Upstart Holdings, Inc.

Previous wording

Upstart is the leading AI lending marketplace. We aim to radically reduce the cost and complexity of borrowing for all Americans by using our proprietary AI models to remake the entire lending process. Upstart’s marketplace supports both unsecured and secured loans. Unsecured loans include personal loans, small dollar loans, and our new unsecured revolving credit product, Cash Line. Secured loans include auto loans – including retail, refinance, and auto secured personal loans – and HELOCs. Long-term, our vision is to become the always-on, everything-store for credit, where we can automatically approve borrowers at the right prices – instantly and effortlessly.

Current wording

Upstart is the leading AI lending marketplace. We aim to radically reduce the cost and complexity of borrowing for all Americans by using our proprietary AI models to remake the entire lending process. Upstart’s marketplace supports both unsecured and secured loans. Unsecured loans include personal loans, small dollar loans, and our new unsecured revolving credit product, Cash Line. Secured loans include auto loans – including retail, refinance 1, and auto secured personal loans – and HELOCs. Long-term, our vision is to become the always-on, everything-store for credit, where we can automatically approve borrowers at the right prices – instantly and effortlessly.

Previous wording

Beyond core underwriting, we apply our proprietary AI models to other areas of our business, such as income and identity verification, fraud detection, and identifying loan stacking behavior, among others. The result is an exceptional digital-first experience with significant levels of automation. For example, during the six months ended June 30, 2026, 91% of loans on our platform were fully automated, with no human intervention by Upstart. Consumer acquisition is another area where we apply our AI, making these activities increasingly efficient. Consumers primarily access Upstart-powered loans through Upstart.com and, for automotive retail in particular, through auto dealerships that use Upstart’s Auto Finance software.

Current wording

Beyond core underwriting, we apply our proprietary AI models to other areas of our business, such as income and identity verification, fraud detection, and identifying loan stacking behavior, among others. The result is an exceptional digital-first experience with significant levels of automation. For example, during the nine months ended September 30, 2026, 91% of loans on our platform were fully automated, with no human intervention by Upstart. Consumer acquisition is another area where we apply our AI, making these activities increasingly efficient. Consumers primarily access Upstart-powered loans through Upstart.com and, for automotive retail in particular, through auto dealerships that use Upstart’s Auto Finance software.

Previous wording

Our dynamic marketplace allows us to serve borrowers across the credit spectrum. Loans issued through our marketplace are purchased by our network of institutional investors, retained or purchased by our lending partners, or in certain instances, held on our balance sheet. Out of the total principal of loans transacted on our marketplace during the six months ended June 30, 2026, 61% were purchased by institutional investors, 31% were retained or purchased by our lending partners, and 8% were held on our balance sheet. Investors may also invest in securities collateralized by Upstart-powered loans through our pass-through and securitization programs.

Current wording

Our dynamic marketplace allows us to serve borrowers across the credit spectrum. Loans issued through our marketplace are purchased by our network of institutional investors, retained or purchased by our lending partners, or in certain instances, held on our balance sheet. Out of the total principal of loans facilitated on our marketplace during the nine months ended September 30, 2026, 64% were purchased by institutional investors, 30% were retained or purchased by our lending partners, and 6% were held on our balance sheet as of September 30, 2026. Investors may also invest in securities collateralized by Upstart-powered loans through our pass-through and securitization programs.

Previous wording

We retain certain loans on our balance sheet for R&D purposes, including to test and evaluate our AI models for newer products and to aid in price discovery. As of June 30, 2026, 51% of loans held on our balance sheet were for R&D purposes, primarily related to our seasoned auto refinance, auto retail loans and HELOCs, as well as newer products including small dollar loans and auto secured personal loans. As products develop and achieve market fit, we no longer consider them as R&D. For example, during the quarter ended June 30, 2026, newly originated auto refinance, auto retail loans and HELOCs were no longer classified as R&D.

Current wording

We retain certain loans on our balance sheet for R&D purposes, including to test and evaluate our AI models for newer products and to aid in price discovery. As of September 30, 2026, 51% of loans held on our balance sheet were for R&D purposes, primarily related to our seasoned auto refinance, auto retail loans and HELOCs, as well as newer products including small dollar loans and auto secured personal loans. As products develop and achieve market fit, we no longer consider them as R&D. For example, beginning in the quarter ended June 30, 2026, newly originated auto refinance, auto retail loans and HELOCs were no longer classified as R&D.

Previous wording

We consider credit performance of Upstart-powered loans to be one of the most important measures of the effectiveness of our AI models. However, credit performance is impacted by multiple factors, including factors that our models do not predict, such as macroeconomic conditions.

Current wording

We consider credit performance of Upstart-powered loans to be one of the most important measures of the effectiveness of our AI models. Credit performance is influenced by multiple factors, including certain macroeconomic conditions that are not predicted by our AI models, and affects our business in three fundamental ways.

Previous wording

In addition to impacting credit performance, the macroeconomic environment has a direct and indirect impact on our business financial condition, and results of operation. In an economic downturn, we believe consumer lending will generally contract. Lending partners and institutional investors will generally require higher rates of return, which in turn increases the interest rates offered to borrowers, leading to lower borrower demand. Macroeconomic factors can also cause fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors. We expect these dynamics would generally invert in an economic upswing.

Current wording

In addition to impacting credit performance, the macroeconomic environment has a direct and indirect impact on our business, financial condition, and results of operations. In an economic downturn, we believe consumer lending will generally contract. Lending partners and institutional investors will generally require higher rates of return, which in turn increases the interest rates offered to borrowers, leading to lower borrower demand. Macroeconomic factors can also cause fluctuations of available capital in our lending marketplace due to shifts in the risk preferences of our lending partners and institutional investors. We expect these dynamics would generally invert in an economic upswing.

Previous wording

To respond to macroeconomic changes and provide relevant and up-to-date information to our lending partners, we introduced a new metric, the UMI, in 2023. As of June 30, 2026, UMI remained elevated, measured at approximately 1.50, meaning that current macroeconomic conditions contributed an incremental risk of approximately 50% to the repayment performance of an Upstart-powered unsecured personal loan, compared to the baseline measurement of 1.0.

Current wording

To respond to macroeconomic changes and provide relevant and up-to-date information to our lending partners, we introduced a new metric, the UMI, in 2023. As of September 30, 2026, UMI remained elevated, measured at approximately 1.50, meaning that current macroeconomic conditions contributed an incremental risk of approximately 50% to the repayment performance of an Upstart-powered unsecured personal loan, compared to the baseline measurement of 1.0. Subsequent to September 30, 2026, UMI increased to approximately 1.53, indicating an incremental increase in macroeconomic risk.

Previous wording

Originations, Dollars increased 50% in the three months ended June 30, 2026 compared to the same period of 2025, andincreased 55%in thesix months ended June 30, 2026 compared to thesame period of 2025. Originations, Number of Loans increased 50% and 60% in the three and six months ended June 30, 2026 compared to the same period of 2025, respectively. These increases were primarily due to model improvements and product initiatives, which resulted in an increase in the number of qualified borrower demand. The increase in Originations, Number of Loans was higher than the increase in Originations, Dollars due to the decrease in average loan size, primarily asunderwriting model improvements drove higher approval rates in smaller dollar categories of loans.

Current wording

Originations, Dollars increased 44% in the three months ended September 30, 2026 compared to the same period of 2025, andincreased 51%in thenine months ended September 30, 2026 compared to thesame period of 2025. Originations, Number of Loans increased 34% and 50% in the three and nine months ended September 30, 2026 compared to the same period of 2025, respectively. These increases were primarily due to model improvements, product initiatives, and increased traffic across our marketing channels. The increase in Originations, Number of Loans was lower than the increase in Originations, Dollars due to the increase in average loan size, primarily reflecting a higher proportion of auto loans and HELOCs and a lower proportion of small dollar loans in the origination mix.

Previous wording

Our Conversion Rate decreased to 19.7% and 19.2% in the three and six months ended June 30, 2026, respectively, from 21.0%and 19.4%in the same periods of 2025, primarily driven by our continued expansion into broader borrower segments and improvements in the accuracy of our underwriting model.

Current wording

Our Conversion Rate decreased to 18.6% and 18.9% in the three and nine months ended September 30, 2026, respectively, from 19.4% in both the three and nine months ended September 30, 2025, primarily driven by our continued expansion into broader borrower segments, which increased application volumes at a faster rate than originations as we maintained disciplined underwriting.

Previous wording

Our Percentage of Loans Fully Automated decreased to 91% in boththe three and six months ended June 30, 2026 from 92% in both the three and six months ended June 30, 2025.

Current wording

Our Percentage of Loans Fully Automated decreased to 90% for the three months ended September 30, 2026 from 91% for the same period in 2025, and remained unchanged at 91% for the nine months ended September 30, 2025 and 2026.

Previous wording

We calculate Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense and certain payroll tax expenses, depreciation and amortization, expense on convertible notes, provision for income taxes, gain on debt extinguishment, net gain on lease modification and reorganization expenses, as applicable. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. Adjusted EBITDA and Adjusted EBITDA Margin include interest expense from corporate debt and warehouse credit facilities which is incurred in the course of earning corresponding interest income. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin.

Current wording

We calculate Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense and certain payroll tax expenses, depreciation and amortization, expense on convertible notes, provision for income taxes, gain on debt extinguishment, net gain on lease modification and reorganization expenses, as applicable. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. Adjusted EBITDA and Adjusted EBITDA Margin include interest expense from warehouse and risk retention facilities which is incurred in the course of earning corresponding interest income. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin.

Previous wording

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 on our condensed consolidated balance sheets as part of our ongoing operating activities, excluding loan servicing assets and liabilities. Interest income, interest expense, and fair value adjustments, net includes realized gain or loss on the sale of loans. For the three and six months ended June 30, 2026, interest income, interest expense, and fair value adjustments, net also includes coupon interest expense and amortization of debt issuance costs related to our convertible senior notes and dividend income earned on certain cash accounts, which were previously included in other income, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Interest income, interest expense, and fair value adjustments, net can fluctuate based on the fair value of financial instruments held on our condensed consolidated balance sheets. This amount has historically been a small percentage of our total revenue, and we do not manage our business with a focus on growing this component of revenue.

Current wording

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 on our condensed consolidated balance sheets as part of our ongoing operating activities, excluding loan servicing assets and liabilities. Interest income, interest expense, and fair value adjustments, net includes realized gain or loss on the sale of loans. For the three and nine months ended September 30, 2026, interest income, interest expense, and fair value adjustments, net also includes coupon interest expense and amortization of debt issuance costs related to our convertible senior notes and dividend income earned on certain cash accounts, which were previously included in other income, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Interest income, interest expense, and fair value adjustments, net can fluctuate based on the fair value of financial instruments held on our condensed consolidated balance sheets. This amount has historically been a small percentage of our total revenue, and we do not manage our business with a focus on growing this component of revenue.

Previous wording

Other income, net primarily consists of dividend income earned on certain restricted cash balances. For the three and six months ended June 30, 2025, other income, net included dividend income earned on all unrestricted cash and cash equivalents and restricted cash balances, as well as expense on convertible notes, comprised of coupon interest expense and amortization of debt issuance costs related to our convertible senior notes. For the three and six months ended June 30, 2026, dividend income earned on certain cash accounts and expense on convertible notes are presented within interest income, interest expense, and fair value adjustments, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

Other income, net primarily consists of dividend income earned on certain restricted cash balances. For the three and nine months ended September 30, 2025, other income, net included dividend income earned on all unrestricted cash and cash equivalents and restricted cash balances, as well as expense on convertible notes, comprised of coupon interest expense and amortization of debt issuance costs related to our convertible senior notes. For the three and nine months ended September 30, 2026, dividend income earned on certain cash accounts and expense on convertible notes are presented within interest income, interest expense, and fair value adjustments, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

(1)For the three and six months ended June 30, 2026, interest income and interest expense include dividend income earned on certain cash accounts and expense on convertible notes, respectively, which were previously included in other income, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

(1)For the three and nine months ended September 30, 2026, interest income and interest expense include dividend income earned on certain cash accounts and expense on convertible notes, respectively, which were previously included in other income, net. Refer to“Note 1. Description of Business and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

Revenue from fees, net increased $107.2 million, or 45%, in the three months ended June 30, 2026, compared to the same period in 2025, which included an increase of $81.2 million in revenue from platform and referral fees, net, an increase of $16.9 million in servicing and other fees, net, and an increase of $9.1 million in loan sales fees. The increase of the platform and referral fees, net was primarily driven by a 50% increase in Originations, Dollars from $2,820.4 million in the three months ended June 30, 2025 to $4,227.2 million in the same period in 2026, partially offset by higher loan premium fees and loan trailing fees. The increase in servicing and other fees, net was primarily driven by an increase in the outstanding principal of serviced loans, an increase in net gain on servicing rights upon loan sales, as well as an increase in borrower fees. The increase in loan sales fees was driven by increased volumes of forward-flow sales subject to these fees, which are recognized as part of the sales proceeds received during the three months ended June 30, 2026.

Current wording

Revenue from fees, netincreased $105.5 million, or 41%, in the three months ended September 30, 2026, compared to the same period in 2025, which included an increase of $66.3 million in revenue from platform and referral fees, net, an increase of $28.2 million in servicing and other fees, net, and an increase of $11.1 million in loan sales fees. The increase in platform and referral fees, net was primarily driven by a 44% increase in Originations, Dollars from $2,854.3 million in the three months ended September 30, 2025 to$4,117.8 million in the same period in 2026, partially offset byhigher loan premium fees and loan trailing fees. Theincrease in servicing and other fees, net was primarily driven byan increase in the outstanding principal of serviced loans, an increase in net gain on servicing rights upon loan sales, as well as an increase in borrower fees. Theincrease in loan sales fees was driven by increased volumes of forward-flow sales subject to these fees, which are recognized as part of the sales proceeds received during the three months ended September 30, 2026.

Previous wording

Revenue from fees, net increased $198.8 million, or 47%, in the six months ended June 30, 2026, compared to the same period in 2025, which included an increase of $154.9 million in revenue from platform and referral fees, net, an increase of $31.5 million in servicing and other fees, net, and an increase of $12.5 million in loan sales fees. The increase of the platform and referral fees, net was primarily driven by a 55% increase in the Originations, Dollars from $4,954.0 million in the six months ended June 30, 2025 to $7,672.3 million in the same period in 2026, partially offset by higher loan premium fees and loan trailing fees. The increase in servicing and other fees, net was primarily driven by an increase in outstanding principal of serviced loans, an increase in net gain on servicing rights upon loan sales, as well as an increase in borrower fees. The increase in loan sales fees was driven by increased volumes of forward-flow sales subject to these fees, which are recognized as part of the sales proceeds received during the six months ended June 30, 2026.

Current wording

Revenue from fees, netincreased $304.3 million, or 44%, in the nine months ended September 30, 2026, compared to the same period in 2025, which included an increase of $221.1 million in revenue from platform and referral fees, net, an increase of $59.6 million in servicing and other fees, net, and an increase of $23.6 million in loan sales fees. The increase in platform and referral fees, net was primarily driven by a 51% increase in the Originations, Dollars from $7,808.3 million in the nine months ended September 30, 2025 to$11,790.1 million in the same period in 2026, partially offset by higher loan premium fees and loan trailing fees. Theincrease in servicing and other fees, net was primarily driven byan increase in outstanding principal of serviced loans, an increase in net gain on servicing rights upon loan sales, as well as an increase in borrower fees. Theincrease in loan sales fees was driven by increased volumes of forward-flow sales subject to these fees, which are recognized as part of the sales proceeds received during the nine months ended September 30, 2026.

Previous wording

Interest income, interest expense, and fair value adjustments, net increased $0.2 million, or 1% in the three months ended June 30, 2026, compared to the same period in 2025. The increase was driven by a $11.4 million increase in interest income, partially offset by a $6.5 million increase in unfavorable fair value adjustments and a $4.8 million increase in interest expense. The increase in interest income was due to dividend income earned on certain cash accounts during the three months ended June 30, 2026, which was previously included in other income, net, as well as the increase in balances of loans and notes receivable and residual certificates held on the condensed consolidated balance sheets by operating entities, partially offset by a decrease in the balance of loans held in the consolidated securitization during the period. The increase in unfavorable fair value adjustments is attributable to a $7.7 million increase in realized loss on loan sales, and a $2.1 million increase in fair value and realized losses on beneficial interests during the three months ended June 30, 2026 compared to the same period in 2025, partially offset by a $3.3 million decrease in unrealized losses and loan charge-offs. The increase in interest expense was due to $5.1 million expense on convertible senior notes incurred during the three months ended June 30, 2026, which was previously included in other income, net, a $0.4 million net increase in interest expense on borrowing facilities and loans recognized by operating entities, and a $0.7 million decrease in interest expense recognized by consolidated securitization entities due to lower payable to securitization note holders during the period.

Current wording

Interest income, interest expense, and fair value adjustments, netdecreased $12.1 million, or 65% in the three months ended September 30, 2026, compared to the same period in 2025. Thedecrease was driven by a$7.3 million increase in unfavorable fair value adjustments, a$4.1 million increase in interest expense, and a$0.6 million decrease in interest income. Theincrease in unfavorable fair value adjustments is attributable toan $11.3 million increase in unrealized losses and loan charge-offs, and a $2.9 million increase in realized losses on loan sales during the three months ended September 30, 2026 compared to the same period in 2025, partially offset by a $6.9 million decrease in fair value and realized losses on beneficial interests. Theincrease in interest expense was due to$5.0 million expense on convertible senior notes incurred during the three months ended September 30, 2026, which was previously included in other income, net, partially offset by a $0.7 million decrease in interest expense recognized by consolidated securitization entities due to lower payable to securitization note holders during the period, and a $0.2 million net decrease in interest expense on borrowing facilities and loans recognized by operating entities. The decrease in interest income was primarily due to the decrease in the balance of loans held on the condensed consolidated balance sheets, as well as a decrease in the balance of loans held in the consolidated securitization during the period, partially offset by dividend income earned on certain cash accounts during the three months ended September 30, 2026, which was previously included in other income, net, and an increase in balance of notes receivable and residual certificates held on the condensed consolidated balance sheets by operating entities.

Previous wording

Interest income, interest expense, and fair value adjustments, net increased $3.4 million, or 8% in the six months ended June 30, 2026, compared to the same period in 2025. The increase was driven by a $26.9 million increase in interest income, partially offset by a $15.4 million increase in unfavorable fair value adjustments and a $8.1 million increase in interest expense. The increase in interest income was due to dividend income earned on certain cash accounts during the six months ended June 30, 2026, which was previously included in other income, net, as well as the increase in balances of loans and notes receivable and residual certificates held on the condensed consolidated balance sheets by operating entities, partially offset by a decrease in the balance of loans held in the consolidated securitization during the period. The increase in unfavorable fair value adjustments is attributable to a $15.2 million increase in realized loss on loan sales, and a $6.7 million decrease in fair value and realized gains on beneficial interests during the six months ended June 30, 2026 compared to the same period in 2025, partially offset by a $6.4 million decrease in unrealized losses and loan charge-offs. The increase in interest expense was due to $10.1 million expense on convertible senior notes incurred during the six months ended June 30, 2026, which was previously included in other income, net, a $0.6 million net decrease in interest expense on borrowing facilities and loans recognized by operating entities and a $1.4 million decrease in interest expense recognized by consolidated securitization entities due to lower payable to securitization note holders during the period.

Current wording

Interest income, interest expense, and fair value adjustments, netdecreased $8.6 million, or 14% in the nine months ended September 30, 2026, compared to the same period in 2025. The decrease was driven bya$22.7 million increase in unfavorable fair value adjustments and a $12.2 million increase in interest expense, partially offset by a $26.3 million increase in interest income. The increasein unfavorable fair value adjustments is attributable to an $18.1 million increase in realized losses on loan sales, a $4.9 million increase in unrealized losses and loan charge-offs, partially offsetby a $0.3 million decrease in fair valueand realized losses on beneficial interests during the nine months ended September 30, 2026 compared to the same period in 2025. Theincrease in interest expense was primarily due to$15.2 million expense on convertible senior notes incurred during the nine months ended September 30, 2026, which was previously included in other income, net, partially offset by a $2.0 million decrease in interest expense recognized by consolidated securitization entities due to lower payable to securitization note holders during the period, and a $0.8 million net decrease in interest expense on borrowing facilities and loans recognized by operating entities. Theincrease in interest income was primarily due to the dividend income earned on certain cash accounts during the nine months ended September 30, 2026, which was previously included in other income, net, as well as the increase in balances of notes receivable and residual certificates held on the condensed consolidated balance sheets by operating entities, partially offset by a decrease in the balance of loans held in the consolidated securitization during the period.

Previous wording

Sales and marketing expenses increased by $86.9 million, or 66%, in the six months ended June 30, 2026 compared to the same period in 2025, which was driven primarily by a $85.0 million increase in advertising and borrower acquisition costs and a $2.3 million increase in payroll and other personnel-related expenses, partially offset by a $0.5 million decrease in marketing operation expenses. As a percentage of total revenue, sales and marketing expenses increased from 28% to 33%.

Current wording

Sales and marketing expenses increased by $23.2 million, or 29%, in the three months ended September 30, 2026 compared to the same period in 2025, which was driven primarily by a $23.9 million increase in advertising and borrower acquisition costs, partially offset by a $0.6 million decrease in payroll and other personnel-related expenses. As a percentage of total revenue, sales and marketing expenses remained unchanged at 28%.

Previous wording

Sales and marketing expenses increased by $41.4 million, or 57%, in the three months ended June 30, 2026 compared to the same period in 2025, which was driven primarily by a $41.3 million increase in advertising and borrower acquisition costs and a $0.9 million increase in payroll and other personnel-related expenses, partially offset by a $0.8 million decrease in marketing operation expenses. As a percentage of total revenue, sales and marketing expenses increased from 28% to 31%.

Current wording

Sales and marketing expenses increased by $110.1 million, or 52%, in the nine months ended September 30, 2026 compared to the same period in 2025, which was driven primarily by a$109.0 million increase in advertising and borrower acquisition costs and a $1.7 million increase in payroll and other personnel-related expenses, partially offset by a $0.6 million decrease in marketing operation expenses. As a percentage of total revenue, sales and marketing expenses increased from 28% to 31%.

Previous wording

Customer operations expenses increased by $15.1 million, or 33%, in the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $8.7 million increase in information verification expenses and systems expenses, a $3.6 million increase in servicing expenses, and a $2.8 million increase in payroll and other personnel-related expenses. As a percentage of total revenue, customer operations expenses decreased from 18% to 17%.

Current wording

Customer operations expenses increased by $13.5 million, or 27%, in the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to an$8.1 million increase in information verification expenses and systems expenses, a $4.0 million increase in servicing expenses, and a $1.1 million increase in payroll and other personnel-related expenses. As a percentage of total revenue, customer operations expenses decreased from 18% to 17%.

Previous wording

Customer operations expenses increased by $29.7 million, or 34%, in the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $17.1 million increase in information verification expenses and systems expenses, a $6.8 million increase in payroll and other personnel-related expenses, and a $5.7 million increase in servicing expenses. As a percentage of total revenue, customer operations expenses decreased from 18% to 17%.

Current wording

Customer operations expenses increased by $43.2 million, or 32%, in the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to a$25.2 million increase in information verification expenses and systems expenses, a $9.7 million increase in servicing expenses, and a $7.9 million increase in payroll and other personnel-related expenses. As a percentage of total revenue, customer operations expenses decreased from 18% to 17%.

Previous wording

Engineering and product development expenses increased by $25.0 million, or 36%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $13.1 million increase in other engineering operating expenses driven by data and infrastructure costs and a $11.9 million increase in payroll and other personnel-related expenses consistent with the increase in headcount. As a percentage of total revenue, engineering and product development expenses decreased from 27% to 26%.

Current wording

Engineering and product development expenses increased by $28.6 million, or 45%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due toa $14.4 million increase in other engineering operating expenses driven by data and infrastructure costs and a $14.2 million increase in payroll and other personnel-related expenses consistent with the increase in headcount. As a percentage of total revenue, engineering and product development expenses increased from 23% to 25%.

Previous wording

Engineering and product development expenses increased by $47.3 million, or 37%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $27.6 million increase in payroll and other personnel-related expenses consistent with the increase in headcount and a $19.7 million increase in other engineering operating expenses driven by data and infrastructure costs. As a percentage of total revenue, engineering and product development expenses decreased from 27% to 26%.

Current wording

Engineering and product development expenses increased by $75.9 million, or 40%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to a$41.8 million increase in payroll and other personnel-related expenses consistent with the increase in headcount and a $34.1 million increase in other engineering operating expenses driven by data and infrastructure costs. As a percentage of total revenue, engineering and product development expenses remained unchanged at 26%.

Previous wording

General, administrative, and other expenses increased by $31.3 million, or 25%, in the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $25.5 million increase in payroll and other personnel-related expenses consistent with the increase in headcount, a $3.9 million increase in professional fees, a $2.0 million increase in office and administrative operating related expenses, and a $0.7 million increase in amortization and depreciation expenses. The increase was partially offset by a $0.7 million decrease in legal and compliance expenses. As a percentage of total revenue, general, administrative, and other expenses decreased from 27% to 23%.

Current wording

General, administrative, and other expenses increased by $15.7 million, or 26%, in the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to an$11.6 million increase in payroll and other personnel-related expenses consistent with the increase in headcount, a $2.4 million increase in professional fees and a $1.2 million increase in office and administrative operating related expenses. As a percentage of total revenue, general, administrative, and other expenses decreased from 22% to 21%.

Previous wording

General, administrative, and other expenses increased by $15.8 million, or 24%, in the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to a $12.3 million increase in payroll and other personnel-related expenses consistent with the increase in headcount, a $2.9 million increase in professional fees, and a $1.3 million increase in amortization and depreciation expenses. The increase was partially offset by a $0.7 million decrease in legal and compliance expenses. As a percentage of total revenue, general, administrative, and other expenses decreased from 25% to 22%.

Current wording

General, administrative, and other expenses increased by $47.0 million, or 25%, in the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to a$37.1 million increase in payroll and other personnel-related expenses consistent with the increase in headcount, a $6.3 million increase in professional fees, and a $3.2 million increase in office and administrative operating related expenses. As a percentage of total revenue, general, administrative, and other expenses decreased from 25% to 22%.

Previous wording

In the three months ended June 30, 2026, other income, net increased by $1.4 million, or 126%, compared to the same period in 2025. The increase was primarily driven by dividend income earned on certain cash accounts and expense on convertible notes, which were included within other income, net, for the three months ended June 30, 2025 compared to interest income and interest expense, for the three months ended June 30, 2026. Excluding the impact of this change, other income, net remained consistent for the periods presented.

Current wording

In the three months ended September 30, 2026, other income, net increased by $0.2 million, or 22%, compared to the same period in 2025. The increase was primarily driven by dividend income earned on certain cash accounts and expense on convertible notes, which were included within other income, net, for the three months ended September 30, 2025 compared to interest income and interest expense, for the three months ended September 30, 2026. Excluding the impact of this change, other income, net remained relatively consistent for the periods presented.

Previous wording

In the six months ended June 30, 2026, other income, net increased by $0.3 million, or 9%, compared to the same period in 2025. The increase was primarily driven by dividend income earned on certain cash accounts and expense on convertible notes, which were included within other income, net, for the six months ended June 30, 2025 compared to interest income and interest expense, for the six months ended June 30, 2026. Excluding the impact of this change, other income, net remained consistent for the periods presented.

Current wording

In the nine months ended September 30, 2026, other income, net increased by $0.5 million, or 12%, compared to the same period in 2025. The increase was primarily driven by dividend income earned on certain cash accounts and expense on convertible notes, which were included within other income, net, for the nine months ended September 30, 2025 compared to interest income and interest expense, for the nine months ended September 30, 2026. Excluding the impact of this change, other income, net remained relatively consistent for the periods presented.

Previous wording

In particular, some of the limitations with respect to Adjusted EBITDA and Adjusted Margin are as follows:

Current wording

In particular, some of the limitations with respect to Adjusted EBITDA and Adjusted EBITDA Margin are as follows:

Previous wording

The following table presents a reconciliation of income from operations to Contribution Profit and Contribution Margin. We define Operating Margin as our net income from operations divided by revenue from fees, net.

Current wording

The following table presents a reconciliation of income from operations to Contribution Profit and Contribution Margin. We define Operating Margin as our income from operations divided by revenue from fees, net.

Previous wording

(1)Borrower acquisition costs were $60.9 million, and$102.3 million for the three months ended June 30, 2025 and 2026, respectively, and were $109.5 million and$194.5 million for the six months ended June 30, 2025 and 2026, respectively. Borrower acquisition costs consist of our sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for our business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses.

Current wording

(1)Borrower acquisition costs were $67.3 million, and $91.2 million for the three months ended September 30, 2025 and 2026, respectively, and were $176.8 million and $285.7 million for the nine months ended September 30, 2025 and 2026, respectively. Borrower acquisition costs consist of our sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for our business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses.

Previous wording

(2)Borrower verification and servicing costs were $39.3 million, and$52.6 million for the three months ended June 30, 2025 and 2026, respectively, and were $73.8 million and$100.1 million for the six months ended June 30, 2025 and 2026, respectively. Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of our customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses.

Current wording

(2)Borrower verification and servicing costs were $43.9 million, and $54.9 million for the three months ended September 30, 2025 and 2026, respectively, and were $117.7 million and $155.0 million for the nine months ended September 30, 2025 and 2026, respectively. Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of our customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses.

Previous wording

As of June 30, 2026, our primary source of liquidity was cash and cash equivalents of $456.0 million. Changes in the balance of cash and cash equivalents are generally a result of working capital fluctuations and the timing of purchases and sales of loans facilitated through our marketplace. To finance purchases of certain loans facilitated through our lending marketplace, we rely on our warehouse credit facilities through special-purpose trusts and corporate cash. We also rely on our risk retention credit facility to finance certain notes receivable retained in our capacity as the risk retention sponsor.

Current wording

As of September 30, 2026, our primary source of liquidity was cash and cash equivalents of $461.5 million. Changes in the balance of cash and cash equivalents are generally a result of working capital fluctuations and the timing of purchases and sales of loans facilitated through our marketplace. To finance purchases of certain loans facilitated through our lending marketplace, we rely on our warehouse credit facilities through special-purpose trusts and corporate cash. We also rely on our risk retention credit facility to finance certain notes receivable retained in our capacity as the risk retention sponsor.

Previous wording

During the six months ended June 30, 2026, we repurchased 3.2 million shares of common stock for $100.1 million. As of June 30, 2026, $122.1 million remains available for future purchases of our common stock under our share repurchase program. Refer to “Note 9. Stockholders’ Equity” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our share repurchase program.

Current wording

During the nine months ended September 30, 2026, we repurchased 3.2 million shares of common stock for $100.1 million. As of September 30, 2026, $122.1 million remains available for future purchases of our common stock under our share repurchase program. Refer to “Note 9. Stockholders’ Equity” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our share repurchase program.

Previous wording

Our convertible senior notes have an aggregate principal balance of $1,687.8 million which matures between 2026 to 2032, unless earlier converted, redeemed, or repurchased in accordance with their terms. The 2026 Notes which are current and due August 2026 have a principal balance of $66.5 million. Refer to “Note 8. Borrowings” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our Notes.

Current wording

Our convertible senior notes have an aggregate principal balance of $1,621.3 million which matures between 2029 to 2032, unless earlier converted, redeemed, or repurchased in accordance with their terms. Refer to “Note 8. Borrowings” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our Notes.

Previous wording

Our warehouse credit facilities, which mature between August 2027 and June 2029, allow us to borrow up to an aggregate of $650.0 million. Our risk retention financing facility, which allows us to borrow up to $200.0 million, has a maturity which aligns with the stated maturities of the underlying securitization notes receivable pledged as collateral, which range from 2033 to 2036. As of June 30, 2026, we have drawn an aggregate of $251.8 million on our warehouse credit facilities and $92.0 million on our risk retention financing facility. Refer to “Note 8. Borrowings” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our borrowings.

Current wording

Our warehouse credit facilities, which mature between October 2027 and June 2029, allow us to borrow up to an aggregate of $650.0 million. Subsequent to September 30, 2026, Upstart Auto Warehouse Trust 2 was amended to set the scheduled maturity date to March 2027. Our risk retention financing facility, which allows us to borrow up to $200.0 million, has a maturity which aligns with the stated maturities of the underlying securitization notes receivable pledged as collateral, which range from 2033 to 2036. As of September 30, 2026, we have drawn an aggregate of $327.6 million on our warehouse credit facilities and $105.3 million on our risk retention financing facility. Refer to “Note 8. Borrowings” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our borrowings.

Previous wording

Our cash requirements related to operating lease agreements is $26.3 million, of which $6.9 million is expected to be paid within the next 12 months. Our cash requirements related to leases entered into that have not yet commenced is $56.0 million, with no amounts expected to be paid within the next 12 months. Refer to “Note 10. Leases” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our operating lease obligations.

Current wording

Our cash requirements related to operating lease agreements are $80.8 million, of which $7.8 million is expected to be paid within the next 12 months. Refer to “Note 10. Leases” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our operating lease obligations.

Previous wording

We have committed to purchase loans from certain lending partners at the conclusion of the required holding period, which is generally three business days. As of June 30, 2026, the total loan purchase commitment was $148.8 million. The Company also has commitments to fund future advances on HELOCs. As of June 30, 2026, these commitments were $27.8 million; however, since we can limit these commitments under certain conditions or these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. See “Note 11. Commitments and Contingencies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our commitments.

Current wording

We have committed to purchase loans from certain lending partners at the conclusion of the required holding period, which is generally three business days. As of September 30, 2026, the total loan purchase commitment was $152.5 million. The Company also has commitments to fund future advances on HELOCs. As of September 30, 2026, these commitments were $21.2 million; however, since we can limit these commitments under certain conditions or these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. See “Note 11. Commitments and Contingencies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our commitments.

Previous wording

In connection with our committed capital and other co-investment arrangements, we are obligated to put a certain amount of our assets at risk in relation to the credit performance of the underlying loans. The risk in these arrangements is subject to a dollar cap, which represents our maximum exposure to losses under severe, hypothetical circumstances, for which we believe the possibility is remote. As of June 30, 2026, our aggregate maximum exposure to losses was $1,294.4 million. Refer to “Note 4. Beneficial Interests” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details. Our cash requirements for the next 12 months related to investments in these existing arrangements is estimated to be up to $312.9 million from cash and cash equivalents and up to $26.0 million from restricted cash.

Current wording

In connection with our committed capital and other co-investment arrangements, we are obligated to put a certain amount of our assets at risk in relation to the credit performance of the underlying loans. The risk in these arrangements is subject to a dollar cap, which represents our maximum exposure to losses under severe, hypothetical circumstances, for which we believe the possibility is remote. As of September 30, 2026, our aggregate maximum exposure to losses was $1,499.1 million. Refer to “Note 4. Beneficial Interests” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details. Our cash requirements for the next 12 months related to investments in these existing arrangements is estimated to be up to $354.7 million from cash and cash equivalents and up to $26.2 million from restricted cash.

Previous wording

Net cash used in operating activities was $269.9 million for the six months ended June 30, 2026, which consisted of $415.5 million net changes in operating assets and liabilities, adjustments for non-cash items of $135.6 million, and net income of $9.9 million. The increase in non-cash adjustments was primarily related to $79.3 million of stock-based compensation expense and $74.1 million of changes in fair value of loans, partially offset by $20.8 million net gain on loan servicing rights from loan sales. The decrease in net changes in operating assets and liabilities was primarily related to $517.7 million net purchases and originations of loans held-for-sale, partially offset by $110.8 million in principal payments received for loans held-for-sale and loans held in consolidated securitization.

Current wording

Net cash used in operating activities was $289.7 million for the nine months ended September 30, 2026, which consisted of $542.3 million net changes in operating assets and liabilities, adjustments for non-cash items of $206.1 million, and net income of $46.5 million. The increase in non-cash adjustments was primarily related to $119.2 million of stock-based compensation expense, $111.0 million of changes in fair value of loans, and $17.8 million of changes in fair value of servicing assets, partially offset by $37.5 million net gain on loan servicing rights from loan sales. The decrease in net changes in operating assets and liabilities was primarily related to $683.3 million net purchases and originations of loans held-for-sale, partially offset by $163.5 million in principal payments received for loans held-for-sale and loans held in consolidated securitization.