payments to the loan buyer or are entitled to receive payments from the buyer if credit losses on personal loans subject to the arrangement deviate from expectations, subject to a dollar cap. As the loan purchaser maintains control of the transferred assets and retains the risk of loss, and the assets remain legally isolated from the Company, the transfer qualified for true sale accounting. The derivative is classified as an asset or a liability and its value is included in other assets or other liabilities, respectively, on the condensed consolidated balance sheets based on the classification of this derivative as an asset or liability. The arrangement is measured at fair value on a recurring basis using a discounted cash flow model. It is categorized as a Level 3 instrument, as the fair value depends on the credit performance of the underlying loan portfolio. The arrangement had no value as of March 31, 2023 as the underlying loan portfolio performs in line with expectations. It also had no impact on the Company’s condensed consolidated statements of operations and comprehensive income (loss) in the quarter ended March 31, 2023.

Stockholders’ Equity - RSU Activity (Details) - RSUs outstanding	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	6,046,796
RSUs granted (in shares) \| shares	3,409,843
RSUs vested (in shares) \| shares	(698,173)
RSUs cancelled and forfeited (in shares) \| shares	(535,535)
Ending balance (in shares) \| shares	8,222,931
Weighted-Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 51.28
RSUs granted (in dollars per share) \| $ / shares	17.44
RSUs vested (in dollars per share) \| $ / shares	42.10
RSUs cancelled and forfeited (in dollars per share) \| $ / shares	74.43
Ending balance (in dollars per share) \| $ / shares	$ 36.52

Balance Sheet Components - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Depreciation	$ 6.4
Capitalized internally developed software balances, net of accumulated amortization	29.9	$ 27.4
Impairment Of Intangible Assets \| January 2023 Plan
Restructuring Cost and Reserve [Line Items]
Reorganization expenses	$ 2.6

Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Other Assets [Abstract]
Servicing fees and other receivables	$ 42,943	$ 46,652
Loan servicing assets (at fair value)	34,650	36,467
Prepaid expenses	22,032	16,740
Deposits	9,839	10,002
Notes receivable and residual certificates (at fair value)	5,009	6,181
Other assets	19,926	22,678
Total other assets	$ 134,399	$ 138,720

Variable Interest Entities - Narrative (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Variable Interest Entity [Line Items]
Risk retention requirement declines	$ 0
Loans (at fair value)	982,229,000	$ 1,010,421,000
Notes receivable and residual certificates	5,000,000
Restricted cash	64,917,000	110,056,000
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Restricted cash	$ 7,100,000	7,100,000
Variable Interest Entity, Not Primary Beneficiary \| Notes receivable and residual certificates (at fair value)
Variable Interest Entity [Line Items]
Loans (at fair value)		$ 6,200,000

Borrowings - Schedule of aggregate principal outstanding of all loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Borrowings [Line Items]
Total payments due	$ 1,011,413	$ 997,702
Unamortized debt discount	(10,542)	(11,308)
Total borrowings	1,000,871	986,394
Warehouse credit facilities \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Total payments due	350,163	336,452
Convertible senior notes
Schedule of Borrowings [Line Items]
Total payments due	$ 661,250	$ 661,250

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2023	May 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-39797
Entity Registrant Name	Upstart Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4332431
Entity Address, Address Line One	2950 S. Delaware Street
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94403
City Area Code	650
Local Phone Number	204-1000
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	UPST
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		82,670,997
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001647639
Current Fiscal Year End Date	--12-31

Fair Value Measurement - Fair Value Assumptions (Details) - Fair Value, Inputs, Level 3 - Valuation Technique, Discounted Cash Flow	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Minimum
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items]
Discount rate	13.00%	13.00%
Credit risk rate	0.04%	0.03%
Market-servicing rate	0.62%	0.62%
Prepayment rate	4.62%	0.53%
Maximum
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items]
Discount rate	20.00%	20.00%
Credit risk rate	65.36%	91.76%
Market-servicing rate	3.72%	3.72%
Prepayment rate	96.90%	91.99%
Weighted Average
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items]
Discount rate	17.08%	17.20%
Credit risk rate	15.73%	16.22%
Market-servicing rate	0.62%	0.62%
Prepayment rate	41.50%	41.19%

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

The Company’s operating leases expire between 2027 and 2032 and are primarily for its corporate headquarters in San Mateo, California and Columbus, Ohio, as well as additional office space in Columbus, Ohio and Austin, Texas. Certain leases have rent abatement, escalating rent payment provisions, lease renewal options, and tenant allowances. Rent expense is recognized on a straight-line basis over the non-cancelable lease term, except when it is reasonably certain that the renewal option will be exercised. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities on our condensed consolidated balance sheets.

In connection with the Company’s lease agreements, letters of credit were issued on behalf of the Company for the benefit of the landlord in an aggregate amount of $3.4 million. The letters of credit are secured by certificates of deposit which are included in restricted cash on the condensed consolidated balance sheets.

As of March 31, 2023, future minimum lease payments are as follows:


	Operating Leases
Remaining 2023	$	11,426
2024	17,054
2025	17,544
2026	18,055
2027	17,745
Thereafter	34,816
Total undiscounted lease payments	116,640
Less: Tenant improvement receivables	(2,375)
Less: Present value adjustment	(15,215)
Operating lease liabilities	$	99,050

The Company did not have any material finance leases in any period presented. The Company’s operating lease expense consists of rent and variable lease payments. Variable lease payments such as common area maintenance and parking fees, were included in operating expenses. Rent expense for the Company’s short-term leases was immaterial for the periods presented. Operating lease expense was as follows:


	Three Months Ended March 31,
	2022		2023
Rent expense	$	3,932	$	4,038
Variable lease payments	$	866	$	976

Supplemental cash flow and non-cash information related to the Company’s operating leases was as follows:


	Three Months Ended March 31,
	2022		2023

Cash paid for amounts included in the measurement of lease liabilities	$	2,063	$	3,665

Supplemental balance sheet information related to the Company’s operating leases was as follows:


									March 31,
									2023
Weighted-average remaining lease term (in years)									7.08
Weighted-average discount rate									3.85%

Leases - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
Leases - Lease Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Rent expense	$ 4,038	$ 3,932
Variable lease payments	976	866
Cash paid for amounts included in the measurement of lease liabilities	$ 3,665	$ 2,063
Weighted-average remaining lease term (in years)	7 years 29 days
Weighted-average discount rate	3.85%

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments The Company has loan purchase obligations under the Company’s loan agreements with certain lending partners. These lending partners retain ownership of the loans facilitated through Upstart’s platform for three days or longer (the “holding period”) after origination, as required under the respective agreements. The Company has committed to purchase the loans at the conclusion of the required holding period. As of December 31, 2022 and March 31, 2023, the total loan purchase commitment included outstanding principal balance of $17.8 million and $15.3 million, respectively. Contingencies Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses material contingencies when it believes a loss is not probable but reasonably possible and may voluntarily provide information on additional contingencies. From time to time the Company is subject to, and it is presently involved in, various litigation and legal proceedings arising from the ordinary course of business activities the outcome of which the Company cannot reasonably determine. Other than the class actions described below, the Company does not believe that it is presently a party to any litigation of which the outcome would individually, or taken together, have a material adverse effect on our business, operating results, cash flows, or financial condition. As of December 31, 2022 and March 31, 2023, no loss contingency has been recorded in connection with legal proceedings. Indemnifications In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s condensed consolidated financial statements. Repurchases Under the terms of the loan purchase and loan servicing agreements between the Company and institutional investors, as well as in agreements with investors in securitizations and pass-through certificate transactions, the Company may, in certain circumstances, become obligated to repurchase loans from such institutional investors. Generally, these circumstances include the occurrence of verifiable identity theft, the failure of sold loans to meet the terms of certain loan-level representations and warranties that speak as of the time of origination or sale, the failure to comply with other contractual terms with the institutional investors, or a violation of the applicable federal, state, or local lending laws. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the loans sold to the institutional investors, which at December 31, 2022 and March 31, 2023 is $15,551.1 million and $14,447.8 million, respectively. Actual payments made relating to the Company’s repurchase and indemnification obligations were immaterial. The Company has recorded contingent liabilities as of December 31, 2022 and March 31, 2023 of immaterial amounts to cover estimated future obligations related to these contractual terms. These amounts are included in accrued expenses and other liabilities on the Company’s condensed consolidated balance sheets. Legal On May 13, 2022, a purported class action lawsuit was filed in the United States District Court, Northern District of California, captioned Ward v. Upstart Holdings, Inc., et al., Case No. 5:22-cv-02856-BLF (N.D. Cal.) against the Company, the Company’s Chief Executive Officer, and Chief Financial Officer alleging, among other things, that the defendants made false and/or misleading statements or omissions about the Company’s business, operations, and prospects in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, as well as Section 20(a) of the Exchange Act. The Ward lawsuit claimed unspecified damages and legal fees. Between May 19, 2022 and June 22, 2022, two additional related purported class action lawsuits were filed in the United States District Court, Northern District of California, captioned Plymouth County Retirement Association v. Upstart Holdings, Inc., et al., Case No. 3:22-cv-02973-WHO (N.D. Cal.) and Zhang v. Upstart Holdings, Inc., et al., Case No. 3:22-cv-03668-JD (N.D. Cal.). On July 7, 2022, a related purported class action lawsuit was filed in the United States District Court, Southern District of Ohio, captioned Handelsbanken Fonder AB v. Upstart Holdings, Inc., et al., Case No. 2:22-cv-02706-SDM-EPD (S.D. Ohio). The Zhang, Plymouth County, and Handelsbanken Fonder actions named the same defendants and made similar allegations to those in the Ward action. On July 11, 2022, plaintiffs in the Zhang and Plymouth County actions filed notices voluntarily dismissing their lawsuits without prejudice. On July 12, 2022, motions to appoint lead plaintiff and lead counsel were filed in both the Ward action and the Handelsbanken Fonder action. On July 26, 2022, plaintiff in the Ward action filed a notice voluntarily dismissing his lawsuit without prejudice, and on July 27, 2022, plaintiff in the Handelsbanken Fonder action filed a notice voluntarily dismissing its lawsuit without prejudice. On July 26, 2022, an additional lawsuit was filed in United States District Court, Southern District of Ohio, captioned Crain v. Upstart Holdings, Inc. et al., Case No. 2:22-cv-02935-ALM-EPD (S.D. Ohio) against the Company, the Company’s Chief Executive Officer, and Chief Financial Officer. The Crain lawsuit makes allegations similar to those in the Handelsbanken Fonder action and alleges that the defendants made false and/or misleading statements or omissions about the Company’s business, operations, and prospects in violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, as well as Section 20(a) of the Exchange Act. The Crain lawsuit claims unspecified damages and legal fees. On August 16, 2022, the court appointed a lead plaintiff and approved lead counsel in the Crain action. On December 5, 2022, the lead plaintiff filed a consolidated amended complaint, which names the same defendants as the previous complaint, along with two Company executives, as well as Third Point LLC and its CEO and Third Point Ventures LLC and its managing partner (also a former Upstart board member). The consolidated amended complaint brings the same claims as the previous complaint but adds a claim under Section 20A of the Exchange Act. On February 24, 2023, defendants filed a motion to dismiss the consolidated amended complaint. No hearing date has been set for that motion. On July 28, 2022, a derivative lawsuit was filed in United States District Court, Southern District of Ohio, captioned OConnor v. Huber et al., Case No. 2:22-cv-02961-EAS-KAJ (S.D. Ohio). The OConnor action includes allegations similar to those in the Crain complaint, and names as defendants each of the Company’s current board members and its Chief Financial Officer. The Company is named as a nominal defendant. The OConnor action includes claims for violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets. The OConnor action seeks unspecified monetary damages and an accounting from the individual defendants. The OConnor action also seeks unspecified corporate governance and internal procedure modifications, punitive damages, and legal fees. On October 7, 2022, a second derivative lawsuit was filed in United States District Court, Southern District of Ohio, captioned Chung v. Huber et al., No. 2:22-cv-03620-MHW-CMV (S.D. Ohio). The Chung action includes allegations similar to those in the OConnor complaint, and names as defendants each of the Company’s current board members, a former board member, and its Chief Financial Officer. The Company is named as a nominal defendant. The Chung action includes claims for violation of Section 10(b), 14(a), and 21D of the Exchange Act, breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The Chung action seeks unspecified monetary damages, restitution, and attorney’s fees and costs from the individual defendants. It also seeks corporate governance and internal procedure modifications. On December 12, 2022, in response to a joint motion by the parties, the Court consolidated the OConnor and Chung matters, appointed co-lead counsel, and stayed the consolidated case until resolution of the related Crain securities class action. On February 3, 2023, a third derivative lawsuit was filed, in the United States District Court, District of Delaware, captioned Hsu v. Girouard, et al., 1:23-cv-00132-UNA (D. Del.). The Hsu action includes allegations similar to those in the consolidated derivative matter pending in Ohio, and names as defendants each of the Company’s current board members, a former board member, and its Chief Financial Officer. The Company is named as a nominal defendant. The Hsu action includes claims for violation of Section 14(a) of the Exchange Act as well as breach of fiduciary duties, and seeks unspecified monetary damages, restitution, and attorney’s fees and costs from the individual defendants. It also seeks corporate governance and internal procedure modifications. On February 16, 2023, in response to a joint stipulation and proposed order submitted by the parties, the Court stayed the Hsu action until resolution of the related Crain securities class action. On March 8, 2023, a fourth derivative lawsuit was filed, in the United States District Court, District of Delaware, captioned Sornchai et al. v. Girouard, et al., 1:23-cv-00253-MN (D. Del). The Sornchai action includes allegations similar to those in the consolidated derivative matter pending in Ohio, and names as defendants each of the Company’s current board members, a former board member, its Chief Financial Officer, and a Company executive. The Company is named as a nominal defendant. The Sornchai action includes claims for violations of Sections 10(b), 14(a) and 21D of the Exchange Act, breach of fiduciary duties, breach of fiduciary duty through misappropriation of material non-public information, and unjust enrichment, and seeks unspecified monetary damages, restitution, and attorney’s fees and costs from the individual defendants. It also seeks corporate governance and internal procedure modifications. On March 24, 2023, in response to a joint stipulation and proposed order submitted by the parties, the Court stayed the Sornchai action until resolution of the related Crain securities class action. On April 5, 2023, a fifth derivative lawsuit was filed, in the Court of Chancery of the State of Delaware, captioned Okhai v. Girouard, et al., C.A. No. 2023-0401-SG (Del. Ch.). The Okhai action includes allegations similar to those in the consolidated derivative matter pending in Ohio, and names as defendants the Company’s current board members, two former board members, its Chief Financial Officer, and two current or former Company executives, as well as Third Point LLC and Third Point Ventures LLC. The Okhai action includes claims for breach of fiduciary, aiding and abetting such alleged breaches, and unjust enrichment, and seeks equitable and/or injunctive relief, restitution, and attorney’s fees and costs from the individual defendants. The Company believes the claims in the above-referenced lawsuits are without merit and intends to defend itself vigorously. Given the uncertainty of litigation described above, the preliminary stage of the cases, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from these actions.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands

Mar. 31, 2023

Dec. 31, 2022

Other assets at fair value

$ 44,096

$ 42,648

Accrued expenses and other liabilities at fair value

$ 7,591

$ 8,820

Common stock, par value (in dollars per share)

$ 0.0001

Common stock, authorized (in shares)

700,000,000

Common stock, issued (in shares)

82,600,748

81,259,676

Common stock, outstanding (in shares)

82,600,748

81,259,676

Assets

Cash

$ 386,942

$ 422,411

Restricted cash

64,917

110,056

Loans (at fair value)

982,229

1,010,421

Other assets (includes $2,244 and $1,456 at fair value as of December 31, 2022 and March 31, 2023, respectively)

134,399

138,720

Total assets

^[1]

1,821,720

1,936,054

Other assets at fair value

44,096

42,648

Liabilities

Accrued expenses and other liabilities

46,991

66,946

Borrowings

1,000,871

986,394

Total liabilities

^[1]

1,194,512

1,263,619

Total stockholders’ equity

627,208

672,435

Variable Interest Entity, Primary Beneficiary

Other assets at fair value

1,456

2,244

Assets

Cash

13,802

838

Restricted cash

18,401

13,147

Loans (at fair value)

952,445

958,822

Other assets (includes $2,244 and $1,456 at fair value as of December 31, 2022 and March 31, 2023, respectively)

11,209

11,674

Total assets

995,857

984,481

Other assets at fair value

1,456

2,244

Liabilities

Accrued expenses and other liabilities

1,314

1,378

Borrowings

350,164

336,452

Total liabilities

351,478

337,830

Total stockholders’ equity

$ 644,379

$ 646,651

[1]


	December 31,		March 31,
	2022		2023
Assets
Cash	$	838	$	13,802
Restricted cash	13,147		18,401
Loans (at fair value)	958,822		952,445

Other assets (includes $2,244 and $1,456 at fair value as of December 31, 2022 and March 31, 2023, respectively)	11,674		11,209
Total assets	$	984,481	$	995,857

Liabilities


Borrowings	$	336,452	$	350,164

Accrued expenses and other liabilities	1,378		1,314
Total liabilities	337,830		351,478
Total net assets	$	646,651	$	644,379

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible assets

Goodwill and Intangible Assets

Goodwill

During the three months ended March 31, 2023, there were no changes in the carrying amount of goodwill of $67.1 million on the Company’s condensed consolidated balance sheets.

Intangible Assets

Developed Technology


	December 31, 2022		March 31, 2023
Gross carrying amount	$	9,400	$	9,400
Accumulated amortization	(5,483)		(6,267)
Net carrying value	$	3,917	$	3,133
Weighted-Average Remaining Useful Life (Years)	1.3		1.0

Customer Relationships


	December 31, 2022		March 31, 2023
Gross carrying amount	$	13,700	$	13,700
Accumulated amortization	(1,998)		(2,283)
Net carrying value	$	11,702	$	11,417
Weighted-Average Remaining Useful Life (Years)	10.3		10.0

Amortization expense was $1.1 million for each of the three months ended March 31, 2022 and 2023.

Expected future amortization expense for intangible assets as of March 31, 2023 is as follows:


Fiscal Years:
Remaining 2023	$	3,206
2024	1,925
2025	1,142
2026	1,142
2027	1,142
Thereafter	5,993
Total	$	14,550

Stockholders’ Equity

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stockholders’ Equity

Stockholders' Equity

Common Stock Reserved for Future Issuance


	December 31,	March 31,
	2022	2023
Options issued and outstanding	12,547,010	13,929,917
RSUs outstanding	6,046,796	8,222,931
PRSUs outstanding	687,500	—
Shares available for future issuance under 2020 plan	5,842,057	6,004,507
Shares available for issuance under ESPP	2,543,089	3,043,551
Total	27,666,452	31,200,906

Share Repurchase Program

In February 2022, the Board of Directors authorized the Company to purchase up to $400.0 million of common stock of the Company. The Company may repurchase shares from time to time through open market

purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1. The repurchase program does not obligate the Company to acquire any particular amount of its common stock, and may be suspended or terminated by the Company at any time at its discretion without prior notice.

The Company records share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. The Company’s policy for share retirements is to allocate the excess between par value and the repurchase price, including costs and fees, to additional paid-in capital. During the three months ended March 31, 2023, the Company made no repurchases of common stock. As of March 31, 2023, $222.1 million remains available for future purchases of our common stock under the share repurchase program.

Equity Incentive Plans

The Company's 2020 Equity Incentive Plan authorizes grants of ISOs, NSOs, stock appreciation rights, restricted stock, RSUs, and performance awards to eligible participants.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2023:


	Number of Options	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Balances at December 31, 2022	12,547,010	$	14.65	6.6	$	77,289

Options granted	2,065,794	15.23
Options exercised	(331,093)	4.64
Options cancelled and forfeited	(351,794)	18.81
Balances at March 31, 2023	13,929,917	14.87		6.8	96,888
Options exercisable – March 31, 2023	8,251,381	6.94		5.1	88,402
Options vested and expected to vest – March 31, 2023	13,881,292	$	14.81	6.8	$	96,844

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the Company’s stock as of March 31, 2023. The aggregate intrinsic value of options exercised for the three months ended March 31, 2022 and 2023 was $105.2 million and $4.0 million respectively. The weighted-average grant date fair value of options granted during the three months ended March 31, 2022 and 2023 was $63.78 and $8.00 per share, respectively. The total fair value of options vested for the three months ended March 31, 2022 and 2023 was $6.7 million and $9.5 million respectively.

As of March 31, 2023, total unrecognized stock-based compensation expense related to unvested stock options was $65.4 million, which is expected to be recognized over a remaining weighted-average period of 3.0 years.

Restricted Stock Units

The Company grants RSUs to employees and nonemployees. RSUs vest upon satisfaction of a service-based condition, which is generally satisfied over one to four years. The following table summarizes RSU activity for the three months ended March 31, 2023:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	6,046,796	$	51.28
RSUs granted	3,409,843	17.44
RSUs vested	(698,173)	42.10
RSUs cancelled and forfeited	(535,535)	74.43
Unvested at March 31, 2023	8,222,931	$	36.52

As of March 31, 2023, total unrecognized stock-based compensation expense related to outstanding unvested RSUs was $253.6 million, which is expected to be recognized over a remaining weighted-average period of 2.6 years.

Restricted Stock

In connection with the Prodigy Software, Inc. (“Prodigy”) acquisition in April 2021, 82,201 shares of the Company’s restricted common stock (“restricted stock”) with a fair value of $10.1 million were issued to certain Prodigy employees. The restricted stock is subject to transfer restrictions and a repurchase option and is contingent upon the employees' continued employment with the Company. The repurchase option will lapse with respect to 1/8th of the shares of restricted stock at the end of each successive three-month period following the closing date of the Prodigy acquisition. The restricted stock is subject to restrictions which lapse on a quarterly basis over two years from the time of the Prodigy acquisition.

The following table summarizes Restricted Stock activity for the three months ended March 31, 2023:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	10,271	$	123.33

Vested	(5,138)	123.33
Unvested at March 31, 2023	5,133	$	123.33

As of March 31, 2023, total unrecognized stock-based compensation expense related to restricted stock was immaterial.

Performance-based Restricted Stock Units

On February 24, 2023, the Company’s Compensation Committee of the Board of Directors approved the cancellation of a performance-based restricted stock unit award (“PRSUs”) that may be settled for 687,500 shares of the Company’s common stock granted to an executive in February 2022.

At the time the PRSUs were granted, the PRSUs were intended to be the executive’s primary compensation through calendar year 2029 so that, in connection with the grant of the PRSUs, the executive’s cash compensation was limited to the amount necessary to allow the executive to participate in the broad-based employee benefits generally applicable at the Company. In reaching its decision to cancel the PRSUs, the Compensation Committee

extensively considered the purpose of the PRSUs and determined that the grant no longer provided the intended retention and incentive value to the executive. After considering various alternatives and the pros and cons of such alternatives and consulting with its external advisors, the Compensation Committee believed it was in the best interest of the Company and its stockholders to cancel the PRSUs in exchange for the reinstatement of the executive’s cash compensation, including the executive’s annual base salary and eligibility to participate in the Company’s 2023 Executive Bonus Plan with an annual target bonus opportunity equal to 75% of the executive’s annual base salary.

Compensation expense associated with the PRSUs was recognized using the straight-line attribution method for each of the nine vesting tranches over the respective derived service period. The weighted-average grant date fair value using the Monte Carlo simulation was $68.76 per share. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether these conditions will be achieved or not, and stock-based compensation expense for any such awards is not reversed if the market condition is not met. The cancellation of the grant was treated by the Company as a settlement for no consideration and remaining unrecognized compensation expense of $39.0 million associated with the grant was accelerated and recorded by the Company as part of engineering and product development expense on the condensed consolidated statements of operations and comprehensive income (loss) for the quarter ended March 31, 2023.

2020 Employee Stock Purchase Plan

Our ESPP provides for consecutive six-month offering periods. The offering periods are scheduled to start on the first trading day on or after February 15 and August 15 of each year. The ESPP permits participants to purchase shares in the amount of 85% of the lower of the fair market value of our shares of common stock on the first trading day of the offering period or on the exercise date. During the three months ended March 31, 2023, 312,134 shares of common stock were purchased under the ESPP.

As of March 31, 2023, total unrecognized stock-based compensation expense related to the ESPP was $1.3 million, which is expected to be recognized over a remaining weighted-average period of 0.4 years.

Fair Value of Awards Granted

In determining the fair value of stock-based awards, the Company uses a Black-Scholes option-pricing model for its options granted and ESPP purchase rights and a Monte Carlo simulation model for its PRSUs. The inputs used for estimating the fair values of options granted, ESPP purchase rights and PRSUs granted during the period include:

Fair Value of Common Stock–The fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market.

Expected Term–The expected term represents the period that the Company’s stock options and ESPP purchase rights are expected to be outstanding. We estimate the expected term based on the simplified method, which is the weighted-average time to vesting and the contractual maturity. The expected term for PRSUs is the simulation term, the time period from the valuation date to the end of the performance measurement period.

Volatility–Because the Company has not had an active trading market for its common stock for a sufficient period of time, the expected volatility is estimated based on the average volatility for comparable publicly-traded companies, over a period equal to the expected term of the stock option grants.

Risk-free Interest Rate–The risk-free interest rate assumption is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the option.

Dividends–The Company has never paid dividends on its common stock and does not anticipate paying dividends on common stock for the foreseeable future. Therefore, the Company uses an expected dividend yield of zero.

The following assumptions were used to estimate the fair value of options granted:

Three Months Ended March 31,

2022

2023

Expected term (in years)

5.2 – 7.0

5.3 – 7.0

Expected volatility

47.58% – 48.72%

50.96% – 52.89%

Risk-free interest rate

1.70% – 2.16%

3.45% – 3.45%

Dividend yield

—%

The following assumptions were used to estimate the fair value of the February 2022 PRSUs granted:



Expected term (in years)			6.9
Expected volatility			48.43%
Risk-free interest rate			1.89%
Dividend yield			0%

The following assumptions were used to estimate the fair value of ESPP purchase rights:


	Three Months Ended March 31,
	2022	2023
Expected term (in years)	0.5	0.5
Expected volatility	91.98%	97.74%
Risk-free interest rate	0.72%	4.97%
Dividend yield	—%	—%

Stock-Based Compensation


	Three Months Ended March 31,
	2022		2023
Sales and marketing	$	2,238	$	3,372
Customer operations	1,619		2,882
Engineering and product development	13,634		56,660
General, administrative, and other	7,559		11,195
Total	$	25,050	$	74,109

Fair Value Measurement - Loans Rollforward (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Loans (at fair value)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 1,010,421	$ 252,477
Reclassification of loans from HFI to HFS		0
Purchases of loans	167,816	443,190
Sale of loans	(67,532)	(50,764)
Purchase of loans for immediate resale	389,389	3,014,594
Immediate resale of loans	(389,389)	(3,014,594)
Repayments received	(82,373)	(29,726)
Changes in fair value recorded in earnings	(48,161)	(19,511)
Other changes	2,058	2,315
Fair value, ending balance	982,229	597,981
Loan Held For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	882,810	142,685
Reclassification of loans from HFI to HFS		109,792
Purchases of loans	120,615	443,190
Sale of loans	(67,532)	(50,764)
Purchase of loans for immediate resale	389,389	3,014,594
Immediate resale of loans	(389,389)	(3,014,594)
Repayments received	(61,501)	(29,726)
Changes in fair value recorded in earnings	(35,430)	(19,511)
Other changes	520	2,315
Fair value, ending balance	839,482	597,981
Loans Held For Investment
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	127,611	109,792
Reclassification of loans from HFI to HFS		(109,792)
Purchases of loans	47,201	0
Sale of loans	0	0
Purchase of loans for immediate resale	0	0
Immediate resale of loans	0	0
Repayments received	(20,872)	0
Changes in fair value recorded in earnings	(12,731)	0
Other changes	1,538	0
Fair value, ending balance	$ 142,747	$ 0

Commitments and Contingencies (Details) - Obligation to Repurchase Loans - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Loss Contingencies [Line Items]
Loan purchase obligation	$ 15.3	$ 17.8
Maximum estimate of potential loss	$ 14,447.8	$ 15,551.1

Fair Value Measurement - Trailing Fee Rollforward (Details) - Fair Value, Inputs, Level 3 - Trailing Fee Liabilities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 4,852	$ 4,315
Issuances	318	1,667
Repayments and settlements	(747)	(629)
Changes in fair value recorded in earnings	26	(112)
Fair value, ending balance	$ 4,449	$ 5,241

Revenue - Interest Income and Fair Value Adjustments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Interest income	$ 45,315	$ 15,134
Interest expense	(7,132)	(959)
Unrealized loss, charge-offs, and other adjustments, net	(44,544)	(19,309)
Realized gain (loss) on sale of loans, net	(7,853)	1,288
Total fair value and other adjustments	(52,397)	(18,021)
Total interest income and fair value adjustments, net	$ (14,214)	$ (3,846)

Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property, equipment, and software	$ 69,451	$ 61,327
Accumulated depreciation and amortization	(22,474)	(17,159)
Total property, equipment, and software, net	46,977	44,168
Internally developed software
Property, Plant and Equipment [Line Items]
Total property, equipment, and software	44,788	37,783
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, equipment, and software	13,919	13,074
Computer and networking equipment
Property, Plant and Equipment [Line Items]
Total property, equipment, and software	6,054	6,049
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property, equipment, and software	$ 4,690	$ 4,421

Description of Business and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Description of Business and Significant Accounting Policies	Description of Business and Significant Accounting Policies Description of Business Upstart Holdings, Inc. and its subsidiaries (together “Upstart”, the “Company”, “we”, or “our”) apply modern data science and technology to the process of originating consumer credit. The Company helps originate credit, including personal and auto loans, by providing lending partners with access to a proprietary, cloud-based, artificial intelligence lending marketplace. As the Company’s technology continues to improve and additional lending partners adopt the Upstart platform, consumers benefit from improved access to affordable and frictionless credit. The Company currently operates in the United States and is headquartered in San Mateo, California and Columbus, Ohio. The Company’s fiscal year ends on December 31. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K. Certain prior period amounts have been reclassified or disaggregated where appropriate to conform to the current period presentation of such amounts. In the opinion of management, the accompanying financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements, which Management believes are critical in understanding and evaluating the Company’s reported financial results include: (i) fair value determinations; (ii) stock-based compensation; (iii) consolidation of VIEs; and (iv) the evaluation for impairment of goodwill and acquired intangible assets. The Company bases its estimates on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. Derivative Financial Instruments The Company evaluates its contracts and financial instruments to determine if these contracts and instruments or their parts meet the definition of derivatives in accordance with the requirements of FASB Accounting Codification (ASC) 815, Derivatives and Hedging. Derivatives are recorded on the condensed consolidated balance sheets at fair value with changes in the value recorded in earnings as part of interest expense or fair value adjustments in the condensed consolidated statements of operations and comprehensive income (loss). The Company does not employ derivatives for trading or speculative purposes and has no derivatives classified as accounting hedges. Refer to “Note 4. Derivative Financial Instruments” for further details. Recently Adopted Accounting Pronouncements On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which was issued by the Financial Accounting Standards Board (“FASB”) in October 2021. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. Under the previous business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The ASU will be applied prospectively to business combinations occurring after the adoption date. The adoption of this new standard did not have an impact on the Company's condensed consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting followed by ASU 2021-01, Reference Rate Reform, Scope issued in January 2021. ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The optional guidance in ASU 2020-04 and ASU 2021-01 and ASU 2022-06 is effective for a limited period of time through December 31, 2024 and may be applied prospectively to contract modifications and hedging relationships. The Company does not expect the adoption of this guidance will have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

Fair Value Measurement - Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets
Notes receivable and residual certificates	$ 5,000
Loan servicing assets	34,650	$ 36,467
Liabilities
Loan servicing liabilities	3,142	3,968
Trailing fee liabilities	4,400	4,900
Fair Value, Inputs, Level 2
Assets
Interest rate cap	4,437	0
Fair Value, Inputs, Level 3
Assets
Loans	982,229	1,010,421
Notes receivable and residual certificates	5,009	6,181
Loan servicing assets	34,650	36,467
Total assets	1,026,325	1,053,069
Liabilities
Loan servicing liabilities	3,142	3,968
Trailing fee liabilities	4,449	4,852
Total liabilities	$ 7,591	$ 8,820

Borrowings

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Borrowings

The following table presents the aggregate principal outstanding of all loans mentioned in this note that are included in the condensed consolidated balance sheets:


	Borrowings
	December 31,		March 31,
	2022		2023
Warehouse credit facilities	$	336,452	$	350,163

Convertible senior notes	661,250		661,250
Total payments due	997,702		1,011,413
Unamortized debt discount	(11,308)		(10,542)
Total borrowings	$	986,394	$	1,000,871

Warehouse Credit Facilities

Upstart Loan Trust Warehouse Credit Facility

In November 2015, the Company’s consolidated VIE, Upstart Loan Trust (“ULT”), entered into a revolving credit and security agreement with a third-party lender (the “ULT Warehouse Credit Facility”). The credit and security agreement for the ULT Warehouse Credit Facility was amended and restated in its entirety in May 2020 and has been further amended from time to time. Under the revolving credit and security agreement, as amended from time to time, the ULT Warehouse Credit Facility provides an aggregate of $175.0 million financing capacity of which $100.0 million is committed and $75.0 million is uncommitted. ULT may borrow up to this capacity until the earlier of June 15, 2023 and the occurrence of an accelerated amortization event. Accelerated amortization events include, but are not limited to, failure to satisfy certain loan performance metrics or the occurrence of an event of

default. The proceeds may only be used to purchase unsecured personal loans and to pay fees and expenses related to the credit facility. The ULT Warehouse Credit Facility matures on the earlier of June 15, 2024 or acceleration of the facility following an event of default, upon which date 100% of the outstanding principal amount, together with any accrued and unpaid interest, becomes due and payable. The ULT Warehouse Credit Facility bears a floating interest rate of Compounded SOFR plus a spread ranging from 1.90% to 3.28% per annum, due and payable monthly in arrears. The Company is also subject to a monthly unused fee ranging from 0.20% to 1.00% per annum on the undrawn balance. The maximum advance rate under the ULT Warehouse Credit Facility on outstanding principal of loans held by ULT was 72.5% as of December 31, 2022 and March 31, 2023.

The ULT Warehouse Credit Facility contains certain financial covenants. As of December 31, 2022 and March 31, 2023, ULT was in compliance with all applicable covenants under the ULT Warehouse Credit Facility. The creditors of ULT have no recourse to the general credit of the Company, except for certain limited obligations of ULT to its creditors that are guaranteed by the Company. The Company does not guarantee the credit performance of the loans owned by ULT, and the loans and other assets owned by ULT are not available to settle the claims of creditors of the Company.


	ULT Warehouse Credit Facility
	December 31, 2022		March 31, 2023
Outstanding borrowings	$	163,773	$	151,733
Aggregate outstanding principal of loans pledged as collateral	228,895		210,383
Aggregate fair value of loans purchased and held by ULT	256,024		253,336
Restricted cash pledged as collateral	$	8,547	$	10,962

Upstart Auto Warehouse Trust Credit Facility

In December 2021, the Company’s consolidated VIE, Upstart Auto Warehouse Trust (“UAWT”), entered into a revolving credit and security agreement with a third-party lender (the “UAWT Warehouse Credit Facility”). The credit and security agreement for the UAWT Warehouse Credit Facility was amended and restated in its entirety in August 2022 and has been further amended from time to time.

As of December 31, 2022, UAWT could borrow up to $200 million until January 2023. The UAWT Warehouse Credit Facility had a maturity date in January 2024 and interest per annum at a rate equivalent to the weighted-average cost of commercial paper notes issued by the lender (the “UAWT Benchmark Rate”), plus a spread ranging from 2.2% to 3.5%. In the event the UAWT Benchmark Rate could not be adequately ascertained or available, the UAWT Benchmark Rate had to be replaced with an alternative rate such as SOFR. In addition, the UAWT Warehouse Credit Facility was also subject to a monthly unused fee of 0.50% per annum on the undrawn balance. Finally, as of December 31, 2022, the maximum advance rate under the UAWT Auto Warehouse Trust Credit Facility on outstanding principal of loans held by UAWT was 82.5%.

On January 31, 2023, UAWT entered into the Omnibus Amendment to the Credit Agreement with the existing third-party lender which extended the last date by which UAWT may make a drawdown from its existing $200 million UAWT Warehouse Credit Facility until the earlier of June 2024 or an accelerated amortization event. An accelerated amortization event includes, but is not limited to, failure to satisfy certain loan performance metrics or the occurrence of an event of default. The proceeds may only be used to purchase secured auto loans originated using Upstart’s platform and to pay fees and expenses related to the credit facility. The UAWT Warehouse Credit

Facility matures in June 2025, at which time all outstanding amounts owed must be repaid. As of March 31, 2023 the UAWT Warehouse Credit Facility bears interest per annum at a rate equivalent to the weighted-average cost of commercial paper notes issued by the lender (the “UAWT Benchmark Rate”), plus a spread ranging from 3.0% to 4.0%, and the maximum advance rate under the credit facility on outstanding principal of loans held by UAWT was 80%. All other key terms of the Omnibus Amendment to the Credit Agreement were the same as those as of December 31, 2022.

In February 2023, UAWT entered into an interest rate cap agreement intended to protect against exposure to changes in cash flows attributable to interest rate risk on the warehouse facility. Refer to “Note 4. Derivative Financial Instruments” for further details related to the agreement.

The UAWT Warehouse Credit Facility contains certain financial covenants. As of December 31, 2022 and March 31, 2023, UAWT was in compliance with all applicable covenants under the UAWT Warehouse Credit Facility. The creditors of UAWT have no recourse to the general credit of the Company, except for certain limited obligations of UAWT to its creditors that are guaranteed by the Company.


	UAWT Warehouse Credit Facility
	December 31, 2022		March 31, 2023
Outstanding borrowings	$	172,679	$	198,430
Aggregate outstanding principal of loans pledged as collateral	221,847		298,158
Aggregate fair value of loans purchased and held by UAWT	216,539		291,621
Restricted cash pledged as collateral	$	843	$	490

Convertible Senior Notes

On August 20, 2021, the Company issued $661.3 million aggregate principal amount of 0.25% convertible senior notes due 2026 (“Notes”) pursuant to an indenture (the “Indenture”), (including the exercise in full of the initial purchasers’ option of an additional $86.3 million aggregate principal of additional notes) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the sale of the Notes were $645.5 million after deducting debt issuance costs.

The Notes represent senior unsecured obligations of the Company and bear interest at a rate of 0.25% per year, payable semiannually in arrears on February 15 and August 15 of each year beginning on February 15, 2022. The Notes mature on August 15, 2026 unless earlier converted, redeemed, or repurchased in accordance with their terms.

The Notes will be convertible at an initial conversion rate of 3.5056 shares of our common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of $285.26 per share, subject to adjustment if certain events occur. Following certain corporate events that may occur prior to the maturity date or following our issuance of a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event or during the related redemption period in certain circumstances. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require the Company to repurchase for cash all or a portion of their respective notes at a purchase price equal to 100% of the principal amount of the Note plus accrued and unpaid interest.

Holders may convert their Notes at their option any time prior to the close of business on the business day immediately preceding May 15, 2026 only under the following circumstances:

(1) during any calendar quarter commencing after December 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(2) during the five business-day period after any five consecutive trading-day period in which the trading price per $1,000 principal amount of Notes for each trading day of such five consecutive trading-day period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day;

(3) if we call any or all of the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

(4) upon the occurrence of specified corporate events.

On or after May 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or any portion of their Notes regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, either cash, shares of common stock or a combination of cash and shares of common stock, at its election.

The Company may not redeem the Notes prior to August 20, 2024. The Company may redeem for cash all or any portion of the Notes, at our option, on or after August 20, 2024, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

The Company accounted for the issuance of the Notes as a single liability at par as the conversion feature does not require bifurcation as a derivative under ASC 815 and the Notes were not issued at a substantial premium. Debt issuance costs related to the Notes totaled $15.7 million and consisted of underwriting fees and third-party offering costs, which are amortized to interest expense using the effective interest method over the contractual term. For the three months ended March 31, 2023, the Company recorded immaterial coupon interest expense and $0.8 million of amortization of debt issuance costs within other income (expense), net on the condensed consolidated statements of operations and comprehensive income (loss). The effective interest rate of the Notes is 0.7%.

The estimated fair value of the Notes as of December 31, 2022 and March 31, 2023 was approximately $364.8 million and $375.0 million, respectively, which represent Level 2 valuations in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the Notes in an over-the-counter market. The carrying value of the Notes of December 31, 2022 and March 31, 2023 was $649.9 million and $650.7 million, respectively.

Capped Call Transactions

The Company used $58.5 million of the net proceeds from the Notes to enter into privately negotiated capped call instruments (“Capped Calls”) with certain financial institutions. The Capped Calls each have an initial strike price of $285.26 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls each have an initial cap price of $400.36 per share. The Capped Calls cover, subject to anti-dilution adjustments, 2.3 million shares of common stock. The Capped Calls are expected to reduce the

potential dilution to common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, in the event the market price per share of common stock, as measured under the terms of the Capped Call, is greater than the strike price of the Capped Call, with such reduction and/or offset subject to a cap. If, however, the market price per share of the common stock, as measured under the terms of the Capped Call, exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price per share of the common stock exceeds the cap price of the Capped Calls. The Capped Calls expire on August 15, 2026, subject to earlier exercise.

The Capped Calls were determined to be freestanding financial instruments that meet the criteria for classification in equity; as such the Capped Calls were recorded as a reduction of additional paid-in capital within stockholders’ equity.

The following table summarizes the aggregate amount of maturities of all borrowings as of March 31, 2023:


	March 31, 2023
Remaining 2023	$	—
2024	151,733
2025	198,430
2026	661,250
2027	—
Thereafter	—
Total	$	1,011,413

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 67,062		$ 67,062
Amortization expense	$ 1,100	$ 1,100

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2023

Other Assets [Abstract]

Schedule of Other Assets

Other assets consisted of the following:


	December 31,		March 31,
	2022		2023
Servicing fees and other receivables	$	46,652	$	42,943
Loan servicing assets (at fair value)	36,467		34,650
Prepaid expenses	16,740		22,032
Deposits	10,002		9,839
Notes receivable and residual certificates (at fair value)	6,181		5,009
Other assets	22,678		19,926
Total other assets	$	138,720	$	134,399

Schedule of Property, Equipment, and Software

Property, equipment, and software, net consisted of the following:


	December 31,		March 31,
	2022		2023
Internally developed software	$	37,783	$	44,788
Leasehold improvements	13,074		13,919
Computer and networking equipment	6,049		6,054
Furniture and fixtures	4,421		4,690
Total property, equipment, and software	61,327		69,451
Accumulated depreciation and amortization	(17,159)		(22,474)
Total property, equipment, and software, net	$	44,168	$	46,977

Schedule of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:


	December 31,		March 31,
	2022		2023
Accrued expenses	$	23,506	$	19,600
Accrued payroll	21,825		12,824


Loan servicing liabilities (at fair value)	3,968		3,142
Trailing fee liability (at fair value)	4,852		4,449


Other liabilities	12,795		6,976
Total accrued expenses and other liabilities	$	66,946	$	46,991

Fair Value Measurement - Loan Servicing Sensitivity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of loan servicing assets	$ 34,650	$ 36,467
Fair value of loan servicing liabilities	3,142	3,968
Fair Value, Inputs, Level 3
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of loan servicing assets	34,650	36,467
Fair value of loan servicing liabilities	3,142	3,968
Fair Value, Inputs, Level 3 \| Loan Servicing Liabilities
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of loan servicing liabilities	3,142	3,968	$ 8,290	$ 8,780
10% market-servicing rates increase	1,936	2,303
20% market-servicing rates increase	3,821	4,640
Fair Value, Inputs, Level 3 \| Loan Servicing Assets
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of loan servicing assets	34,650	36,467	$ 27,960	$ 18,388
10% market-servicing rates increase	(9,090)	(9,989)
20% market-servicing rates increase	$ (18,508)	$ (19,950)

Subsequent Events (Details) - Upstart-powered personal loans - USD ($) $ in Millions		3 Months Ended
	Apr. 24, 2023	Mar. 31, 2023
Subsequent Event [Line Items]
Changes in fair value recorded in earnings		$ (17.0)
Subsequent Event
Subsequent Event [Line Items]
Sale of loans	$ 351.5

Stockholders’ Equity - Weighted-Average Assumptions (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%
Options issued and outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum	50.96%	47.58%
Expected volatility, maximum	52.89%	48.72%
Risk free rate, minimum	3.45%	1.70%
Risk free rate, maximum	3.45%	2.16%
Dividend yield	0.00%	0.00%
Options issued and outstanding \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	5 years 3 months 18 days	5 years 2 months 12 days
Options issued and outstanding \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	7 years	7 years
PRSUs outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 10 months 24 days
Expected volatility	48.43%
Risk-free interest rate	1.89%
Dividend yield	0.00%
Shares available for issuance under ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 months	6 months
Expected volatility	97.74%	91.98%
Risk-free interest rate	4.97%	0.72%
Dividend yield	0.00%	0.00%

Derivative Financial Instruments (Details) - USD ($) $ in Millions	Feb. 28, 2023	Jan. 31, 2023	Dec. 31, 2022
Primary Beneficiary \| Revolving Credit Facility \| UAWT Warehouse Credit Facility
Derivative [Line Items]
Maximum borrowing capacity		$ 200.0	$ 200.0
Interest Rate Cap
Derivative [Line Items]
Notional amortizing interest rate cap	$ 198.7
Interest cap rate	3.00%
Interest Rate Cap \| Secured Overnight Financing Rate (SOFR)
Derivative [Line Items]
Interest cap rate	3.00%

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue:
Revenue from fees, net	$ 117,141	$ 313,982
Interest income	45,315	15,134
Interest expense	(7,132)	(959)
Fair value and other adjustments	(52,397)	(18,021)
Total interest income and fair value adjustments, net	(14,214)	(3,846)
Total revenue	102,927	310,136
Operating expenses:
Sales and marketing	31,438	133,449
Customer operations	40,590	48,407
Engineering and product development	110,071	49,991
General, administrative, and other	52,663	43,456
Total operating expenses	234,762	275,303
Income (loss) from operations	(131,835)	34,833
Other income (expense), net	2,597	(2,122)
Net income (loss) before income taxes	(129,238)	32,711
Provision for income taxes	16	19
Net income (loss)	$ (129,254)	$ 32,692
Net income (loss) per share, basic (in dollars per share)	$ (1.58)	$ 0.39
Net income (loss) per share, diluted (in dollars per share)	$ (1.58)	$ 0.34
Weighted-average number of shares outstanding used in computing net income (loss) per share, basic (in shares)	81,911,433	84,230,445
Weighted-average number of shares outstanding used in computing net income (loss) per share, diluted (in shares)	81,911,433	95,457,776

Goodwill and Intangible Assets - Future Expected Amortization (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining 2023	$ 3,206
2024	1,925
2025	1,142
2026	1,142
2027	1,142
Thereafter	5,993
Net carrying value	$ 14,550

Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Financial Assets and Liabilities from Variable Interest Entities

The following tables present a summary of financial assets and liabilities from the Company’s involvement with consolidated VIEs:


	Assets		Liabilities		Net Assets
December 31, 2022



Total consolidated VIEs	$	984,481	$	337,830	$	646,651


	Assets		Liabilities		Net Assets
March 31, 2023



Total consolidated VIEs	$	995,857	$	351,478	$	644,379

The following tables summarize the aggregate value of assets and liabilities of unconsolidated VIEs in which the Company holds a variable interest but is not the primary beneficiary:


	Assets		Liabilities		Net Assets		Maximum Exposure to Losses
December 31, 2022
Securitizations and other	$	364,013	$	265,040	$	98,973	$	13,311


	Assets		Liabilities		Net Assets		Maximum Exposure to Losses
March 31, 2023
Securitizations and other	$	312,600	$	223,703	$	88,897	$	12,138

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Fair Value Measurement - Loan Servicing Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	$ 36,467
Fair value, ending balance	34,650
Servicing Liability at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	3,968
Fair value, ending balance	3,142
Fair Value, Inputs, Level 3
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	36,467
Fair value, ending balance	34,650
Servicing Liability at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	3,968
Fair value, ending balance	3,142
Fair Value, Inputs, Level 3 \| Loan Servicing Liabilities
Servicing Liability at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	3,968	$ 8,780
Sale of loans	49	1,905
Changes in fair value recorded in earnings	(875)	(2,395)
Fair value, ending balance	3,142	8,290
Loan Servicing Assets \| Fair Value, Inputs, Level 3
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value, beginning balance	36,467	18,388
Sale of loans	3,662	10,610
Changes in fair value recorded in earnings	(5,479)	(1,038)
Fair value, ending balance	$ 34,650	$ 27,960

Fair Value Measurement

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurement

The following table presents assets and liabilities measured at fair value and categorized in accordance with the fair value hierarchy:


		December 31,		March 31,
	Level	2022		2023
Assets
Loans	3	$	1,010,421	$	982,229
Notes receivable and residual certificates	3	6,181		5,009
Loan servicing assets	3	36,467		34,650
Interest rate cap(1)	2	—		4,437
Total assets		$	1,053,069	$	1,026,325
Liabilities
Loan servicing liabilities	3	$	3,968	$	3,142
Trailing fee liabilities	3	4,852		4,449
Total liabilities		$	8,820	$	7,591

(1)The terms and fair value considerations of the interest rate cap agreement can be found in “Note 4. Derivative Financial Instruments”

Financial instruments are categorized in the fair value hierarchy based on the significance of unobservable factors in the overall fair value measurement. Since the Company’s loans, notes receivable and residual certificates, loan servicing assets and liabilities, and trailing fee liabilities do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities.

There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the periods presented.

Loans

Loans included in the Company’s condensed consolidated balance sheets are classified as either held-for-sale or held-for-investment based on the Company’s intent and ability to sell the loans prior to maturity. From time to time the Company transfers loans between classifications based on changes in the Company’s intent. As of December 31, 2022, $882.8 million and $127.6 million of loans held on the Company’s condensed consolidated balance sheets were classified as held-for-sale and held-for-investment, respectively. As of March 31, 2023, $839.5 million and $142.7 million of loans held on the Company’s condensed consolidated balance sheets were classified as held-for-sale and held-for-investment, respectively.

Valuation Methodology

Loans held-for-sale and held-for-investment are measured at estimated fair value using a discounted cash flow model. The fair valuation methodology considers projected prepayments and historical defaults, losses and recoveries to project future losses and net cash flows on loans. Net cash flows are discounted using an estimate of market rates of return. The fair value of these loans also includes accrued interest.

Significant Inputs and Assumptions

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loans held-for-investment and held-for-sale:


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Discount rate	6.36	%	22.28	%	11.87	%	6.36	%	22.67	%	11.78	%
Credit risk rate (1)	0.01	%	93.09	%	16.93	%	0.01	%	93.05	%	16.97	%
Prepayment rate (1)	0.08	%	93.43	%	40.49	%	0.05	%	93.43	%	40.65	%

(1)Expressed as a percentage of the original principal balance of the loans

(2)Unobservable inputs were weighted by relative fair value

Discount rates–The discount rates are rates of return used to discount future expected cash flows to arrive at a present value, which represents the fair value. The discount rates used for the projected net cash flows are the Company’s estimates of the rates of return that market participants would require when investing in these financial instruments with cash flows dependent on credit quality of the related loan. A risk premium component is implicitly included in the discount rates to reflect the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity.

Credit risk rates–The credit risk rates are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a financial instrument. The credit risk rates are expressed as a percentage of the original principal amount of the instrument. The estimated net cumulative loss represents the sum of the net losses estimated to occur each month of the life of the instrument, net of the average recovery expected to be received.

Prepayment rates–Prepayment rates are an estimate of the cumulative principal prepayments that will occur over the entire life of a loan as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments impact the projected balances and expected terms of the loans.

The above inputs are similarly used in estimating fair value of related financial instruments. Refer to the Assets and Liabilities related to Securitization Transactions section below for additional information.

Significant Recurring Level 3 Fair Value Input Sensitivity

The following table presents the sensitivity of the loans held-for-sale and held-for-investment to adverse changes in key assumptions used in the valuation model as of December 31, 2022 and March 31, 2023, respectively.


	December 31,		March 31,
	2022		2023
Fair value of loans	$	1,010,421	$	982,229
Discount rates
100 basis point increase	(11,979)		(11,508)
200 basis point increase	(23,720)		(22,790)
Expected credit loss rates on underlying loans
10% adverse change	(11,927)		(11,686)
20% adverse change	(23,852)		(23,375)
Expected prepayment rates
10% adverse change	(2,284)		(2,238)
20% adverse change	(4,530)		(4,435)

Rollforward of Level 3 Fair Values

The following tables include a rollforward of the loans classified within Level 3 of the fair value hierarchy:


	Loans Held-for- Sale		Loans Held-for-Investment		Total
Fair value at December 31, 2021	$	142,685	$	109,792	$	252,477
Reclassification of loans from HFI to HFS	109,792		(109,792)		—
Purchases of loans	443,190		—		443,190
Sale of loans	(50,764)		—		(50,764)
Purchase of loans for immediate resale	3,014,594		—		3,014,594
Immediate resale of loans	(3,014,594)		—		(3,014,594)
Repayments received	(29,726)		—		(29,726)
Changes in fair value recorded in earnings	(19,511)		—		(19,511)
Other changes	2,315		—		2,315

Fair value at March 31, 2022	$	597,981	$	—	$	597,981


	Loans Held-for- Sale		Loans Held-for-Investment		Total
Fair value at December 31, 2022	$	882,810	$	127,611	$	1,010,421

Purchases of loans	120,615		47,201		167,816
Sale of loans	(67,532)		—		(67,532)
Purchase of loans for immediate resale	389,389		—		389,389
Immediate resale of loans	(389,389)		—		(389,389)
Repayments received	(61,501)		(20,872)		(82,373)
Changes in fair value recorded in earnings	(35,430)		(12,731)		(48,161)
Other changes	520		1,538		2,058

Fair value at March 31, 2023	$	839,482	$	142,747	$	982,229

The following table presents the aggregate fair value and aggregate principal outstanding of all loans and loans that were 90 days or more past due included in the condensed consolidated balance sheets:


	Loans				Loans > 90 Days Past Due
	December 31,		March 31,		December 31,		March 31,
	2022		2023		2022		2023
Outstanding principal balance	$	1,047,714	$	1,040,562	$	9,006	$	11,341
Net fair value and accrued interest adjustments	(37,293)		(58,333)		(7,006)		(9,864)
Fair value(1)	$	1,010,421	$	982,229	$	2,000	$	1,477

_________

(1) Includes $397.7 million and $401.1 million of auto loans as of December 31, 2022 and March 31, 2023, respectively, of which an immaterial amount is 90 days or more past due for each period presented.

The Company places loans on non-accrual status at 120 days past due. Any accrued interest recorded in relation to these loans is reversed in the respective period. The Company charges-off loans no later than 120 days past due.

In connection with planned sale of a pool of Upstart-powered loans, subsequent to March 31, 2023, the Company recognized an unrealized loss as a negative fair value adjustment of $17.0 million for the quarter ended March 31, 2023, which is included in the fair value and other adjustments on the Company’s condensed consolidated statements of operations and comprehensive income (loss). Refer to “Note 15. Subsequent Events”, for additional details.

Assets related to Securitization Transactions

As of December 31, 2022 and March 31, 2023, the Company held notes receivable and residual certificates with an aggregate fair value of $6.2 million and $5.0 million, respectively, within other assets on the Company’s condensed consolidated balance sheets. The balances consist of securitization notes and residual certificates retained from securitization transactions.

Valuation Methodology

The discounted cash flow methodology, which is used to estimate the fair value of notes receivable and residual certificates, uses the same projected net cash flows as their related loans. This model uses inputs that are

inherently judgmental and reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value.

Significant Inputs and Assumptions

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements of assets related to securitization transactions:


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Notes receivable and residual certificates
Discount rate	8.42	%	22.27	%	12.79	%	8.98	%	22.66	%	12.79	%
Credit risk rate (1)	0.59	%	50.69	%	18.43	%	0.59	%	50.69	%	18.21	%
Prepayment rate (1)	10.90	%	88.73	%	42.66	%	10.90	%	87.53	%	43.13	%

_________

(1)Expressed as a percentage of the original principal balance of the loans underlying the financial instruments

(2)Unobservable inputs were weighted by relative fair value

Significant Recurring Level 3 Fair Value Input Sensitivity

The securities issued in the securitization transactions are senior or subordinated based on the waterfall criteria of loan payments to each security class, with the residual interest (the “residual certificates”) issued being the first to absorb credit losses in accordance with the waterfall criteria. Accordingly, the residual certificates are the most sensitive to adverse changes in credit risk rates. Depending on the specific securitization, a hypothetical increase in the credit risk rate of 10% to 20% would result in significant decreases in the fair value of the residual certificates. On average, a hypothetical increase in the credit risk rate under a discounted cash flow methodology of 20% would result in a 34% decrease in the fair value of the residual certificates as of March 31, 2023. The remaining classes of securities, with the exception of those in 2018-2, are all overcollateralized such that changes in credit risk rates are not expected to have significant impacts on their fair values.

The fair value of the securities is also sensitive to adverse changes in discount rates, which represent estimates of the rates of return that institutional investors would require when investing in financial instruments with similar risk and return characteristics. On average, a hypothetical 100 basis point increase in discount rates results in a decrease in fair value of the securities (including securitization notes and residual certificates) of 1.10% and 1.03% as of December 31, 2022 and March 31, 2023, respectively. On average, a hypothetical 200 basis point increase in discount rates results in a decrease in fair value of securitization notes and residual certificates of 2.18% and 2.05% as of December 31, 2022 and March 31, 2023, respectively.

The fair value of securitization notes and residual certificates are not sensitive to adverse changes in expected prepayment rates as such changes would not result in a significant impact on the fair value as of December 31, 2022 and March 31, 2023.

Rollforward of Level 3 Fair Values

The following tables include a rollforward of the notes receivable and residual certificates related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy:


	Notes Receivable and Residual Certificates
Fair value at December 31, 2021	$	8,288

Repayments and settlements	(2,067)
Changes in fair value recorded in earnings	163

Fair value at March 31, 2022	$	6,384


	Notes Receivable and Residual Certificates
Fair value at December 31, 2022	$	6,181

Repayments and settlements	(1,566)
Changes in fair value recorded in earnings	394

Fair value at March 31, 2023	$	5,009

Loan Servicing Assets and Liabilities

Valuation Methodology

Loan servicing assets and liabilities are measured at estimated fair value using a discounted cash flow model. The cash flows in the valuation model represent the difference between the contractual servicing fees charged to institutional investors and an estimated market servicing fee. Since contractual servicing fees are generally based on the monthly unpaid principal balance of the underlying loans, the expected cash flows in the model incorporate estimates of net losses and prepayments.

Significant Inputs and Assumptions

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loan servicing assets and liabilities:


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Discount rate	13.00	%	20.00	%	17.20	%	13.00	%	20.00	%	17.08	%
Credit risk rate (1)	0.03	%	91.76	%	16.22	%	0.04	%	65.36	%	15.73	%
Market-servicing rate (3)(4)(5)	0.62	%	3.72	%	0.62	%	0.62	%	3.72	%	0.62	%
Prepayment rate (1)	0.53	%	91.99	%	41.19	%	4.62	%	96.90	%	41.50	%

_________

(1)Expressed as a percentage of the original principal balance of the loans underlying the servicing arrangement

(2)Unobservable inputs were weighted by relative fair value

(3)Excludes ancillary fees that would be passed on to a third-party servicer

(4)Expressed as a percentage of the outstanding principal balance of the loan

(5)Includes personal loans and auto loans

Discount rates–The discount rates are the Company’s estimate of the rates of return that market participants would require when investing in similar servicing rights. Discount rates for servicing rights on existing loans are

adjusted to reflect the time value of money and a risk premium intended to reflect the amount of compensation market participants would require due to the uncertainty associated with these instruments’ cash flows.

Credit risk rates–The credit risk rates are the Company’s estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding net cumulative losses impact the projected balances and expected terms of the loans, which are used to project future servicing revenues.

Market-servicing rates–Market-servicing rate is an estimated measure of adequate compensation for a market participant, if one was required. The rate is expressed as a fixed percentage of outstanding principal balance per annum. The estimate considers the profit that would be demanded in the marketplace to service the portfolio of outstanding loans subject to the Company’s servicing agreements.

Prepayment rates–Prepayment rates are the Company’s estimate of the cumulative principal prepayments that will occur over the entire life of a loan as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments impact the projected balances and expected terms of the loans, which are used to project future servicing revenues.

Significant Recurring Level 3 Fair Value Input Sensitivity

The table below presents the fair value sensitivity of loan servicing assets and liabilities to adverse changes in key assumptions. The fair value of loan servicing assets and liabilities is not sensitive to adverse changes in discount rates and prepayment rates as such changes would not result in a significant impact on the fair value as of December 31, 2022 and March 31, 2023, respectively.


	December 31,		March 31,
	2022		2023
Fair value of loan servicing assets	$	36,467	$	34,650
Expected market-servicing rates
10% market-servicing rates increase	(9,989)		(9,090)
20% market-servicing rates increase	(19,950)		(18,508)


	December 31,		March 31,
	2022		2023
Fair value of loan servicing liabilities	$	3,968	$	3,142
Expected market-servicing rates
10% market-servicing rates increase	2,303		1,936
20% market-servicing rates increase	4,640		3,821

Rollforward of Level 3 Fair Values

The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy:


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2021	$	18,388	$	8,780
Sale of loans	10,610		1,905
Changes in fair value recorded in earnings	(1,038)		(2,395)
Fair value at March 31, 2022	$	27,960	$	8,290


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2022	$	36,467	$	3,968
Sale of loans	3,662		49
Changes in fair value recorded in earnings	(5,479)		(875)
Fair value at March 31, 2023	$	34,650	$	3,142

Trailing Fee Liabilities

The Company pays certain bank partners monthly trailing fees based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. Significant inputs used for estimating the fair value of trailing fee liabilities included discount rates of 6.36% to 22.28% and credit risk rates of 0.01% to 93.09% as of December 31, 2022 and discount rates of 6.36% to 22.67% and credit risk rates of 0.01% to 93.05% as of March 31, 2023.

The fair value sensitivity of trailing fee liabilities to adverse changes in key assumptions would not result in a material impact on the Company’s financial position of the results of operations.

Rollforward of Level 3 Fair Values

The following tables include a rollforward of trailing fee liabilities classified by the Company within Level 3 of the fair value hierarchy:


	Trailing Fee Liabilities
Fair value at December 31, 2021	$	4,315
Issuances	1,667
Repayments and settlements	(629)
Changes in fair value recorded in earnings	(112)
Fair value at March 31, 2022	$	5,241


	Trailing Fee Liabilities
Fair value at December 31, 2022	$	4,852
Issuances	318
Repayments and settlements	(747)
Changes in fair value recorded in earnings	26

Fair value at March 31, 2023	$	4,449

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Borrowings - Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Remaining 2023	$ 0
2024	151,733
2025	198,430
2026	661,250
2027	0
Thereafter	0
Total	$ 1,011,413	$ 997,702

Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders - Antidilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	24,596,844	4,804,812
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	13,881,292	718,911
Unvested RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	8,222,931	1,077,703
Unvested PRSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	0	687,500
Purchase rights committed under the ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	174,543	2,620
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	2,318,078	2,318,078

Reorganization Expenses	3 Months Ended
Reorganization Expenses	Mar. 31, 2023
Reorganizations [Abstract]
Reorganization Expenses	Reorganization Expenses On January 31, 2023, the Company implemented a plan of reorganization (the “January 2023 Plan”). The January 2023 Plan was designed to reduce operating costs, streamline operations and return the Company to profitability. As part of the January 2023 Plan, the Company reduced its workforce by approximately 20%, or 365 employees, and suspended development of its small business loan product. During the quarter ended March 31, 2023, the Company incurred reorganization expenses in relation to the January 2023 plan, which primarily consisted of $15.5 million of severance charges related to employee cash compensation, benefits, and associated taxes. During the three months ended March 31, 2023, the Company has made $12.7 million of cash payments to impacted employees. The Company also recognized an impairment expense of $2.6 million for previously capitalized internally developed software costs. In addition to these charges, the Company recognized $2.9 million of one-time non-cash savings related to the reversal of previously expensed stock-based compensation associated with forfeited stock awards.

Borrowings - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions			1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2022 USD ($)	Aug. 20, 2021 USD ($) day $ / shares shares	May 31, 2020 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jan. 31, 2023 USD ($)
ULT Warehouse Credit Facility \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Maximum borrowing capacity			$ 175.0
Redemption price (in percent)			100.00%
Maximum advance rate (in percent)	72.50%			72.50%	72.50%
ULT Warehouse Credit Facility \| Minimum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Monthly unused fee (in percent)			0.20%
ULT Warehouse Credit Facility \| Maximum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Monthly unused fee (in percent)			1.00%
ULT Warehouse Credit Facility - Committed \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Maximum borrowing capacity			$ 100.0
ULT Warehouse Credit Facility - Uncommitted \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Maximum borrowing capacity			$ 75.0
UAWT Warehouse Credit Facility \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Monthly unused fee (in percent)	0.50%
Maximum advance rate (in percent)	82.50%				82.50%
UAWT Warehouse Credit Facility \| Revolving Credit Facility \| Primary Beneficiary
Schedule of Borrowings [Line Items]
Maximum borrowing capacity	$ 200.0				$ 200.0	$ 200.0
Maximum advance rate					80.00%
2026 ("Notes")
Schedule of Borrowings [Line Items]
Convertible notes payable	649.9			$ 650.7	$ 649.9
Purchase of capped calls		$ 58.5
Initial conversion price (in dollars per share) \| $ / shares		$ 285.26
Initial cap price (in dollars per share) \| $ / shares		$ 400.36
Capped call cover (in shares) \| shares		2.3
2026 ("Notes") \| Fair Value, Inputs, Level 2
Schedule of Borrowings [Line Items]
Fair value of convertible senior notes	$ 364.8			375.0	$ 364.8
2026 ("Notes") \| Convertible Debt
Schedule of Borrowings [Line Items]
Aggregate principal amount		$ 661.3
Stated interest rate		0.25%
Additional aggregate principal		$ 86.3
Net proceeds from sale of the notes		$ 645.5
Initial conversion rate (in shares)		0.003506
Initial conversion price (in dollars per share) \| $ / shares		$ 285.26
Percent of the principal amount		100.00%
2026 ("Notes") \| Convertible Debt \| Conversion Period One
Schedule of Borrowings [Line Items]
Trading days \| day		20
Consecutive trading days \| day		30
Conversion price maximum threshold		130.00%
2026 ("Notes") \| Convertible Debt \| Conversion Period Two
Schedule of Borrowings [Line Items]
Trading days \| day		5
Consecutive trading days \| day		5
Percentage of the last reported sale price		98.00%
2026 ("Notes") \| Convertible Debt \| Conversion Period Three
Schedule of Borrowings [Line Items]
Redemption price (in percent)		100.00%
Trading days \| day		20
Consecutive trading days \| day		30
Conversion price maximum threshold		130.00%
Gross debt issuance cost		$ 15.7
Amortization of debt issuance costs				$ 0.8
Effective interest rate				0.70%
Secured Overnight Financing Rate \| ULT Warehouse Credit Facility \| Minimum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Basis spread on variable rate			1.90%
Secured Overnight Financing Rate \| ULT Warehouse Credit Facility \| Maximum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Basis spread on variable rate			3.28%
Weighted-Average Cost Of Commercial Paper Notes Issued By The Lender \| UAWT Warehouse Credit Facility \| Minimum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Basis spread on variable rate	2.20%
Weighted-Average Cost Of Commercial Paper Notes Issued By The Lender \| UAWT Warehouse Credit Facility \| Maximum \| Revolving Credit Facility
Schedule of Borrowings [Line Items]
Basis spread on variable rate	3.50%
UAWT Benchmark Rate \| UAWT Warehouse Credit Facility \| Minimum \| Revolving Credit Facility \| Primary Beneficiary
Schedule of Borrowings [Line Items]
Basis spread on variable rate					3.00%
UAWT Benchmark Rate \| UAWT Warehouse Credit Facility \| Maximum \| Revolving Credit Facility \| Primary Beneficiary
Schedule of Borrowings [Line Items]
Basis spread on variable rate					4.00%

Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders - Calculation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income (loss)	$ (129,254)	$ 32,692
Denominator:
Weighted-average common shares outstanding used to calculate net income (loss) per share, basic (in shares)	81,911,433	84,230,445
Weighted-average effect of dilutive securities (in shares)	0	11,227,331
Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted (in shares)	81,911,433	95,457,776
Net income (loss) per share, basic (in dollars per share)	$ (1.58)	$ 0.39
Net income (loss) per share, diluted (in dollars per share)	$ (1.58)	$ 0.34

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126958026&loc=d3e1448-109256

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Balance Sheet Components

3 Months Ended

Mar. 31, 2023

Other Assets [Abstract]

Balance Sheet Components

Other Assets

Other assets consisted of the following:


	December 31,		March 31,
	2022		2023
Servicing fees and other receivables	$	46,652	$	42,943
Loan servicing assets (at fair value)	36,467		34,650
Prepaid expenses	16,740		22,032
Deposits	10,002		9,839
Notes receivable and residual certificates (at fair value)	6,181		5,009
Other assets	22,678		19,926
Total other assets	$	138,720	$	134,399

Servicing fees and other receivables represent amounts recognized as revenue but not yet collected in relation to servicing and other agreements with institutional investors and lending partners.

Property, Equipment, and Software, Net

Property, equipment, and software, net consisted of the following:


	December 31,		March 31,
	2022		2023
Internally developed software	$	37,783	$	44,788
Leasehold improvements	13,074		13,919
Computer and networking equipment	6,049		6,054
Furniture and fixtures	4,421		4,690
Total property, equipment, and software	61,327		69,451
Accumulated depreciation and amortization	(17,159)		(22,474)
Total property, equipment, and software, net	$	44,168	$	46,977

Depreciation and amortization expense on property, equipment, and software was immaterial for the three months ended March 31, 2022 and was $6.4 million for the three months ended March 31, 2023. Capitalized internally developed software balances, net of accumulated amortization, were $27.4 million and $29.9 million as of December 31, 2022 and March 31, 2023, respectively. The Company also recognized impairment charges to internally developed software of $2.6 million for the three months ended March 31, 2023 as a result of the January 2023 Plan. Refer to “Note 14. Reorganization Expenses” for more information.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:


	December 31,		March 31,
	2022		2023
Accrued expenses	$	23,506	$	19,600
Accrued payroll	21,825		12,824


Loan servicing liabilities (at fair value)	3,968		3,142
Trailing fee liability (at fair value)	4,852		4,449


Other liabilities	12,795		6,976
Total accrued expenses and other liabilities	$	66,946	$	46,991

Leases - Lease Liability Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Remaining 2023	$ 11,426
2024	17,054
2025	17,544
2026	18,055
2027	17,745
Thereafter	34,816
Total undiscounted lease payments	116,640
Less: Tenant improvement receivables	(2,375)
Less: Present value adjustment	(15,215)
Operating lease liabilities	$ 99,050	$ 100,787

Stockholders’ Equity - Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 74,109	$ 25,050
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	3,372	2,238
Customer operations
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	2,882	1,619
Engineering and product development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	56,660	13,634
General, administrative, and other
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 11,195	$ 7,559

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from fees, net	$ 117,141	$ 313,982
Platform and referral fees, net
Disaggregation of Revenue [Line Items]
Revenue from fees, net	77,657	271,812
Servicing and other fees, net
Disaggregation of Revenue [Line Items]
Revenue from fees, net	$ 39,484	$ 42,170

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue from fees, net

The Company disaggregates revenue from fees by type of service for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Revenue from fees, net:
Platform and referral fees, net	$	271,812	$	77,657
Servicing and other fees, net	42,170		39,484
Total revenue from fees, net	$	313,982	$	117,141

Platform and referral fees, net

The Company enters into contracts with lending partners 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 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 purchased by the Company, Upstart pays lending partners a one-time loan premium fee upon completion of the minimum contractual holding period. Upstart also pays lending partners monthly loan trailing fees based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. Both the loan premium fees and loan trailing fees are consideration payable to customers 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 $8.7 million and $1.4 million of loan premium fees and loan trailing fees as contra-revenue within platform and referral fees, net during the three months ended March 31, 2022 and 2023 respectively.

As of December 31, 2022 and March 31, 2023, the Company recognized $4.9 million and $4.4 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, which are our lending partners, 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 typically billed and paid on either a daily or monthly basis. As such, the Company’s contracts with customers do not include a significant financing component.

The Company had no material contract assets, contract liabilities, or deferred contract costs recorded as of December 31, 2022 and March 31, 2023. The Company had $31.1 million and $29.2 million of accounts receivable that are included in other assets on the condensed consolidated balance sheets related to contracts with customers as of December 31, 2022 and March 31, 2023, 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, 2022 and March 31, 2023, the Company had a $2.6 million amount of contract costs capitalized within other assets on the condensed consolidated balance sheets. The Company amortized an immaterial amount 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:


	March 31,
		2022	2023
Customer A		46%	30%
Customer B		31%	18%
Customer C		*	10%

* Less than 10%

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


	March 31,
	2022	2023
Customer C	38%	35%

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. Loan servicing fees are not within the scope of ASC 606 and are accounted for under ASC 860, Transfers and Servicing.

Servicing and other fees, net also include 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 in the periods presented. Refer to “Note 5. Fair Value Measurement” for additional information on changes in fair value associated with servicing assets and liabilities.

The Company recognized a net gain related to loan servicing rights upon loan sales for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Net gain related to loan servicing rights	$	8,705	$	3,613

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. Revenue from collection agency fees and borrower fees are included in 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). The total fees charged by collection agencies are also recognized in the period incurred and reported as part of customer operations expenses.

The Company recognized collection agency fees and borrower fees, which are included in servicing and other fees, net for the periods presented as follows:


	Three Months Ended March 31,
	2022		2023
Collection agency fees	$	1,990	$	3,916
Borrower fees	$	5,230	$	7,737

Interest Income and Fair Value Adjustments, Net

Interest income 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 and notes receivable and residual certificates.


	Three Months Ended March 31,
	2022		2023

Interest income	$	15,134	$	45,315
Interest expense	(959)		(7,132)
Fair value and other adjustments
Unrealized loss, charge-offs, and other adjustments, net	(19,309)		(44,544)
Realized gain (loss) on sale of loans, net	1,288		(7,853)
Total fair value and other adjustments	(18,021)		(52,397)

Total interest income and fair value adjustments, net	$	(3,846)	$	(14,214)

Interest income

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

Interest income also includes accrued interest earned on outstanding loans but not collected. Loans that have reached a delinquency of over 120 days are classified as non-accrual status and any accrued interest recorded in relation to these loans is reversed in the respective period. The Company does not record an allowance for credit losses on accrued interest receivable. As of December 31, 2022 and March 31, 2023, the Company has recorded $12.8 million and $13.9 million of accrued interest income in loans on the condensed consolidated balance sheets, respectively.

Interest expense

Interest expense is primarily related to interest recorded on the Company’s borrowings on warehouse credit facilities. Interest expense includes accrued interest incurred but not paid. Accrued interest expenses were immaterial as of December 31, 2022 and March 31, 2023. Interest expense also includes changes in fair value of the

interest rate cap, which were immaterial for the quarter ended March 31, 2023. Refer to “Note 4. Derivative Financial Instruments” for additional information.

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 the interest rate cap. 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 gain (loss) recognized through our capital markets programs and 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 or the transaction is completed.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Net Income Per Share Attributable to Common Stockholders


	Three Months Ended March 31,
		2022		2023
Numerator:
Net income (loss)		$	32,692	$	(129,254)






Denominator:
Weighted-average common shares outstanding used to calculate net income (loss) per share, basic		84,230,445		81,911,433
Weighted-average effect of dilutive securities		11,227,331		—
Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted		95,457,776		81,911,433

Net income (loss) per share, basic		$	0.39	$	(1.58)
Net income (loss) per share, diluted		$	0.34	$	(1.58)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share


	Three Months Ended March 31,
	2022	2023

Options to purchase common stock	718,911	13,881,292
Unvested RSUs	1,077,703	8,222,931
Unvested PRSUs	687,500	—
Purchase rights committed under the ESPP	2,620	174,543

Convertible debt	2,318,078	2,318,078

Total	4,804,812	24,596,844

Stockholders’ Equity - Narrative (Details)			3 Months Ended
Stockholders’ Equity - Narrative (Details)	Feb. 24, 2023 shares	Apr. 08, 2021 USD ($) shares	Mar. 31, 2023 USD ($) vesting_tranche $ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	Feb. 28, 2022 USD ($)	Dec. 31, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, authorized (in shares) \| shares			700,000,000		700,000,000		700,000,000
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001		$ 0.0001		$ 0.0001
Authorized share repurchase amount						$ 400,000,000
Stock repurchase program, remaining authorized repurchase amount (in dollars per share)			$ 222,100,000
Aggregate intrinsic value of options exercised			4,000,000	$ 105,200,000
Fair value of options vested during period			9,500,000	$ 6,700,000
Unrecognized stock-based compensation expense related to unvested stock options			$ 65,400,000
Annual target bonus opportunity percentage			75.00%
Number of vesting tranches \| vesting_tranche			9
Dividend yield			0.00%
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of common stock under employee stock purchase plan (in shares) \| shares			312,134	47,894
Weighted Average
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value (in dollars per share) \| $ / shares			$ 8.00	$ 63.78
Options issued and outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield			0.00%	0.00%
Options issued and outstanding \| Weighted Average
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of recognition			3 years
RSUs outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense			$ 253,600,000
Period of recognition			2 years 7 months 6 days
Unvested (in dollars per share) \| $ / shares			$ 36.52		51.28
RSUs outstanding \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			1 year
RSUs outstanding \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		2 years
Unvested (in dollars per share) \| $ / shares			$ 123.33		$ 123.33
Restricted Stock \| Prodigy Software, Inc.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock issued (in shares) \| shares		82,201
Value of restricted stock issued		$ 10,100,000
PRSUs outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense			$ 39,000,000
Number of shares available for settlement of cancelled awards (in shares) \| shares	687,500
Unvested (in dollars per share) \| $ / shares			$ 68.76
Dividend yield			0.00%
Shares available for issuance under ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense			$ 1,300,000
Period of recognition			4 months 24 days
Purchase period			6 months
ESPP purchase price of common stock, percent of market price			85.00%
Dividend yield			0.00%	0.00%

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events The Company has evaluated events that have occurred through the filing date of this Quarterly Report on Form 10-Q. Based on its evaluation, other than any items recorded or disclosed within the condensed consolidated financial statements and related notes, including as discussed below, the Company has determined no subsequent events were required to be recognized or disclosed. On April 24, 2023, the Company signed an agreement with an investor for a capital commitment program to purchase Upstart-powered personal loans. The agreement includes risk and upside sharing for both under and over performance for the Company and the investor for loans purchased under the program. As part of the agreement, the Company agreed to sell to the investor a pool of Upstart-powered loans with an aggregate outstanding principal amount of $351.5 million. The Company recognized an unrealized loss as a negative fair value adjustment of $17.0 million related to the sale of such pool of Upstart-powered loans for the quarter ended March 31, 2023, which is included in the fair value and other adjustments on the Company’s condensed consolidated statements of operations and comprehensive income (loss).

Variable Interest Entities

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Consolidated VIEs

The Company consolidates variable interest entities (“VIEs”) in which the Company has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Company has a variable interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Company continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Company is involved with the VIE.

The Company also determines whether decision-maker or service-provider fees are variable interests. Decision-maker or service-provider fees are not considered variable interests when the arrangement does not expose the Company to risks of loss that a potential VIE was designed to pass on to its variable interest holders, the fees are commensurate, the arrangement is at market, and the Company does not have any other interests (including direct interests and certain indirect interests held through related parties) that absorb more than an insignificant amount of a VIE’s potential variability. This determination can have a significant impact on the Company’s consolidation analysis, as it could affect whether a legal entity is a VIE and whether the Company is the primary beneficiary of a VIE. When the Company’s decision-maker or service-provider fee is not a variable interest, the Company is viewed as acting as a fiduciary for the potential VIE.

Warehouse Entities

The Company established Upstart Loan Trust (“ULT”) and Upstart Auto Warehouse Trust (“UAWT”) to enter into warehouse credit facilities for the purpose of purchasing Upstart-powered loans. Refer to “Note 8. Borrowings” for additional information. The entities are Delaware statutory trusts that are structured to be bankruptcy-remote, with third-party banks operating as trustees.

Other Consolidated VIE

Upstart Loan Trust 2, a Delaware statutory trust, holds loans facilitated through the Upstart platform that are not pledged or eligible to be pledged to the Company’s warehouse credit facilities.

The following tables present a summary of financial assets and liabilities from the Company’s involvement with consolidated VIEs:


	Assets		Liabilities		Net Assets
December 31, 2022



Total consolidated VIEs	$	984,481	$	337,830	$	646,651


	Assets		Liabilities		Net Assets
March 31, 2023



Total consolidated VIEs	$	995,857	$	351,478	$	644,379

The Company’s continued involvement in all of its securitizations in which it is the sponsor includes loan servicing rights and obligations for which it receives servicing fees over the life of the underlying loans. The Company monitors its status as the primary beneficiary and in case of reconsideration events, updates the analysis accordingly.

Unconsolidated VIEs

The Company’s transactions with unconsolidated VIEs include securitizations of unsecured personal whole loans and sales of whole loans to VIEs. While the Company continues to be involved with the unconsolidated VIEs in its role as the sponsor and the servicer of these transactions, the Company does not hold a significant economic interest in these entities and has determined that it is not the primary beneficiary of these entities. The Company’s unconsolidated VIEs include entities established as the issuers and grantor trusts for various securitization transactions.

In cases where the VIEs are not consolidated and the transfer of the loans from the Company to the securitization trust meets sale accounting criteria, the Company recognizes a gain or loss on sales of loans. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction. The assets are transferred into a trust such that the assets are legally isolated from the creditors of the Company and are not available to satisfy obligations of the Company. These assets can only be used to settle obligations of the underlying securitization trusts.

The following tables summarize the aggregate value of assets and liabilities of unconsolidated VIEs in which the Company holds a variable interest but is not the primary beneficiary:


	Assets		Liabilities		Net Assets		Maximum Exposure to Losses
December 31, 2022
Securitizations and other	$	364,013	$	265,040	$	98,973	$	13,311


	Assets		Liabilities		Net Assets		Maximum Exposure to Losses
March 31, 2023
Securitizations and other	$	312,600	$	223,703	$	88,897	$	12,138

The Company’s maximum exposure to loss from its involvement with unconsolidated VIEs represents the estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is remote, such as where the value of securitization notes and senior and residual certificates the Company holds as part of the risk retention requirement declines to zero.

The investors and the securitization trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the securitization trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company and its affiliates are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal whole loans.

The carrying value of assets that relate to variable interests in unconsolidated VIEs consists of $6.2 million and $5.0 million of securitization notes and residual certificates which are included in other assets on the consolidated balance sheets as of December 31, 2022 and March 31, 2023, respectively. The Company also had $7.1 million of cash deposits made to reserve accounts for related securitizations, included in other assets on the condensed consolidated balance sheets as of December 31, 2022 and March 31, 2023.

Off-Balance Sheet Loans

Off-balance sheet loans relate to securitization transactions for which the Company has some form of continuing involvement, including as servicer. For a loan related to securitization transactions where servicing is the only form of continuing involvement, the Company would only experience a loss if it were required to repurchase such a loan due to a breach in representations and warranties associated with its loan sale or servicing contracts.

The Company routinely contributes loans to securitization transactions which it co-sponsors as a non-retaining sponsor. As a non-retaining sponsor and a servicer of these transactions, the Company does not retain economic risk in these transactions. Contributions of loans to these securitizations are recognized as transfers under ASC 860, Transfers and Servicing.

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Net carrying value	$ 14,550
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	9,400	$ 9,400
Accumulated amortization	(6,267)	(5,483)
Net carrying value	$ 3,133	$ 3,917
Developed technology \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Life (Years)	1 year	1 year 3 months 18 days
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 13,700	$ 13,700
Accumulated amortization	(2,283)	(1,998)
Net carrying value	$ 11,417	$ 11,702
Customer relationships \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Life (Years)	10 years	10 years 3 months 18 days

Fair Value Measurement - Note Receivable Rollforward (Details) - Notes receivable and residual certificates (at fair value) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 6,181	$ 8,288
Repayments and settlements	(1,566)	(2,067)
Changes in fair value recorded in earnings	394	163
Fair value, ending balance	$ 5,009	$ 6,384

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The Company’s effective tax rates for the three months ended March 31, 2022 and 2023, are as follows:


	Three Months Ended March 31,
	2022			2023
Provision for income taxes	$	19		$	16
Effective tax rate	0.06		%	(0.01)		%

The Company's tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising during the period. The decrease in the effective tax rate for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, was primarily driven by a decrease in the Company's state tax liabilities in 2023. The effective tax rate differs from the U.S. statutory tax rate primarily due to the valuation allowance on the Company’s deferred tax assets as it is more likely than not that some or all of these deferred tax assets will not be realized.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Revenue - Fees Collected (Details) - USD ($) $ in Thousands	3 Months Ended
Revenue - Fees Collected (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from fees, net	$ 117,141	$ 313,982
Collection agency fees
Disaggregation of Revenue [Line Items]
Revenue from fees, net	3,916	1,990
Borrower fees
Disaggregation of Revenue [Line Items]
Revenue from fees, net	$ 7,737	$ 5,230

- Definition

+ References

+ Details

Stockholders’ Equity - Restricted Stock Activity (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	10,271
RSUs vested (in shares) \| shares	(5,138)
Ending balance (in shares) \| shares	5,133
Weighted-Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 123.33
Vested (in dollars per share) \| $ / shares	123.33
Ending balance (in dollars per share) \| $ / shares	$ 123.33

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value

The following table presents assets and liabilities measured at fair value and categorized in accordance with the fair value hierarchy:


		December 31,		March 31,
	Level	2022		2023
Assets
Loans	3	$	1,010,421	$	982,229
Notes receivable and residual certificates	3	6,181		5,009
Loan servicing assets	3	36,467		34,650
Interest rate cap(1)	2	—		4,437
Total assets		$	1,053,069	$	1,026,325
Liabilities
Loan servicing liabilities	3	$	3,968	$	3,142
Trailing fee liabilities	3	4,852		4,449
Total liabilities		$	8,820	$	7,591

(1)The terms and fair value considerations of the interest rate cap agreement can be found in “Note 4. Derivative Financial Instruments”

Schedule of Significant Unobservable Inputs


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Discount rate	6.36	%	22.28	%	11.87	%	6.36	%	22.67	%	11.78	%
Credit risk rate (1)	0.01	%	93.09	%	16.93	%	0.01	%	93.05	%	16.97	%
Prepayment rate (1)	0.08	%	93.43	%	40.49	%	0.05	%	93.43	%	40.65	%

(1)Expressed as a percentage of the original principal balance of the loans

(2)Unobservable inputs were weighted by relative fair value


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Notes receivable and residual certificates
Discount rate	8.42	%	22.27	%	12.79	%	8.98	%	22.66	%	12.79	%
Credit risk rate (1)	0.59	%	50.69	%	18.43	%	0.59	%	50.69	%	18.21	%
Prepayment rate (1)	10.90	%	88.73	%	42.66	%	10.90	%	87.53	%	43.13	%

_________

(1)Expressed as a percentage of the original principal balance of the loans underlying the financial instruments

(2)Unobservable inputs were weighted by relative fair value

Schedule of Sensitivity Analysis of Fair Value


	December 31,		March 31,
	2022		2023
Fair value of loans	$	1,010,421	$	982,229
Discount rates
100 basis point increase	(11,979)		(11,508)
200 basis point increase	(23,720)		(22,790)
Expected credit loss rates on underlying loans
10% adverse change	(11,927)		(11,686)
20% adverse change	(23,852)		(23,375)
Expected prepayment rates
10% adverse change	(2,284)		(2,238)
20% adverse change	(4,530)		(4,435)

Schedule of Rollforward of Level 3 Assets

The following tables include a rollforward of the loans classified within Level 3 of the fair value hierarchy:


	Loans Held-for- Sale		Loans Held-for-Investment		Total
Fair value at December 31, 2021	$	142,685	$	109,792	$	252,477
Reclassification of loans from HFI to HFS	109,792		(109,792)		—
Purchases of loans	443,190		—		443,190
Sale of loans	(50,764)		—		(50,764)
Purchase of loans for immediate resale	3,014,594		—		3,014,594
Immediate resale of loans	(3,014,594)		—		(3,014,594)
Repayments received	(29,726)		—		(29,726)
Changes in fair value recorded in earnings	(19,511)		—		(19,511)
Other changes	2,315		—		2,315

Fair value at March 31, 2022	$	597,981	$	—	$	597,981


	Loans Held-for- Sale		Loans Held-for-Investment		Total
Fair value at December 31, 2022	$	882,810	$	127,611	$	1,010,421

Purchases of loans	120,615		47,201		167,816
Sale of loans	(67,532)		—		(67,532)
Purchase of loans for immediate resale	389,389		—		389,389
Immediate resale of loans	(389,389)		—		(389,389)
Repayments received	(61,501)		(20,872)		(82,373)
Changes in fair value recorded in earnings	(35,430)		(12,731)		(48,161)
Other changes	520		1,538		2,058

Fair value at March 31, 2023	$	839,482	$	142,747	$	982,229


	Notes Receivable and Residual Certificates
Fair value at December 31, 2021	$	8,288

Repayments and settlements	(2,067)
Changes in fair value recorded in earnings	163

Fair value at March 31, 2022	$	6,384


	Notes Receivable and Residual Certificates
Fair value at December 31, 2022	$	6,181

Repayments and settlements	(1,566)
Changes in fair value recorded in earnings	394

Fair value at March 31, 2023	$	5,009

Schedule of Aggregate Fair Value and Principal Outstanding of All Loans And Loans 90 Days or More Past Due


	Loans				Loans > 90 Days Past Due
	December 31,		March 31,		December 31,		March 31,
	2022		2023		2022		2023
Outstanding principal balance	$	1,047,714	$	1,040,562	$	9,006	$	11,341
Net fair value and accrued interest adjustments	(37,293)		(58,333)		(7,006)		(9,864)
Fair value(1)	$	1,010,421	$	982,229	$	2,000	$	1,477

_________

Schedule of Level 3 Fair Value Assumptions for Loan Servicing Assets and Liabilities

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loan servicing assets and liabilities:


	December 31, 2022						March 31, 2023
	Minimum		Maximum		Weighted-Average (2)		Minimum		Maximum		Weighted-Average (2)
Discount rate	13.00	%	20.00	%	17.20	%	13.00	%	20.00	%	17.08	%
Credit risk rate (1)	0.03	%	91.76	%	16.22	%	0.04	%	65.36	%	15.73	%
Market-servicing rate (3)(4)(5)	0.62	%	3.72	%	0.62	%	0.62	%	3.72	%	0.62	%
Prepayment rate (1)	0.53	%	91.99	%	41.19	%	4.62	%	96.90	%	41.50	%

_________

(1)Expressed as a percentage of the original principal balance of the loans underlying the servicing arrangement

(2)Unobservable inputs were weighted by relative fair value

(3)Excludes ancillary fees that would be passed on to a third-party servicer

(4)Expressed as a percentage of the outstanding principal balance of the loan

(5)Includes personal loans and auto loans

Schedule of Fair Value Sensitivity of Loan Servicing Assets and Liabilities to Adverse Changes in Key Assumptions


	December 31,		March 31,
	2022		2023
Fair value of loan servicing assets	$	36,467	$	34,650
Expected market-servicing rates
10% market-servicing rates increase	(9,989)		(9,090)
20% market-servicing rates increase	(19,950)		(18,508)


	December 31,		March 31,
	2022		2023
Fair value of loan servicing liabilities	$	3,968	$	3,142
Expected market-servicing rates
10% market-servicing rates increase	2,303		1,936
20% market-servicing rates increase	4,640		3,821

Schedule of Servicing Liabilities at Fair Value Rollforward

The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy:


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2021	$	18,388	$	8,780
Sale of loans	10,610		1,905
Changes in fair value recorded in earnings	(1,038)		(2,395)
Fair value at March 31, 2022	$	27,960	$	8,290


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2022	$	36,467	$	3,968
Sale of loans	3,662		49
Changes in fair value recorded in earnings	(5,479)		(875)
Fair value at March 31, 2023	$	34,650	$	3,142

Schedule of Servicing Assets at Fair Value Rollforward

The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy:


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2021	$	18,388	$	8,780
Sale of loans	10,610		1,905
Changes in fair value recorded in earnings	(1,038)		(2,395)
Fair value at March 31, 2022	$	27,960	$	8,290


	Loan Servicing Assets		Loan Servicing Liabilities
Fair value at December 31, 2022	$	36,467	$	3,968
Sale of loans	3,662		49
Changes in fair value recorded in earnings	(5,479)		(875)
Fair value at March 31, 2023	$	34,650	$	3,142

Schedule of Rollforward of Level 3 Liabilities

The following tables include a rollforward of trailing fee liabilities classified by the Company within Level 3 of the fair value hierarchy:


	Trailing Fee Liabilities
Fair value at December 31, 2021	$	4,315
Issuances	1,667
Repayments and settlements	(629)
Changes in fair value recorded in earnings	(112)
Fair value at March 31, 2022	$	5,241


	Trailing Fee Liabilities
Fair value at December 31, 2022	$	4,852
Issuances	318
Repayments and settlements	(747)
Changes in fair value recorded in earnings	26

Fair value at March 31, 2023	$	4,449

Fair Value Measurement - Significant Inputs and Assumptions (Details) - Valuation Technique, Discounted Cash Flow - Fair Value, Inputs, Level 3	Mar. 31, 2023	Dec. 31, 2022
Minimum \| Discount rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	6.36%	6.36%
Minimum \| Discount rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	8.98%	8.42%
Minimum \| Credit risk rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	0.01%	0.01%
Minimum \| Credit risk rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	0.59%	0.59%
Minimum \| Prepayment rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	0.05%	0.08%
Minimum \| Prepayment rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	10.90%	10.90%
Maximum \| Discount rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	22.67%	22.28%
Maximum \| Discount rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	22.66%	22.27%
Maximum \| Credit risk rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	93.05%	93.09%
Maximum \| Credit risk rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	50.69%	50.69%
Maximum \| Prepayment rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	93.43%	93.43%
Maximum \| Prepayment rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	87.53%	88.73%
Weighted Average \| Discount rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	11.78%	11.87%
Weighted Average \| Discount rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	12.79%	12.79%
Weighted Average \| Credit risk rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	16.97%	16.93%
Weighted Average \| Credit risk rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	18.21%	18.43%
Weighted Average \| Prepayment rate \| Loans (at fair value)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	40.65%	40.49%
Weighted Average \| Prepayment rate \| Notes Receivable
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loan receivable, measurement input	43.13%	42.66%