“This quarter’s results are disappointing and reflect a difficult macroeconomic environment that led to funding constraints in our marketplace,” Dave Girouard, co-founder and CEO of Upstart, said in a press release.
“In response we’re taking the necessary actions to build a more resilient and committed funding model over time. We’re confident that our AI-based risk model is more accurate than ever, and provides the opportunity for long-term, sustainable growth,” he added.
See also: Lender Upstart Will Move Excess Loans From Balance Sheet
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Total revenue was $228 million, an increase of 18% from the second quarter of last year, with total fee revenue up 38% year over year. The company posted $32.1 million in losses, down from $36.3 million in 2021.
Adjusted EBITDA was $5.5 million, down from $59.5 million in the second quarter of 2021. The second-quarter 2022 adjusted EBITDA margin was 2% of total revenue, down from 31% in the second quarter of 2021, according to the press release.
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Headquartered in Silicon Valley and founded in 2012, Upstart offers personal loans using a machine learning (ML)-powered credit scoring model that the company said can identify reliable borrowers with non-optimal credit histories.
Trading under the ticker UPST, Upstart also released its financial outlook for the third quarter, expecting revenue of approximately $170 million.
Analysts were anticipating an estimated average of $249 million in revenue for the third quarter, according to media reports.
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