ewsba.se
Written by Jeremy Bowman for The Motley Fool->
Upstart delivered strong loan growth, showing solid demand for its platform.
Margins narrowed as it invested in digital channels.
The company expects profit growth to return over the rest of the year.
Shares of Upstart (NASDAQ: UPST), the AI-based loan origination platform, were moving lower after the company topped revenue estimates in its first-quarter earnings report, but margins narrowed, showing it had to spend more to drive that growth.
Upstart's business model makes it easy for the company to deliver revenue growth as it can make more loans to bring in more fees, but it's key for the model to deliver growth on the bottom line.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
As of 1:23 p.m. ET, the stock was down 8.1% on the news.
The business continued to expand at a rapid pace in the first quarter, with originations up 61% to $3.4 billion and transaction volume up 77% to 425,356 loans, driving total revenue up by 44% to $308.2 million, which topped estimates at $303 million.
However, sales and marketing spending nearly doubled to $104.4 million, and its generally accepted accounting principles (GAAP) operating loss actually widened from $4.5 million to $7.5 million. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin also narrowed from 20% to 13%, and its GAAP loss per share widened from $0.03 to $0.07.
Management explained the increase in marketing spend as "investment to optimize digital channels and support new product growth."
The company also expects EBITDA margin acceleration over the remainder of the year as it forecast slower expense growth.
Looking ahead, the company maintained its revenue guidance for the full year at $1.4 billion, up 34.5% from 2025, and adjusted EBITDA of $294 million, up 28%.
That's a solid growth rate and shows that margins should improve later in the year. However, given the weak Q1 results, today's sell-off is understandable.
Before you buy stock in Upstart, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Upstart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $473,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,204,650!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 6, 2026.
Jeremy Bowman has positions in Upstart. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
This data feed is not available at this time.