Upstart (UPST $21.37 +0.28%) reported Q3 2026 results on November 3, before the market opened: revenue of $370.5M, 1.6% above the $364.8M consensus of 13 analysts and $0.1M above our forecast of $370.4M. Our preview, published October 24, called a slight beat. Before the call the shares traded 4.9% above the November 2 close of $21.31 in pre-market trading; by the middle of the call they were 2.2% below it.
The total was close, but not because every line was. Fee revenue came in $18.6M above our number and the net interest and fair value line $18.5M below it, so two errors of almost the same size cancelled out. The beat also came with a cut. Upstart now expects about $1.35B of revenue and about $260M of adjusted EBITDA for 2026, down from about $1.4B and $294M. Against its own nine-month figures, that leaves about $307M of revenue for Q4, 17% less than in Q3 and far below the $382.3M consensus.
The data behind this piece
Explore the primary data Equibles carries for UPST:
Our forecast against the results
| $M | Our forecast | Consensus | Actual | Our error |
|---|---|---|---|---|
| Originations | 4,117.8 | n/a | 4,117.8 | 0.0 |
| Revenue from fees | 345.4 | n/a | 364.0 | +18.6 |
| Net interest and fair value | 25.0 | n/a | 6.5 | -18.5 |
| Total revenue | 370.4 | 364.8 | 370.5 | +0.1 |
| Contribution margin | 56% | n/a | 60% | +4 points |
| Adjusted EBITDA | 81.5 | n/a | 89.3 | +7.8 |
Consensus is the 13-analyst average on October 15, the figure the preview used. By November 2 it had slipped to $363.7M.
What the model got right
- Volume was known. The release reports $4,117.8M of originations, exactly what Upstart's July, August and September releases added up to. Building revenue from published volume, rather than from consensus, is why the total landed within $0.1M.
- Fees grew while volume fell. Originations fell 2.6% from Q2, yet fee revenue rose from $348.0M to $364.0M. The preview's argument was that nearly a fifth of fees come from servicing and selling loans already made, and that part grew fastest: servicing, loan sale and other fees reached $80.9M, up from $63.9M.
- The full-year target was at risk. We put full-year adjusted EBITDA at $283.3M, $10.7M short of the ~$294M target, while the company still stood by it. The new guide is about $260M.
What the model got wrong
The fee rate. Fees were 8.84% of originations against our 8.39%. Platform and referral fees, the take on new loans, were $283.1M, or 6.88% of originations, against the 6.72% we held flat from Q2. That is $6.4M of the gap. Servicing, loan sale and other fees were $80.9M against our $68.7M, the other $12.2M. Loan sales fees alone, a line Upstart has shown separately since Q2, were $11.1M.
The fair value line. Net interest and fair value was $6.5M against our $25.0M. Interest income was $56.6M and interest expense $12.9M, but fair value and other adjustments took off $37.2M: $26.9M of unrealized losses and charge-offs on loans, $7.1M on beneficial interests in securitizations and a $3.3M realized loss on loan sales. We had assumed a smaller mark than in Q2 because the Upstart Macro Index (UMI), the company's gauge of how the economy is affecting losses, read flat in the releases published during the quarter. On the call, Paul Gu said it averaged 1.50 in Q3, up from 1.41 in Q2, and the line fell from $16.7M in Q2 instead of recovering. Chief financial officer Andrea Blankmeyer said about half of that $10M drop was fair value write-downs and charge-offs as the UMI rose, and the other half a sale in Q2 that did not repeat. Rising interest rates had little effect on the Q3 marks, she said.
Margins. Adjusted EBITDA beat our number by $7.8M even though total revenue matched, because more of the revenue came from fees. Contribution profit, fee revenue minus the variable cost of finding, verifying and servicing borrowers, was a record $218.0M, a 60% margin, against our $193.4M at 56%. The secured products, auto loans and home equity lines, reached a positive 17% contribution margin a quarter before management's target. By the same arithmetic the preview used, fixed costs were about $135.2M, $1.7M below our $136.9M.
The full-year profit target
Before the report, Upstart guided to about $1.4B of revenue and about $294M of adjusted EBITDA for 2026. The first half delivered $117.4M of adjusted EBITDA, so the second half needed $176.6M. Q3 delivered $89.3M, more than we expected, but the target itself moved. The new guide of about $260M, a 19% margin on about $1.35B of revenue, leaves about $53.3M for Q4, a margin of about 17%.
The guide also puts fee revenue at about $1.32B for the year. Nine months brought $989.1M of fees and $54.3M from net interest and fair value, so Q4 implies about $330.9M of fees, 9% less than in Q3, and about -$24.3M from net interest and fair value, a line that was positive in every quarter since Q2 2025. All of these are approximate, because the guidance is.
What management said
Paul Gu, co-founder and chief executive, put the cut on the economy and on the loans Upstart holds on its own balance sheet, not on new lending. The February guide assumed the UMI would go no higher than 1.5 and that interest rates would be flat or down. Since then, he said, the UMI has climbed from 1.39 to 1.53 and the two-year Treasury yield has risen by more than 115 basis points.
“An increase in UMI causes a significant reduction in fair values and net interest income. The impact to total revenue and profit from this is actually larger than the impact from reducing new originations.”
Paul Gu, co-founder and CEO, on the full-year outlook, Q3 2026 earnings call
He expects full-year fee revenue and contribution profit to modestly exceed the original guidance, while “income from the balance sheet is tracking well below our initial outlook”. The new outlook assumes the UMI stays at or below 1.55 through year-end and no material change in two-year Treasury yields. His rule of thumb for volume: each one-point rise in the UMI, or 10 basis points on funding costs, cuts daily originations by roughly 1% to 2%. Without the rise in the UMI during Q3, he estimated, originations would have been at least $370M higher.
What changes for Q4
Our Q4 forecast was $376.5M, below the $382.3M consensus, but far above the roughly $306.6M the new guidance implies. The first month is already public. Upstart published October originations alongside the results: $1,249.2M, or $48.1M per origination day, 6.8% below the Q3 pace of $51.6M and 9.4% below September's $53.1M. The UMI rose to 1.53 from 1.49 on October 5, about 53% above what Upstart would expect in a normal economy.
Slower volume explains part of the Q4 cut. Implied Q4 fees are 9.1% below Q3, against October volume per day 6.8% below the Q3 pace, and the rest of the cut is in the fair value line, where the guide implies a loss for the quarter. Blankmeyer said October volume per day was 26% above a year earlier, and that the lower outlook reflects lower net interest income and fair value adjustments, “primarily driven by higher UMI”. The new guide still includes about $750M of contribution profit for the year, up roughly 41%.
Positioning after the report
Going in, short interest was 28.6M shares at September 30, 29.4% of the shares outstanding, and options priced a move of about 12% on the report. By the October 15 settlement it had fallen to 26.9M shares, 27.6% of the 97.3M shares, or 6.4 days of average volume. CEO Paul Gu bought 50,000 shares at $25.55 on September 10; the stock closed at $21.31 on November 2, the day before the report. The next short-interest figure, for the October 30 settlement, is due from FINRA on November 10. Data: UPST short interest, UPST insider trading.
Sources
- Upstart Q3 2026 earnings release, 8-K EX-99.1, accession 0001647639-26-000083 (filing).
- Upstart Q3 2026 Form 10-Q, accession 0001647639-26-000084 (filing).
- Upstart Q3 2026 earnings call.
- Upstart's monthly originations releases for July, August, September and October 2026, and its UMI readings.
- Our preview: Upstart (UPST) Q3 2026 Earnings Preview and Forecast.
- Share prices, analyst consensus and short interest: Equibles.
This article is our analysis of public filings and our own financial model. It is not investment advice, and forecasts can be wrong. Equibles staff may hold positions in the securities discussed.