Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 08, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
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 410 | ||
Entity Address, City or Town | San Mateo | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94403 | ||
City Area Code | 833 | ||
Local Phone Number | 212-2461 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | UPST | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,594,276,077 | ||
Entity Common Stock, Shares Outstanding | 86,430,264 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the 2024 Annual Meeting of Stockholders are incorporated by reference into Part II and III of this Annual Report on Form 10-K to the extent stated herein. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001647639 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | San Francisco, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Assets | |||
Cash | $ 368,405,000 | $ 422,411,000 | |
Restricted cash | 99,382,000 | 110,056,000 | |
Loans (at fair value) | [1] | 1,156,413,000 | 1,010,421,000 |
Property, equipment, and software, net | 42,655,000 | 44,168,000 | |
Operating lease right of use assets | 54,694,000 | 86,335,000 | |
Beneficial interest assets (at fair value) | 41,012,000 | 0 | |
Non-marketable equity securities | 41,250,000 | 41,250,000 | |
Goodwill | 67,062,000 | 67,062,000 | |
Other assets (includes $42,648 and $48,897 at fair value as of December 31, 2022 and December 31, 2023, respectively) | 146,227,000 | 154,351,000 | |
Total assets | [2] | 2,017,100,000 | 1,936,054,000 |
Liabilities: | |||
Accounts payable | 12,613,000 | 18,715,000 | |
Payable to investors | 53,580,000 | 90,777,000 | |
Borrowings | 1,040,424,000 | 986,394,000 | |
Payable to securitization note holders (at fair value) | 141,416,000 | 0 | |
Accrued expenses and other liabilities (includes $8,820 and $10,510 at fair value as of December 31, 2022 and December 31, 2023, respectively) | 71,438,000 | 66,946,000 | |
Operating lease liabilities | 62,324,000 | 100,787,000 | |
Total liabilities | [2] | 1,381,795,000 | 1,263,619,000 |
Stockholders’ equity: | |||
Common stock, $0.0001 par value; 700,000,000 shares authorized; 81,259,676 and 86,330,303 shares issued and outstanding as of December 31, 2022 and December 31, 2023, respectively | 9,000 | 8,000 | |
Additional paid-in capital | 917,872,000 | 714,871,000 | |
Accumulated deficit | (282,576,000) | (42,444,000) | |
Total stockholders’ equity | 635,305,000 | 672,435,000 | |
Total liabilities and stockholders’ equity | $ 2,017,100,000 | $ 1,936,054,000 | |
[1] As of December 31, 2023, includes $179.1 million of loans, at fair value, contributed as collateral for the consolidated securitization. No such loans were held as of December 31, 2022. Refer to “ Note 6. Fair Value Measurement ” for details. 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 December 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 liabilities in the table below include liabilities for which creditors 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, December 31, 2022 2023 Assets Cash $ 838 $ 1,603 Restricted cash 13,147 23,450 Loans (at fair value) 958,822 1,147,423 Other assets (includes $2,244 and $5,958 at fair value as of December 31, 2022 and December 31, 2023, respectively) 11,674 22,917 Total assets $ 984,481 $ 1,195,393 Liabilities Payable to investors $ — $ 121 Borrowings 336,452 387,440 Payable to securitization note holders (at fair value) — 141,416 Accrued expenses and other liabilities 1,378 1,975 Total liabilities 337,830 530,952 Total net assets $ 646,651 $ 664,441 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Other assets at fair value | $ 48,897,000 | $ 42,648,000 | |
Accrued expenses and other liabilities at fair value | $ 10,510,000 | $ 8,820,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 | |
Common stock, issued (in shares) | 86,330,303 | 81,259,676 | |
Common stock, outstanding (in shares) | 86,330,303 | 81,259,676 | |
Loans held in consolidated securitization | $ 179,100,000 | $ 0 | |
Assets | |||
Cash | 368,405,000 | 422,411,000 | |
Restricted cash | 99,382,000 | 110,056,000 | |
Loans (at fair value) | [1] | 1,156,413,000 | 1,010,421,000 |
Other assets (includes $2,244 and $5,958 at fair value as of December 31, 2022 and December 31, 2023, respectively) | 146,227,000 | 154,351,000 | |
Total assets | [2] | 2,017,100,000 | 1,936,054,000 |
Liabilities | |||
Payable to investors | 53,580,000 | 90,777,000 | |
Borrowings | 1,040,424,000 | 986,394,000 | |
Payable to securitization note holders (at fair value) | 141,416,000 | 0 | |
Accrued expenses and other liabilities | 71,438,000 | 66,946,000 | |
Total liabilities | [2] | 1,381,795,000 | 1,263,619,000 |
Total stockholders’ equity | 635,305,000 | 672,435,000 | |
Variable Interest Entity, Primary Beneficiary | |||
Other assets at fair value | 5,958,000 | 2,244,000 | |
Assets | |||
Cash | 1,603,000 | 838,000 | |
Restricted cash | 23,450,000 | 13,147,000 | |
Loans (at fair value) | 1,147,423,000 | 958,822,000 | |
Other assets (includes $2,244 and $5,958 at fair value as of December 31, 2022 and December 31, 2023, respectively) | 22,917,000 | 11,674,000 | |
Total assets | 1,195,393,000 | 984,481,000 | |
Liabilities | |||
Payable to investors | 121,000 | 0 | |
Borrowings | 387,440,000 | 336,452,000 | |
Payable to securitization note holders (at fair value) | 141,416,000 | 0 | |
Accrued expenses and other liabilities | 1,975,000 | 1,378,000 | |
Total liabilities | 530,952,000 | 337,830,000 | |
Total stockholders’ equity | $ 664,441,000 | $ 646,651,000 | |
[1] As of December 31, 2023, includes $179.1 million of loans, at fair value, contributed as collateral for the consolidated securitization. No such loans were held as of December 31, 2022. Refer to “ Note 6. Fair Value Measurement ” for details. 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 December 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 liabilities in the table below include liabilities for which creditors 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, December 31, 2022 2023 Assets Cash $ 838 $ 1,603 Restricted cash 13,147 23,450 Loans (at fair value) 958,822 1,147,423 Other assets (includes $2,244 and $5,958 at fair value as of December 31, 2022 and December 31, 2023, respectively) 11,674 22,917 Total assets $ 984,481 $ 1,195,393 Liabilities Payable to investors $ — $ 121 Borrowings 336,452 387,440 Payable to securitization note holders (at fair value) — 141,416 Accrued expenses and other liabilities 1,378 1,975 Total liabilities 337,830 530,952 Total net assets $ 646,651 $ 664,441 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Revenue: | ||||
Revenue from fees, net | $ 560,431 | $ 907,272 | $ 801,275 | |
Interest income, interest expense, and fair value adjustments, net: | ||||
Interest income | [1] | 168,996 | 105,580 | 20,634 |
Interest expense | [1] | (34,894) | (10,843) | (3,274) |
Fair value and other adjustments | [1] | (180,971) | (159,565) | 29,954 |
Total interest income, interest expense, and fair value adjustments, net | (46,869) | (64,828) | 47,314 | |
Revenue from fees, net | 513,562 | 842,444 | 848,589 | |
Operating expenses: | ||||
Sales and marketing | 127,143 | 345,776 | 333,453 | |
Customer operations | 150,418 | 187,994 | 117,579 | |
Engineering and product development | 280,138 | 237,247 | 133,999 | |
General, administrative, and other | 212,388 | 185,290 | 122,677 | |
Total operating expenses | 770,087 | 956,307 | 707,708 | |
Income (loss) from operations | (256,525) | (113,863) | 140,881 | |
Other income (expense), net | 21,206 | 9,473 | (5,174) | |
Expense on convertible notes | (4,706) | (4,684) | (1,976) | |
Net income (loss) before income taxes | (240,025) | (109,074) | 133,731 | |
(Benefit) provision for income taxes | 107 | (409) | (1,712) | |
Net income (loss) | $ (240,132) | $ (108,665) | $ 135,443 | |
Net income (loss) per share, basic (in dollars per share) | $ (2.87) | $ (1.31) | $ 1.73 | |
Net income (loss) per share, diluted (in dollars per share) | $ (2.87) | $ (1.31) | $ 1.43 | |
Weighted-average number of shares outstanding used in computing net income (loss) per share, basic (in shares) | 83,765,896 | 82,771,268 | 78,106,359 | |
Weighted-average number of shares outstanding used in computing net income (loss) per share, diluted (in shares) | 83,765,896 | 82,771,268 | 94,772,641 | |
[1] Balances for year ended December 31, 2023 include amounts related to the consolidated securitization. Refer to “ Note 2. Revenue ” for details. |
Consolidated Statements of Stoc
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, 2020 | 73,314,026 | |||
Beginning balance at Dec. 31, 2020 | $ 300,252 | $ 7 | $ 369,467 | $ (69,222) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 7,047,722 | |||
Issuance of common stock upon exercise of stock options | 14,736 | 14,736 | ||
Issuance of common stock upon settlement of restricted stock units (in shares) | 32,775 | |||
Exercise of common stock warrants (in shares) | 72,407 | |||
Shares withheld related to net share settlement of restricted stock units (in shares) | (1,730) | |||
Shares withheld related to net share settlement of restricted stock units | (236) | (236) | ||
Issuance of common stock in connection with an acquisition (in shares) | 650,740 | |||
Issuance of common stock in connection with acquisition | 71,003 | 71,003 | ||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs (in shares) | 2,300,000 | |||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs | 263,931 | $ 1 | 263,930 | |
Stock-based compensation expense | 76,327 | 76,327 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 243,725 | |||
Issuance of common stock under employee stock purchase plan | 4,145 | 4,145 | ||
Purchase of capped calls | (58,523) | (58,523) | ||
Net income (loss) | 135,443 | 135,443 | ||
Ending balance (in shares) at Dec. 31, 2021 | 83,659,665 | |||
Ending 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) | 2,464,572 | |||
Issuance of common stock upon exercise of stock options | 12,354 | $ 1 | 12,353 | |
Issuance of common stock upon settlement of restricted stock units (in shares) | 866,717 | |||
Shares withheld related to net share settlement of restricted stock units (in shares) | (619) | |||
Shares withheld related to net share settlement of restricted stock units | (16) | (16) | ||
Repurchase and retirement of restricted stock (in shares) | (10,279) | |||
Stock-based compensation expense | 131,905 | 131,905 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 162,796 | |||
Issuance of common stock under employee stock purchase plan | 7,662 | 7,662 | ||
Repurchases of stock (in shares) | (5,883,176) | |||
Repurchases of stock | (177,883) | $ (1) | (177,882) | |
Net income (loss) | $ (108,665) | (108,665) | ||
Ending balance (in shares) at Dec. 31, 2022 | 81,259,676 | 81,259,676 | ||
Ending 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) | 1,441,787 | 1,441,787 | ||
Issuance of common stock upon exercise of stock options | $ 12,881 | $ 1 | 12,880 | |
Issuance of common stock upon settlement of restricted stock units (in shares) | 3,170,158 | |||
Shares withheld related to net share settlement of restricted stock units (in shares) | (777) | |||
Shares withheld related to net share settlement of restricted stock units | (15) | (15) | ||
Stock-based compensation expense | 181,705 | 181,705 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 459,459 | |||
Issuance of common stock under employee stock purchase plan | 8,431 | 8,431 | ||
Net income (loss) | $ (240,132) | (240,132) | ||
Ending balance (in shares) at Dec. 31, 2023 | 86,330,303 | 86,330,303 | ||
Ending balance at Dec. 31, 2023 | $ 635,305 | $ 9 | $ 917,872 | $ (282,576) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income (loss) | $ (240,132) | $ (108,665) | $ 135,443 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Change in fair value of financial instruments | 234,822 | 168,878 | (228) |
Stock-based compensation | 175,039 | 125,945 | 73,186 |
Gain on loan servicing rights, net | (13,713) | (28,739) | (6,916) |
Depreciation and amortization | 24,903 | 13,513 | 7,541 |
Non-cash interest expense | 3,057 | 3,047 | 1,983 |
Other | (3,869) | 0 | 0 |
Net changes in operating assets and liabilities: | |||
Purchases of loans held-for-sale | (3,006,510) | (7,807,429) | (8,932,604) |
Proceeds from sale of loans held-for-sale | 2,514,627 | 6,828,617 | 8,826,045 |
Principal payments received for loans held-for-sale | 189,746 | 152,018 | 8,659 |
Principal payments received for loans held by consolidated securitization | 24,832 | 0 | 0 |
Settlements of beneficial interest liabilities | (596) | 0 | 0 |
Other assets | (8,932) | 4,173 | (62,042) |
Operating lease liability and right-of-use asset | (6,822) | 10,204 | 3,126 |
Accounts payable | (6,127) | 11,878 | (7,513) |
Payable to investors | (42,989) | (16,821) | 62,097 |
Accrued expenses and other liabilities | 2,171 | (31,300) | 59,576 |
Net cash provided by (used in) operating activities | (160,493) | (674,681) | 168,353 |
Cash flows from investing activities | |||
Purchases and originations of loans held-for-investment | (157,223) | (149,298) | (159,398) |
Proceeds from sale of loans held-for-investment | 972 | 14,289 | 51,403 |
Principal payments received for loans held-for-investment | 102,446 | 43,311 | 24,532 |
Principal payments received for notes receivable and repayments of residual certificates | 4,328 | 6,736 | 11,458 |
Purchases of property and equipment | (1,527) | (8,825) | (8,427) |
Capitalized software costs | (10,559) | (14,088) | (6,688) |
Acquisition of beneficial interest assets | (56,892) | 0 | 0 |
Purchases of non-marketable equity securities | 0 | (1,250) | (40,000) |
Purchase of certificates of deposit | 0 | (5,000) | 0 |
Acquisition, net of cash acquired | 0 | 0 | (16,757) |
Net cash used in investing activities | (118,455) | (114,125) | (143,877) |
Cash flows from financing activities | |||
Proceeds from borrowings | 626,910 | 688,813 | 718,422 |
Repayments of borrowings | (575,937) | (400,898) | (71,316) |
Principal payments made on securitization notes | (23,320) | 0 | 0 |
Proceeds from issuance of securitization notes | 165,318 | 0 | 0 |
Proceeds from secondary offering, net of underwriting discounts, commissions, and offering costs | 0 | 0 | 263,931 |
Payment of debt issuance costs | 0 | 0 | (15,727) |
Purchase of capped calls | 0 | 0 | (58,523) |
Proceeds from issuance of common stock under employee stock purchase plan | 8,431 | 7,662 | 4,145 |
Proceeds from exercise of stock options | 12,881 | 12,354 | 14,736 |
Taxes paid related to net share settlement of equity awards | (15) | (16) | (236) |
Repurchases of common stock | 0 | (177,883) | 0 |
Net cash provided by financing activities | 214,268 | 130,032 | 855,432 |
Change in cash and restricted cash | (64,680) | (658,774) | 879,908 |
Cash and restricted cash at beginning of year | 532,467 | 1,191,241 | 311,333 |
Cash and restricted cash at end of year | 467,787 | 532,467 | 1,191,241 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 36,547 | 12,473 | 3,274 |
Cash (received) paid for income taxes, net | (658) | 328 | 2,300 |
Supplemental disclosures of non-cash investing and financing activities | |||
Securities retained under consolidated securitization transaction | 44,763 | 0 | 0 |
Residual certificates retained under unconsolidated securitization | 13,172 | 4,680 | 0 |
Beneficial interest assets included in payable to investors | 5,792 | 0 | 0 |
Capitalized stock-based compensation expense | 6,666 | 5,960 | 3,141 |
Issuance of common stock in connection with acquisition | 0 | 0 | 80,256 |
Cash and Restricted Cash | |||
Cash | 368,405 | 422,411 | |
Restricted cash | 99,382 | 110,056 | |
Total cash and restricted cash | $ 467,787 | $ 532,467 | $ 1,191,241 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 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”, “management”, “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 Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries, and consolidated VIEs. All intercompany accounts and transactions have been eliminated. The Company’s functional and reporting currency is the U.S. dollar. Follow-on Offering On April 13, 2021, the Company completed a follow-on offering, in which 2,300,000 shares of common stock (including the exercise in full of the underwriters’ option to purchase 300,000 additional shares) were issued and sold at $120.00 per share. The Company received net proceeds of $263.9 million after deducting underwriting discounts and commissions of $11.0 million and offering expenses of $1.0 million. Offering expenses consisted of incremental accounting, legal, and other fees incurred related to the follow-on offering. Use of Estimates The preparation of the 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying 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 years. Cash and Restricted Cash Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. As of December 31, 2022 and 2023, the Company did not have any cash equivalent balances, defined as highly liquid financial instruments purchased with original maturities of three months or less. Restricted cash primarily consists of deposit accounts that are held in our custody but restricted for regulatory or legal purposes. This balance includes amounts that are: (i) received from borrowers for interest and principal applied to loans as part of loan servicing, but not yet distributed to institutional investors; (ii) provided by institutional investors in relation to loan purchases; (iii) collateral for letters of credit the Company as required to maintain under its operating lease agreements; (iv) received from borrowers for interest and principal applied to loans pledged as part of our Company’s warehouse credit facilities, but not yet distributed to the Company, and (v) cash balances restricted in connection with the Company’s risk sharing arrangements. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities; Level 2— Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value on a recurring basis include loans, notes receivable and residual certificates, loan servicing assets and liabilities, derivatives, beneficial interests, payable to securitization note holders, and trailing fee liabilities. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability. Financial Instruments not Measured at Fair Value The Company’s financial instruments not measured at fair value consist primarily of cash, restricted cash, and other assets (excluding certain financial instruments, which are measured at fair value, such as loan servicing assets, interest rate caps, notes receivable and residual certificates), accounts payable, payable to investors, and other liabilities (excluding certain financial instruments, such as loan servicing liabilities, beneficial interest liabilities, and trailing fee liabilities which are measured at fair value). Payable to investors includes amounts of loan repayments not yet distributed to institutional investors, as well as amounts received from institutional investors but not yet invested directly in whole loans. The carrying values of these financial instruments are approximates of their respective fair values due to their short-term nature. Borrowings are presented at par, net of debt issuance costs and amortized over the contractual term using the effective interest method, with accrued interest included as part of accrued expenses and other liabilities on the consolidated balance sheets. The carrying value of borrowings associated with the warehouse credit facilities approximates the fair value due to their relatively short maturities. Variable Interest Entities A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The Company consolidates a VIE when it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses or the right to receive benefits of the VIE that could be potentially significant to the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Consolidated Securitization The Company elected the measurement alternative under Accounting Standards Codification (“ASC”) 810, Consolidation , and maximizes the use of observable inputs to estimate the fair value of the financial assets and liabilities of a consolidated securitization entity. Under the measurement alternative, the Company determined that the fair value of the liabilities, which consists of securitization notes and residual certificates issued by the entity, is based on more observable inputs than inputs used to determine the fair value of the assets, which consists of held-for-sale loans. Thus, the fair value of these loans is determined by the sum of the fair value of the related securitization notes and residual certificates. Changes in the fair value of these assets and liabilities are included in the consolidated statements of operations and comprehensive income (loss). Transfer of Financial Assets Upstart-powered loans originated by lending partners are either retained by the lending partners, purchased by the Company and immediately sold to institutional investors under loan sale agreements, or purchased and held by the Company for a period of time before being sold to third-party investors, or held to maturity by the Company for the primary purpose of product research and development. Loans held on the Company’s consolidated balance sheets are classified as either held-for-investment or held-for-sale, and loans purchased for immediate resale to third-party investors are classified as held-for-sale. Immediate loan resales to institutional investors are accounted for as transfers of financial assets when the Company surrenders control of these loan assets. These sales typically occur shortly after the origination of the loans by the lending partner and the Company’s subsequent acquisition of the loans from the originating lending partner. Loans sold to institutional investors are derecognized from the Company’s consolidated balance sheets at the time of sale in accordance with the ASC 860, Transfers and Servicing . The Company records an asset or a liability at fair value for its estimated post-sale servicing arrangements. The Company also records liabilities net of fair value for contingent obligations to repurchase loans that do not conform to the representations and warranties made to the loan purchaser at the time of sale. These liabilities are included within other liabilities on the Company’s consolidated balance sheets. Loan Servicing Assets and Liabilities Loan servicing assets and liabilities are recognized at fair value when the Company transfers loans, which qualify as sales under ASC 860 with servicing rights retained or when the Company enters into servicing agreements with lending partners who retain Upstart-powered loans. A loan servicing asset or liability exists depending on whether the revenue from servicing is expected to more than adequately compensate the Company for carrying out its servicing obligations. Loan servicing assets and liabilities are recorded in other assets and accrued expenses and other liabilities, respectively, in the consolidated balance sheets, with changes in fair value recorded in servicing revenue, net, which is part of revenue from fees, net in the consolidated statements of operations and comprehensive income (loss). Refer to “ Note 2. Revenue ” for further details. Property, Equipment, and Software, Net Property, equipment, and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method over the estimated useful lives of the assets, which are generally three years for internally developed software, computer and networking equipment, and furniture and fixtures. Leasehold improvements are depreciated over the shorter of the remaining lease term or the estimated useful life. Internally developed software is capitalized upon completion of the preliminary project stage, when it becomes probable that the project will be completed, and the software will be used as intended. Capitalized costs primarily consist of salaries and payroll related costs for employees directly involved in development efforts. Costs related to the preliminary project stage and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are capitalized if they result in additional functionalities or substantial enhancements. The Company evaluates its long-lived assets for potential impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When such an event occurs the carrying amount of the asset is reduced to its estimated fair value. Leases The Company determines if an arrangement is or contains a lease at inception. Operating leases are recorded on the consolidated balance sheets with right-of-use assets representing the right to use the underlying asset and lease liabilities representing the obligation to make lease payments. Right-of-use assets (“ROU”) and lease liabilities are recognized at lease commencement primarily based on the present value of lease payments over the lease term, and as necessary, at modification. The operating lease ROU assets also include any initial direct costs, lease payments made prior to lease commencement, and lease incentives received. Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. The Company’s lease terms are the non-cancelable period including any rent-free periods provided by the lessor and may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised. Lease costs for lease payments are recognized on a straight-line basis over the lease term. As the rate implicit on the Company’s leases is not readily determinable, the Company uses its secured incremental borrowing rate to determine the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and in a similar economic environment. The Company has elected not to separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component. The Company has immaterial leases with a term of 12 months or less. 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 ASC 815, Derivatives and Hedging . Derivatives are recorded on the consolidated balance sheets at fair value with changes in the value recorded in earnings on the consolidated statements of operations and comprehensive income (loss), and are reported within the net cash used in operating activities in the consolidated statements of cash flows. The Company uses derivative financial instruments to manage risks related to our ongoing business operations, including managing interest rates on our warehouse facilities. The Company does not employ derivatives for trading or speculative purposes and has no derivatives classified as accounting hedges. Beneficial Interests Beneficial interests represent the Company’s right to receive or an obligation to make cash payments to certain loan buyers based on the credit performance of the underlying loan portfolios. The Company evaluates these arrangements to determine if they or their components meet the characteristics of derivative financial instruments. Beneficial interests that meet such characteristics are reported in accordance with the derivative financial instruments policy. For other beneficial interests that meet the criteria of a debt security, the Company has elected to record the arrangement at fair value and recognize the changes in fair value and other adjustments on the consolidated statements of operations and comprehensive income (loss). Refer to “ Note 5. Beneficial Interests ” for additional information. Non-marketable Equity Securities The Company’s strategic investments consists of non-marketable equity securities on the consolidated balance sheets which are investments in privately held companies. Non-marketable equity securities do not have a readily determinable fair value and are measured by the Company at cost less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “measurement alternative”). Gains and losses on the investment, realized and unrealized, are recognized in other income (expense), net on our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition of the gains and losses. There have been no unrealized or realized gains and losses or impairments related to the non-marketable equity securities accounted for under the measurement alternative for the years presented. As of December 31, 2022 and 2023, the carrying value of our non-marketable equity securities was $41.3 million. The determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment. In its evaluation, the Company considers factors such as differences in the rights and preferences of the investment and the extent to which those differences would affect the fair value of the investment. In the event the Company identifies an observable price change from an orderly transaction for an identical or similar investment of the same issuer, the Company must estimate the fair value of its strategic investments using the most recent data available. The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors. Business Combinations The Company accounts for business combinations using the acquisition method of accounting which requires the fair values of assets acquired and liabilities assumed to be recognized in the consolidated financial statements. Assets acquired and liabilities assumed in a business combination are recognized at their estimated fair value as of the acquisition date. The excess purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period, with the corresponding offset to goodwill. Acquisition-related costs, such as legal and consulting fees, are recognized separately from the business combination and are expensed as incurred. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is reviewed for impairment annually, or more frequently if an event or a change in circumstances indicates that goodwill may be impaired. We first assess qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value. Examples of qualitative factors include, but are not limited to, a significant adverse change in legal factors or in the business climate, a significant decline in our stock price, a significant decline in our projected revenue or cash flows, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is performed. We perform a quantitative goodwill impairment test by determining the fair value of the reporting unit and comparing it to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized on a straight-line basis over their estimated useful lives. Acquired intangible assets are presented net of accumulated amortization on the consolidated balance sheets. The Company reviews the carrying amounts of intangible assets for impairment whenever an event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. We measure the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. Impairment is measured by the amount in which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. Revenue Recognition The Company’s revenue consists of two components: revenue from fees, net and interest income, interest expense, and fair value adjustments, net. The revenue from fees, net line item on the consolidated statements of operations and comprehensive income (loss) is primarily comprised of platform and referral fees, net, which are recognized in accordance with ASC 606, Revenue from Contracts with Customers, and servicing and other fees, net, which are accounted for under ASC 860, Transfers and Servicing. Refer to “ Note 2. Revenue ” for further information. Operating Expenses Sales and Marketing Sales and marketing expenses primarily consist of costs incurred across various advertising channels, including expenses for partnerships with third-parties providing borrower referrals, direct mail and digital advertising campaigns, as well as other expenses associated with building overall brand awareness and experiential marketing costs. Sales and marketing expenses also include payroll and other personnel-related costs, including stock-based compensation expense, for related teams. These costs are recognized in the period incurred. Customer Operations Customer operations expenses include payroll and other personnel-related expenses, including stock-based compensation expense, for personnel engaged in onboarding, loan servicing, customer support and other related operational teams. These costs also include costs of third-party collection agencies and other systems and tools the Company uses as part of information verification, fraud detection, and payment processing activities. These costs are recognized in the period incurred. Engineering and Product Development Engineering and product development expenses primarily consist of payroll and other employee-related expenses, including stock-based compensation expenses, for the engineering and product development teams as well as the costs of systems and tools used by these teams. These costs are recognized in the period incurred. General, Administrative, and Other General, administrative, and other expenses consist primarily of payroll and other employee-related expenses, including stock-based compensation expense for legal and compliance, finance and accounting, human resources and facilities teams, as well as depreciation and amortization of property, equipment and software, professional services fees, facilities and travel expenses. These costs are recognized in the period incurred. Stock-Based Compensation The Company issues stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), and restricted stock to employees and non-employees, including directors and third-party service providers, and employee stock purchase rights granted under the Company’s employee stock purchase plan (“ESPP”). Stock options and employee stock purchase rights granted under the ESPP are initially measured at fair value at the date of grant using the Black-Scholes option-pricing model. RSUs and restricted stock are measured at the fair market value of our common stock at the grant date. PRSUs are initially measured at fair value using a Monte Carlo simulation model. Stock-based compensation expenses are recognized based on their respective grant-date fair values. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is recorded net of estimated forfeitures, such that the expense is recorded only for those awards that are expected to vest. Other Income (Expense), Net In 2021, the Company voluntarily repaid proceeds received under the Paycheck Protection Program plus accrued interest totaling $5.3 million. The Company recognized the loan principal repayment as an other expense. In the year ended December 31, 2022 and 2023, other income (expense), net primarily consists of dividend income earned by the Company on its unrestricted cash balance which is recognized in the period earned. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance may be established to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax asset or benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss carryforwards depends on having sufficient taxable income of an appropriate character within the carryback or carryforward periods. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon review by the taxing authority. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Net Income (Loss) Per Share The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities. The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the year to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the year had been distributed. Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the year. Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting year, adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, unvested RSUs, purchase rights committed under the ESPP, and convertible debt. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares. For years 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. 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 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 consolidated financial statements or related disclosures. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue from Fees, Net The Company disaggregates revenue from fees by type of service for the years presented as follows: Year Ended December 31, 2021 2022 2023 Revenue from fees, net: Platform and referral fees, net $ 726,161 $ 732,237 $ 414,120 Servicing and other fees, net 75,114 175,035 146,311 Total revenue from fees, net $ 801,275 $ 907,272 $ 560,431 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, which are our lending partners, and are recorded as a reduction to platform and referral fees, net, which is part of revenue from fees, net, in the consolidated statements of operations and comprehensive income (loss). The Company recognized $23.6 million, $27.7 million, and $8.1 million of loan premium fees and loan trailing fees as contra-revenue within platform and referral fees, net during the year ended December 31, 2021, 2022, and 2023, respectively. As of December 31, 2022 and 2023, the Company recognized $4.9 million and $4.3 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 consolidated balance sheets. Refer to “ Note 6. 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, 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 also enters into subscription agreements with auto dealerships to access Upstart Auto Retail software, a cloud-based solution that facilitates dealership operations and enables them to provide consumers with access to Upstart-powered auto loans. Subscription agreements generally have a contractual term of one The Company had $31.1 million and $19.5 million of accounts receivable that are included in other assets on the consolidated balance sheets related to contracts with customers as of December 31, 2022 and 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 years 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 2023, the Company had $2.6 million and $2.7 million of contract costs, respectively, capitalized within other assets on the consolidated balance sheets. During the years ended December 31, 2021, 2022 and 2023, the Company amortized an immaterial amount, $2.8 million, and $3.2 million, respectively, of capitalized contracts costs to sales and marketing in the consolidated statements of operations and comprehensive income (loss) for the years presented. Customers accounting for greater than 10% of total revenue were as follows: Year Ended December 31, 2021 2022 2023 Customer A 56% 45% 29% Customer B 27% 28% 23% Customer C * * 11% * Less than 10% Customers accounting for greater than 10% of accounts receivable were as follows: December 31, December 31, 2022 2023 Customer C 23% 15% Customer A * 11% * Less than 10% 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, Revenue from Contracts with Customers , and are accounted for under ASC 860, Transfers and Servicing . 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. The total fees charged by collection agencies are recognized in the period incurred and reported as part of customer operations expenses. Servicing and other fees, net also includes 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. Refer to “ Note 6. Fair Value Measurement ” for additional information on changes in fair value associated with servicing assets and liabilities. The following table presents the components of servicing and other fees, net as part of revenue from fees, net in the Company’s consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2021 2022 2023 Servicing fees $ 51,255 $ 115,742 $ 107,008 Borrower fees 7,289 25,208 29,139 Collection agency fees 4,473 10,519 15,865 Other fees 1,067 675 743 Net gain (loss) on servicing rights and fair value adjustments 11,030 22,891 (6,444) Total servicing and other fees, net $ 75,114 $ 175,035 $ 146,311 Interest Income, Interest Expense, and Fair Value Adjustments, Net Interest income, interest expense, 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, derivatives, beneficial interests, notes receivable and residual certificates, trailing fee liabilities, and payable to securitization note holders. The following table presents components of the interest income, interest expense, and fair value adjustments, net presented in the Company’s consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2021 2022 2023 Interest income (1) $ 20,634 $ 105,580 $ 168,996 Interest expense (1) (3,274) (10,843) (34,894) Fair value and other adjustments Unrealized gain (loss) on loans, loan charge-offs, and other fair value adjustments, net 1,894 (101,422) (130,440) Realized gain (loss) on sale of loans, net 28,060 (58,143) (24,042) Fair value losses on beneficial interests — — (26,489) Total fair value and other adjustments, net (1) 29,954 (159,565) (180,971) Total interest income, interest expense, and fair value adjustments, net $ 47,314 $ (64,828) $ (46,869) __________ (1) Includes interest income, interest expense and fair value and other adjustments, net related to the consolidated securitization as follows: Year Ended December 31, 2021 2022 2023 Interest income, interest expense, and fair value adjustments, net related to consolidated securitization: Interest income $ — $ — $ 19,697 Interest expense — — (6,733) Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net — — (5,496) Total interest income, interest expense, and fair value adjustments, net $ — $ — $ 7,468 Interest Income Interest income is recognized based on the terms of the underlying agreements with borrowers for loans held on the Company’s 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 2023, the Company has recorded $12.8 million and $14.2 million of accrued interest income in loans on the consolidated balance sheets Interest Expense Interest expense is primarily related to interest recorded on the Company’s borrowings on warehouse credit facilities, and interest expense related to the consolidated securitization. Interest expense includes accrued interest incurred but not paid. Accrued interest expenses were immaterial as of December 31, 2022 and 2023. Interest expense also includes changes in fair value of the interest rate cap. 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 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 6. Fair Value Measurement ” for additional information. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Consolidated VIEs The Company consolidates 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. 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 Consolidated securitization $ — $ — $ — Consolidated warehouse entities 488,337 337,269 151,068 Other consolidated VIEs 496,144 561 495,583 Total consolidated VIEs $ 984,481 $ 337,830 $ 646,651 Assets Liabilities Net Assets December 31, 2023 Consolidated securitization $ 187,258 $ 141,420 $ 45,838 Consolidated warehouse entities 645,455 388,681 256,774 Other consolidated VIEs 362,680 851 361,829 Total consolidated VIEs $ 1,195,393 $ 530,952 $ 664,441 Consolidated Securitization On July 6, 2023, the Company completed a private securitization securities offering (“UPST 2023-2”). As a retaining sponsor of the transaction, under risk retention requirements in Title 17 U.S. Code of Federal Regulations Part 246, Credit Risk Retention, promulgated by the Securities and Exchange Commission, the Company is required to retain at least 5% of the economic risk in UPST 2023-2. The Company elected to satisfy the risk retention requirements by holding eligible vertical retained interests in the form of a combination of securitization notes and residual certificates. The Company has also retained the remainder of the residual certificates issued as part of the transaction. The Company was the sole contributor of the collateral, which included $204.7 million unpaid principal balance of Upstart-powered loans held by the Company. The weighted-average coupon of the securitization notes issued was approximately 9.2%, and their sale generated approximately $165.3 million in gross cash proceeds. These proceeds and payments made on securitization notes are classified as financing activities in the statement of cash flows. Upon closing of UPST 2023-2, the Company determined that servicing fees represent a variable interest due to the retained interests held by the Company. The retained interests held by the Company were deemed to potentially absorb more than an insignificant amount of expected losses or expected returns at the inception of the securitization transaction. The Company, as servicer, also has the power to direct the activities that most significantly impact the economics of the entities associated with the UPST 2023-2 securitization, and as such, the Company determined it was the primary beneficiary and consolidated the entities associated with UPST 2023-2. The loans held in the consolidated securitization trust are classified as held-for-sale and included in loans, at fair value, and the notes sold to third-party investors are recorded at fair value as payable to securitization note holders on the consolidated balance sheets. Refer to “ Note 6. Fair Value Measurement ” for additional information on determination of fair value of these assets and liabilities. The value of the residual certificates issued as part of the securitization and retained by the Company was eliminated as part of the consolidation. 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 10. Borrowings ” for additional information. These entities are Delaware statutory trusts that are structured to be bankruptcy-remote, with third-party banks operating as trustees. Other Consolidated VIE The Company has formed a number of VIEs for the purpose of holding Upstart-powered loans that are not pledged or eligible to be pledged to the Company’s warehouse credit facilities. 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 securitization 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. During the year ended December 31, 2023, the Company exercised a clean up call related to two unconsolidated VIEs and subsequently liquidated the associated entities. A clean up call option allows the Company, as servicer, to repurchase the remaining transferred financial asset once the collateral falls below a predefined level, which represents the point where servicing becomes administratively burdensome. The clean up calls had no material impact on the consolidated financial statements of the Company. 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 December 31, 2023 Securitizations and other $ 445,929 $ 319,357 $ 126,572 $ 20,885 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. The carrying value of assets that relate to variable interests in unconsolidated VIEs consists of $6.2 million and $14.8 million of securitization notes and residual certificates which are included in other assets on the consolidated balance sheets as of December 31, 2022 and 2023, respectively. The Company also had $7.1 million and $6.0 million of cash deposits held as reserve accounts for related securitizations, included in other assets on the consolidated balance sheets as of December 31, 2022 and 2023. For securitization transactions where the Company is not the risk retaining sponsor, and 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 and is not able to collect all repayments, refer to “ Note 13. Commitments and Contingencies ” for further information. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments In February 2023 and June 2023, UAWT and ULT entered into interest rate cap agreements with a strike rate of 3.0% and 3.25%, respectively. The agreements were entered into in relation to the warehouse credit facilities which bear floating interest rates, refer to “Note 10. Borrowings” for further information. The interest rate caps provide protection to the credit facilities against exposure to changes in cash flows to the extent the underlying interest rate on the facility exceeds the strike rate. The UAWT interest rate cap matures in April 2029 and the ULT interest rate cap matures June 2025. The interest rate cap agreements meet the definition of a derivative and are reported at fair value. Refer to “ Note 6. Fair Value Measurement ” for additional information. The following table presents the notional amount as well as the fair value of interest rate caps, which is reported as part of other assets on the consolidated balance sheets. There were no material derivative financial instruments held by the Company as of December 31, 2022. December 31, 2023 Notional Amount Fair Value Interest rate caps $ 299,578 $ 5,958 The Company recognizes changes in fair value of these instruments in earnings and reports them as part of the interest expense on the consolidated statements of operations and comprehensive income (loss). The Company recognized no gains or losses on interest rate caps during the year ended December 31, 2021 and 2022. The Company recognized an immaterial amount of fair value gains, net on interest rate caps during the year ended December 31, 2023. |
Beneficial Interests
Beneficial Interests | 12 Months Ended |
Dec. 31, 2023 | |
Beneficial Interests [Abstract] | |
Beneficial Interests | Beneficial Interests In connection with certain committed capital agreements, the Company has risk sharing arrangements in which it is obligated to make payments to the loan buyer or is entitled to receive payments from the loan buyer if credit performance on the underlying loans subject to the arrangements deviates from initial expectations, subject to a dollar cap. The Company has beneficial interests in these arrangements which either meet the definition of a derivative or that meet the criteria of a debt security. As of December 31, 2023 the Company’s capital at risk, which represents the maximum exposure to losses, under these arrangements was $98.5 million. The Company had no risk sharing arrangements as of December 31, 2022. The following table presents the aggregate unpaid principal balance of the underlying portfolio as well as the fair value of beneficial interest assets, which are presented as a separate asset line item on the consolidated balance sheets and beneficial interest liabilities which are included in other liabilities on the consolidated balance sheets. There were no beneficial interest assets or liabilities held by the Company as of December 31, 2022. December 31, 2023 Unpaid Principal Balance Fair Value Beneficial interest assets $ 958,870 $ 41,012 Beneficial interest liabilities $ 769,102 $ 4,221 The Company recognizes beneficial interests at fair value with changes reported as part of the fair value and other adjustments on the consolidated statements of operations and comprehensive income (loss) . The table below presents losses recognized on beneficial interests during the year ended December 31, 2023 The Company recognized no gains or losses on beneficial interest during the year ended December 31, 2021 and 2022. Year Ended December 31, 2023 Fair value losses on beneficial interests $ (26,489) Refer to “ Note 6. Fair Value Measurement ” for additional information. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The following tables presents assets and liabilities measured at fair value and categorized in accordance with the fair value hierarchy: December 31, December 31, Level 2022 2023 Assets Loans 3 $ 1,010,421 $ 1,156,413 Beneficial interests 3 — 41,012 Loan servicing assets 3 36,467 28,092 Notes receivable and residual certificates 3 6,181 14,847 Interest rate caps (1) 2 — 5,958 Total assets $ 1,053,069 $ 1,246,322 Liabilities Payable to securitization note holders 3 $ — $ 141,416 Trailing fee liabilities 3 4,852 4,251 Beneficial interest liabilities 3 — 4,221 Loan servicing liabilities 3 3,968 2,038 Total liabilities $ 8,820 $ 151,926 __________ (1) The fair value of interest rate caps is determined based on the present value of the estimated future cash flows over the contract term using observable market-based inputs as of the valuation date, including implied interest rates. Financial instruments are categorized in the fair value hierarchy based on the significance of unobservable inputs and assumptions in the overall fair value measurement. Financial instruments classified as Level 3 within the fair value hierarchy 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 years presented. Loans Loans included in the Company’s 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 the classification categories based on changes in the Company’s intent and ability. Loans held in the consolidated securitization include loans contributed as collateral to and held in the consolidated securitization (UPST 2023-2) and are classified as held-for-sale following their classification upon the contribution. The following table presents the fair value of classes of loans included in the Company’s consolidated balance sheets as of December 31, 2022 and 2023: December 31, December 31, 2022 2023 Loans held-for-sale $ 882,810 $ 830,574 Loans held-for-investment 127,611 146,768 Loans held in consolidated securitization — 179,071 Total $ 1,010,421 $ 1,156,413 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. The Company elected the measurement alternative under Topic 810, Consolidation , and maximizes the use of observable inputs to estimate the fair value of the financial assets and liabilities of UPST 2023-2. Under the measurement alternative, the Company determined that inputs used to determine the value of UPST 2023-2 liabilities, which consist of securitization notes and residual certificates issued as part of this securitization, are more observable than those used to measure fair value of UPST 2023-2 financial assets, which consist of held-for-sale loans contributed as collateral. Thus, the loans are measured based on the sum of the fair value of the UPST 2023-2 securitization notes and residual certificates, with changes in fair value included in the consolidated statements of operations and comprehensive income (loss). 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 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.36 % 22.28 % 11.87 % 9.63 % 23.22 % 12.06 % Credit risk rate (1) 0.01 % 93.09 % 16.93 % 0.01 % 93.10 % 17.66 % Prepayment rate (1) 0.08 % 93.43 % 40.49 % 0.13 % 95.80 % 36.52 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. The following table presents quantitative information about the significant unobservable inputs implied for the Company’s Level 3 fair value measurements for loans held in consolidated securitization, which is determined by the sum of the fair value of the related securitization notes and residual certificates: December 31, 2022 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate * * * 6.85 % 16.00 % 9.99 % Credit risk rate (1) * * * 0.61 % 37.70 % 15.51 % Prepayment rate (1) * * * 6.66 % 89.84 % 42.73 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. * Not applicable 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 impacts the projected balances and expected terms of the loans. Significant Recurring Level 3 Fair Value Input Sensitivity The following table presents the sensitivity of the fair value of 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 2023, respectively. December 31, 2022 2023 Fair value of loans held-for-sale and held-for-investment $ 1,010,421 $ 977,342 Discount rates 100 basis point increase (11,979) (11,680) 200 basis point increase (23,720) (23,127) Expected credit loss rates on underlying loans 10% adverse change (11,927) (12,453) 20% adverse change (23,852) (24,979) Expected prepayment rates 10% adverse change (2,284) (1,884) 20% adverse change (4,530) (3,756) The following table presents the sensitivity of the fair value of loans in consolidated securitization to adverse changes in key assumptions used in the valuation model as of December 31, 2023. No loans were held in consolidated securitization as of December 31, 2022. December 31, 2023 Fair value of loans held in consolidated securitization $ 179,071 Discount rates 100 basis point increase (2,413) 200 basis point increase (4,785) Expected credit loss rates on underlying loans 10% adverse change (2,669) 20% adverse change (5,227) Expected prepayment rates 10% adverse change (1,625) 20% adverse change (3,234) 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- Loans Held-for-Investment Loans Held in Consolidated Securitization Total Fair value at December 31, 2021 $ 142,685 $ 109,792 $ — $ 252,477 Reclassification of loans (1) 103,677 (103,677) — — Purchases of loans (1) 1,807,787 149,344 — 1,957,131 Sale of loans (1) (914,369) — — (914,369) Purchase of loans for immediate resale (1) 5,992,148 — — 5,992,148 Immediate resale of loans (1) (5,992,148) — — (5,992,148) Repayments received (1) (180,135) (15,194) — (195,329) Charge-offs and changes in fair value recorded in earnings (85,567) (14,215) — (99,782) Other charges 8,732 1,561 — 10,293 Fair value at December 31, 2022 $ 882,810 $ 127,611 $ — $ 1,010,421 Transfer of loans to consolidated securitization (2) (209,968) — 209,968 — Purchases and originations of loans (1)(3) 1,676,146 157,223 — 1,833,369 Sale of loans (1) (1,241,233) — — (1,241,233) Purchase of loans for immediate resale (1) 1,330,364 — — 1,330,364 Immediate resale of loans (1) (1,330,364) — — (1,330,364) Repayments received (1) (202,982) (89,210) (24,832) (317,024) Charge-offs and changes in fair value recorded in earnings (74,952) (53,304) (6,065) (134,321) Other changes 753 4,448 — 5,201 Fair value at December 31, 2023 $ 830,574 $ 146,768 $ 179,071 $ 1,156,413 _________ (1) Represents the principal balance. (2) Transfer of loans to consolidated securitization at fair value. (3) Purchase activity includes an immaterial unpaid principal balance related to securitization clean-up calls during the year ended December 31, 2023. 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 consolidated balance sheets: Loans Loans > 90 Days Past Due December 31, December 31, December 31, December 31, 2022 2023 2022 2023 Outstanding principal balance $ 1,047,714 $ 1,182,577 $ 9,006 $ 15,310 Net fair value and accrued interest adjustments (37,293) (26,164) (7,006) (12,260) Fair value (1) $ 1,010,421 $ 1,156,413 $ 2,000 $ 3,050 _________ (1) Includes $397.7 million and $343.1 million of auto loans at fair value as of December 31, 2022 and 2023, respectively, of which an immaterial amount and $2.8 million is 90 days or more past due as of December 31, 2022 and 2023, respectively. 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. Assets and Liabilities related to Securitization Transactions As of December 31, 2022 and 2023, the Company held notes receivable and residual certificates with an aggregate fair value of $6.2 million and $14.8 million, respectively, within other assets on the Company’s consolidated balance sheets. The balances consist of securitization notes and residual certificates retained from securitization transactions. As of December 31, 2023, the Company recognized payables to securitization note holders of $141.4 million at fair value. The balance represents the value of the securitization notes issued and owned by third-party investors in connection with UPST 2023-2. Accrued interest on these financial instruments is immaterial as of December 31, 2023. The value of the UPST 2023-2 securitization notes and residual certificates retained by the Company is eliminated in the consolidation process. As of December 31, 2022, the Company did not hold liabilities related to the consolidated securitization transaction. Valuation Methodology The Company prioritizes the use of observable inputs in estimating the fair value of notes receivable and residual certificates and payable to securitization note holders when available. When market activity for these financial instruments is not observable, the fair value is determined using a discounted cash flow methodology. This approach uses assumptions of projected cash flows of the underlying collateral loan pools adjusted for features of these securities, which 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 related to note receivable, residual certificates, and payable to securitization note holders: December 31, 2022 December 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 % 9.99 % 23.22 % 12.74 % Credit risk rate (1) 0.59 % 50.69 % 18.43 % 0.48 % 50.69 % 16.32 % Prepayment rate (1) 10.90 % 88.73 % 42.66 % 6.36 % 89.46 % 43.14 % Payable to securitization note holders Discount rate * * * 6.85 % 12.30 % 8.48 % Credit risk rate (1) * * * 0.61 % 37.70 % 15.51 % Prepayment rate (1) * * * 6.66 % 89.84 % 42.73 % _________ (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. * Not applicable Significant Recurring Level 3 Fair Value Input Sensitivity Notes Receivable and Residual Certificates Adverse changes in discount rates, credit risk rates, or prepayment rates do not result in a material impact to the fair value of notes receivable and residual certificates as of December 31, 2022 and 2023. Payable to Securitization Note Holders The fair value of the payable to securitization note holders is 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 and 200 basis point increase in discount rates results in a decrease in fair value of payable to securitization note holders of $1.9 million and $3.7 million, respectively, as of December 31, 2023. Adverse changes in credit risk rates and expected prepayment rates do not result in a material impact to the fair value of payable to securitization note holders as of December 31, 2023. The Company held no payable to securitization note holders as of December 31, 2022. Rollforward of Level 3 Fair Values The following tables include a rollforward of the notes receivable and residual certificates and payables to securitization note holders related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy: Notes Receivable and Residual Certificates Payable to Securitization Note Holders Fair value at December 31, 2021 $ 8,288 $ — Additions 4,680 — Repayments and settlements (6,736) — Changes in fair value recorded in earnings (51) — Fair value at December 31, 2022 $ 6,181 $ — Additions 13,172 165,318 Repayments and settlements (4,328) (23,320) Changes in fair value recorded in earnings (178) (582) Fair value at December 31, 2023 $ 14,847 $ 141,416 Loan Servicing Assets and Liabilities As of December 31, 2022 and 2023, the Company’s loan servicing assets had a fair value of $36.5 million and $28.1 million, respectively, recorded within other assets on the consolidated balance sheets. As of December 31, 2022 and 2023, the Company’s loan servicing liabilities had a fair value of $4.0 million and $2.0 million, respectively, recorded within other accrued expenses and other liabilities on the consolidated balance sheets. 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 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 13.00 % 20.00 % 17.20 % 13.00 % 20.00 % 16.89 % Credit risk rate (1) 0.03 % 91.76 % 16.22 % 0.05 % 88.42 % 14.93 % Market-servicing rate (3)(4) 0.62 % 3.72 % 0.62 % 0.62 % 3.72 % 0.62 % Prepayment rate (1) 0.53 % 91.99 % 41.19 % 1.05 % 96.90 % 41.05 % _________ (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 personal loans and auto loans, of 0.62% and 3.72%, respectively. Discount rates –The discount rates are the Company’s estimate of the rates of return that market participants in servicing rights 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 rate s–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 impacts 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 impacts 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 prepayments rates as such changes would not result in a significant impact on the fair value as of December 31, 2022 and 2023, respectively. December 31, December 31, 2022 2023 Fair value of loan servicing assets $ 36,467 $ 28,092 Expected market-servicing rates 10% market-servicing rates increase (9,989) (7,475) 20% market-servicing rates increase (19,950) (14,916) December 31, December 31, 2022 2023 Fair value of loan servicing liabilities $ 3,968 $ 2,038 Expected market-servicing rates 10% market-servicing rates increase 2,303 1,100 20% market-servicing rates increase 4,640 2,235 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 31,041 2,302 Repayments and other changes in fair value recorded in earnings (12,962) (7,114) Fair value at December 31, 2022 $ 36,467 $ 3,968 Sale of loans 13,796 83 Repayments and other changes in fair value recorded in earnings (22,171) (2,013) Fair value at December 31, 2023 $ 28,092 $ 2,038 Beneficial Interests In connection with certain loan sale agreements, the Company is obligated to make payments to the loan buyer or is entitled to receive payments from the buyer if credit performance on personal loans subject to the arrangement deviate from initial expectations, subject to a dollar cap. As of December 31, 2023, the Company held beneficial interest assets related to these arrangements of $41.0 million and beneficial interest liabilities of $4.2 million. The Company held no beneficial interests as of December 31, 2022. Valuation Methodology Beneficial interests are measured at estimated fair value using a discounted cash flow model. The fair valuation methodology considers projected defaults, losses and recoveries to project future losses and net cash flows on the underlying loans. Net cash flows are discounted using an estimate of market rates of return that reflect the risk premium related to those cash flows. The models use inputs that are inherently judgmental and reflect the Company’s best estimates of the assumptions a market participant would use to determine fair value. Significant Inputs and Assumptions The following table presents quantitative information about the significant unobservable inputs used for the Company’s fair value measurements of beneficial interests as of December 31, 2023: Minimum Maximum Weighted-Average (1) Beneficial interest assets Discount rate 7.00 % 14.00 % 13.63 % Credit risk rate spread (2) (0.85) % (0.85) % (0.85) % Beneficial interest liabilities Discount rate 14.00 % 14.00 % 14.00 % Credit risk rate spread (2) 0.09 % 9.81 % 8.79 % _________ (1) Unobservable inputs were weighted by relative fair value. (2) Expressed as a percentage of cumulative loss expectations as of the valuation date compared to the origination date. 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 performance of the underlying loan portfolio. 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. The Company uses two different discount rates for expected cash flows associated with demonstrated to-date credit performance and those associated with future credit performance. The difference in these rates reflects the level of uncertainty and, as a result, risk premium that would be required by market participants when investing in these instruments. Credit risk rate spreads –Credit risk rates for beneficial interests are determined the same way as for underlying loan portfolios. Credit risk rates are an estimate of cumulative losses, net of average recoveries, of the underlying portfolio, which represent the amount of principal that will not be repaid over the entire life of a financial instrument. The credit risk rate spreads are the relative difference, expressed as a percentage, between the expected credit risk rate on origination date and the estimated credit risk rate as of a valuation date. The following table presents the sensitivity of beneficial interest assets and liabilities to adverse changes in key assumptions used in the valuation model as of December 31, 2023. Adverse changes in discount rates do not result in a material impact to the fair value of beneficial interest liabilities as of December 31, 2023. Significant Recurring Level 3 Fair Value Input Sensitivity December 31, 2023 Fair value of beneficial interest assets $ 41,012 Discount rate 100 basis point increase (1,240) 200 basis point increase (2,431) Expected credit rate spreads on underlying loans 10% adverse change (9,059) 20% adverse change (16,743) Fair value of beneficial interest liabilities $ 4,221 Expected credit rate spreads on underlying loans 10% adverse change 5,606 20% adverse change 11,217 Rollforward of Level 3 Fair Values The following tables present a rollforward of beneficial interest assets and liabilities: Beneficial Interest Assets Beneficial Interest Liabilities Fair value as of December 31, 2022 $ — $ — Additions 62,684 — Settlements — (596) Changes in fair value recorded in earnings (21,672) 4,817 Fair value at December 31, 2023 $ 41,012 $ 4,221 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. As of December 31, 2022 and 2023, the Company held trailing fee liabilities of $4.9 million and $4.3 million, respectively. Valuation Methodology The discounted cash flow methodology, which is used to estimate the fair value of trailing fee liabilities, uses the same projected net cash flows as the underlying loans. The fair valuation methodology considers projected prepayments and historical defaults, losses and recoveries to project future losses and net cash flows of the underlying loans. Net cash flows are discounted using an estimate of market rates of return. 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 trailing fee liabilities: December 31, 2022 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.36 % 22.28 % 12.80 % 9.63 % 23.22 % 12.88 % Credit risk rate (1) 0.01 % 93.09 % 18.43 % 0.01 % 88.42 % 17.61 % Prepayment rate (1) 0.53 % 93.43 % 39.89 % 1.05 % 94.68 % 39.94 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. Significant Recurring Level 3 Fair Value Input Sensitivity 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 or 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 3,898 Repayments and settlements (3,001) Changes in fair value recorded in earnings (360) Fair value at December 31, 2022 $ 4,852 Issuances 2,126 Repayments and settlements (2,757) Changes in fair value recorded in earnings 30 Fair value at December 31, 2023 $ 4,251 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions In April 2021, the Company completed its acquisition of Prodigy Software, Inc. (“Prodigy”). Prodigy provided a modern multi-channel car buying experience, helping dealerships serve consumers with a holistic software solution that integrates legacy systems. The acquisition enabled the launch of Upstart Auto Retail software, a cloud-based solution that enables dealerships to provide consumers with access to Upstart-powered auto loans by combining Prodigy Software and Upstart intellectual property. The total consideration the Company provided for Prodigy was $89.0 million, comprised of the following: April 8, 2021 Fair value of Upstart common stock issued to Prodigy stockholders (1) $ 70,121 Cash paid to common and preferred stockholders, warrant holders, and vested option holders 17,151 Fair value of assumed Prodigy options attributable to pre-combination service period 889 Transactions costs paid by Upstart on behalf of Prodigy 883 Total purchase consideration $ 89,044 _________ (1) The fair value is based on 568,539 shares of Company common stock at $123.33 per share, the closing stock price on April 8, 2021, and 87,339 shares are held in escrow as security for certain indemnification obligations of former Prodigy stockholders. Excluded from the total purchase consideration above are 82,201 shares of the Company’s restricted common stock (“restricted stock”) with a fair value of $10.1 million issued to certain Prodigy employees. As of the year ended December 31, 2023, all restricted stock was fully lapsed. Refer to “ Note 11. Stockholders' Equity ” for further information. The acquisition was accounted for as a business combination. The purchase consideration was allocated to the tangible and intangible assets and liabilities acquired as of the acquisition date, with the excess recorded to goodwill. The values assigned to the assets acquired and liabilities assumed were based on estimates of fair value available to us as of the date of acquisition, and adjusted during the measurement period, which ended on January 1, 2022. No material adjustments to the fair value of assets and liabilities were made during the measurement period. Refer to “ Note 8. Goodwill and Intangible Assets ” for further information. The Company recognized acquisition-related costs of $1.2 million in the year ended December 31, 2021, which are included in the general and administrative expense in the consolidated statement of operations and comprehensive income (loss). No acquisition-related costs were incurred during the year ended December 31, 2022 and 2023. We have included the financial results of the acquired business in our consolidated financial statements from the date of acquisition. These revenues and expenses were immaterial for the year ended December 31, 2021. Pro forma results of operations have not been presented because the effects of this acquisition were not material to our financial results. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible assets | Goodwill and Intangible Assets Goodwill During the year ended December 31, 2022 and 2023, there were no changes in the carrying amount of goodwill of $67.1 million on the Company’s consolidated balance sheets. Intangible Assets Acquired intangible assets subject to amortization consist of developed technology and customer relationships, and are recorded net of amortization and included within other assets on the consolidated balance sheets. The gross and net carrying values and accumulated amortization are as follows: December 31, 2022 December 31, 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Developed technology $ 9,400 $ (5,483) $ 3,917 $ 9,400 $ (8,617) $ 783 Customer relationships 13,700 (1,998) 11,702 13,700 (3,139) 10,561 Total intangible assets $ 23,100 $ (7,481) $ 15,619 $ 23,100 $ (11,756) $ 11,344 Amortization expense was $3.2 million, $4.3 million and $4.3 million for the year ended December 31, 2021, 2022, and 2023, respectively. Expected future amortization expense for intangible assets as of December 31, 2023 is as follows: Fiscal Years: 2024 $ 1,925 2025 1,142 2026 1,142 2027 1,142 2028 1,142 Thereafter 4,851 Total $ 11,344 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Balance Sheet Components | Balance Sheet Components Other Assets Other assets consisted of the following: December 31, December 31, 2022 2023 Servicing fees and other receivables $ 46,652 $ 40,490 Loan servicing assets (at fair value) 36,467 28,092 Other assets 22,678 18,589 Prepaid expenses 16,740 17,976 Notes receivable and residual certificates (at fair value) 6,181 14,847 Intangible assets, net (2) 15,631 11,356 Deposits 10,002 8,919 Interest rate caps (at fair value) (1) — 5,958 Total other assets $ 154,351 $ 146,227 _________ (1) Refer to “ Note 4. Derivative Financial Instruments” for further information. (2) Refer to “ Note 8. Goodwill and Intangible Assets ” for further information. 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, December 31, 2022 2023 Internally developed software $ 37,783 $ 55,008 Leasehold improvements 13,074 14,281 Computer and networking equipment 6,049 6,054 Furniture and fixtures 4,421 4,761 Total property, equipment, and software 61,327 80,104 Accumulated depreciation and amortization (17,159) (37,449) Total property, equipment, and software, net $ 44,168 $ 42,655 For the year ended December 31, 2021, 2022 and 2023, depreciation and amortization expense on property, equipment, and software was $4.2 million, $13.5 million, and $20.6 million, respectively. Capitalized internally developed software balances, net of accumulated amortization, were $27.4 million and $31.3 million as of December 31, 2022 and 2023, respectively. The Company also recognized impairment charges to internally developed software of $2.6 million during the year ended December 31, 2023 as a result of the January 2023 Plan. Refer to “ Note 16. Reorganization Expenses ” for more information. There were no impairments of long-lived assets during the year ended December 31, 2022. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: December 31, December 31, 2022 2023 Accrued payroll $ 21,825 $ 30,161 Accrued expenses 23,506 28,099 Trailing fee liability (at fair value) 4,852 4,251 Beneficial interest liabilities (at fair value) — 4,221 Other liabilities 12,795 2,668 Loan servicing liabilities (at fair value) 3,968 2,038 Total accrued expenses and other liabilities $ 66,946 $ 71,438 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The following table presents the aggregate principal outstanding of all debt mentioned in this note that are included in the consolidated balance sheets: Borrowings December 31, December 31, 2022 2023 Warehouse credit facilities $ 336,452 $ 387,425 Convertible senior notes 661,250 661,250 Total payments due 997,702 1,048,675 Unamortized debt discount (11,308) (8,251) Total borrowings $ 986,394 $ 1,040,424 Warehouse Credit Facilities Upstart Loan Trust Warehouse Credit Facility In November 2015, the Company’s consolidated VIE, 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, the ULT Warehouse Credit Facility provides an aggregate of $250.0 million financing capacity of which $175.0 million is committed and $75.0 million is uncommitted. ULT may borrow up to this capacity until the earlier of June 15, 2025 or 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, 2026 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 Secured Overnight Financing Rate (“SOFR”) plus a spread ranging from 2.75% to 4.13% per annum, due and payable monthly in arrears. The Company is also subject to a monthly unused fee ranging from 0.15% 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 2023. In June 2023, ULT 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 ULT Warehouse Credit Facility contains certain financial covenants. As of December 31, 2022 and 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. 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 consolidated balance sheets: ULT Warehouse Credit Facility December 31, 2022 December 31, 2023 Outstanding borrowings $ 163,773 $ 247,942 Aggregate outstanding principal of loans pledged as collateral 228,895 350,396 Aggregate fair value of loans purchased and held by ULT 256,024 356,109 Restricted cash pledged as collateral $ 8,547 $ 10,799 Upstart Auto Warehouse Trust Credit Facility In December 2021, the Company’s consolidated VIE, 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. 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 December 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 82.5% as of December 31, 2022 and 72.5% as of December 31, 2023. 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 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. 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 consolidated balance sheets as of December 31, 2022 and 2023. UAWT Warehouse Credit Facility December 31, 2022 December 31, 2023 Outstanding borrowings $ 172,679 $ 139,483 Aggregate outstanding principal of loans pledged as collateral 221,847 277,576 Aggregate fair value of loans purchased and held by UAWT 216,539 258,374 Restricted cash pledged as collateral $ 843 $ 446 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. The Company recorded immaterial coupon interest expense for all years presented. The Company also recorded $1.4 million, $3.0 million, and $3.1 million for the year ended December 31, 2021, 2022, and 2023 respectively, of amortization of debt issuance costs within expense on convertible notes on the 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 2023 was approximately $364.8 million and $488.7 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 as of December 31, 2022 and 2023 was $649.9 million and $653.0 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 December 31, 2023: December 31, 2024 $ — 2025 139,483 2026 909,192 2027 — 2028 — Thereafter — Total $ 1,048,675 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders’ Equity | Stockholders' Equity Common Stock Reserved for Future 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, December 31, 2022 2023 Options issued and outstanding 12,547,010 12,617,254 RSUs outstanding 6,046,796 5,534,394 PRSUs outstanding 687,500 — Shares available for future issuance under 2020 plan 5,842,057 6,420,703 Shares available for issuance under ESPP 2,543,089 2,896,226 Total 27,666,452 27,468,577 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 year ended December 31, 2023, the Company made no repurchases of common stock. As of December 31, 2023, $222.1 million remains available for future purchases of our common stock under the share repurchase program. Equity Incentive Plans In 2012, the Company adopted the Equity Incentive Plan (“2012 Equity Incentive Plan”) authorizing the granting of incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) to eligible participants. Under the 2012 Equity Incentive Plan, the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors. The exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors. Options generally vest over four years and are exercisable for up to 10 years after the date of grant if the employee provides service to the Company for at least three years. In October 2020, our Board of Directors adopted, and in November 2020 our Board of Directors amended and our stockholders approved, our 2020 Equity Incentive Plan which was effective on December 14, 2020. The Company terminated the 2012 Equity Incentive Plan immediately prior to effectiveness of the 2020 Equity Incentive Plan with respect to the grant of future awards. However, our 2012 Equity Incentive Plan continues to govern the terms and conditions of the outstanding awards granted under our 2012 Equity Incentive Plan. The 2020 Equity Incentive Plan authorizes granting of ISOs, NSOs, stock appreciation rights, restricted stock, restricted stock units, or RSUs, and performance awards. In addition, the 2020 Equity Incentive Plan also includes any shares subject to awards granted under our 2012 Equity Incentive Plan that, on or after December 15, 2020, expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by us for payment of an exercise price or for satisfying tax withholding obligations, or are forfeited to or repurchased by us due to failure to vest. The maximum number of shares that may be added to the 2020 Equity Incentive Plan pursuant to outstanding awards under the 2012 Equity Incentive Plan is 15,000,000 shares. The number of shares available for issuance under our 2020 Equity Incentive Plan also includes an annual increase on the first day of each fiscal year beginning with 2021 in an amount equal to the lesser of 15,000,000 shares or 5% of the outstanding shares of our common stock on the last day of our immediately preceding fiscal year. In connection with the Company’s acquisition of Prodigy, the Company assumed the Prodigy Software, Inc. 2015 Stock Incentive Plan (the “Prodigy Plan”), under which certain unvested options under the Prodigy Plan were assumed by the Company. The assumed options are subject to the same terms and conditions that were applicable to them under the Prodigy Plan, except that (i) the assumed options relate to shares of Upstart’s common stock, and (ii) the number of shares of Upstart’s common stock was the result of an adjustment based upon a ratio as described further in the Registration Statement on Form S-8 filed with the SEC on April 16, 2021. Stock Options The following table summarizes stock option activity for the year ended December 31, 2023: Number of Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (years) Aggregate Balances at December 31, 2022 12,547,010 $ 14.65 6.6 $ 77,289 Options granted 2,139,321 15.82 Options exercised (1,441,787) 8.93 Options cancelled and forfeited (627,290) 33.41 Balances at December 31, 2023 12,617,254 14.57 6.1 375,897 Options exercisable – December 31, 2023 8,754,026 9.82 4.9 292,002 Options vested and expected to vest – December 31, 2023 12,617,254 $ 14.57 6.1 $ 375,897 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 December 31, 2023. The aggregate intrinsic value of options exercised for the year ended December 31, 2021, 2022 and 2023 was $1,391.7 million, $157.3 million, and $28.9 million respectively. The weighted-average grant date fair value of options granted during the year ended December 31, 2021, 2022 and 2023 was $62.06, $15.60, and $8.19 per share, respectively. The total fair value of options vested for the year ended December 31, 2021, 2022 and 2023 was $23.5 million, $23.2 million, and $34.7 million, respectively. As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested stock options was $40.6 million, which is expected to be recognized over a remaining weighted-average period of 2.5 years. In May 2021, the Company amended an employee stock option agreement which resulted in a modification of the vesting of a certain number of option shares. The Company valued the amended stock options as of the modification date. Based on the Black-Scholes option pricing model, incremental stock-based compensation expense of $4.4 million resulting from the modification was recognized during the year ended December 31, 2021. The amendment had no impact for the years ended December 31, 2022 and 2023. 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 Number of Shares Weighted-Average Grant Date Fair Value Per Share Unvested at December 31, 2022 6,046,796 $ 51.28 RSUs granted 4,049,756 19.64 RSUs vested (3,170,158) 36.05 RSUs cancelled and forfeited (1,392,000) 59.05 Unvested at December 31, 2023 5,534,394 $ 34.90 As of December 31, 2023, total unrecognized stock-based compensation expense related to outstanding unvested RSUs was $150.1 million, which is expected to be recognized over a remaining weighted-average period of 2.0 years. Restricted Stock In connection with the Prodigy acquisition in April 2021, 82,201 shares of the Company’s 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 restricted stock is subject to restrictions which lapse on a quarterly basis over two years from the time of the Prodigy acquisition, refer to Note 7. Acquisitions for further information. During the year ended December 31, 2023, 10,271 shares of restricted stock with a weighted-average grant date value of $123.33 per share fully lapsed and there was no unrecognized stock-based compensation expense as of December 31, 2023. Performance-based Restricted Stock Units On February 24, 2023, the Company’s Compensation Committee of the Board of Directors approved the cancellation of 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 consolidated statements of operations and comprehensive income (loss) for the year ended December 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 year ended December 31, 2023, 459,459 shares of common stock were purchased under the ESPP. As of December 31, 2023, total unrecognized stock-based compensation expense related to the ESPP was immaterial. 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: Year Ended December 31, 2021 2022 2023 Expected term (in years) 5.3 – 6.9 5.1 – 7.0 5.1 – 7.0 Expected volatility 45.98% – 65.01% 47.58% – 52.96% 50.96% – 53.76% Risk-free interest rate 0.62% – 1.34% 1.70% – 4.23% 3.45% – 4.86% 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: Year Ended December 31, 2021 2022 2023 Expected term (in years) 0.5 - 0.6 0.5 0.5 Expected volatility 61.65% - 152.95% 91.98% - 179.35% 97.74% - 131.05% Risk-free interest rate 0.05% - 0.09% 0.72% - 3.13% 4.97% - 5.55% Dividend yield —% —% —% Stock-Based Compensation The Company recorded stock-based compensation in the following expense categories in its consolidated statements of operations and comprehensive income (loss) for employees and nonemployees: Year Ended December 31, 2021 2022 2023 Sales and marketing $ 6,059 $ 11,354 $ 8,166 Customer operations 6,251 9,355 10,683 Engineering and product development 39,191 72,169 110,381 General, administrative, and other 21,685 33,067 45,809 Total $ 73,186 $ 125,945 $ 175,039 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company’s operating leases expire between 2027 and 2029 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. During the year ended December 31, 2023, the Company entered into an amendment to partially terminate a portion of its leased office space in Columbus, Ohio. In connection with the amendment, the Company removed the extension option from the lease term as it was no longer reasonably certain to exercise such option. The Company also incurred a one-time termination fee of $7.0 million. The transaction was accounted for as a lease modification, which resulted in a decrease of the ROU asset and lease liability of $19.9 million and $21.2 million, respectively, and an immaterial gain on partial termination within other income (expense) on the consolidated statements of operations and comprehensive income (loss). 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 consolidated balance sheets. As of December 31, 2023, future minimum lease payments are as follows: Operating Leases 2024 $ 14,966 2025 15,402 2026 15,850 2027 15,474 2028 6,143 Thereafter 2,990 Total undiscounted lease payments 70,825 Less: Present value adjustment (8,501) Operating lease liabilities $ 62,324 The Company did not have any material finance leases as of December 31, 2022 and had no finance leases as of December 31, 2023. 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 years presented. Operating lease expense was as follows: Year Ended December 31, 2021 2022 2023 Rent expense $ 7,756 $ 15,916 $ 15,766 Variable lease payments $ 1,650 $ 3,696 $ 4,067 Supplemental cash flow and non-cash information related to the Company’s operating leases was as follows: Year Ended December 31, 2021 2022 2023 Cash paid for amounts included in the measurement of lease liabilities $ 4,553 $ 11,084 $ 22,014 Right-of-use assets capitalized 83,463 1,826 — Adjustments to operating lease right-of-use assets due to modification and other reassessment events $ — $ — $ (19,865) Supplemental balance sheet information related to the Company’s operating leases was as follows: December 31, 2023 Weighted-average remaining lease term (in years) 4.56 Weighted-average discount rate 5.11% |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 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 2023, the total loan purchase commitment included outstanding principal balance of $17.8 million and $36.6 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 and derivative 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 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 adverse effect on the Company’s 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 2023 is $15,551.1 million and $12,208.1 million, respectively. Actual payments made relating to the Company’s repurchase and indemnification obligations were immaterial. The Company did not have material contingent liabilities related to future loan repurchase obligations as of December 31, 2022 and 2023. These amounts are included in accrued expenses and other liabilities on the Company’s 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, the Upstart defendants filed a motion to dismiss the consolidated amended complaint. On September 29, 2023, the Court issued an order, granting in part and denying in part the Upstart defendants’ motion. On November 7, 2023, the Upstart defendants filed a motion for reconsideration, which has now been fully briefed and is awaiting decision by the Court. The Company believes the remaining claims in the Crain action are without merit and intends to defend itself vigorously. 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. On August 3, 3023, in response to a motion to stay by the defendants in the Okhai action, the Court stayed the Okhai action until resolution of the motion to dismiss in the related Crain securities class action. Following the issuance of the September 29, 2023 order on the motion to dismiss in the related Crain securities class action, on November 16, 2023, in response to a joint stipulation and proposed order submitted by the parties, the Court stayed the Okhai action until resolution of a motion for reconsideration of the September 29, 2023 order on the motion to dismiss in the related Crain securities class action. On October 13, 2023, a sixth derivative lawsuit was filed, in the Court of Chancery of the State of Delaware, captioned Romanyshyn v. Girouard, et al., C.A. No. 2023-1029-SG (Del. Ch.). The Romanyshyn action includes allegations similar to those in the consolidated derivative matter pending in Ohio, and names as defendants current and former directors and Company executives, as well as Third Point LLC and its CEO, and Third Point Ventures LLC. The Romanyshyn action includes claims for breach of fiduciary, 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 November 3, 2023, in response to a joint stipulation and proposed order submitted by the parties, the Court stayed the Romanyshyn action until resolution of the motion to stay in the related Okhai derivative action. On October 24, 2023, a seventh derivative lawsuit was filed, in the Court of Chancery of the State of Delaware, captioned Agarwal v. Girouard, et al., C.A. No. 2023-1075-SG (Del. Ch.). The Agarwal action includes allegations similar to those in the consolidated derivative matter pending in Ohio, and names as defendants current and former directors and Company executives, as well as Third Point LLC and its CEO, and Third Point Ventures LLC. The Agarwal action includes claims for breach of fiduciary, 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 November 3, 2023, in response to a joint stipulation and proposed order submitted by the parties, the Court stayed the Agarwal action until resolution of the motion to stay in the related Okhai derivative action. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes consisted entirely of income from domestic operations of $133.7 million for the year ended December 31, 2021. Loss before income taxes consisted entirely of losses from domestic operations of, $109.1 million and $240.0 million for the calendar year ended December 31, 2022 and 2023, respectively. Income tax (benefit) expense included in the statements of operations and comprehensive income (loss) consisted of the following: Year Ended December 31, 2021 2022 2023 Current: Federal $ — $ — $ — State 229 174 107 Total current tax expense 229 174 107 Deferred: Federal (1,435) 41 — State (506) (624) — Total deferred tax expense (1,941) (583) — Total (benefit) provision for income taxes $ (1,712) $ (409) $ 107 Income tax expense differed from the amount computed by applying the Federal statutory income tax rate of 21% to net income (loss) before income taxes for the year ended December 31, 2023 as a result of the following: Year Ended December 31, 2021 2022 2023 Federal tax at statutory rate $ 28,084 $ (22,906) $ (50,405) State income taxes, net of federal tax benefit (248) (448) 107 Stock-based compensation (236,726) (4,490) 2,306 Research and development credit (19,103) (6,333) (6,288) PPP loan forgiveness (CARES Act) 1,110 — — Change in valuation allowance 222,230 26,263 38,189 Tax return to tax provision adjustment (34) 309 (878) Section 162(m) limitation 2,653 6,494 16,586 Other 322 702 490 (Benefit) provision for income taxes $ (1,712) $ (409) $ 107 The tax effects of temporary differences that gave rise to significant portions of the Company’s deferred tax assets and liabilities related to the following: December 31, 2022 2023 Deferred tax assets: Net operating loss carryforwards $ 304,879 $ 328,511 Capitalized research and experimental expenditures 28,732 54,335 Research and development credits 38,796 47,009 Operating lease liabilities 29,052 18,041 Stock-based compensation 13,714 14,067 Convertible debt transactions 10,734 6,694 Accruals and reserves 6,647 7,306 Investment in partnerships 801 — Amortization 90 299 Other 631 298 Total deferred tax assets 434,076 476,560 Less: valuation allowance (387,976) (443,165) Deferred tax assets – net of valuation allowance 46,100 33,395 Deferred tax liabilities: Right of use asset 24,887 15,832 Servicing rights 9,368 7,542 Interest receivables 3,699 4,100 Intangible assets 4,502 3,461 Depreciation 3,644 1,972 Investment in partnerships — 488 Total deferred tax liabilities 46,100 33,395 Net deferred tax liabilities $ — $ — Management believes that, based on available evidence, both positive and negative, it is more likely than not that the deferred tax assets will not be utilized, and as such the Company maintains a full valuation allowance at December 31, 2023. The valuation allowance increased by $55.2 million for the year ended December 31, 2023 primarily as a result of current year activities and the capitalization of research and experimental activities. As of December 31, 2023, the Company had approximately $1,069.2 million and $1,528.1 million of federal and state (post-apportioned) net operating losses (NOL), that will begin to expire in 2035 and 2034, respectively. The Company also has Federal and California research and development tax credits of $49.8 million and $21.7 million, respectively. The Federal research credits will begin to expire in 2032 and the California research credits have no expiration date. The Internal Revenue Code (“IRC”) limits the amount of NOL carryforwards that a company may use in a given year in the event of certain cumulative changes in ownership over a three-year period as described in Section 382 of the IRC. Utilization of NOL carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed an ownership analysis and identified ownership changes in prior years, as defined under IRC Section 382 and 383, however neither resulted in a material limitation that will reduce the total amount of NOL carryforwards and credits that can be utilized. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows: Year Ended December 31, 2021 2022 2023 Balance at beginning of year $ 1,820 $ 13,904 $ 18,474 Additions for tax positions of prior years 461 885 308 Tax positions related to the current year 11,623 3,685 3,376 Balance at end of year $ 13,904 $ 18,474 $ 22,158 If recognized, all of the unrecognized tax benefits would not impact the effective tax rate due to the valuation allowance against certain deferred tax assets. As of December 31, 2023, the Company had $22.2 million unrecognized income tax benefits and there was an increase of $3.7 million to the Company’s unrecognized tax benefits during the year. The Company does not anticipate any significant increases or decreases to unrecognized tax benefits during the next twelve months. The Company’s policy is to classify interest and penalties associated with unrecognized tax benefits as income tax expense. The Company had no interest or penalty accruals associated with uncertain tax benefits in its consolidated balance sheet and consolidated statement of operations and comprehensive income (loss) for the tax year ended December 31, 2023. The Company files income tax returns in the U.S. Federal jurisdiction and various state and local jurisdictions. The Company is not currently under examination by income tax authorities in federal, state, or local jurisdictions. However, because the Company has net operating losses and credits carried forward in several jurisdictions, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax attributes carried forward to open years. All tax returns will remain open for examination by the federal and most state taxing authorities for three years and four years, respectively, from the date of utilization of any net operating loss carryforwards or research and development credits. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per common share is based on the weighted-average common shares outstanding during the relevant year. Diluted net income (loss) per share is based on the weighted-average common shares outstanding during the relevant year adjusted for the dilutive effect of share-based awards and convertible debt. Basic and diluted net income (loss) per share are computed independently for each year presented, which involves the use of different weighted-average share count figures. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of each fiscal quarter-to-date basic and diluted net income (loss) per share may not equal year-to-date basic and diluted net income (loss) per share. For years 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. Year Ended December 31, 2021 2022 2023 Numerator: Net income (loss) $ 135,443 $ (108,665) $ (240,132) Denominator: Weighted-average common shares outstanding used to calculate net income (loss) per share, basic 78,106,359 82,771,268 83,765,896 Weighted-average effect of dilutive securities 16,666,282 — — Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted 94,772,641 82,771,268 83,765,896 Net income (loss) per share, basic $ 1.73 $ (1.31) $ (2.87) Net income (loss) per share, diluted $ 1.43 $ (1.31) $ (2.87) The following securities were excluded from the computation of diluted net income (loss) per share for the years presented, due to their anti-dilutive effect. These amounts represent the number of instruments outstanding at the end of each respective year: Year Ended December 31, 2021 2022 2023 Options to purchase common stock 461,157 12,547,010 12,617,254 Unvested RSUs 506,302 6,046,796 5,534,394 Convertible debt 2,318,078 2,318,078 2,318,078 Purchase rights committed under the ESPP — 101,397 184,447 Unvested PRSUs — 687,500 — Total 3,285,537 21,700,781 20,654,173 |
Reorganization Expenses
Reorganization Expenses | 12 Months Ended |
Dec. 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated events that have occurred through the filing date of this Annual Report on Form 10-K. Based on its evaluation, other than any items recorded or disclosed within the consolidated financial statement and related notes, including as discussed below, the Company has determined no subsequent events were required to be recognized or disclosed. On February 9, 2024, the Company signed an agreement with an investor to sell a pool of Upstart-powered core personal loans with an aggregate outstanding principal amount of $299.7 million. The total consideration in exchange for the loans include cash, and a right to receive additional cash amounts if credit performance of the loan pool is in line or exceeds initial expectations. In case of credit underperformance, the Company is obligated to make cash payments to the purchaser over time, subject to a certain cap. The Company plans to account for this sale under ASC 860, Transfers and Servicing . On February 13, 2024, the Company obtained a waiver for breach in certain covenants related to the UAWT Warehouse Credit Facility for the January 2024 collection period and paid down $15.3 million of the outstanding advance on the credit facility. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income (loss) | $ (240,132) | $ (108,665) | $ 135,443 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Natalia Mirgorodskaya [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Name and title of officer: Natalia Mirgorodskaya, Corporate Controller Date of adoption: November 30, 2023 Duration of the trading arrangement: Through August 31, 2024 or earlier if all transactions under the trading arrangement are completed Aggregate number of securities to be sold from time to time: up to 13,688 shares | |
Name | Natalia Mirgorodskaya | |
Title | Corporate Controller | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | November 30, 2023 | |
Arrangement Duration | 275 days | |
Aggregate Available | 13,688 | 13,688 |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation |
Basis of Consolidation | Basis of Presentation and Consolidation The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries, and consolidated VIEs. All intercompany accounts and transactions have been eliminated. The Company’s functional and reporting currency is the U.S. dollar. Consolidated VIEs The Company consolidates 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. |
Use of Estimates | Use of Estimates The preparation of the 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying 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 years. |
Cash and Restricted Cash | Cash and Restricted Cash Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. As of December 31, 2022 and 2023, the Company did not have any cash equivalent balances, defined as highly liquid financial instruments purchased with original maturities of three months or less. Restricted cash primarily consists of deposit accounts that are held in our custody but restricted for regulatory or legal purposes. This balance includes amounts that are: (i) received from borrowers for interest and |
Fair Value Measurement | Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities; Level 2— Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value on a recurring basis include loans, notes receivable and residual certificates, loan servicing assets and liabilities, derivatives, beneficial interests, payable to securitization note holders, and trailing fee liabilities. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. |
Financial Instruments not Measured at Fair Value | Financial Instruments not Measured at Fair Value The Company’s financial instruments not measured at fair value consist primarily of cash, restricted cash, and other assets (excluding certain financial instruments, which are measured at fair value, such as loan servicing assets, interest rate caps, notes receivable and residual certificates), accounts payable, payable to investors, and other liabilities (excluding certain financial instruments, such as loan servicing liabilities, beneficial interest liabilities, and trailing fee liabilities which are measured at fair value). Payable to investors includes amounts of loan repayments not yet distributed to institutional investors, as well as amounts received from institutional investors but not yet invested directly in whole loans. The carrying values of these financial instruments are approximates of their respective fair values due to their short-term nature. Borrowings are presented at par, net of debt issuance costs and amortized over the contractual term using the effective interest method, with accrued interest included as part of accrued expenses and other liabilities on the consolidated balance sheets. The carrying value of borrowings associated with the warehouse credit facilities approximates the fair value due to their relatively short maturities. |
Variable Interest Entities and Consolidated Securitization | Variable Interest Entities A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The Company consolidates a VIE when it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses or the right to receive benefits of the VIE that could be potentially significant to the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Consolidated Securitization The Company elected the measurement alternative under Accounting Standards Codification (“ASC”) 810, Consolidation , and maximizes the use of observable inputs to estimate the fair value of the financial assets and liabilities of a consolidated securitization entity. Under the measurement alternative, the Company determined that the fair value of the liabilities, which consists of securitization notes and residual certificates issued by the entity, is based on more observable inputs than inputs used to determine the fair value of the assets, which consists of held-for-sale loans. Thus, the fair value of these loans is determined by the sum of the fair value of the related securitization notes and residual certificates. Changes in the fair value of these assets and liabilities are included in the consolidated statements of operations and comprehensive income (loss). 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 securitization 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. During the year ended December 31, 2023, the Company exercised a clean up call related to two unconsolidated VIEs and subsequently liquidated the associated entities. A clean up call option allows the Company, as servicer, to repurchase the remaining transferred financial asset once the collateral falls below a predefined level, which represents the point where servicing becomes administratively burdensome. The clean up calls had no material impact on the consolidated financial statements of the Company. 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. The carrying value of assets that relate to variable interests in unconsolidated VIEs consists of $6.2 million and $14.8 million of securitization notes and residual certificates which are included in other assets on the consolidated balance sheets as of December 31, 2022 and 2023, respectively. The Company also had $7.1 million and $6.0 million of cash deposits held as reserve accounts for related securitizations, included in other assets on the consolidated balance sheets as of December 31, 2022 and 2023. For securitization transactions where the Company is not the risk retaining sponsor, and 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 and is not able to collect all repayments, refer to “ Note 13. Commitments and Contingencies ” for further information. |
Transfer of Financial Assets | Transfer of Financial Assets Upstart-powered loans originated by lending partners are either retained by the lending partners, purchased by the Company and immediately sold to institutional investors under loan sale agreements, or purchased and held by the Company for a period of time before being sold to third-party investors, or held to maturity by the Company for the primary purpose of product research and development. Loans held on the Company’s consolidated balance sheets are classified as either held-for-investment or held-for-sale, and loans purchased for immediate resale to third-party investors are classified as held-for-sale. Immediate loan resales to institutional investors are accounted for as transfers of financial assets when the Company surrenders control of these loan assets. These sales typically occur shortly after the origination of the loans by the lending partner and the Company’s subsequent acquisition of the loans from the originating lending partner. Loans sold to institutional investors are derecognized from the Company’s consolidated balance sheets at the time of sale in accordance with the ASC 860, Transfers and Servicing |
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Loan servicing assets and liabilities are recognized at fair value when the Company transfers loans, which qualify as sales under ASC 860 with servicing rights retained or when the Company enters into servicing agreements with lending partners who retain Upstart-powered loans. A loan servicing asset or liability exists depending on whether the revenue from servicing is expected to more than adequately compensate the Company for carrying out its servicing obligations. |
Property, Equipment, and Software, Net | Property, Equipment, and Software, Net |
Internally Developed Software | Internally developed software is capitalized upon completion of the preliminary project stage, when it becomes probable that the project will be completed, and the software will be used as intended. Capitalized costs primarily consist of salaries and payroll related costs for employees directly involved in development efforts. Costs related to the preliminary project stage and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are capitalized if they result in additional functionalities or substantial enhancements. |
Impairment of Long-Lived Assets | The Company evaluates its long-lived assets for potential impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When such an event occurs the carrying amount of the asset is reduced to its estimated fair value. |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception. Operating leases are recorded on the consolidated balance sheets with right-of-use assets representing the right to use the underlying asset and lease liabilities representing the obligation to make lease payments. Right-of-use assets (“ROU”) and lease liabilities are recognized at lease commencement primarily based on the present value of lease payments over the lease term, and as necessary, at modification. The operating lease ROU assets also include any initial direct costs, lease payments made prior to lease commencement, and lease incentives received. Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. The Company’s lease terms are the non-cancelable period including any rent-free periods provided by the lessor and may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised. Lease costs for lease payments are recognized on a straight-line basis over the lease term. As the rate implicit on the Company’s leases is not readily determinable, the Company uses its secured incremental borrowing rate to determine the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and in a similar economic environment. |
Derivative Financial Instruments | 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 ASC 815, Derivatives and Hedging |
Beneficial Interests | Beneficial Interests |
Non-marketable Equity Security | Non-marketable Equity Securities The Company’s strategic investments consists of non-marketable equity securities on the consolidated balance sheets which are investments in privately held companies. Non-marketable equity securities do not have a readily determinable fair value and are measured by the Company at cost less impairment, if any, and adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “measurement alternative”). Gains and losses on the investment, realized and unrealized, are recognized in other income (expense), net on our consolidated statements of operations and comprehensive income (loss) and a new carrying value is established for the investment upon such recognition of the gains and losses. There have been no unrealized or realized gains and losses or impairments related to the non-marketable equity securities accounted for under the measurement alternative for the years presented. As of December 31, 2022 and 2023, the carrying value of our non-marketable equity securities was $41.3 million. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting which requires the fair values of assets acquired and liabilities assumed to be recognized in the consolidated financial statements. Assets acquired and liabilities assumed in a business combination are recognized at their estimated fair value as of the acquisition date. The excess purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period, with the corresponding offset to goodwill. Acquisition-related costs, such as legal and consulting fees, are recognized separately from the business combination and are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is reviewed for impairment annually, or more frequently if an event or a change in circumstances indicates that goodwill may be impaired. We first assess qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value. Examples of qualitative factors include, but are not limited to, a significant adverse change in legal factors or in the business climate, a significant decline in our stock price, a significant decline in our projected revenue or cash flows, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is performed. We perform a quantitative goodwill impairment test by determining the fair value of the reporting unit and comparing it to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized on a straight-line basis over their estimated useful lives. Acquired intangible assets are presented net of accumulated amortization on the consolidated balance sheets. The Company reviews the carrying amounts of intangible assets for impairment whenever an event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. We measure the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. Impairment is measured by the amount in which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. |
Revenue Recognition | Revenue Recognition The Company’s revenue consists of two components: revenue from fees, net and interest income, interest expense, and fair value adjustments, net. The revenue from fees, net line item on the consolidated statements of operations and comprehensive income (loss) is primarily comprised of platform and referral fees, net, which are recognized in accordance with ASC 606, Revenue from Contracts with Customers, and servicing and other fees, net, which are accounted for under ASC 860, Transfers and Servicing. |
Operating Expenses | Operating Expenses Sales and Marketing Sales and marketing expenses primarily consist of costs incurred across various advertising channels, including expenses for partnerships with third-parties providing borrower referrals, direct mail and digital advertising campaigns, as well as other expenses associated with building overall brand awareness and experiential marketing costs. Sales and marketing expenses also include payroll and other personnel-related costs, including stock-based compensation expense, for related teams. These costs are recognized in the period incurred. Customer Operations Customer operations expenses include payroll and other personnel-related expenses, including stock-based compensation expense, for personnel engaged in onboarding, loan servicing, customer support and other related operational teams. These costs also include costs of third-party collection agencies and other systems and tools the Company uses as part of information verification, fraud detection, and payment processing activities. These costs are recognized in the period incurred. Engineering and Product Development Engineering and product development expenses primarily consist of payroll and other employee-related expenses, including stock-based compensation expenses, for the engineering and product development teams as well as the costs of systems and tools used by these teams. These costs are recognized in the period incurred. General, Administrative, and Other |
Stock-Based Compensation | Stock-Based Compensation |
Other Income (Expense), Net | Other Income (Expense), Net |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance may be established to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax asset or benefits will be realized. Realization of tax benefits of deductible temporary differences and operating loss carryforwards depends on having sufficient taxable income of an appropriate character within the carryback or carryforward periods. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities. The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the year to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the year had been distributed. Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the year. |
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 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 consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Specifically, the new guidance requires disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker, and an amount for other segment items by reportable segment, with a description of its composition. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and provide new segment disclosure requirements for entities with a single reportable segment. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the amendments to its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The amendments in this update require entities that hold certain crypto assets to subsequently measure them at fair value, with changes in fair value recorded in net income. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. This ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements or related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require entities to disclose specific categories in the effective tax rate reconciliation and provide additional information for reconciling items where the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income/loss by the applicable statutory income tax rate. In addition, entities are required to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of these amendments on its consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 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 years presented as follows: Year Ended December 31, 2021 2022 2023 Revenue from fees, net: Platform and referral fees, net $ 726,161 $ 732,237 $ 414,120 Servicing and other fees, net 75,114 175,035 146,311 Total revenue from fees, net $ 801,275 $ 907,272 $ 560,431 |
Schedule of Customers Accounting for Greater Than 10% of Accounts Receivable | Customers accounting for greater than 10% of total revenue were as follows: Year Ended December 31, 2021 2022 2023 Customer A 56% 45% 29% Customer B 27% 28% 23% Customer C * * 11% * Less than 10% Customers accounting for greater than 10% of accounts receivable were as follows: December 31, December 31, 2022 2023 Customer C 23% 15% Customer A * 11% * Less than 10% |
Schedule of Collection Agency and Borrower Fees | The following table presents the components of servicing and other fees, net as part of revenue from fees, net in the Company’s consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2021 2022 2023 Servicing fees $ 51,255 $ 115,742 $ 107,008 Borrower fees 7,289 25,208 29,139 Collection agency fees 4,473 10,519 15,865 Other fees 1,067 675 743 Net gain (loss) on servicing rights and fair value adjustments 11,030 22,891 (6,444) Total servicing and other fees, net $ 75,114 $ 175,035 $ 146,311 |
Schedule of Components of Interest Income and Fair Value Adjustments, Net | The following table presents components of the interest income, interest expense, and fair value adjustments, net presented in the Company’s consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2021 2022 2023 Interest income (1) $ 20,634 $ 105,580 $ 168,996 Interest expense (1) (3,274) (10,843) (34,894) Fair value and other adjustments Unrealized gain (loss) on loans, loan charge-offs, and other fair value adjustments, net 1,894 (101,422) (130,440) Realized gain (loss) on sale of loans, net 28,060 (58,143) (24,042) Fair value losses on beneficial interests — — (26,489) Total fair value and other adjustments, net (1) 29,954 (159,565) (180,971) Total interest income, interest expense, and fair value adjustments, net $ 47,314 $ (64,828) $ (46,869) __________ (1) Includes interest income, interest expense and fair value and other adjustments, net related to the consolidated securitization as follows: Year Ended December 31, 2021 2022 2023 Interest income, interest expense, and fair value adjustments, net related to consolidated securitization: Interest income $ — $ — $ 19,697 Interest expense — — (6,733) Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net — — (5,496) Total interest income, interest expense, and fair value adjustments, net $ — $ — $ 7,468 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 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 Consolidated securitization $ — $ — $ — Consolidated warehouse entities 488,337 337,269 151,068 Other consolidated VIEs 496,144 561 495,583 Total consolidated VIEs $ 984,481 $ 337,830 $ 646,651 Assets Liabilities Net Assets December 31, 2023 Consolidated securitization $ 187,258 $ 141,420 $ 45,838 Consolidated warehouse entities 645,455 388,681 256,774 Other consolidated VIEs 362,680 851 361,829 Total consolidated VIEs $ 1,195,393 $ 530,952 $ 664,441 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 December 31, 2023 Securitizations and other $ 445,929 $ 319,357 $ 126,572 $ 20,885 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Gains (Losses) Recognized on Derivative Instruments Not Designated as Hedging Instruments | The following table presents the notional amount as well as the fair value of interest rate caps, which is reported as part of other assets on the consolidated balance sheets. There were no material derivative financial instruments held by the Company as of December 31, 2022. December 31, 2023 Notional Amount Fair Value Interest rate caps $ 299,578 $ 5,958 |
Beneficial Interests (Tables)
Beneficial Interests (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Beneficial Interests [Abstract] | |
Schedule of Beneficial Interests | The following table presents the aggregate unpaid principal balance of the underlying portfolio as well as the fair value of beneficial interest assets, which are presented as a separate asset line item on the consolidated balance sheets and beneficial interest liabilities which are included in other liabilities on the consolidated balance sheets. There were no beneficial interest assets or liabilities held by the Company as of December 31, 2022. December 31, 2023 Unpaid Principal Balance Fair Value Beneficial interest assets $ 958,870 $ 41,012 Beneficial interest liabilities $ 769,102 $ 4,221 The Company recognizes beneficial interests at fair value with changes reported as part of the fair value and other adjustments on the consolidated statements of operations and comprehensive income (loss) . The table below presents losses recognized on beneficial interests during the year ended December 31, 2023 The Company recognized no gains or losses on beneficial interest during the year ended December 31, 2021 and 2022. Year Ended December 31, 2023 Fair value losses on beneficial interests $ (26,489) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following tables presents assets and liabilities measured at fair value and categorized in accordance with the fair value hierarchy: December 31, December 31, Level 2022 2023 Assets Loans 3 $ 1,010,421 $ 1,156,413 Beneficial interests 3 — 41,012 Loan servicing assets 3 36,467 28,092 Notes receivable and residual certificates 3 6,181 14,847 Interest rate caps (1) 2 — 5,958 Total assets $ 1,053,069 $ 1,246,322 Liabilities Payable to securitization note holders 3 $ — $ 141,416 Trailing fee liabilities 3 4,852 4,251 Beneficial interest liabilities 3 — 4,221 Loan servicing liabilities 3 3,968 2,038 Total liabilities $ 8,820 $ 151,926 __________ (1) The fair value of interest rate caps is determined based on the present value of the estimated future cash flows over the contract term using observable market-based inputs as of the valuation date, including implied interest rates. |
Schedule of Fair Value by Classes of Loans Held by the Company | The following table presents the fair value of classes of loans included in the Company’s consolidated balance sheets as of December 31, 2022 and 2023: December 31, December 31, 2022 2023 Loans held-for-sale $ 882,810 $ 830,574 Loans held-for-investment 127,611 146,768 Loans held in consolidated securitization — 179,071 Total $ 1,010,421 $ 1,156,413 |
Schedule of Significant Unobservable Inputs | 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 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.36 % 22.28 % 11.87 % 9.63 % 23.22 % 12.06 % Credit risk rate (1) 0.01 % 93.09 % 16.93 % 0.01 % 93.10 % 17.66 % Prepayment rate (1) 0.08 % 93.43 % 40.49 % 0.13 % 95.80 % 36.52 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. The following table presents quantitative information about the significant unobservable inputs implied for the Company’s Level 3 fair value measurements for loans held in consolidated securitization, which is determined by the sum of the fair value of the related securitization notes and residual certificates: December 31, 2022 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate * * * 6.85 % 16.00 % 9.99 % Credit risk rate (1) * * * 0.61 % 37.70 % 15.51 % Prepayment rate (1) * * * 6.66 % 89.84 % 42.73 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. * Not applicable The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements related to note receivable, residual certificates, and payable to securitization note holders: December 31, 2022 December 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 % 9.99 % 23.22 % 12.74 % Credit risk rate (1) 0.59 % 50.69 % 18.43 % 0.48 % 50.69 % 16.32 % Prepayment rate (1) 10.90 % 88.73 % 42.66 % 6.36 % 89.46 % 43.14 % Payable to securitization note holders Discount rate * * * 6.85 % 12.30 % 8.48 % Credit risk rate (1) * * * 0.61 % 37.70 % 15.51 % Prepayment rate (1) * * * 6.66 % 89.84 % 42.73 % _________ (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. * Not applicable The following table presents quantitative information about the significant unobservable inputs used for the Company’s fair value measurements of beneficial interests as of December 31, 2023: Minimum Maximum Weighted-Average (1) Beneficial interest assets Discount rate 7.00 % 14.00 % 13.63 % Credit risk rate spread (2) (0.85) % (0.85) % (0.85) % Beneficial interest liabilities Discount rate 14.00 % 14.00 % 14.00 % Credit risk rate spread (2) 0.09 % 9.81 % 8.79 % _________ (1) Unobservable inputs were weighted by relative fair value. (2) Expressed as a percentage of cumulative loss expectations as of the valuation date compared to the origination date. The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for trailing fee liabilities: December 31, 2022 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.36 % 22.28 % 12.80 % 9.63 % 23.22 % 12.88 % Credit risk rate (1) 0.01 % 93.09 % 18.43 % 0.01 % 88.42 % 17.61 % Prepayment rate (1) 0.53 % 93.43 % 39.89 % 1.05 % 94.68 % 39.94 % _________ (1) Expressed as a percentage of the original principal balance of the loans. (2) Unobservable inputs were weighted by relative fair value. |
Schedule of Sensitivity Analysis of Fair Value | The following table presents the sensitivity of the fair value of 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 2023, respectively. December 31, 2022 2023 Fair value of loans held-for-sale and held-for-investment $ 1,010,421 $ 977,342 Discount rates 100 basis point increase (11,979) (11,680) 200 basis point increase (23,720) (23,127) Expected credit loss rates on underlying loans 10% adverse change (11,927) (12,453) 20% adverse change (23,852) (24,979) Expected prepayment rates 10% adverse change (2,284) (1,884) 20% adverse change (4,530) (3,756) The following table presents the sensitivity of the fair value of loans in consolidated securitization to adverse changes in key assumptions used in the valuation model as of December 31, 2023. No loans were held in consolidated securitization as of December 31, 2022. December 31, 2023 Fair value of loans held in consolidated securitization $ 179,071 Discount rates 100 basis point increase (2,413) 200 basis point increase (4,785) Expected credit loss rates on underlying loans 10% adverse change (2,669) 20% adverse change (5,227) Expected prepayment rates 10% adverse change (1,625) 20% adverse change (3,234) The following table presents the sensitivity of beneficial interest assets and liabilities to adverse changes in key assumptions used in the valuation model as of December 31, 2023. Adverse changes in discount rates do not result in a material impact to the fair value of beneficial interest liabilities as of December 31, 2023. Significant Recurring Level 3 Fair Value Input Sensitivity December 31, 2023 Fair value of beneficial interest assets $ 41,012 Discount rate 100 basis point increase (1,240) 200 basis point increase (2,431) Expected credit rate spreads on underlying loans 10% adverse change (9,059) 20% adverse change (16,743) Fair value of beneficial interest liabilities $ 4,221 Expected credit rate spreads on underlying loans 10% adverse change 5,606 20% adverse change 11,217 |
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- Loans Held-for-Investment Loans Held in Consolidated Securitization Total Fair value at December 31, 2021 $ 142,685 $ 109,792 $ — $ 252,477 Reclassification of loans (1) 103,677 (103,677) — — Purchases of loans (1) 1,807,787 149,344 — 1,957,131 Sale of loans (1) (914,369) — — (914,369) Purchase of loans for immediate resale (1) 5,992,148 — — 5,992,148 Immediate resale of loans (1) (5,992,148) — — (5,992,148) Repayments received (1) (180,135) (15,194) — (195,329) Charge-offs and changes in fair value recorded in earnings (85,567) (14,215) — (99,782) Other charges 8,732 1,561 — 10,293 Fair value at December 31, 2022 $ 882,810 $ 127,611 $ — $ 1,010,421 Transfer of loans to consolidated securitization (2) (209,968) — 209,968 — Purchases and originations of loans (1)(3) 1,676,146 157,223 — 1,833,369 Sale of loans (1) (1,241,233) — — (1,241,233) Purchase of loans for immediate resale (1) 1,330,364 — — 1,330,364 Immediate resale of loans (1) (1,330,364) — — (1,330,364) Repayments received (1) (202,982) (89,210) (24,832) (317,024) Charge-offs and changes in fair value recorded in earnings (74,952) (53,304) (6,065) (134,321) Other changes 753 4,448 — 5,201 Fair value at December 31, 2023 $ 830,574 $ 146,768 $ 179,071 $ 1,156,413 _________ (1) Represents the principal balance. (2) Transfer of loans to consolidated securitization at fair value. (3) Purchase activity includes an immaterial unpaid principal balance related to securitization clean-up calls during the year ended December 31, 2023. The following tables include a rollforward of the notes receivable and residual certificates and payables to securitization note holders related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy: Notes Receivable and Residual Certificates Payable to Securitization Note Holders Fair value at December 31, 2021 $ 8,288 $ — Additions 4,680 — Repayments and settlements (6,736) — Changes in fair value recorded in earnings (51) — Fair value at December 31, 2022 $ 6,181 $ — Additions 13,172 165,318 Repayments and settlements (4,328) (23,320) Changes in fair value recorded in earnings (178) (582) Fair value at December 31, 2023 $ 14,847 $ 141,416 The following tables present a rollforward of beneficial interest assets and liabilities: Beneficial Interest Assets Beneficial Interest Liabilities Fair value as of December 31, 2022 $ — $ — Additions 62,684 — Settlements — (596) Changes in fair value recorded in earnings (21,672) 4,817 Fair value at December 31, 2023 $ 41,012 $ 4,221 |
Schedule of Rollforward of Level 3 Liabilities | The following tables include a rollforward of the notes receivable and residual certificates and payables to securitization note holders related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy: Notes Receivable and Residual Certificates Payable to Securitization Note Holders Fair value at December 31, 2021 $ 8,288 $ — Additions 4,680 — Repayments and settlements (6,736) — Changes in fair value recorded in earnings (51) — Fair value at December 31, 2022 $ 6,181 $ — Additions 13,172 165,318 Repayments and settlements (4,328) (23,320) Changes in fair value recorded in earnings (178) (582) Fair value at December 31, 2023 $ 14,847 $ 141,416 The following tables present a rollforward of beneficial interest assets and liabilities: Beneficial Interest Assets Beneficial Interest Liabilities Fair value as of December 31, 2022 $ — $ — Additions 62,684 — Settlements — (596) Changes in fair value recorded in earnings (21,672) 4,817 Fair value at December 31, 2023 $ 41,012 $ 4,221 |
Schedule of Aggregate Fair Value and Principal Outstanding of All Loans And Loans 90 Days or More Past Due | 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 consolidated balance sheets: Loans Loans > 90 Days Past Due December 31, December 31, December 31, December 31, 2022 2023 2022 2023 Outstanding principal balance $ 1,047,714 $ 1,182,577 $ 9,006 $ 15,310 Net fair value and accrued interest adjustments (37,293) (26,164) (7,006) (12,260) Fair value (1) $ 1,010,421 $ 1,156,413 $ 2,000 $ 3,050 _________ |
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 3,898 Repayments and settlements (3,001) Changes in fair value recorded in earnings (360) Fair value at December 31, 2022 $ 4,852 Issuances 2,126 Repayments and settlements (2,757) Changes in fair value recorded in earnings 30 Fair value at December 31, 2023 $ 4,251 |
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 December 31, 2023 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 13.00 % 20.00 % 17.20 % 13.00 % 20.00 % 16.89 % Credit risk rate (1) 0.03 % 91.76 % 16.22 % 0.05 % 88.42 % 14.93 % Market-servicing rate (3)(4) 0.62 % 3.72 % 0.62 % 0.62 % 3.72 % 0.62 % Prepayment rate (1) 0.53 % 91.99 % 41.19 % 1.05 % 96.90 % 41.05 % _________ (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) |
Schedule of Fair Value Sensitivity of Loan Servicing Assets and Liabilities to Adverse Changes in Key Assumptions | 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 prepayments rates as such changes would not result in a significant impact on the fair value as of December 31, 2022 and 2023, respectively. December 31, December 31, 2022 2023 Fair value of loan servicing assets $ 36,467 $ 28,092 Expected market-servicing rates 10% market-servicing rates increase (9,989) (7,475) 20% market-servicing rates increase (19,950) (14,916) December 31, December 31, 2022 2023 Fair value of loan servicing liabilities $ 3,968 $ 2,038 Expected market-servicing rates 10% market-servicing rates increase 2,303 1,100 20% market-servicing rates increase 4,640 2,235 |
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 31,041 2,302 Repayments and other changes in fair value recorded in earnings (12,962) (7,114) Fair value at December 31, 2022 $ 36,467 $ 3,968 Sale of loans 13,796 83 Repayments and other changes in fair value recorded in earnings (22,171) (2,013) Fair value at December 31, 2023 $ 28,092 $ 2,038 |
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 31,041 2,302 Repayments and other changes in fair value recorded in earnings (12,962) (7,114) Fair value at December 31, 2022 $ 36,467 $ 3,968 Sale of loans 13,796 83 Repayments and other changes in fair value recorded in earnings (22,171) (2,013) Fair value at December 31, 2023 $ 28,092 $ 2,038 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Total Consideration | The total consideration the Company provided for Prodigy was $89.0 million, comprised of the following: April 8, 2021 Fair value of Upstart common stock issued to Prodigy stockholders (1) $ 70,121 Cash paid to common and preferred stockholders, warrant holders, and vested option holders 17,151 Fair value of assumed Prodigy options attributable to pre-combination service period 889 Transactions costs paid by Upstart on behalf of Prodigy 883 Total purchase consideration $ 89,044 _________ (1) The fair value is based on 568,539 shares of Company common stock at $123.33 per share, the closing stock price on April 8, 2021, and 87,339 shares are held in escrow as security for certain indemnification obligations of former Prodigy stockholders. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Intangible Assets | The gross and net carrying values and accumulated amortization are as follows: December 31, 2022 December 31, 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Developed technology $ 9,400 $ (5,483) $ 3,917 $ 9,400 $ (8,617) $ 783 Customer relationships 13,700 (1,998) 11,702 13,700 (3,139) 10,561 Total intangible assets $ 23,100 $ (7,481) $ 15,619 $ 23,100 $ (11,756) $ 11,344 |
Schedule of Expected Future Amortization Expense | Expected future amortization expense for intangible assets as of December 31, 2023 is as follows: Fiscal Years: 2024 $ 1,925 2025 1,142 2026 1,142 2027 1,142 2028 1,142 Thereafter 4,851 Total $ 11,344 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following: December 31, December 31, 2022 2023 Servicing fees and other receivables $ 46,652 $ 40,490 Loan servicing assets (at fair value) 36,467 28,092 Other assets 22,678 18,589 Prepaid expenses 16,740 17,976 Notes receivable and residual certificates (at fair value) 6,181 14,847 Intangible assets, net (2) 15,631 11,356 Deposits 10,002 8,919 Interest rate caps (at fair value) (1) — 5,958 Total other assets $ 154,351 $ 146,227 _________ (1) Refer to “ Note 4. Derivative Financial Instruments” for further information. (2) Refer to “ Note 8. Goodwill and Intangible Assets ” for further information. |
Schedule of Property, Equipment, and Software | Property, equipment, and software, net consisted of the following: December 31, December 31, 2022 2023 Internally developed software $ 37,783 $ 55,008 Leasehold improvements 13,074 14,281 Computer and networking equipment 6,049 6,054 Furniture and fixtures 4,421 4,761 Total property, equipment, and software 61,327 80,104 Accumulated depreciation and amortization (17,159) (37,449) Total property, equipment, and software, net $ 44,168 $ 42,655 |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following: December 31, December 31, 2022 2023 Accrued payroll $ 21,825 $ 30,161 Accrued expenses 23,506 28,099 Trailing fee liability (at fair value) 4,852 4,251 Beneficial interest liabilities (at fair value) — 4,221 Other liabilities 12,795 2,668 Loan servicing liabilities (at fair value) 3,968 2,038 Total accrued expenses and other liabilities $ 66,946 $ 71,438 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Aggregate Principal Outstanding of All Debt | The following table presents the aggregate principal outstanding of all debt mentioned in this note that are included in the consolidated balance sheets: Borrowings December 31, December 31, 2022 2023 Warehouse credit facilities $ 336,452 $ 387,425 Convertible senior notes 661,250 661,250 Total payments due 997,702 1,048,675 Unamortized debt discount (11,308) (8,251) Total borrowings $ 986,394 $ 1,040,424 |
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 consolidated balance sheets: ULT Warehouse Credit Facility December 31, 2022 December 31, 2023 Outstanding borrowings $ 163,773 $ 247,942 Aggregate outstanding principal of loans pledged as collateral 228,895 350,396 Aggregate fair value of loans purchased and held by ULT 256,024 356,109 Restricted cash pledged as collateral $ 8,547 $ 10,799 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 consolidated balance sheets as of December 31, 2022 and 2023. UAWT Warehouse Credit Facility December 31, 2022 December 31, 2023 Outstanding borrowings $ 172,679 $ 139,483 Aggregate outstanding principal of loans pledged as collateral 221,847 277,576 Aggregate fair value of loans purchased and held by UAWT 216,539 258,374 Restricted cash pledged as collateral $ 843 $ 446 |
Schedule of Maturities of All Borrowings | The following table summarizes the aggregate amount of maturities of all borrowings as of December 31, 2023: December 31, 2024 $ — 2025 139,483 2026 909,192 2027 — 2028 — Thereafter — Total $ 1,048,675 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 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, December 31, 2022 2023 Options issued and outstanding 12,547,010 12,617,254 RSUs outstanding 6,046,796 5,534,394 PRSUs outstanding 687,500 — Shares available for future issuance under 2020 plan 5,842,057 6,420,703 Shares available for issuance under ESPP 2,543,089 2,896,226 Total 27,666,452 27,468,577 |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2023: Number of Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (years) Aggregate Balances at December 31, 2022 12,547,010 $ 14.65 6.6 $ 77,289 Options granted 2,139,321 15.82 Options exercised (1,441,787) 8.93 Options cancelled and forfeited (627,290) 33.41 Balances at December 31, 2023 12,617,254 14.57 6.1 375,897 Options exercisable – December 31, 2023 8,754,026 9.82 4.9 292,002 Options vested and expected to vest – December 31, 2023 12,617,254 $ 14.57 6.1 $ 375,897 |
Schedule of Restricted Stock Units and Restricted Stock | The following table summarizes RSU activity for the year ended December 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 4,049,756 19.64 RSUs vested (3,170,158) 36.05 RSUs cancelled and forfeited (1,392,000) 59.05 Unvested at December 31, 2023 5,534,394 $ 34.90 |
Schedule of Stock Options Fair Value Assumptions | The following assumptions were used to estimate the fair value of options granted: Year Ended December 31, 2021 2022 2023 Expected term (in years) 5.3 – 6.9 5.1 – 7.0 5.1 – 7.0 Expected volatility 45.98% – 65.01% 47.58% – 52.96% 50.96% – 53.76% Risk-free interest rate 0.62% – 1.34% 1.70% – 4.23% 3.45% – 4.86% 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: Year Ended December 31, 2021 2022 2023 Expected term (in years) 0.5 - 0.6 0.5 0.5 Expected volatility 61.65% - 152.95% 91.98% - 179.35% 97.74% - 131.05% Risk-free interest rate 0.05% - 0.09% 0.72% - 3.13% 4.97% - 5.55% Dividend yield —% —% —% |
Schedule of Stock-based Compensation Expense | The Company recorded stock-based compensation in the following expense categories in its consolidated statements of operations and comprehensive income (loss) for employees and nonemployees: Year Ended December 31, 2021 2022 2023 Sales and marketing $ 6,059 $ 11,354 $ 8,166 Customer operations 6,251 9,355 10,683 Engineering and product development 39,191 72,169 110,381 General, administrative, and other 21,685 33,067 45,809 Total $ 73,186 $ 125,945 $ 175,039 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | As of December 31, 2023, future minimum lease payments are as follows: Operating Leases 2024 $ 14,966 2025 15,402 2026 15,850 2027 15,474 2028 6,143 Thereafter 2,990 Total undiscounted lease payments 70,825 Less: Present value adjustment (8,501) Operating lease liabilities $ 62,324 |
Schedule of Operating Lease Expense and Supplemental Cash and Non-cash Information | Operating lease expense was as follows: Year Ended December 31, 2021 2022 2023 Rent expense $ 7,756 $ 15,916 $ 15,766 Variable lease payments $ 1,650 $ 3,696 $ 4,067 Supplemental cash flow and non-cash information related to the Company’s operating leases was as follows: Year Ended December 31, 2021 2022 2023 Cash paid for amounts included in the measurement of lease liabilities $ 4,553 $ 11,084 $ 22,014 Right-of-use assets capitalized 83,463 1,826 — Adjustments to operating lease right-of-use assets due to modification and other reassessment events $ — $ — $ (19,865) Supplemental balance sheet information related to the Company’s operating leases was as follows: December 31, 2023 Weighted-average remaining lease term (in years) 4.56 Weighted-average discount rate 5.11% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Income tax (benefit) expense included in the statements of operations and comprehensive income (loss) consisted of the following: Year Ended December 31, 2021 2022 2023 Current: Federal $ — $ — $ — State 229 174 107 Total current tax expense 229 174 107 Deferred: Federal (1,435) 41 — State (506) (624) — Total deferred tax expense (1,941) (583) — Total (benefit) provision for income taxes $ (1,712) $ (409) $ 107 |
Schedule of Effective Tax Rates | Income tax expense differed from the amount computed by applying the Federal statutory income tax rate of 21% to net income (loss) before income taxes for the year ended December 31, 2023 as a result of the following: Year Ended December 31, 2021 2022 2023 Federal tax at statutory rate $ 28,084 $ (22,906) $ (50,405) State income taxes, net of federal tax benefit (248) (448) 107 Stock-based compensation (236,726) (4,490) 2,306 Research and development credit (19,103) (6,333) (6,288) PPP loan forgiveness (CARES Act) 1,110 — — Change in valuation allowance 222,230 26,263 38,189 Tax return to tax provision adjustment (34) 309 (878) Section 162(m) limitation 2,653 6,494 16,586 Other 322 702 490 (Benefit) provision for income taxes $ (1,712) $ (409) $ 107 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that gave rise to significant portions of the Company’s deferred tax assets and liabilities related to the following: December 31, 2022 2023 Deferred tax assets: Net operating loss carryforwards $ 304,879 $ 328,511 Capitalized research and experimental expenditures 28,732 54,335 Research and development credits 38,796 47,009 Operating lease liabilities 29,052 18,041 Stock-based compensation 13,714 14,067 Convertible debt transactions 10,734 6,694 Accruals and reserves 6,647 7,306 Investment in partnerships 801 — Amortization 90 299 Other 631 298 Total deferred tax assets 434,076 476,560 Less: valuation allowance (387,976) (443,165) Deferred tax assets – net of valuation allowance 46,100 33,395 Deferred tax liabilities: Right of use asset 24,887 15,832 Servicing rights 9,368 7,542 Interest receivables 3,699 4,100 Intangible assets 4,502 3,461 Depreciation 3,644 1,972 Investment in partnerships — 488 Total deferred tax liabilities 46,100 33,395 Net deferred tax liabilities $ — $ — |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows: Year Ended December 31, 2021 2022 2023 Balance at beginning of year $ 1,820 $ 13,904 $ 18,474 Additions for tax positions of prior years 461 885 308 Tax positions related to the current year 11,623 3,685 3,376 Balance at end of year $ 13,904 $ 18,474 $ 22,158 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | For years 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. Year Ended December 31, 2021 2022 2023 Numerator: Net income (loss) $ 135,443 $ (108,665) $ (240,132) Denominator: Weighted-average common shares outstanding used to calculate net income (loss) per share, basic 78,106,359 82,771,268 83,765,896 Weighted-average effect of dilutive securities 16,666,282 — — Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted 94,772,641 82,771,268 83,765,896 Net income (loss) per share, basic $ 1.73 $ (1.31) $ (2.87) Net income (loss) per share, diluted $ 1.43 $ (1.31) $ (2.87) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities were excluded from the computation of diluted net income (loss) per share for the years presented, due to their anti-dilutive effect. These amounts represent the number of instruments outstanding at the end of each respective year: Year Ended December 31, 2021 2022 2023 Options to purchase common stock 461,157 12,547,010 12,617,254 Unvested RSUs 506,302 6,046,796 5,534,394 Convertible debt 2,318,078 2,318,078 2,318,078 Purchase rights committed under the ESPP — 101,397 184,447 Unvested PRSUs — 687,500 — Total 3,285,537 21,700,781 20,654,173 |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Apr. 13, 2021 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) segment component | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Short-term Debt [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Offering price per share (in dollars per share) | $ / shares | $ 120 | |||
Net proceeds from sale of stock | $ 263,900 | |||
Underwriting discount | 11,000 | |||
Offering expense | $ 1,000 | |||
Non-marketable equity securities | $ 41,250 | $ 41,250 | ||
Number of revenue components | component | 2 | |||
Computer and networking equipment | ||||
Short-term Debt [Line Items] | ||||
Estimated useful lives | 3 years | |||
Furniture and fixtures | ||||
Short-term Debt [Line Items] | ||||
Estimated useful lives | 3 years | |||
Internally developed software | ||||
Short-term Debt [Line Items] | ||||
Estimated useful lives | 3 years | |||
Paycheck Protection Program Loan, CARES Act | ||||
Short-term Debt [Line Items] | ||||
Aggregate principal amount | $ 5,300 | |||
Public Stock Offering | ||||
Short-term Debt [Line Items] | ||||
Shares sold in offering | shares | 2,300,000 | |||
Over-Allotment Option | ||||
Short-term Debt [Line Items] | ||||
Shares sold in offering | shares | 300,000 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type of Service (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | $ 560,431 | $ 907,272 | $ 801,275 |
Platform and referral fees, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | 414,120 | 732,237 | 726,161 |
Servicing and other fees, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | $ 146,311 | $ 175,035 | $ 75,114 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Trailing fee liabilities | $ 4,300 | $ 4,900 | |
Servicing fees and other receivables | 40,490 | 46,652 | |
Contract costs capitalized | 2,700 | 2,600 | |
Amortization of capitalized contracts cost | $ 3,200 | 2,800 | $ 0 |
Loans on non-accrual status | 120 days | ||
Accrued interest income | $ 14,200 | 12,800 | |
Amounts received from borrowers for previously charged-off loan | $ 7,200 | $ 0 | 0 |
Financing receivable, accrued interest, after allowance for credit loss, statement of financial position [extensible enumeration] | Financing receivable, after allowance for credit loss | Financing receivable, after allowance for credit loss | |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Subscription agreements term | 1 month | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Subscription agreements term | 6 months | ||
Platform and referral fees, net | |||
Disaggregation of Revenue [Line Items] | |||
Loan premium and loan trailing fees recognized | $ 8,100 | $ 27,700 | 23,600 |
Servicing fees and other receivables | $ 19,500 | 31,100 | |
Capitalized cost amortization term | 3 years | ||
Subscription fee | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | $ 3,800 | $ 0 | $ 0 |
Revenue - Schedule of Customers
Revenue - Schedule of Customers Accounting for Greater Than 10% of Accounts Receivable (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A | Revenue Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (in percent) | 29% | 45% | 56% |
Customer A | Accounts Receivable | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (in percent) | 11% | ||
Customer B | Revenue Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (in percent) | 23% | 28% | 27% |
Customer C | Revenue Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (in percent) | 11% | ||
Customer C | Accounts Receivable | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (in percent) | 15% | 23% |
Revenue - Schedule of Collectio
Revenue - Schedule of Collection Agency and Borrower Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | $ 560,431 | $ 907,272 | $ 801,275 |
Net gain (loss) on servicing rights and fair value adjustments | (6,444) | 22,891 | 11,030 |
Servicing fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | 107,008 | 115,742 | 51,255 |
Borrower fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | 29,139 | 25,208 | 7,289 |
Collection agency fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | 15,865 | 10,519 | 4,473 |
Other fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | 743 | 675 | 1,067 |
Servicing and other fees, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from fees, net | $ 146,311 | $ 175,035 | $ 75,114 |
Revenue - Schedule of Component
Revenue - Schedule of Components of Interest Income and Fair Value Adjustments, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | ||||
Interest income | [1] | $ 168,996 | $ 105,580 | $ 20,634 |
Interest expense | [1] | (34,894) | (10,843) | (3,274) |
Unrealized gain (loss) on loans, loan charge-offs, and other fair value adjustments, net | (130,440) | (101,422) | 1,894 | |
Realized gain (loss) on sale of loans, net | (24,042) | (58,143) | 28,060 | |
Fair value losses on beneficial interests | (26,489) | 0 | 0 | |
Total fair value and other adjustments, net | [1] | (180,971) | (159,565) | 29,954 |
Total interest income, interest expense, and fair value adjustments, net | (46,869) | (64,828) | 47,314 | |
Variable Interest Entity, Primary Beneficiary | ||||
Disaggregation of Revenue [Line Items] | ||||
Interest income | 19,697 | 0 | 0 | |
Interest expense | (6,733) | 0 | 0 | |
Unrealized gain (loss) on loans, loan charge-offs, and other fair value adjustments, net | (5,496) | 0 | 0 | |
Total interest income, interest expense, and fair value adjustments, net | $ 7,468 | $ 0 | $ 0 | |
[1] Balances for year ended December 31, 2023 include amounts related to the consolidated securitization. Refer to “ Note 2. Revenue ” for details. |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Financial Assets and Liabilities from Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||||
Assets | [1] | $ 2,017,100 | $ 1,936,054 | ||
Liabilities | [1] | 1,381,795 | 1,263,619 | ||
Net Assets | 635,305 | 672,435 | $ 807,078 | $ 300,252 | |
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 1,195,393 | 984,481 | |||
Liabilities | 530,952 | 337,830 | |||
Net Assets | 664,441 | 646,651 | |||
Variable Interest Entity, Primary Beneficiary | Consolidated securitization | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 187,258 | 0 | |||
Liabilities | 141,420 | 0 | |||
Net Assets | 45,838 | 0 | |||
Variable Interest Entity, Primary Beneficiary | Consolidated warehouse entities | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 645,455 | 488,337 | |||
Liabilities | 388,681 | 337,269 | |||
Net Assets | 256,774 | 151,068 | |||
Variable Interest Entity, Primary Beneficiary | Other consolidated VIEs | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 362,680 | 496,144 | |||
Liabilities | 851 | 561 | |||
Net Assets | 361,829 | 495,583 | |||
Variable Interest Entity, Not Primary Beneficiary | Securitizations and other | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 445,929 | 364,013 | |||
Liabilities | 319,357 | 265,040 | |||
Net Assets | 126,572 | 98,973 | |||
Maximum Exposure to Losses | $ 20,885 | $ 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 December 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 liabilities in the table below include liabilities for which creditors 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, December 31, 2022 2023 Assets Cash $ 838 $ 1,603 Restricted cash 13,147 23,450 Loans (at fair value) 958,822 1,147,423 Other assets (includes $2,244 and $5,958 at fair value as of December 31, 2022 and December 31, 2023, respectively) 11,674 22,917 Total assets $ 984,481 $ 1,195,393 Liabilities Payable to investors $ — $ 121 Borrowings 336,452 387,440 Payable to securitization note holders (at fair value) — 141,416 Accrued expenses and other liabilities 1,378 1,975 Total liabilities 337,830 530,952 Total net assets $ 646,651 $ 664,441 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) $ in Thousands | 12 Months Ended | ||||
Jul. 06, 2023 USD ($) | Dec. 31, 2023 USD ($) variable_interest_entity | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | ||
Variable Interest Entity [Line Items] | |||||
Net cash proceeds | $ 165,318 | $ 0 | $ 0 | ||
Exercised a clean up | variable_interest_entity | 2 | ||||
Financing receivable, after allowance for credit loss | [1] | $ 1,156,413 | 1,010,421 | ||
Restricted cash | 99,382 | 110,056 | |||
Variable Interest Entity, Not Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Restricted cash | 6,000 | 7,100 | |||
Variable Interest Entity, Not Primary Beneficiary | Notes receivable and residual certificates (at fair value) | |||||
Variable Interest Entity [Line Items] | |||||
Financing receivable, after allowance for credit loss | $ 14,800 | $ 6,200 | |||
Variable Interest Entity, Not Primary Beneficiary | Consolidated securitization | |||||
Variable Interest Entity [Line Items] | |||||
Unpaid principal balance of loans | $ 204,700 | ||||
Weighted average coupon yield | 9.20% | ||||
Net cash proceeds | $ 165,300 | ||||
[1] As of December 31, 2023, includes $179.1 million of loans, at fair value, contributed as collateral for the consolidated securitization. No such loans were held as of December 31, 2022. Refer to “ Note 6. Fair Value Measurement ” for details. |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | Feb. 28, 2023 | |
Derivative [Line Items] | |||||
Derivative financial instruments | $ 5,958,000 | $ 0 | |||
Interest rate caps | |||||
Derivative [Line Items] | |||||
Interest cap rate | 3.25% | 3% | |||
Derivative financial instruments | 5,958,000 | ||||
Gains (losses) recognized | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule Of Gains (Losses) Recognized On Derivative Instruments Not Designated As Hedging Instruments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Fair Value | $ 5,958,000 | $ 0 |
Interest rate caps | ||
Derivative [Line Items] | ||
Notional Amount | 299,578,000 | |
Fair Value | $ 5,958,000 |
Beneficial Interests - Narrativ
Beneficial Interests - Narrative (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Beneficial Interests [Abstract] | ||
Maximum exposure to loss | $ 98,500,000 | $ 0 |
Beneficial Interests - Schedule
Beneficial Interests - Schedule of Beneficial Interest Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Beneficial Interest [Line Items] | |||
Unpaid principal balance, asset | $ 958,870,000 | ||
Unpaid principal balance, liability | 769,102,000 | ||
Fair value, asset | 41,012,000 | $ 0 | |
Fair value, liability | 4,221,000 | 0 | |
Beneficial interests | |||
Schedule Of Beneficial Interest [Line Items] | |||
Fair value losses on beneficial interests | $ (26,489,000) | $ 0 | $ 0 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Loans | $ 1,156,413,000 | $ 1,010,421,000 |
Loan servicing assets | 28,092,000 | 36,467,000 |
Total assets | 1,246,322,000 | 1,053,069,000 |
Liabilities | ||
Payable to securitization note holders | 141,416,000 | 0 |
Trailing fee liabilities | 4,300,000 | 4,900,000 |
Beneficial interest liabilities | 4,221,000 | 0 |
Loan servicing liabilities | 2,038,000 | 3,968,000 |
Fair Value, Inputs, Level 3 | ||
Assets | ||
Loans | 1,156,413,000 | 1,010,421,000 |
Beneficial interests | 41,012,000 | 0 |
Loan servicing assets | 28,092,000 | 36,467,000 |
Notes receivable and residual certificates | 14,847,000 | 6,181,000 |
Liabilities | ||
Payable to securitization note holders | 141,416,000 | 0 |
Trailing fee liabilities | 4,251,000 | 4,852,000 |
Beneficial interest liabilities | 4,221,000 | 0 |
Loan servicing liabilities | 2,038,000 | 3,968,000 |
Total liabilities | 151,926,000 | 8,820,000 |
Fair Value, Inputs, Level 2 | ||
Assets | ||
Interest rate caps | $ 5,958,000 | $ 0 |
Fair Value Measurement - Sche_2
Fair Value Measurement - Schedule of Fair Value of classes of Loans Held by the Company (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans held in consolidated securitization | $ 179,100,000 | $ 0 |
Total assets | 1,156,413,000 | 1,010,421,000 |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans held-for-sale | 830,574,000 | 882,810,000 |
Loans held-for-investment | 146,768,000 | 127,611,000 |
Loans held in consolidated securitization | 179,071,000 | 0 |
Total assets | $ 1,156,413,000 | $ 1,010,421,000 |
Fair Value Measurement - Sche_3
Fair Value Measurement - Schedule of Significant Unobservable Inputs (Details) - Valuation Technique, Discounted Cash Flow | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | 7% | |
Beneficial interest liabilities | 14% | |
Minimum | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | (0.85%) | |
Beneficial interest liabilities | 0.09% | |
Maximum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | 14% | |
Beneficial interest liabilities | 14% | |
Maximum | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | (0.85%) | |
Beneficial interest liabilities | 9.81% | |
Weighted Average | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | 13.63% | |
Beneficial interest liabilities | 14% | |
Weighted Average | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Beneficial interest assets | (0.85%) | |
Beneficial interest liabilities | 8.79% | |
Fair Value, Inputs, Level 3 | Minimum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 9.63% | 6.36% |
Loans held in consolidated securitization | 0.0685 | |
Notes receivable and residual certificates | 0.0999 | 0.0842 |
Payable to securitization note holders | 0.0685 | |
Trailing fee liabilities | 9.63% | 6.36% |
Fair Value, Inputs, Level 3 | Minimum | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 0.01% | 0.01% |
Loans held in consolidated securitization | 0.0061 | |
Notes receivable and residual certificates | 0.0048 | 0.0059 |
Payable to securitization note holders | 0.0061 | |
Trailing fee liabilities | 0.01% | 0.01% |
Fair Value, Inputs, Level 3 | Minimum | Prepayment rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 0.13% | 0.08% |
Loans held in consolidated securitization | 0.0666 | |
Notes receivable and residual certificates | 0.0636 | 0.1090 |
Payable to securitization note holders | 0.0666 | |
Trailing fee liabilities | 1.05% | 0.53% |
Fair Value, Inputs, Level 3 | Maximum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 23.22% | 22.28% |
Loans held in consolidated securitization | 0.1600 | |
Notes receivable and residual certificates | 0.2322 | 0.2227 |
Payable to securitization note holders | 0.1230 | |
Trailing fee liabilities | 23.22% | 22.28% |
Fair Value, Inputs, Level 3 | Maximum | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 93.10% | 93.09% |
Loans held in consolidated securitization | 0.3770 | |
Notes receivable and residual certificates | 0.5069 | 0.5069 |
Payable to securitization note holders | 0.3770 | |
Trailing fee liabilities | 88.42% | 93.09% |
Fair Value, Inputs, Level 3 | Maximum | Prepayment rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 95.80% | 93.43% |
Loans held in consolidated securitization | 0.8984 | |
Notes receivable and residual certificates | 0.8946 | 0.8873 |
Payable to securitization note holders | 0.8984 | |
Trailing fee liabilities | 94.68% | 93.43% |
Fair Value, Inputs, Level 3 | Weighted Average | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 12.06% | 11.87% |
Loans held in consolidated securitization | 0.0999 | |
Notes receivable and residual certificates | 0.1274 | 0.1279 |
Payable to securitization note holders | 0.0848 | |
Trailing fee liabilities | 12.88% | 12.80% |
Fair Value, Inputs, Level 3 | Weighted Average | Credit risk rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 17.66% | 16.93% |
Loans held in consolidated securitization | 0.1551 | |
Notes receivable and residual certificates | 0.1632 | 0.1843 |
Payable to securitization note holders | 0.1551 | |
Trailing fee liabilities | 17.61% | 18.43% |
Fair Value, Inputs, Level 3 | Weighted Average | Prepayment rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 36.52% | 40.49% |
Loans held in consolidated securitization | 0.4273 | |
Notes receivable and residual certificates | 0.4314 | 0.4266 |
Payable to securitization note holders | 0.4273 | |
Trailing fee liabilities | 39.94% | 39.89% |
Fair Value Measurement - Sche_4
Fair Value Measurement - Schedule of Sensitivity Analysis of Fair Value (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of loans held-for-sale and held-for-investment | $ 1,156,413,000 | $ 1,010,421,000 |
Fair value of beneficial interest assets | 41,012,000 | 0 |
Expected prepayment rates | ||
Fair value of beneficial interest liabilities | (4,221,000) | 0 |
Beneficial Interests | ||
Expected credit rate spreads on underlying loans | ||
10% adverse change | 5,606,000 | |
20% adverse change | 11,217,000 | |
Loans Held For Sale And Investment | ||
Discount rates | ||
100 basis point increase | (11,680,000) | (11,979,000) |
200 basis point increase | (23,127,000) | (23,720,000) |
Expected credit loss rates on underlying loans | ||
10% adverse change | (12,453,000) | (11,927,000) |
20% adverse change | (24,979,000) | (23,852,000) |
Expected prepayment rates | ||
10% adverse change | (1,884,000) | (2,284,000) |
20% adverse change | (3,756,000) | (4,530,000) |
Loans Held in Consolidated Securitization | ||
Discount rates | ||
100 basis point increase | (2,413,000) | |
200 basis point increase | (4,785,000) | |
Expected credit loss rates on underlying loans | ||
10% adverse change | (2,669,000) | |
20% adverse change | (5,227,000) | |
Expected prepayment rates | ||
10% adverse change | (1,625,000) | |
20% adverse change | (3,234,000) | |
Beneficial Interests | ||
Discount rates | ||
100 basis point increase | (1,240,000) | |
200 basis point increase | (2,431,000) | |
Expected credit loss rates on underlying loans | ||
10% adverse change | (9,059,000) | |
20% adverse change | (16,743,000) | |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of loans held-for-sale and held-for-investment | 1,156,413,000 | 1,010,421,000 |
Fair value of beneficial interest assets | 41,012,000 | |
Expected prepayment rates | ||
Fair value of beneficial interest liabilities | (4,221,000) | 0 |
Fair Value, Inputs, Level 3 | Beneficial Interests | ||
Expected prepayment rates | ||
Fair value of beneficial interest liabilities | 4,221,000 | |
Fair Value, Inputs, Level 3 | Loans Held For Sale And Investment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of loans held-for-sale and held-for-investment | 977,342,000 | $ 1,010,421,000 |
Fair Value, Inputs, Level 3 | Loans Held in Consolidated Securitization | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of loans held-for-sale and held-for-investment | $ 179,071,000 |
Fair Value Measurement - Sche_5
Fair Value Measurement - Schedule of Rollforward of Level 3 Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Reclassification of loans | $ 0 | |
Loans (at fair value) | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | $ 1,010,421 | 252,477 |
Transfer of loans to consolidated securitization | 0 | |
Reclassification of loans | 0 | |
Purchases and originations of loans | 1,833,369 | 1,957,131 |
Sale of loans | (1,241,233) | (914,369) |
Purchase of loans for immediate resale | 1,330,364 | 5,992,148 |
Immediate resale of loans | (1,330,364) | (5,992,148) |
Repayments received | (317,024) | (195,329) |
Charge-offs and changes in fair value recorded in earnings | (134,321) | (99,782) |
Other charges | 5,201 | 10,293 |
Fair value, ending balance | 1,156,413 | 1,010,421 |
Loans Held-for- Sale | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 882,810 | 142,685 |
Transfer of loans to consolidated securitization | (209,968) | |
Reclassification of loans | 103,677 | |
Purchases and originations of loans | 1,676,146 | 1,807,787 |
Sale of loans | (1,241,233) | (914,369) |
Purchase of loans for immediate resale | 1,330,364 | 5,992,148 |
Immediate resale of loans | (1,330,364) | (5,992,148) |
Repayments received | (202,982) | (180,135) |
Charge-offs and changes in fair value recorded in earnings | (74,952) | (85,567) |
Other charges | 753 | 8,732 |
Fair value, ending balance | 830,574 | 882,810 |
Loans Held-for-Investment | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 127,611 | 109,792 |
Transfer of loans to consolidated securitization | 0 | |
Reclassification of loans | (103,677) | |
Purchases and originations of loans | 157,223 | 149,344 |
Sale of loans | 0 | 0 |
Purchase of loans for immediate resale | 0 | 0 |
Immediate resale of loans | 0 | 0 |
Repayments received | (89,210) | (15,194) |
Charge-offs and changes in fair value recorded in earnings | (53,304) | (14,215) |
Other charges | 4,448 | 1,561 |
Fair value, ending balance | 146,768 | 127,611 |
Loans Held in Consolidated Securitization | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 0 | 0 |
Transfer of loans to consolidated securitization | 209,968 | |
Purchases and originations of loans | 0 | 0 |
Sale of loans | 0 | 0 |
Purchase of loans for immediate resale | 0 | 0 |
Immediate resale of loans | 0 | 0 |
Repayments received | (24,832) | 0 |
Charge-offs and changes in fair value recorded in earnings | (6,065) | 0 |
Other charges | 0 | 0 |
Fair value, ending balance | $ 179,071 | $ 0 |
Fair Value Measurement - Sche_6
Fair Value Measurement - Schedule of Aggregate Fair Value and Principal Outstanding of All Loans And Loans 90 Days or More Past Due (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Financing Receivable, Past Due [Line Items] | |||
Fair value | [1] | $ 1,156,413 | $ 1,010,421 |
Loans (at fair value) | |||
Financing Receivable, Past Due [Line Items] | |||
Outstanding principal balance | 1,182,577 | 1,047,714 | |
Net fair value and accrued interest adjustments | (26,164) | (37,293) | |
Fair value | 1,156,413 | 1,010,421 | |
Loans (at fair value) | Auto Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Fair value | 343,100 | 397,700 | |
Loans > 90 Days Past Due | Loans (at fair value) | |||
Financing Receivable, Past Due [Line Items] | |||
Outstanding principal balance | 15,310 | 9,006 | |
Net fair value and accrued interest adjustments | (12,260) | (7,006) | |
Fair value | 3,050 | 2,000 | |
Loans > 90 Days Past Due | Loans (at fair value) | Auto Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Fair value | $ 2,800 | $ 0 | |
[1] As of December 31, 2023, includes $179.1 million of loans, at fair value, contributed as collateral for the consolidated securitization. No such loans were held as of December 31, 2022. Refer to “ Note 6. Fair Value Measurement ” for details. |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans on non-accrual status | 120 days | |
Charges-off loans | 120 days | |
Payable to securitization note holders (at fair value) | $ 141,416,000 | $ 0 |
Loan servicing assets | 28,092,000 | 36,467,000 |
Loan servicing liabilities | 2,038,000 | 3,968,000 |
Beneficial interest assets (at fair value) | 41,012,000 | 0 |
Beneficial interest liabilities | 4,221,000 | 0 |
Trailing fee liability (at fair value) | 4,251,000 | 4,852,000 |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Notes receivable and residual certificates | 14,847,000 | 6,181,000 |
Payable to securitization note holders (at fair value) | 141,416,000 | 0 |
Impact of 100 point increase in discount rate | 1,900,000 | |
Impact of 200 point increase in discount rate | 3,700,000 | |
Loan servicing assets | 28,092,000 | 36,467,000 |
Loan servicing liabilities | 2,038,000 | 3,968,000 |
Beneficial interest assets (at fair value) | 41,012,000 | |
Beneficial interest liabilities | $ 4,221,000 | $ 0 |
Fair Value Measurement - Level
Fair Value Measurement - Level Three Assets and Liabilities Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Beneficial interest liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | $ 0 | |
Additions | 0 | |
Repayments and settlements | (596) | |
Changes in fair value recorded in earnings | 4,817 | |
Fair value, ending balance | 4,221 | $ 0 |
Beneficial Interests | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 0 | |
Additions | 62,684 | |
Repayments and settlements | 0 | |
Changes in fair value recorded in earnings | (21,672) | |
Fair value, ending balance | 41,012 | 0 |
Fair Value, Inputs, Level 3 | Payable to Securitization Note Holders | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 0 | 0 |
Additions | 165,318 | 0 |
Repayments and settlements | (23,320) | 0 |
Changes in fair value recorded in earnings | (582) | 0 |
Fair value, ending balance | 141,416 | 0 |
Fair Value, Inputs, Level 3 | Trailing Fee Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 4,852 | 4,315 |
Issuances | 2,126 | 3,898 |
Repayments and settlements | (2,757) | (3,001) |
Changes in fair value recorded in earnings | 30 | (360) |
Fair value, ending balance | 4,251 | 4,852 |
Fair Value, Inputs, Level 3 | Notes receivable and residual certificates (at fair value) | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | 6,181 | 8,288 |
Additions | 13,172 | 4,680 |
Repayments and settlements | (4,328) | (6,736) |
Changes in fair value recorded in earnings | (178) | (51) |
Fair value, ending balance | $ 14,847 | $ 6,181 |
Fair Value Measurement - Sche_7
Fair Value Measurement - Schedule of Level 3 Fair Value Assumptions for Loan Servicing Assets and Liabilities (Details) - Fair Value, Inputs, Level 3 - Valuation Technique, Discounted Cash Flow | 12 Months Ended | |
Dec. 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% | 13% |
Credit risk rate | 0.05% | 0.03% |
Market-servicing rate | 0.62% | 0.62% |
Prepayment rate | 1.05% | 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% | 20% |
Credit risk rate | 88.42% | 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 | 16.89% | 17.20% |
Credit risk rate | 14.93% | 16.22% |
Market-servicing rate | 0.62% | 0.62% |
Prepayment rate | 41.05% | 41.19% |
Fair Value Measurement - Sche_8
Fair Value Measurement - Schedule of Fair Value Sensitivity of Loan Servicing Assets and Liabilities to Adverse Changes in Key Assumptions (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 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 | $ 28,092 | $ 36,467 | |
Fair value of loan servicing liabilities | 2,038 | 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 | 28,092 | 36,467 | |
Fair value of loan servicing liabilities | 2,038 | 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 | 2,038 | 3,968 | $ 8,780 |
10% market-servicing rates increase | 1,100 | 2,303 | |
20% market-servicing rates increase | 2,235 | 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 | 28,092 | 36,467 | $ 18,388 |
10% market-servicing rates increase | (7,475) | (9,989) | |
20% market-servicing rates increase | $ (14,916) | $ (19,950) |
Fair Value Measurement - Sche_9
Fair Value Measurement - Schedule of Servicing Liabilities at Fair Value Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value, beginning balance | $ 36,467 | |
Fair value, ending balance | 28,092 | $ 36,467 |
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Fair value, beginning balance | 3,968 | |
Fair value, ending balance | 2,038 | 3,968 |
Fair Value, Inputs, Level 3 | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value, beginning balance | 36,467 | |
Fair value, ending balance | 28,092 | 36,467 |
Servicing Liability at Fair Value, Amount [Roll Forward] | ||
Fair value, beginning balance | 3,968 | |
Fair value, ending balance | 2,038 | 3,968 |
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 | 83 | 2,302 |
Changes in fair value recorded in earnings | (2,013) | (7,114) |
Fair value, ending balance | 2,038 | 3,968 |
Fair Value, Inputs, Level 3 | Loan Servicing Assets | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value, beginning balance | 36,467 | 18,388 |
Sale of loans | 13,796 | 31,041 |
Repayments and other changes in fair value recorded in earnings | (22,171) | (12,962) |
Fair value, ending balance | $ 28,092 | $ 36,467 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | 12 Months Ended | |||
Apr. 08, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Acquisition costs recognized | $ 0 | $ 0 | $ 1,200,000 | |
Prodigy Software, Inc. | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 89,044,000 | |||
Prodigy Software, Inc. | Restricted Stock | ||||
Business Acquisition [Line Items] | ||||
Restricted stock issued (in shares) | 82,201 | |||
Issuance of common stock upon settlement of restricted stock units | $ 10,100,000 |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Apr. 08, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Fair value of Upstart common stock issued to Prodigy stockholders | $ 0 | $ 0 | $ 80,256 | |
Prodigy Software, Inc. | ||||
Business Acquisition [Line Items] | ||||
Fair value of Upstart common stock issued to Prodigy stockholders | $ 70,121 | |||
Cash paid to common and preferred stockholders, warrant holders, and vested option holders | 17,151 | |||
Fair value of assumed Prodigy options attributable to pre-combination service period | 889 | |||
Transactions costs paid by Upstart on behalf of Prodigy | 883 | |||
Total purchase consideration | $ 89,044 | |||
Shares of common stock transferred (in shares) | 568,539 | |||
Value of common stock transferred (in dollars per share) | $ 123.33 | |||
Shares held in escrow (in shares) | 87,339 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 67,062 | $ 67,062 | |
Amortization expense | $ 4,300 | $ 4,300 | $ 3,200 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 23,100 | $ 23,100 |
Accumulated Amortization | (11,756) | (7,481) |
Net Carrying Value | 11,344 | 15,619 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 9,400 | 9,400 |
Accumulated Amortization | (8,617) | (5,483) |
Net Carrying Value | 783 | 3,917 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 13,700 | 13,700 |
Accumulated Amortization | (3,139) | (1,998) |
Net Carrying Value | $ 10,561 | $ 11,702 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 1,925 | |
2025 | 1,142 | |
2026 | 1,142 | |
2027 | 1,142 | |
2028 | 1,142 | |
Thereafter | 4,851 | |
Net Carrying Value | $ 11,344 | $ 15,619 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Other Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Servicing fees and other receivables | $ 40,490,000 | $ 46,652,000 |
Loan servicing assets (at fair value) | 28,092,000 | 36,467,000 |
Other assets | 18,589,000 | 22,678,000 |
Prepaid expenses | 17,976,000 | 16,740,000 |
Notes receivable and residual certificates (at fair value) | 14,847,000 | 6,181,000 |
Intangible assets, net | 11,356,000 | 15,631,000 |
Deposits | 8,919,000 | 10,002,000 |
Interest rate caps (at fair value) | 5,958,000 | 0 |
Total other assets | $ 146,227,000 | $ 154,351,000 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property, Equipment, and Software (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property, equipment, and software | $ 80,104 | $ 61,327 |
Accumulated depreciation and amortization | (37,449) | (17,159) |
Total property, equipment, and software, net | 42,655 | 44,168 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment, and software | 55,008 | 37,783 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment, and software | 14,281 | 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 | $ 4,761 | $ 4,421 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Assets [Abstract] | |||
Depreciation | $ 20,600,000 | $ 13,500,000 | $ 4,200,000 |
Capitalized internally developed software balances, net of accumulated amortization | 31,300,000 | 27,400,000 | |
Internally developed software impairment | $ 2,600,000 | ||
Impairments of long-lived assets | $ 0 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Accrued payroll | $ 30,161 | $ 21,825 |
Accrued expenses | 28,099 | 23,506 |
Trailing fee liability (at fair value) | 4,251 | 4,852 |
Beneficial interest liabilities (at fair value) | 4,221 | 0 |
Other liabilities | 2,668 | 12,795 |
Loan servicing liabilities (at fair value) | 2,038 | 3,968 |
Total accrued expenses and other liabilities | $ 71,438 | $ 66,946 |
Borrowings - Schedule of aggreg
Borrowings - Schedule of aggregate principal outstanding of all loans (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Borrowings [Line Items] | ||
Total payments due | $ 1,048,675 | $ 997,702 |
Unamortized debt discount | (8,251) | (11,308) |
Total borrowings | 1,040,424 | 986,394 |
Convertible senior notes | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | 661,250 | 661,250 |
Revolving Credit Facility | Warehouse credit facilities | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | $ 387,425 | $ 336,452 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | ||||
Aug. 20, 2021 USD ($) day $ / shares shares | May 31, 2020 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2023 USD ($) | |
Schedule of Borrowings [Line Items] | ||||||
Purchase of capped calls | $ 0 | $ 0 | $ 58,523,000 | |||
ULT Warehouse Credit Facility | Revolving Credit Facility | ||||||
Schedule of Borrowings [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000,000 | |||||
Redemption price (in percent) | 100% | |||||
Maximum advance rate (in percent) | 72.50% | 72.50% | ||||
ULT Warehouse Credit Facility | Revolving Credit Facility | Minimum | ||||||
Schedule of Borrowings [Line Items] | ||||||
Monthly unused fee (in percent) | 0.15% | |||||
ULT Warehouse Credit Facility | Revolving Credit Facility | Maximum | ||||||
Schedule of Borrowings [Line Items] | ||||||
Monthly unused fee (in percent) | 1% | |||||
ULT Warehouse Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate | Minimum | ||||||
Schedule of Borrowings [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
ULT Warehouse Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate | Maximum | ||||||
Schedule of Borrowings [Line Items] | ||||||
Basis spread on variable rate | 4.13% | |||||
ULT Warehouse Credit Facility - Committed | Revolving Credit Facility | ||||||
Schedule of Borrowings [Line Items] | ||||||
Maximum borrowing capacity | $ 175,000,000 | |||||
ULT Warehouse Credit Facility - UnCommitted | Revolving Credit Facility | ||||||
Schedule of Borrowings [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||
UAWT Warehouse Credit Facility | Revolving Credit Facility | Primary Beneficiary | ||||||
Schedule of Borrowings [Line Items] | ||||||
Maximum borrowing capacity | $ 200,000,000 | |||||
Maximum advance rate | 72.50% | 82.50% | ||||
UAWT Warehouse Credit Facility | Revolving Credit Facility | UAWT Benchmark Rate | Minimum | Primary Beneficiary | ||||||
Schedule of Borrowings [Line Items] | ||||||
Basis spread on variable rate | 3% | |||||
UAWT Warehouse Credit Facility | Revolving Credit Facility | UAWT Benchmark Rate | Maximum | Primary Beneficiary | ||||||
Schedule of Borrowings [Line Items] | ||||||
Basis spread on variable rate | 4% | |||||
2026 ("Notes") | ||||||
Schedule of Borrowings [Line Items] | ||||||
Convertible notes payable | $ 653,000,000 | $ 649,900,000 | ||||
Purchase of capped calls | $ 58,500,000 | |||||
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 | 488,700,000 | 364,800,000 | ||||
2026 ("Notes") | Convertible Debt | ||||||
Schedule of Borrowings [Line Items] | ||||||
Aggregate principal amount | $ 661,300,000 | |||||
Stated interest rate | 0.25% | |||||
Additional aggregate principal | $ 86,300,000 | |||||
Net proceeds from sale of the notes | $ 645,500,000 | |||||
Initial conversion rate (in shares) | 0.0035056 | |||||
Initial conversion price (in dollars per share) | $ / shares | $ 285.26 | |||||
Percent of the principal amount | 100% | |||||
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% | |||||
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% | |||||
2026 ("Notes") | Convertible Debt | Conversion Period Three | ||||||
Schedule of Borrowings [Line Items] | ||||||
Redemption price (in percent) | 100% | |||||
Trading days | day | 20 | |||||
Consecutive trading days | day | 30 | |||||
Conversion price maximum threshold | 130% | |||||
Gross debt issuance cost | $ 15,700,000 | |||||
Amortization of debt issuance costs | $ 3,100,000 | $ 3,000,000 | $ 1,400,000 | |||
Effective interest rate | 0.70% |
Borrowings - Schedule of Assets
Borrowings - Schedule of Assets Pledged as Collateral (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | $ 1,048,675 | $ 997,702 |
Aggregate fair value of loans purchased and held by ULT/UAWT | 1,156,413 | 1,010,421 |
Restricted cash pledged as collateral | 99,382 | 110,056 |
Variable Interest Entity, Primary Beneficiary | ||
Schedule of Borrowings [Line Items] | ||
Restricted cash pledged as collateral | 23,450 | 13,147 |
ULT Warehouse Credit Facility | Revolving Credit Facility | Variable Interest Entity, Primary Beneficiary | ||
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | 247,942 | 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 | 350,396 | 228,895 |
Aggregate fair value of loans purchased and held by ULT/UAWT | 356,109 | 256,024 |
Restricted cash pledged as collateral | 10,799 | 8,547 |
UAWT Warehouse Credit Facility | Revolving Credit Facility | Variable Interest Entity, Primary Beneficiary | ||
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | 139,483 | 172,679 |
Aggregate outstanding principal of loans pledged as collateral | 277,576 | 221,847 |
Aggregate fair value of loans purchased and held by ULT/UAWT | 258,374 | 216,539 |
Restricted cash pledged as collateral | $ 446 | $ 843 |
Borrowings - Schedule of Maturi
Borrowings - Schedule of Maturities of All Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 0 | |
2025 | 139,483 | |
2026 | 909,192 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | $ 1,048,675 | $ 997,702 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Reserved Shares of Common Stock for Issuance (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance (in shares) | 27,468,577 | 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) | 6,420,703 | 5,842,057 |
Options issued and outstanding | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance (in shares) | 12,617,254 | 12,547,010 |
RSUs outstanding | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance (in shares) | 5,534,394 | 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) | 2,896,226 | 2,543,089 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) | 12 Months Ended | ||||||
Feb. 24, 2023 shares | Apr. 08, 2021 USD ($) shares | Dec. 31, 2023 USD ($) vesting_tranche $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / 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 | 28,900,000 | $ 157,300,000 | $ 1,391,700,000 | ||||
Fair value of options vested during period | 34,700,000 | 23,200,000 | 23,500,000 | ||||
Stock-based compensation expense | $ 175,039,000 | $ 125,945,000 | $ 73,186,000 | ||||
Annual target bonus opportunity percentage | 75% | ||||||
Number of vesting tranches | vesting_tranche | 9 | ||||||
Dividend yield | 0% | ||||||
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 | 459,459 | 162,796 | 243,725 | ||||
Minimum | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase, percent of outstanding shares (percent) | 5% | ||||||
Maximum | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase (in shares) | shares | 15,000,000 | ||||||
Weighted Average | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.19 | $ 15.60 | $ 62.06 | ||||
2012 Equity Incentive Plan | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | shares | 15,000,000 | ||||||
Incentive Stock Options and Non-Statutory Stock Options | 2012 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Exercise price less than percent of estimated fair value (percent) | 100% | ||||||
Minimum required service period | 3 years | ||||||
Incentive Stock Options and Non-Statutory Stock Options | 2012 Equity Incentive Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Incentive Stock Options and Non-Statutory Stock Options | 2012 Equity Incentive Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 10 years | ||||||
Incentive Stock Option | 2012 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stockholder ownership (percent) | 10% | ||||||
Incentive Stock Option | 2012 Equity Incentive Plan | Greater Than 10% Stockholders | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Exercise price less than percent of estimated fair value (percent) | 110% | ||||||
Options issued and outstanding | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense related to unvested stock options | $ 40,600,000 | ||||||
Dividend yield | 0% | 0% | 0% | ||||
Options issued and outstanding | Black-Scholes Option Pricing Model | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 4,400,000 | ||||
Options issued and outstanding | Weighted Average | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Period of recognition | 2 years 6 months | ||||||
RSUs outstanding | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense related to unvested stock options | $ 150,100,000 | ||||||
RSUs vested (in shares) | shares | 3,170,158 | ||||||
Vested (in dollars per share) | $ / shares | $ 36.05 | ||||||
Unvested (in dollars per share) | $ / shares | $ 34.90 | $ 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 | ||||||
RSUs outstanding | Weighted Average | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Period of recognition | 2 years | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
RSUs vested (in shares) | shares | 10,271 | ||||||
Vested (in dollars per share) | $ / shares | $ 123.33 | ||||||
Unrecognized stock-based compensation expense | $ 0 | ||||||
Restricted Stock | Prodigy Software, Inc. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock issued (in shares) | shares | 82,201 | ||||||
Issuance of common stock upon settlement of restricted stock units | $ 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% | ||||||
Shares available for issuance under ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense | $ 0 | ||||||
Purchase period | 6 months | ||||||
ESPP purchase price of common stock, percent of market price | 85% | ||||||
Dividend yield | 0% | 0% | 0% |
Stockholders_ Equity - Schedu_2
Stockholders’ Equity - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Beginning balance (in shares) | 12,547,010 | |
Options granted (in shares) | 2,139,321 | |
Options exercised (in shares) | (1,441,787) | |
Options cancelled and forfeited (in shares) | (627,290) | |
Ending balance (in shares) | 12,617,254 | 12,547,010 |
Options exercisable (in shares) | 8,754,026 | |
Options vested and expected to vest (in shares) | 12,617,254 | |
Weighted-Average Exercise Price Per Share | ||
Options outstanding (in dollars per share) | $ 14.65 | |
Options granted (in dollars per share) | 15.82 | |
Options exercised (in dollars per share) | 8.93 | |
Options cancelled and forfeited (in dollars per share) | 33.41 | |
Options outstanding (in dollars per share) | 14.57 | $ 14.65 |
Options exercisable, weighted average exercise price per share (in dollars per share) | 9.82 | |
Options vested and expected to vest, weighted average exercise price per share (in dollars per share) | $ 14.57 | |
Weighted-Average Remaining Contractual Life (years) | ||
Options outstanding | 6 years 1 month 6 days | 6 years 7 months 6 days |
Options exercisable | 4 years 10 months 24 days | |
Options vested and expected to vest | 6 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Balances aggregate intrinsic value | $ 375,897 | $ 77,289 |
Options exercisable | 292,002 | |
Options vested and expected to vest | $ 375,897 |
Stockholders_ Equity - Schedu_3
Stockholders’ Equity - Schedule of RSU Activity (Details) - RSUs outstanding | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 6,046,796 |
RSUs granted (in shares) | shares | 4,049,756 |
RSUs vested (in shares) | shares | (3,170,158) |
RSUs cancelled and forfeited (in shares) | shares | (1,392,000) |
Ending balance (in shares) | shares | 5,534,394 |
Weighted-Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 51.28 |
RSUs granted (in dollars per share) | $ / shares | 19.64 |
RSUs vested (in dollars per share) | $ / shares | 36.05 |
RSUs cancelled and forfeited (in dollars per share) | $ / shares | 59.05 |
Ending balance (in dollars per share) | $ / shares | $ 34.90 |
Stockholders_ Equity - Schedu_4
Stockholders’ Equity - Schedule of Weighted-Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | ||
Options issued and outstanding | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum | 50.96% | 47.58% | 45.98% |
Expected volatility, maximum | 53.76% | 52.96% | 65.01% |
Risk free rate, minimum | 3.45% | 1.70% | 0.62% |
Risk free rate, maximum | 4.86% | 4.23% | 1.34% |
Dividend yield | 0% | 0% | 0% |
Options issued and outstanding | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 1 month 6 days | 5 years 1 month 6 days | 5 years 3 months 18 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 | 6 years 10 months 24 days |
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% | ||
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, minimum | 97.74% | 91.98% | 61.65% |
Expected volatility, maximum | 131.05% | 179.35% | 152.95% |
Risk free rate, minimum | 4.97% | 0.72% | 0.05% |
Risk free rate, maximum | 5.55% | 3.13% | 0.09% |
Dividend yield | 0% | 0% | 0% |
Shares available for issuance under ESPP | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | ||
Shares available for issuance under ESPP | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 7 months 6 days |
Stockholders_ Equity - Schedu_5
Stockholders’ Equity - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 175,039 | $ 125,945 | $ 73,186 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 8,166 | 11,354 | 6,059 |
Customer operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 10,683 | 9,355 | 6,251 |
Engineering and product development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 110,381 | 72,169 | 39,191 |
General, administrative, and other | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 45,809 | $ 33,067 | $ 21,685 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
One-time termination fee | $ 7,000,000 | ||
Increase (decrease) of right of use asset | (19,865,000) | $ 0 | $ 0 |
Increase (decrease) of lease liability | (21,200,000) | ||
Operating lease liabilities | 62,324,000 | 100,787,000 | |
Letter of credit outstanding | 3,400,000 | ||
Finance leases | $ 0 | $ 0 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 14,966 | |
2025 | 15,402 | |
2026 | 15,850 | |
2027 | 15,474 | |
2028 | 6,143 | |
Thereafter | 2,990 | |
Total undiscounted lease payments | 70,825 | |
Less: Present value adjustment | (8,501) | |
Operating lease liabilities | $ 62,324 | $ 100,787 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Expense and Supplemental Cash and Non-cash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Rent expense | $ 15,766 | $ 15,916 | $ 7,756 |
Variable lease payments | 4,067 | 3,696 | 1,650 |
Cash paid for amounts included in the measurement of lease liabilities | 22,014 | 11,084 | 4,553 |
Right-of-use assets capitalized | 0 | 1,826 | 83,463 |
Adjustments to operating lease right-of-use assets due to modification and other reassessment events | $ (19,865) | $ 0 | $ 0 |
Weighted-average remaining lease term (in years) | 4 years 6 months 21 days | ||
Weighted-average discount rate | 5.11% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jun. 22, 2022 lawsuit | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |||
Loss contingency, new claims filed, number | lawsuit | 2 | ||
Obligation to Repurchase Loans | |||
Loss Contingencies [Line Items] | |||
Loss contingency, ownership loan facilitated term | 3 days | ||
Loan purchase obligation | $ 36.6 | $ 17.8 | |
Maximum estimate of potential loss | $ 12,208.1 | $ 15,551.1 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Income (loss) before income taxes from domestic operations | $ (240,000) | $ (109,100) | $ 133,700 | |
Increase in valuation allowance | 55,200 | |||
Unrecognized tax benefits | 22,158 | $ 18,474 | $ 13,904 | $ 1,820 |
Increase in unrecognized tax benefits | 3,700 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 1,069,200 | |||
Federal | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carry forward | 49,800 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 1,528,100 | |||
State | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carry forward | $ 21,700 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 107 | 174 | 229 |
Total current tax expense | 107 | 174 | 229 |
Deferred: | |||
Federal | 0 | 41 | (1,435) |
State | 0 | (624) | (506) |
Total deferred tax expense | 0 | (583) | (1,941) |
Total (benefit) provision for income taxes | $ 107 | $ (409) | $ (1,712) |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal tax at statutory rate | $ (50,405) | $ (22,906) | $ 28,084 |
State income taxes, net of federal tax benefit | 107 | (448) | (248) |
Stock-based compensation | 2,306 | (4,490) | (236,726) |
Research and development credit | (6,288) | (6,333) | (19,103) |
PPP loan forgiveness (CARES Act) | 0 | 0 | 1,110 |
Change in valuation allowance | 38,189 | 26,263 | 222,230 |
Tax return to tax provision adjustment | (878) | 309 | (34) |
Section 162(m) limitation | 16,586 | 6,494 | 2,653 |
Other | 490 | 702 | 322 |
Total (benefit) provision for income taxes | $ 107 | $ (409) | $ (1,712) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 328,511 | $ 304,879 |
Capitalized research and experimental expenditures | 54,335 | 28,732 |
Research and development credits | 47,009 | 38,796 |
Operating lease liabilities | 18,041 | 29,052 |
Stock-based compensation | 14,067 | 13,714 |
Convertible debt transactions | 6,694 | 10,734 |
Accruals and reserves | 7,306 | 6,647 |
Investment in partnerships | 0 | 801 |
Amortization | 299 | 90 |
Other | 298 | 631 |
Total deferred tax assets | 476,560 | 434,076 |
Less: valuation allowance | (443,165) | (387,976) |
Deferred tax assets – net of valuation allowance | 33,395 | 46,100 |
Deferred tax liabilities: | ||
Right of use asset | 15,832 | 24,887 |
Servicing rights | 7,542 | 9,368 |
Interest receivables | 4,100 | 3,699 |
Intangible assets | 3,461 | 4,502 |
Depreciation | 1,972 | 3,644 |
Investment in partnerships | 488 | 0 |
Total deferred tax liabilities | 33,395 | 46,100 |
Net deferred tax liabilities | $ 0 | $ 0 |
Income Taxes - Income Tax Asset
Income Taxes - Income Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 18,474 | $ 13,904 | $ 1,820 |
Additions for tax positions of prior years | 308 | 885 | 461 |
Tax positions related to the current year | 3,376 | 3,685 | 11,623 |
Balance at end of year | $ 22,158 | $ 18,474 | $ 13,904 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income (loss) | $ (240,132) | $ (108,665) | $ 135,443 |
Denominator: | |||
Weighted-average common shares outstanding used to calculate net income (loss) per share, basic (in shares) | 83,765,896 | 82,771,268 | 78,106,359 |
Weighted-average effect of dilutive securities (in shares) | 0 | 0 | 16,666,282 |
Weighted-average common shares outstanding used to calculate net income (loss) per share, diluted (in shares) | 83,765,896 | 82,771,268 | 94,772,641 |
Net income (loss) per share, basic (in dollars per share) | $ (2.87) | $ (1.31) | $ 1.73 |
Net income (loss) per share, diluted (in dollars per share) | $ (2.87) | $ (1.31) | $ 1.43 |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 20,654,173 | 21,700,781 | 3,285,537 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 12,617,254 | 12,547,010 | 461,157 |
Unvested RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 5,534,394 | 6,046,796 | 506,302 |
Unvested PRSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 0 | 687,500 | 0 |
Purchase rights committed under the ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 184,447 | 101,397 | 0 |
Convertible debt | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (in shares) | 2,318,078 | 2,318,078 | 2,318,078 |
Reorganization Expenses (Detail
Reorganization Expenses (Details) - January 2023 Plan $ in Millions | 12 Months Ended | |
Jan. 31, 2023 employee | Dec. 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% | |
Expected reduction in workforce, number of employees | employee | 365 | |
Reorganization expenses | 15.5 | |
Impairment of Intangible Assets | ||
Restructuring Cost and Reserve [Line Items] | ||
Reorganization expenses | $ 2.6 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Feb. 13, 2024 | Feb. 09, 2024 |
Subsequent Event [Line Items] | ||
Principal amount of loans sold | $ 299.7 | |
Revolving Credit Facility | UAWT Warehouse Credit Facility | Primary Beneficiary | ||
Subsequent Event [Line Items] | ||
Repayments of credit facility | $ 15.3 |