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Earnings Results: Upstart stock surges as company crushes earnings expectations, announces buyback program

Shares of Upstart Holdings Inc. surged in after-hours trading Tuesday after the financial-technology company easily topped expectations with its latest earnings and outlook while announcing a new share-repurchase program.

Upstart
UPST,
+4.31%
,
which uses artificial intelligence to inform lending decisions, generated fourth-quarter revenue of $304.8 million, up from $86.7 million a year earlier, and ahead of the FactSet consensus, which called for $262.9 million. The total included $287 million in fee revenue.

Shares were up nearly 30% in after-hours trading Tuesday.

The company saw net income of $58.9 million, or 61 cents a share. Upstart registered $1.0 million in net income a year prior.

Adjusted earnings per share rose to 89 cents from 7 cent a year prior, while analysts tracked by FactSet had been looking for 51 cents a share.

Chief Executive Officer Dave Girouard said in the company’s press release that “auto loan originations on our platform are now ramping quickly and will provide growth opportunities to Upstart for years to come.”

For the first quarter, Upstart expected $295 million to $305 million in revenue as well as adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $56 million to $58 million. Analysts were projecting $258.3 million in revenue for the March quarter as well as $53 million in adjusted Ebitda.

Looking to the full year, Upstart anticipates revenue of $1.4 billion and 17% growth in adjusted Ebitda. The FactSet consensus was for $1.2 billion in revenue.

The company expects about $1.5 billion in auto transaction volume during the full year.

Upstart further announced that it planned a share-repurchase program of up to $400 million.

“With the volatility in the trading of our stock, we have seen what we believe to be attractive buying conditions at various times over the past year, and our profitability puts us in a position to be able to initiate this program and take advantage of those situations on behalf of our shareholders,” Chief Financial Officer Sanjay Datta said in a release.

Shares have declined 53.3% over the past three months as the S&P 500
SPX,
+1.58%

has lost 4.5%.

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