Upstart Earnings | Another BAD report! Thesis busted?

TL;DR

Company's Q2 2022 financial performance shows revenue drop, margin stability, and balance sheet challenges.

Transcript

today's video here we go so this was q2 2022 as the time is recording this company's market cap is about 2.7 billion you can subtract about 10 from that if the early indication numbers from the pre-market trading uh holds so let's rewind the clock to may to set the stage in may then their company's q1 earnings report they said that revenue for this... Read More

Key Insights

• 🍂 Revenue growth at 18% met updated guidance but fell below Wall Street estimates.
• 🪐 Contribution margin remained stable at 47%, with net income negative at $30 million.
• 🧘 Balance sheet showed deteriorating cash position and shift to net debt.
• ❓ Company actively diversifying lending partners and automation of loans.
• 💯 Core product's moat appears stable with potential widening.
• 💛 Thesis for the stock remains with yellow flag due to business model shift.
• 🌓 Financial performance challenges evident for the upcoming quarters.

Questions & Answers

Q: How did the company's Q2 2022 revenue compare to Wall Street estimates?

The company's Q2 revenue grew 18% to $228 million, meeting management's updated guidance but fell below Wall Street's estimates.

Q: What were the key highlights of the company's financial performance in Q2 2022?

The company's contribution margin was stable at 47%, while net income was negative at $30 million. Furthermore, the balance sheet showed a deteriorating cash position and a shift to net debt.

Q: What challenges did the company face regarding its revenue growth in Q2?

The company faced challenges in revenue growth due to selling loans at a loss, resulting in only an 18% revenue increase despite a 38% rise in core business revenue.

Q: What indicators should investors monitor to assess the company's financial health?

Investors should monitor credit quality, partner sign-ups, balance sheet de-risking, and automation of loans to assess the company's financial health and operational performance effectively.

Summary & Key Takeaways

• Company's Q2 revenue grew 18% to $228 million, meeting updated guidance.

• Contribution margin at 47%, net income negative at $30 million.

• Balance sheet shows deteriorating cash position and shift to net debt.