Upstart Q3 Preview: Volume Is Already Public, The EBITDA Target Is The Test

Upstart (UPST) reports Q3 2026 results on Tuesday, November 3, before the open, with the release at about 7:00 a.m. ET and the call at 8:00 a.m. ET. The stock fell the day after each of its last four reports, by 9.7%, 15.0%, 7.9% and 0.4%.

Upstart is unusual among lenders because the most important number of the quarter is already out. Since February it has published loan originations every month, and July, August and September add up to $4,117.8M: 44% more than a year earlier, but 2.6% less than in Q2, the first quarter-on-quarter drop since Q2 2024.

Our call: Q3 revenue slightly above consensus. The harder test is the full-year adjusted EBITDA target of about $294M.

Rebuilding revenue from the published volume

Consensus is $364.8M from 13 analysts as of October 15, almost exactly Q2's $364.7M. We are above it for two reasons:

• Platform and referral fees follow volume. They were 6.72% of originations in Q2, and CFO Andrea Blankmeyer said she expects "relative consistency with where we are on take rates today". We hold 6.72%, which gives $276.7M.

• Servicing fees follow the serviced book, not the quarter's volume. With originations still 44% above a year ago, we assume 7% growth to $58.7M. The net interest and fair-value line fell to $16.7M in Q2 as the Upstart Macro Index rose; the index was flat through Q3, so we put the line at $25.0M, halfway between Q1 and Q2.

Every 10 basis points of referral take rate is worth about $4M of quarterly revenue.

The full-year EBITDA target

First-half adjusted EBITDA was $117.4M, so the roughly $294M target needs $176.6M in the second half, a 24.3% margin. The CFO said fixed expenses would grow "in the low single digits sequentially in both Q3 and Q4". On a 3% rise and contribution margins of 56% and 57%, we get $81.5M in Q3 and $84.4M in Q4, short of the about $95M Q4 would need. Closing that gap in Q4 alone takes about 5% more fee revenue than we assume, or a net interest line near $36M. Fee growth of that size happened in Q2, and the net interest line was $31.2M as recently as Q1. That is why we call the target at risk rather than out of reach.

Positioning

• Short interest was 28.6M shares on September 30, 29.4% of the 97.3M shares outstanding, up 10.6% from June 30.

• Insiders made four open-market purchases worth about $7.7M since April, including CEO Paul Gu's 50,000 shares at $25.55 on September 10.

• Options on October 23 implied a move of about 12% for the report, against an average of 8.3% for the last four.

What to watch

• October originations, due on November 3 under Upstart's monthly schedule. A daily rate well above September's $53.1M would support Q4 consensus of $382.3M.

• Whether "about $294M" of adjusted EBITDA survives the call.

• Take rate against our 6.72%, and progress toward breakeven in the secured products.

The full Upstart preview has the Q4 forecast, the upside and downside scenarios, the balance sheet and the bank application.

Data: Upstart SEC filings, monthly origination releases and earnings call transcripts, processed by Equibles.