Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39797 | |
Entity Registrant Name | Upstart Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4332431 | |
Entity Address, Address Line One | 2950 S. Delaware Street | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | San Mateo | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94403 | |
City Area Code | 650 | |
Local Phone Number | 204-1000 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | UPST | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 77,767,428 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001647639 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | |
Assets | |||
Cash | $ 506,287 | $ 250,819 | |
Restricted cash | 111,246 | 60,514 | |
Property, equipment, and software, net | 13,549 | 10,032 | |
Operating lease right of use assets | 16,208 | 18,310 | |
Goodwill | 66,866 | 0 | |
Intangible Assets, Net (Excluding Goodwill) | 22,131 | 0 | |
Other assets (includes $6,831 and $15,450 at fair value as of December 31, 2020 and June 30, 2021, respectively) | 72,990 | 40,046 | |
Total assets | [1] | 904,583 | 477,255 |
Liabilities: | |||
Accounts payable | 17,326 | 13,775 | |
Payable to investors | 76,947 | 45,501 | |
Borrowings | 6,057 | 62,626 | |
Accrued expenses and other liabilities (includes $9,530 and $14,396 at fair value as of December 31, 2020 and June 30, 2021, respectively) | 70,379 | 35,669 | |
Operating lease liabilities | 17,778 | 19,432 | |
Total liabilities | [1] | 188,487 | 177,003 |
Stockholders’ equity: | |||
Common stock, $0.0001 par value; 700,000,000 shares authorized; 73,314,026 and 77,626,866, shares issued and outstanding as of December 31, 2020 and June 30, 2021, respectively | 8 | 7 | |
Additional paid-in capital | 737,924 | 369,467 | |
Accumulated deficit | (21,836) | (69,222) | |
Total stockholders’ equity | 716,096 | 300,252 | |
Total liabilities and stockholders’ equity | 904,583 | 477,255 | |
Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Restricted cash | 30,769 | 12,371 | |
Other assets (includes $6,831 and $15,450 at fair value as of December 31, 2020 and June 30, 2021, respectively) | 220 | 29 | |
Total assets | 118,484 | 104,992 | |
Liabilities: | |||
Accounts payable | 28 | 83 | |
Borrowings | 6,057 | 42,181 | |
Accrued expenses and other liabilities (includes $9,530 and $14,396 at fair value as of December 31, 2020 and June 30, 2021, respectively) | 81 | 32 | |
Total liabilities | 6,166 | 42,296 | |
Stockholders’ equity: | |||
Total stockholders’ equity | 112,318 | 62,696 | |
Loans (at fair value) | |||
Assets | |||
Loans, notes receivables, and residual certificates | 82,311 | 78,460 | |
Loans (at fair value) | Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Loans, notes receivables, and residual certificates | 75,656 | 75,373 | |
Notes receivable and residual certificates (at fair value) | |||
Assets | |||
Loans, notes receivables, and residual certificates | 12,995 | 19,074 | |
Notes receivable and residual certificates (at fair value) | Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Loans, notes receivables, and residual certificates | $ 11,839 | $ 17,219 | |
[1] | The following table presents information on assets and liabilities related to variable interest entities (“VIEs”) that are consolidated by Upstart Holdings, Inc. at December 31, 2020 and June 30, 2021. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The holders of the beneficial interests do not have recourse to the general credit of Upstart Holdings, Inc. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. December 31, June 30, 2020 2021 Assets Restricted cash $ 12,371 $ 30,769 Loans (at fair value) 75,373 75,656 Notes receivable and residual certificates (at fair value) 17,219 11,839 Other assets 29 220 Total assets $ 104,992 $ 118,484 Liabilities Accounts payable $ 83 $ 28 Borrowings 42,181 6,057 Other liabilities 32 81 Total liabilities $ 42,296 $ 6,166 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Other assets at fair value | $ 15,450 | $ 6,831 |
Accrued expenses and other liabilities at fair value | $ 14,396 | $ 9,530 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 77,626,866 | 73,314,026 |
Common Stock, outstanding (in shares) | 77,626,866 | 73,314,026 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Revenue from fees, net | $ 187,297 | $ 13,305 | $ 303,467 | $ 81,318 |
Interest income and fair value adjustments, net (includes $406 and $1,014 from related parties expense and $(97) and $4,238 of related parties fair value adjustments for the three and six months ended June 30, 2020, respectively) | 6,649 | 4,048 | 11,824 | 29 |
Total revenue | 193,946 | 17,353 | 315,291 | 81,347 |
Operating expenses: | ||||
Sales and marketing | 75,916 | 5,436 | 125,292 | 41,388 |
Customer operations | 24,164 | 6,621 | 41,552 | 15,432 |
Engineering and product development | 31,431 | 7,667 | 50,419 | 14,685 |
General, administrative, and other | 26,141 | 9,017 | 46,160 | 20,677 |
Total operating expenses | 157,652 | 28,741 | 263,423 | 92,182 |
Income (loss) from operations | 36,294 | (11,388) | 51,868 | (10,835) |
Other income (expense) | 15 | 5,297 | (5,218) | 5,447 |
Income (expense) on warrants and other non-operating expenses, net | (13) | (18) | (31) | 271 |
Net income (loss) before income taxes | 36,296 | (6,109) | 46,619 | (5,117) |
Provision (benefit) for income taxes | (988) | 0 | (767) | 0 |
Net income (loss) before attribution to noncontrolling interests | 37,284 | (6,109) | 47,386 | (5,117) |
Net income (loss) attributable to noncontrolling interests | 0 | 84 | 0 | (404) |
Net income (loss) attributable to Upstart Holdings, Inc. common stockholders | $ 37,284 | $ (6,193) | $ 47,386 | $ (4,713) |
Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic (in dollars per share) | $ 0.49 | $ (0.42) | $ 0.63 | $ (0.32) |
Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted (in dollars per share) | $ 0.39 | $ (0.42) | $ 0.51 | $ (0.32) |
Weighted-average number of shares outstanding used in computing net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic (in shares) | 76,674,129 | 14,657,399 | 75,160,037 | 14,641,333 |
Weighted-average number of shares outstanding used in computing net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted (in shares) | 94,802,123 | 14,657,399 | 93,193,153 | 14,641,333 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Related party interest expense | $ 1,014 | $ 406 | $ 1,014 | $ 406 |
Fair value adjustments from related parties | $ 4,238 | $ (97) | $ 4,238 | $ (97) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Total Upstart Holdings, Inc. Stockholders’ Deficit | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 47,349,577,000 | |||||
Beginning balance at Dec. 31, 2019 | $ 162,546 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 47,349,577,000 | |||||
Ending balance at Jun. 30, 2020 | $ 162,546 | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 14,561,398,000 | |||||
Beginning balance at Dec. 31, 2019 | (61,688) | $ (62,714) | $ 2 | $ 12,489 | $ (75,205) | $ 1,026 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 98,563,000 | |||||
Issuance of common stock upon exercise of stock options | 203 | 203 | 203 | |||
Stock-based compensation expense | 4,689 | 4,689 | 4,689 | |||
Return of capital to interests in consolidated VIEs | (622) | (622) | ||||
Incentive share expense | 358 | 358 | 358 | |||
Net income (loss) | (5,117) | (4,713) | (4,713) | (404) | ||
Ending balance (in shares) at Jun. 30, 2020 | 14,659,961,000 | |||||
Ending balance at Jun. 30, 2020 | $ (62,177) | (62,177) | $ 2 | 17,739 | (79,918) | 0 |
Beginning balance (in shares) at Mar. 31, 2020 | 47,349,577,000 | |||||
Beginning balance at Mar. 31, 2020 | $ 162,546 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 47,349,577,000 | |||||
Ending balance at Jun. 30, 2020 | $ 162,546 | |||||
Beginning balance (in shares) at Mar. 31, 2020 | 14,654,032,000 | |||||
Beginning balance at Mar. 31, 2020 | (58,837) | (58,994) | $ 2 | 14,729 | (73,725) | 157 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 5,929,000 | |||||
Issuance of common stock upon exercise of stock options | 18 | 18 | 18 | |||
Stock-based compensation expense | 2,634 | 2,634 | 2,634 | |||
Return of capital to interests in consolidated VIEs | (241) | (241) | ||||
Incentive share expense | 358 | 358 | 358 | |||
Net income (loss) | (6,109) | (6,193) | (6,193) | 84 | ||
Ending balance (in shares) at Jun. 30, 2020 | 14,659,961,000 | |||||
Ending balance at Jun. 30, 2020 | $ (62,177) | (62,177) | $ 2 | 17,739 | (79,918) | 0 |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||
Beginning balance at Dec. 31, 2020 | $ 0 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||
Ending balance at Jun. 30, 2021 | $ 0 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 73,314,026 | 73,314,026,000 | ||||
Beginning balance at Dec. 31, 2020 | $ 300,252 | 300,252 | $ 7 | 369,467 | (69,222) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 1,284,977,000 | 1,284,977,000 | ||||
Issuance of common stock upon exercise of stock options | $ 2,932 | 2,932 | 2,932 | |||
Stock-based compensation expense | 30,828 | 30,828 | 30,828 | |||
Net income (loss) | 47,386 | 47,386 | 47,386 | |||
Issuance of common stock upon settlement of restricted stock units (in shares) | 6,446,000 | |||||
Shares withheld related to net share settlement of restricted stock units (in shares) | (1,730,000) | |||||
Shares withheld related to net share settlement of restricted stock units | $ (236) | (236) | (236) | |||
Issuance of common stock in connection with an acquisition (in shares) | 650,740,000 | |||||
Issuance of common stock in connection with acquisition | $ 71,003 | |||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs (in shares) | 2,300,000,000 | |||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs | $ 263,931 | 263,931 | $ 1 | 263,930 | ||
Exercise of common stock warrants (in shares) | 72,407,000 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 77,626,866 | 77,626,866,000 | ||||
Ending balance at Jun. 30, 2021 | $ 716,096 | 716,096 | $ 8 | 737,924 | (21,836) | 0 |
Beginning balance (in shares) at Mar. 31, 2021 | 0 | |||||
Beginning balance at Mar. 31, 2021 | $ 0 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||
Ending balance at Jun. 30, 2021 | $ 0 | |||||
Beginning balance (in shares) at Mar. 31, 2021 | 73,908,252,000 | |||||
Beginning balance at Mar. 31, 2021 | 320,590 | 320,590 | $ 7 | 379,703 | (59,120) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 763,466,000 | |||||
Issuance of common stock upon exercise of stock options | 1,440 | 1,440 | 1,440 | |||
Stock-based compensation expense | 22,084 | 22,084 | 22,084 | |||
Net income (loss) | 37,284 | 37,284 | 37,284 | |||
Issuance of common stock upon settlement of restricted stock units (in shares) | 6,138,000 | |||||
Shares withheld related to net share settlement of restricted stock units (in shares) | (1,730,000) | |||||
Shares withheld related to net share settlement of restricted stock units | $ (236) | (236) | (236) | |||
Issuance of common stock in connection with an acquisition (in shares) | 650,740,000 | |||||
Issuance of common stock in connection with acquisition | $ 71,003 | |||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs (in shares) | 2,300,000,000 | |||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs | $ 263,931 | 263,931 | $ 1 | 263,930 | ||
Ending balance (in shares) at Jun. 30, 2021 | 77,626,866 | 77,626,866,000 | ||||
Ending balance at Jun. 30, 2021 | $ 716,096 | $ 716,096 | $ 8 | $ 737,924 | $ (21,836) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 47,386 | $ (5,117) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Increase (Decrease) in Financial Instruments Used in Operating Activities | (4,167) | 14,264 |
Stock-based compensation | 29,808 | 4,484 |
Gain on loan servicing arrangements | (2,102) | (1,680) |
Depreciation and amortization | 2,799 | 1,050 |
Incentive share expense | 0 | 358 |
Other | 216 | 36 |
Net changes in operating assets and liabilities: | ||
Purchase of loans for immediate resale | (3,414,231) | (915,234) |
Proceeds from immediate resale of loans | 3,414,231 | 915,234 |
Purchase of loans held-for-sale | (38,311) | (98,601) |
Principal payments received for loans held-for-sale | 3,676 | 7,790 |
Net proceeds from sale of loans held-for-sale | 57,183 | 6,813 |
Other assets | (19,651) | (2,455) |
Operating lease liability and right-of-use asset | 448 | 57 |
Accounts payable | 3,380 | (3,341) |
Payable to investors | 31,446 | 18,689 |
Accrued expenses and other liabilities | 23,785 | (12,886) |
Net cash (used in) provided by operating activities | 135,896 | (70,539) |
Cash flows from investing activities | ||
Principal payments received for loans held by consolidated securitizations | 0 | 24,018 |
Net proceeds from sale of loans held-for-investment | 9,718 | 88,136 |
Principal payments received for loans held-for-investment | 7,488 | 9,192 |
Principal payments received for notes receivable and repayments of residual certificates | 6,349 | 7,616 |
Purchase of loans held-for-investment | (42,548) | (2,794) |
Purchase of notes receivable and residual certificates | 0 | (4) |
Purchase of property and equipment | (1,997) | (908) |
Capitalized software costs | (2,148) | (1,659) |
Acquisition, net of cash acquired | (16,561) | 0 |
Net cash (used in) provided by investing activities | (39,699) | 123,597 |
Cash flows from financing activities | ||
Proceeds from secondary offering, net of underwriting discounts, commissions, and offering costs | 263,931 | 0 |
Taxes paid related to net share settlement of equity awards | (236) | 0 |
Payments made on securitization notes and certificates (includes $1,034 paid to related parties for the six months ended June 30, 2020) | 0 | (26,126) |
Repayments of borrowings | (62,455) | (86,848) |
Distributions made to noncontrolling interests | 0 | (622) |
Proceeds from borrowings | 5,831 | 75,997 |
Proceeds from exercise of stock options | 2,932 | 203 |
Net cash (used in) provided by financing activities | 210,003 | (37,396) |
Net increase in cash and restricted cash | 306,200 | 15,662 |
Cash and restricted cash | ||
Cash and restricted cash at beginning of period | 311,333 | 80,067 |
Cash and restricted cash at end of period | 617,533 | 95,729 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 2,527 | 5,516 |
Cash paid for income taxes | 1,567 | 0 |
Cash paid for amounts included in the measurement of lease liabilities | 2,132 | 2,046 |
Supplemental disclosures of non-cash operating activities | ||
Total right-of-use assets capitalized | 0 | 187 |
Supplemental disclosures of non-cash investing and financing activities | ||
Issuance of common stock in connection with acquisition | 80,256 | 0 |
Derecognition of loans held-for-investment in consolidated VIE | 0 | 57,222 |
Derecognition of payable to securitization note holders and residual certificate holders | 0 | 58,017 |
Capitalized stock-based compensation expense | $ 1,020 | $ 205 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Change in fair value of financial instruments | $ 4,167 | $ (14,264) |
Payments made on securitization notes and certificates | 0 | 26,126 |
Affiliate | ||
Change in fair value of financial instruments | $ (4,238) | |
Payments made on securitization notes and certificates | $ 1,034 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Description of Business Upstart Holdings, Inc. and its subsidiaries (together “Upstart”, the “Company”, “we”, or “our”) apply modern data science and technology to the process of originating consumer credit. The Company helps bank partners originate credit by providing them with a proprietary, cloud-based, artificial intelligence lending platform. As the Company’s technology continues to improve and additional banks adopt the Upstart platform, consumers benefit from improved access to affordable and frictionless credit. Upstart Network, Inc. was incorporated in Delaware in 2012. Pursuant to a restructuring, Upstart Holdings, Inc. was incorporated in December 2013 and became the holding company of Upstart Network, Inc. The Company currently operates in the United States and is headquartered in San Mateo, California and Columbus, Ohio. The Company’s fiscal year ends on December 31. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. The preparation of the condensed consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements, which management believes are critical in understanding and evaluating the Company’s reported financial results include: (i) fair value determinations; (ii) stock-based compensation; (iii) consolidation of VIEs; and (iv) provision for income taxes, net of valuation allowance for deferred tax assets. The Company bases its estimates on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. Stock-Based Compensation The Company issues stock options, restricted stock units (“RSUs”), and restricted stock to employees and nonemployees, including directors and third-party service providers, and employee stock purchase rights granted under the Company’s employee stock purchase plan (“ESPP”). Stock options and employee stock purchase rights granted under the ESPP are initially measured at fair value at the date of grant using the Black-Scholes option-pricing model. RSUs and restricted stock are measured at the fair market value of our common stock at the grant date. Stock-based compensation expenses are recognized based on their respective grant-date fair values. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is recorded net of estimated forfeitures, such that the expense is recorded only for those stock options that are expected to vest. Business Combinations The Company accounts for business combinations using the acquisition method of accounting which requires the fair values of assets acquired and liabilities assumed to be recognized in the interim condensed consolidated financial statements. Assets acquired and liabilities assumed in a business combination are recognized at their estimated fair value as of the acquisition date. The excess purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period, with the corresponding offset to goodwill. Acquisition-related costs, such as legal and consulting fees, are recognized separately from the business combination and are expensed as incurred. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is reviewed for impairment annually, or more frequently if an event or a change in circumstances indicates that goodwill may be impaired. We first assess qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the Company concludes the fair value is less than its carrying value a quantitative test is performed. We perform a quantitative goodwill impairment test by determining the fair value of the reporting unit and comparing it to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized on a straight-line basis over their estimated useful lives. Acquired intangible assets are presented net of accumulated amortization on the condensed consolidated balance sheets. The Company reviews the carrying amounts of intangible assets for impairment whenever an event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. We measure the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. Impairment is measured by the amount in which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. Follow-on Offering On April 13, 2021, the Company completed a follow-on offering, in which 2,300,000 shares of common stock (including the exercise in full of the underwriters’ option to purchase 300,000 additional shares) were issued and sold at $120.00 per share. The Company received net proceeds of $263.9 million after deducting underwriting discounts and commissions of $11.0 million and offering expenses of $1.0 million. Offering expenses consisted of incremental accounting, legal, and other fees incurred related to the follow-on offering. Other Income (Expense) In the three and six months ended June 30, 2021, other income (expense) primarily consisted of dividend income earned by the Company on its unrestricted cash balance which is recognized in the period earned. In April 2020, the Company received a forgivable loan under the Paycheck Protection Program (“PPP”), totaling $5.3 million with a stated annual interest rate of 1%. All loan payments are deferred for six months if not forgiven under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The loan and accrued interest are forgivable for borrowers who use the loan proceeds for eligible expenses during a twenty-four week period following the borrower’s receipt of the loan and maintain payroll and employee headcount. The Company has used the full proceeds of the loan for eligible expenses within the required period. The Company determined that forgiveness of the loan under the CARES Act was reasonably assured and recorded the full amount of proceeds as other income in the condensed consolidated statement of operations and comprehensive income (loss) in 2020. In March 2021, the Company voluntarily repaid proceeds received under the Paycheck Protection Program plus accrued interest totaling $5.3 million. The Company recognized the loan principal repayment as an other expense. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company will no longer qualify as an emerging growth company on the last day of the fiscal year ending December 31, 2021. Accordingly, the Company will be required to comply with the new or revised accounting pronouncements as of the effective dates applicable to public companies that are not emerging growth companies, as disclosed below. Recently Adopted Accounting Pronouncements The Company adopted the following accounting standards during the six months ended June 30, 2021: In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance in Topic 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard is effective January 1, 2021 for emerging growth companies that have adopted the private company relief. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs after the date of adoption. The guidance became effective on January 1, 2021 and the Company adopted the standard on a prospective basis. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The standard removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and also simplifies the diluted earnings per share calculation in certain areas. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition. Early adoption is permitted. The Company early adopted ASU 2020-06 on January 1, 2021 with no material impact on the Company’s condensed consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which will be effective January 1, 2023 for emerging growth companies that have adopted the private company relief. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The Company accounts for its loans at fair value through net income (loss), which is outside the scope of Topic 326. For available for sale debt securities, the guidance will require recognition of expected credit losses by recognizing an allowance for credit losses when the fair value of the security is below amortized cost and the recognition of this allowance is limited to the difference between the security’s amortized cost basis and fair value. The Company is evaluating the impact this ASU will have on its condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive income (loss), condensed consolidated statements of cash flows and related disclosures. The Company plans to adopt Topic 326 effective as of January 1, 2021 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In March 2020 the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting followed by ASU 2021-01, Reference Rate Reform, Scop e issued in January 2021. ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and ASU 2021-01 on its condensed consolidated financial statements and related disclosures. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue from fees, net The Company disaggregates revenue from fees by type of service for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Revenue from fees, net: Platform and referral fees, net $ 7,612 $ 169,080 $ 67,842 $ 276,033 Servicing fees, net 5,693 18,217 13,476 $ 27,434 Total revenue from fees, net $ 13,305 $ 187,297 $ 81,318 $ 303,467 Platform and referral fees, net The Company enters into contracts with bank partners to provide access to a cloud-based artificial intelligence lending platform developed by the Company (the “Upstart platform”) to enable banks to originate unsecured personal and secured auto loans. The Upstart platform includes a cloud-based application (through Upstart.com or a bank-branded program) for submitting loan applications, verifying information provided within submitted applications, risk underwriting (through a series of proprietary technology solutions), delivery of electronic loan offers, and if the offer is accepted by the borrower, an electronic loan documentation signed by the borrower. Bank partners can specify certain parameters of loans they are willing to originate. Under these contracts, bank partners can choose to use Upstart’s referral services, which allow them to access new borrowers through Upstart’s marketing channels. The Company’s contracts with bank partners are non-cancelable and generally have 12-month terms that automatically renew. After origination, Upstart-powered loans are either retained by bank partners, purchased by the Company for immediate resale to institutional investors under loan sale agreements, or purchased and held by the Company. For loans purchased by the Company, Upstart pays bank partners a one-time loan premium fee upon completion of the minimum holding periods. Upstart also pays bank partners monthly loan trailing fees based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. The monthly loan trailing fees are paid based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. Both the loan premium fees and loan trailing fees are consideration payable to customers and are recorded as a reduction to platform and referral fees, net, which is part of revenue from fees, net, in the condensed consolidated statements of operations and comprehensive income (loss) for the periods presented. The Company recognized $1.4 million and $3.8 million, of loan premium fees and loan trailing fees as contra-revenue within platform and referral fees, net for the three and six months ended June 30, 2020, respectively, and $6.0 million and $9.6 million, for the three and six months ended June 30, 2021, respectively. As of December 31, 2020 and June 30, 2021, the Company recorded $1.3 million and $2.5 million of loan trailing fee liability, respectively, which is recorded at fair value and included within accrued expenses other liabilities on the Company’s condensed consolidated balance sheets. Refer to “ Note 4. Fair Value Measurement ” for additional information on changes in fair value associated with trailing fee liabilities. The Company’s arrangements for platform and referral services typically consist of an obligation to provide one or both of these services to customers, which are our bank partners, on a when and if needed basis (a stand-ready obligation), and revenue is recognized as such services are performed. Additionally, the services have the same pattern and period of transfer, and when provided individually or together, are accounted for as a single combined performance obligation representing a series of distinct services. Platform and referral services are typically provided under a fixed or declining (tier-based) price per unit based on volume or as a percentage of the total value of loans originated each period; however, pricing for these services may also be based on minimum usage fees. The tier-based pricing, when offered, resets on a monthly basis and does not accumulate. Given that the nature of the Company’s promise is to stand-ready and provide continuous access to and process transactions through the platform, tier-based pricing based on usage represents variable consideration. Since the variable fees relate directly to the day in which such services are provided, they generally meet the criteria for allocating variable consideration entirely to one or more, but not all, performance obligations in a contract. Accordingly, when the requisite criteria are met, variable fees are allocated to and recognized on the day the services are provided. Fees for platform and referrals services are typically billed and paid on a monthly basis. As such, the Company’s contracts with customers do not include a significant financing component. The Company did not recognize revenue from performance obligations related to prior periods for the periods presented. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded as of December 31, 2020 and June 30, 2021. The Company had $8.1 million and $16.2 million of accounts receivable that are included in other assets on the condensed consolidated balance sheets related to contracts with customers as of December 31, 2020 and June 30, 2021, respectively. The Company’s allowance for bad debt was immaterial as of December 31, 2020 and June 30, 2021, and the Company’s bad debt expense was immaterial for the periods presented. The Company capitalizes incremental costs of obtaining a contract with a customer, which are certain sales commissions paid to acquire bank partners. Capitalized costs are amortized over the expected period of benefit, which we have determined, based on an analysis, to be three years. The Company applies the practical expedient to expense costs to obtain contracts with customers if the amortization period is one year or less. As of June 30, 2021, the Company had an immaterial amount of contract costs capitalized within other assets on the condensed consolidated balance sheets. For the three and six months ended June 30, 2021, the Company amortized an immaterial amount of capitalized contracts costs to sales and marketing in the condensed consolidated statements of operations and comprehensive income (loss). For the three and six months ended June 30, 2020, the Company had one customer (“Customer A”) which accounted for 35% and 70% of the Company’s total revenue, respectively. For the three and six months ended June 30, 2021, Customer A accounted for 63% and 62%, respectively, of the Company’s total revenue and a second customer accounted for 22% and 23%, respectively, of the Company’s total revenue. Two customers accounted for 34% and 15% of accounts receivable as of December 31, 2020, respectively, and 38% and 18% as of June 30, 2021, respectively. Servicing fees, net The Company also enters into contracts with bank partners and institutional investors to provide loan servicing for the life of Upstart-powered loans. These services commence upon origination of these loans by bank partners and include collection, processing and reconciliations of payments received, investor reporting and borrower customer support as well as distribution of funds to the holders of the loans. The Company charges the loan holder a monthly servicing fee calculated based on a predetermined percentage of the outstanding principal balance. Servicing fees also include certain ancillary fees charged on a per transaction basis for processing late payments and payments declined due to insufficient funds. Servicing fees are recognized in the period the services are provided. Loan servicing fees are not within the scope of ASC 606 and are accounted for under ASC 860, Transfers and servicing of financial assets. Servicing fees, net also include gains and losses on assets and liabilities recognized under loan servicing arrangements for loans retained by bank partners or loans sold to institutional investors. Such gains or losses are recognized based on whether the benefits of servicing are expected to more than adequately compensate the Company for carrying out its servicing obligations. Servicing fees also include changes in fair value of loan servicing assets and liabilities in the periods presented. Refer to “ Note 4. Fair Value Measurement ” for additional information on changes in fair value associated with servicing assets and liabilities. The Company recognized gains related to loan servicing rights upon loan sales for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Net gain related to loan servicing rights $ 221 $ 2,169 $ 1,680 $ 2,102 The Company generally outsources borrower payment collections for loans that are more than 30 days past due or charged off to third-party collection agencies. The Company charges bank partners and institutional investors for collection agency fees related to their outstanding loan portfolio. The Company has discretion in hiring the collection agencies and determining the scope of their work. As the principal in the arrangement, the Company recognizes gross revenue from collection agency fees in the period that the services are provided. Upstart also receives certain ancillary fees inclusive of late payment fees and ACH fail fees. Revenue from collection agency fees and borrower fees are included in servicing fees, net as part of revenue from fees, net in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The total fees charged by collection agencies are also recognized in the period incurred and reported as part of customer operations expenses. The Company recognized collection agency fees and borrower fees, which are included in servicing fees, net for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Collection agency fees $ 654 $ 991 $ 1,454 $ 1,854 Borrower fees $ 419 $ 1,095 $ 936 $ 1,980 Interest Income and Fair Value Adjustments, Net Interest income and fair value adjustments, net is comprised of interest income, interest expense and net changes in the fair value of financial instruments, held in the Company’s normal course of business at fair value, including loans, notes receivable and residual certificates, payable to securitization note holders and residual certificate holders. The table below presents components of the interest income and fair value adjustments, net presented in the Company’s condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended Six Months Ended 2020 2021 2020 2021 Interest income and fair value adjustments, net: Interest income $ 7,724 $ 3,545 $ 16,907 $ 6,951 Interest expense (2,260) (1,497) (5,515) (2,527) Fair value and other adjustments, net (1,416) 4,601 (11,363) 7,400 Total interest income and fair value adjustments, net $ 4,048 $ 6,649 $ 29 $ 11,824 Amounts above include interest income, interest expense and fair value adjustments, net related to consolidated securitization trusts for the three and six months ended June 30, 2020 is as follows: Three Months Ended Six Months Ended Interest income and fair value adjustments, net related to consolidated securitization trusts: Interest income $ 1,794 $ 5,173 Interest expense (505) (1,074) Fair value and other adjustments, net (555) (3,555) Total interest income and fair value adjustments, net $ 734 $ 544 Interest income Interest income is recognized based on the terms of the underlying agreements with borrowers for loans held on the Company’s condensed consolidated balance sheets and is earned over the life of a loan. Interest income also includes accrued interest earned on outstanding loans but not collected. Loans that have reached a delinquency of over 120 days are classified as non-accrual status and any accrued interest recorded in relation to these loans is reversed in the respective period. As of December 31, 2020 and June 30, 2021, the Company has recorded $0.9 million of accrued interest income in loans on the condensed consolidated balance sheets. Interest expense Interest expense is primarily related to interest recorded on the Company’s borrowings and the notes issued as part of the consolidated securitizations. Interest expense includes accrued interest incurred but not paid. Accrued interest expenses were immaterial as of December 31, 2020 and June 30, 2021. Fair value and other adjustments, net Fair value and other adjustments, net include changes in fair value of financial instruments, other than loan servicing assets and liabilities, common stock warrant liabilities, and convertible preferred stock warrant liabilities. These adjustments are recorded in the Company’s condensed consolidated statements of operations and comprehensive income (loss) and include both realized and unrealized changes to the value of related assets and liabilities. Refer to “ Note 4. Fair Value Measurement ” for additional information. |
Securitizations and Variable In
Securitizations and Variable Interest Entities | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Securitizations and Variable Interest Entities | Securitizations and Variable Interest Entities Consolidated VIEs The Company consolidates VIEs in which the Company has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Company has a variable interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Company continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Company is involved with the VIE. The Company also determines whether decision-maker or service-provider fees are variable interests. Decision-maker or service-provider fees are not considered variable interests when the arrangement does not expose the Company to risks of loss that a potential VIE was designed to pass on to its variable interest holders, the fees are commensurate, the arrangement is at market, and the Company does not have any other interests (including direct interests and certain indirect interests held through related parties) that absorb more than an insignificant amount of a VIE’s potential variability. This determination can have a significant impact on the Company’s consolidation analysis, as it could affect whether a legal entity is a VIE and whether the Company is the primary beneficiary of a VIE. When the Company’s decision-maker or service-provider fee is not a variable interest, the Company is viewed as acting as a fiduciary for the potential VIE. Warehouse Entity The Company established Upstart Loan Trust to enter into warehouse credit facilities for the purpose of purchasing Upstart-powered loans. See “ Note 9. Borrowings” for additional information. The entity is a Delaware statutory trust that is structured to be bankruptcy-remote, with third-party banks operating as trustees. Consolidated Securitizations and MOAs The Company entered into a private offering securitization transaction in April 2018 (“2018-1”). As the sponsor of the securitization transaction, the Company created legal entities for the roles of depositors, issuers, grantor trusts, and MOAs. Under the risk retention requirements in Title 17 U.S. Code of Federal Regulations Part 246, Credit Risk Retention, promulgated by Securities and Exchange Commission (“RR”), the Company is required to retain at least 5% of the economic risk in securitization transactions in which the Company is the retaining sponsor. The Company elected to satisfy the RR requirements by holding Eligible Horizontal Retained Interests (“EHRIs”) in the form of subordinated certificates within the established MOA. Concurrently with the closing of the 2018-1 securitization transaction, while maintaining its status as the primary beneficiary of the related MOA, the Company sold 80% of its interests in the MOA to an institutional investor in exchange for cash of approximately $8.0 million based on the fair value of the residual certificates held in the MOA as determined on the pricing date. As a result of the sale, the Company maintained a 20% interest in the MOA and its status as the managing member, while the investor became a non-voting limited member. As of December 31, 2020 and June 30, 2021, no noncontrolling interests were recognized due to deconsolidation of the 2018-1 securitization during 2020. Upon closing of the securitization transaction, the Company determined that the servicing fees represented a variable interest in the securitization entities due to the EHRIs held by the Company’s MOA to satisfy the RR requirements. The EHRIs held by the MOA were deemed to potentially absorb more than an insignificant amount of the VIEs’ expected losses or expected returns at the inception of the securitization transaction. The Company also determined that it was the primary beneficiary of the entities and consolidated the MOA and trusts associated with the 2018-1 securitization transaction. Subsequent to the expiration of the RR requirements for 2018-1 in June 2020, the residual certificates held by the MOA was distributed based on the proportional equity held by Upstart and the investor. This distribution required the Company to reassess whether its servicing fee is a variable interest. Although the Company maintains a reduced level of variable interests in the 2018-1 securitization transaction through the EHRIs, the Company’s other interests subsequent to these distributions are no longer expected to absorb more than an insignificant amount of the VIE’s expected losses or expected returns. Therefore, the Company concluded that the fees for servicing the securitization transaction are no longer considered variable interests, and as such the powers the Company possesses through the servicing arrangement is no longer considered in the primary beneficiary determination. As a result, the Company concluded it was no longer the primary beneficiary of the 2018-1 securitization transaction. The Company deconsolidated the legal entities associated with the 2018-1 securitization as of June 30, 2020. The Company recorded an immaterial net gain on the deconsolidation of the entities. The Company maintained its role as servicer of these securitization transactions. The Company sponsored three additional securitization transactions in August 2018 (“2018-2”), February 2019 (“2019-1”) and August 2019 (“2019-2”), respectively. As the retaining sponsor of these transactions, the Company was subject to the RR requirements and satisfied them through Eligible Vertical Interests (“EVIs”) in the form of a combination of securitization notes and residual certificates through the established MOAs. The Company concluded that it has a variable interest and is the primary beneficiary of the MOAs associated with these securitization transactions. As a result, the Company consolidated these MOAs as of December 31, 2020 and 2019 and the MOAs continue to remain consolidated as of June 30, 2021. The Company determined that it is not the primary beneficiary of the trusts which hold the loans associated with these securitization transactions, primarily because the Company’s servicing fees are not considered variable interests, and that the transfer of loans as collateral into these securitization transactions met the definition of a sale under Topic 860, Transferring and Servicing. As such, the Company derecognized these loans from the condensed consolidated balance sheets upon the closing of these securitization transactions. Refer to the Unconsolidated Securitizations section below for more information. Other Consolidated VIEs Upstart Loan Trust 2, a Delaware statutory trust, holds personal loans facilitated through the Upstart platform. These loans include, but are not limited to, loans which do not satisfy the warehouse requirements or loans that were the result of the Company’s repurchases of loans for breaches of representations and warranties made to institutional investors, as described above. The following tables present a summary of financial assets and liabilities from the Company’s involvement with consolidated VIEs: Assets Liabilities Net Assets December 31, 2020 Warehouse Entities $ 71,530 $ 35,109 $ 36,421 Majority-owned Affiliates 17,219 7,187 10,032 Other Consolidated VIEs 16,243 — 16,243 Total Consolidated VIEs $ 104,992 $ 42,296 $ 62,696 Assets Liabilities Net Assets June 30, 2021 Warehouse Entities $ 55,935 $ 2,759 $ 53,176 Majority-owned Affiliates 11,839 3,330 8,509 Other Consolidated VIEs 50,710 77 50,633 Total Consolidated VIEs $ 118,484 $ 6,166 $ 112,318 The Company’s continued involvement in all of its securitizations in which it is the sponsor includes loan servicing rights and obligations for which it receives servicing fees over the life of the underlying loans. The Company monitors its status as the primary beneficiary and in case of reconsideration events, updates the analysis accordingly. Unconsolidated VIEs The Company’s transactions with unconsolidated VIEs include securitizations of unsecured personal whole loans and sales of whole loans to VIEs. The Company has various forms of involvement with VIEs, including servicing of loans and holding senior or residual interests in the VIEs. The Company’s transactions with unconsolidated VIEs include securitizations of unsecured personal whole loans and sales of whole loans to VIEs. The Company has various forms of involvement with VIEs, including servicing of loans and holding senior or residual interests in the VIEs. Unconsolidated Securitizations As of June 30, 2021, the Company’s unconsolidated VIEs include entities established as the issuers and grantor trusts for the 2017-1, 2017-2, 2018-1, 2018-2, 2019-1, and 2019-2 securitization transactions (the “Unconsolidated Securitizations”). The Company’s continued involvement in the unconsolidated VIEs is in the form of its role as the sponsor and the servicer of these transactions. For each of the unconsolidated securitizations, the Company determined that it is not the primary beneficiary. In cases where the VIEs are not consolidated and the transfer of the loans from the Company to the securitization trust meets sale accounting criteria, the Company recognizes a gain or loss on sales of loans. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction. The assets are transferred into a trust such that the assets are legally isolated from the creditors of the Company and are not available to satisfy obligations of the Company. These assets can only be used to settle obligations of the underlying securitization trusts. Upstart Network Trust Upstart Network Trust (“UNT”), also a Delaware statutory trust, was established in 2014 to facilitate Upstart’s fractional loan program. The Company is the servicer of UNT’s loan assets and previously concluded that the servicing fee represents a variable interest and that the Company is the primary beneficiary of UNT. The program was formally discontinued in 2019 and as a result of a reduction in the Company’s investment in UNT, the Company concluded that it was no longer the primary beneficiary and therefore deconsolidated UNT during 2019. The fair value of the Company’s investment in UNT is included in notes receivable and residual certificates in the condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021. The Company’s continued involvement in UNT includes loan servicing rights and obligations for which it receives servicing fees over the life of the underlying loans The following tables summarize the aggregate carrying value of assets and liabilities of unconsolidated VIEs in which the Company holds a variable interest but is not the primary beneficiary: Assets Liabilities Net Assets Maximum Exposure to Losses December 31, 2020 Securitizations $ 484,604 $ 390,252 $ 94,352 $ 24,434 Upstart Network Trust 39,754 39,754 — 1,707 Total Unconsolidated VIEs $ 524,358 $ 430,006 $ 94,352 $ 26,141 Assets Liabilities Net Assets Maximum Exposure to Losses June 30, 2021 Securitizations $ 326,832 $ 251,219 $ 75,613 $ 19,054 Upstart Network Trust 24,612 24,612 — 1,157 Total Unconsolidated VIEs $ 351,444 $ 275,831 $ 75,613 $ 20,211 The carrying value of assets that relate to variable interests in unconsolidated VIEs consists of $18.9 million and $13.0 million which are included in notes receivable and residual certificates on the condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021, respectively. The Company also had $7.2 million of cash deposits made to reserve accounts for related securitizations, included in other assets on the condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021. The Company’s maximum exposure to loss from its involvement with unconsolidated VIEs represents the estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is remote, such as where the value of securitization notes and senior and residual certificates the Company holds as part of the RR requirement declines to zero. Retained Interest in Unconsolidated VIEs The investors and the securitization trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the securitization trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company and the Company’s MOAs are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal whole loans. Off-Balance Sheet Loans Off-balance sheet loans relate to securitization transactions for which the Company has some form of continuing involvement, including as servicer. For a loan related to securitization transactions where servicing is the only form of continuing involvement, the Company would only experience a loss if it were required to repurchase such a loan due to a breach in representations and warranties associated with its loan sale or servicing contracts. Additionally, in the unlikely event principal payments on the loans backing a securitization are insufficient to pay senior note holders, any amounts the Company contributed to the securitization reserve accounts may be depleted. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The following table presents assets and liabilities measured at fair value and categorized as Level 3 in the fair value hierarchy: December 31, June 30, 2020 2021 Assets Loans $ 78,460 $ 82,311 Notes receivable and residual certificates 19,074 12,995 Loan servicing assets 6,831 15,450 Total assets $ 104,365 $ 110,756 Liabilities Loan servicing liabilities $ 8,254 $ 11,883 Trailing fee liabilities 1,276 2,513 Total liabilities $ 9,530 $ 14,396 Financial instruments are categorized in the fair value hierarchy based on the significance of unobservable factors in the overall fair value measurement. Since the Company’s loans, notes receivable and residual certificates, other assets, loan servicing assets and liabilities, and trailing fee liabilities do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the periods presented. Loans Loans included in the Company’s condensed consolidated balance sheets are classified as either held-for-sale or held-for-investment. The Company reclassified loans held by the warehouse entities from held-for-investment to held-for-sale as of January 1, 2020, due to the Company’s intent to sell the loans prior to maturity and increasing evidence of their marketability. Other loans held on the Company’s condensed consolidated balance sheets retained their classification as held-for-investment. These loans include, but are not limited to, loans which do not satisfy the warehouse requirements and loans held in the consolidated securitizations. The following table presents the fair value of classes of loans held by the Company: December 31, June 30, 2020 2021 Loans held-for-sale $ 60,232 $ 26,741 Loans held-for-investment 18,228 55,570 Total $ 78,460 $ 82,311 Valuation Methodology Loans held-for-sale and held-for-investment are measured at estimated fair value using a discounted cash flow model. The fair valuation methodology considers projected prepayments and historical defaults, losses and recoveries to project future losses and net cash flows on loans. Net cash flows are discounted using an estimate of market rates of return. The fair value of these loans also includes accrued interest, which was immaterial as of December 31, 2020 and June 30, 2021. For the three and six months ended June 30, 2020 and 2021, the Company elected the measurement alternative under Topic 810, Consolidation, and maximizes the use of observable inputs to estimate the fair value of the financial assets and liabilities of consolidated securitization entities. Under the measurement alternative, the Company measures the financial assets, which consist of held-for-investment and held-for-sale loans in the condensed consolidated balance sheets, and financial liabilities, which consist of securitization notes and residual certificates issued to institutional investors, included in payable to securitization note holders and residual certificate holders in the condensed consolidated balance sheets, using the more observable of the fair value of the financial assets and liabilities. The Company determined the fair value of the amounts payable to securitization note holders and residual certificate holders is more observable than that of the loans. The securitization notes and residual certificates are measured at fair value, and the loans are measured based on the sum of the fair value of the securitization notes and residual certificates, with changes in fair value included in the condensed consolidated statements of operations and comprehensive income (loss). Significant Inputs and Assumptions The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loans held-for-investment and held-for-sale: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.80 % 16.99 % 7.44 % 3.50 % 17.27 % 7.22 % Credit risk rate (1) 0.36 % 52.31 % 19.82 % 0.08 % 50.85 % 22.22 % Prepayment rate (1) 11.64 % 78.36 % 31.03 % 11.15 % 86.75 % 37.09 % (1) Expressed as a percentage of the original principal balance of the loans (2) Unobservable inputs were weighted by relative fair value Discount rates –The discount rates are rates of return used to discount future expected cash flows to arrive at a present value, which represents the fair value. The discount rates used for the projected net cash flows are the Company’s estimates of the rates of return that market participants would require when investing in these financial instruments with cash flows dependent on credit quality of the related loan. A risk premium component is implicitly included in the discount rates to reflect the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity. Credit risk rates –The credit risk rates are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a financial instrument. The credit risk rates are expressed as a percentage of the original principal amount of the instrument. The estimated net cumulative loss represents the sum of the net losses estimated to occur each month of the life of the instrument, net of the average recovery expected to be received. Prepayment rates –Prepayment rates are an estimate of the cumulative principal prepayments that will occur over the entire life of a loan as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments impact the projected balances and expected terms of the loans. The above inputs are similarly used in estimating fair value of related financial instruments. Refer to the Assets and Liabilities related to Securitization Transactions section below for more information. Significant Recurring Level 3 Fair Value Input Sensitivity The below table presents the sensitivity of the loans held-for-sale and held-for-investment to adverse changes in key assumptions used in the valuation model as of December 31, 2020 and June 30, 2021, respectively. The estimated fair value of these loans is not sensitive to adverse changes in expected prepayment rates as such changes would not result in a significant impact on the fair value in either periods. December 31, June 30, 2020 2021 Fair value of loans $ 78,460 $ 82,311 Discount rates 100 basis point increase (979) (1,089) 200 basis point increase (1,939) (2,154) Expected credit loss rates on underlying loans 10% adverse change (1,303) (1,350) 20% adverse change (2,611) (2,700) Rollforward of Level 3 Fair Values The following tables include a rollforward of the loans classified within Level 3 of the fair value hierarchy: Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at March 31, 2020 $ 116,511 $ 16,758 $ 67,332 $ 200,601 Purchases of loans 677 39 — 716 Purchase of loans for immediate resale 66,694 — — 66,694 Immediate resale (66,694) — — (66,694) Repayments received (7,908) (1,317) (8,745) (17,970) Changes in fair value recorded in earnings (1,201) (229) (1,365) (2,795) Other changes 29 (61) — (32) Changes due to deconsolidation — — (57,222) (57,222) Fair value at June 30, 2020 $ 108,108 $ 15,190 $ — $ 123,298 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at December 31, 2019 $ — $ 141,555 $ 90,750 $ 232,305 Reclassification of loans from HFI to HFS 125,297 (125,297) — — Purchases of loans 98,601 2,794 — 101,395 Sale of loans (94,949) — — (94,949) Purchase of loans for immediate resale 915,234 — — 915,234 Immediate resale (915,234) — — (915,234) Repayments received (14,354) (2,628) (24,018) (41,000) Changes in fair value recorded in earnings (6,482) (1,248) (9,508) (17,238) Other changes (5) 14 (2) 7 Changes due to deconsolidation — — (57,222) (57,222) Fair value at June 30, 2020 $ 108,108 $ 15,190 $ — $ 123,298 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at March 31, 2021 $ 28,794 $ 28,395 $ — $ 57,189 Purchases of loans 20,071 29,601 — 49,672 Sale of loans (20,432) — — (20,432) Purchase of loans for immediate resale 2,119,597 — — 2,119,597 Immediate resale (2,119,597) — — (2,119,597) Repayments received (1,726) (3,800) — (5,526) Changes in fair value recorded in earnings (5) 1,174 — 1,169 Other changes 39 200 — 239 Fair value at June 30, 2021 $ 26,741 $ 55,570 $ — $ 82,311 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at December 31, 2020 $ 60,232 $ 18,228 $ — $ 78,460 Reclassification of loans from HFI to HFS (26) 26 — — Purchases of loans 38,311 42,548 — 80,859 Sale of loans (66,901) — — (66,901) Purchase of loans for immediate resale 3,414,231 — — 3,414,231 Immediate resale (3,414,231) — — (3,414,231) Repayments received (5,036) (6,129) — (11,165) Changes in fair value recorded in earnings 352 616 — 968 Other changes (191) 281 — 90 Fair value at June 30, 2021 $ 26,741 $ 55,570 $ — $ 82,311 Assets related to Securitization Transactions As of December 31, 2020 and June 30, 2021, the Company held notes receivable and residual certificates with an aggregate fair value of $19.1 million and $13.0 million, respectively. The balances consist of securitization notes and residual certificates corresponding to the 5% economic risk retention the Company is required to maintain as the retaining sponsor of the unconsolidated securitizations. Valuation Methodology The discounted cash flow methodology is used to estimate the fair value of notes receivable and residual certificates, using the same projected net cash flows as their related loans. This model uses inputs that are inherently judgmental and reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Significant Inputs and Assumptions The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements of assets related to securitization transactions: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Notes receivable and residual certificates Discount rate 3.01 % 14.00 % 5.84 % 2.98 % 14.00 % 5.89 % Credit risk rate (1) 0.04 % 50.69 % 17.12 % 0.04 % 50.69 % 17.90 % Prepayment rate (1) 15.60 % 36.88 % 27.63 % 15.60 % 36.88 % 27.70 % (1) Expressed as a percentage of the original principal balance of the loans underlying the financial instruments (2) Unobservable inputs were weighted by relative fair value Significant Recurring Level 3 Fair Value Input Sensitivity The securities issued in the securitization transactions are senior or subordinated based on the waterfall criteria of loan payments to each security class, with the residual interest (the “residual certificates”) issued being the first to absorb credit losses in accordance with the waterfall criteria. Accordingly, the residual certificates are the most sensitive to adverse changes in credit risk rates. Depending on the specific securitization, a hypothetical increase in the credit risk rate of 10% to 20% would result in significant decreases in the fair value of the residual certificates. On average, a hypothetical increase in the credit risk rate of 20% would result in a 17% decrease in the fair value of the residual certificates. The remaining classes of securities, with the exception of those in 2018-2, are all overcollateralized such that changes in credit risk rates are not expected to have significant impacts on their fair values. The fair value of the securities is also sensitive to adverse changes in discount rates, which represent estimates of the rates of return that institutional investors would require when investing in financial instruments with similar risk and return characteristics. On average, a hypothetical 100 basis point increase in discount rates results in a decrease in fair value of the securities (including securitization notes and residual certificates) of 1.23% and 0.83% as of December 31, 2020 and June 30, 2021, respectively. On average, a hypothetical 200 basis point increase in discount rates results in a decrease in fair value of the securities (including securitization notes and residual certificates) of 2.36% and 1.66% as of December 31, 2020 and June 30, 2021, respectively. The fair value of securitization notes and residual certificates are not sensitive to adverse changes in expected prepayment rates as such changes would not result in a significant impact on the fair value as of December 31, 2020 and June 30, 2021. Rollforward of Level 3 Fair Values The following tables include a rollforward of the notes receivable and residual certificates related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy: Notes Receivable and Residual Certificates Fair value at March 31, 2020 $ 26,896 Repayments and settlements (3,588) Changes in fair value recorded in earnings 1,532 Fair value at June 30, 2020 $ 24,840 Notes Receivable and Residual Certificates Fair value at December 31, 2019 $ 34,116 Purchases and issuances of securitization notes and residual certificates 4 Repayments and settlements (7,616) Changes in fair value recorded in earnings (1,664) Fair value at June 30, 2020 $ 24,840 Notes Receivable and Residual Certificates Fair value at March 31, 2021 $ 16,033 Repayments and settlements (3,230) Changes in fair value recorded in earnings 192 Fair value at June 30, 2021 $ 12,995 Notes Receivable and Residual Certificates Fair value at December 31, 2020 $ 19,074 Repayments and settlements (6,349) Changes in fair value recorded in earnings 270 Fair value at June 30, 2021 $ 12,995 Loan Servicing Assets and Liabilities Valuation Methodology Loan servicing assets and liabilities are measured at estimated fair value using a discounted cash flow model. The cash flows in the valuation model represent the difference between the contractual servicing fees charged to institutional investors and an estimated market servicing fee. Since contractual servicing fees are generally based on the monthly unpaid principal balance of the underlying loans, the expected cash flows in the model incorporate estimates of net losses and prepayments. Significant Inputs and Assumptions The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loan servicing assets and liabilities: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 15.00 % 35.00 % 22.69 % 13.00 % 20.00 % 15.83 % Credit risk rate (1) 0.03 % 52.78 % 17.19 % 0.03 % 52.78 % 9.23 % Market-servicing rate (3)(4) 0.75 % 0.75 % 0.75 % 0.75 % 0.75 % 0.75 % Prepayment rate (1) 9.07 % 89.01 % 31.62 % 8.39 % 92.60 % 36.29 % (1) Expressed as a percentage of the original principal balance of the loans underlying the servicing arrangement (2) Unobservable inputs were weighted by relative fair value (3) Excludes ancillary fees that would be passed on to a third-party servicer (4) Expressed as a percentage of the outstanding principal balance of the loan Discount rates –The discount rates are the Company’s estimate of the rates of return that market participants in servicing rights would require when investing in similar servicing rights. Discount rates for servicing rights on existing loans are adjusted to reflect the time value of money and a risk premium intended to reflect the amount of compensation market participants would require due to the uncertainty associated with these instruments’ cash flows. Credit risk rate s–The credit risk rates are the Company’s estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding net cumulative losses impact the projected balances and expected terms of the loans, which are used to project future servicing revenues. Market-servicing rates –Market-servicing rate is an estimated measure of adequate compensation for a market participant, if one was required. The rate is expressed as a fixed percentage of outstanding principal balance. The estimate considers the profit that would be demanded in the marketplace to service the portfolio of outstanding loans subject to the Company’s servicing agreements. Prepayment rates –Prepayment rates are the Company’s estimate of the cumulative principal prepayments that will occur over the entire life of a loan as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments impact the projected balances and expected terms of the loans, which are used to project future servicing revenues. Significant Recurring Level 3 Fair Value Input Sensitivity The table below presents the fair value sensitivity of loan servicing assets and liabilities to adverse changes in key assumptions. The fair value of loan servicing assets and liabilities is not sensitive to adverse changes in discount rates as such changes would not result in a significant impact on the fair value as of December 31, 2020 and June 30, 2021, respectively. December 31, June 30, 2020 2021 Fair value of loan servicing assets $ 6,831 $ 15,450 Expected market-servicing rates 10% market-servicing rates increase (19,013) (2,742) 20% market-servicing rates increase (38,027) (5,144) Expected prepayment rates 10% adverse change (2,061) (28) 20% adverse change (4,212) (62) December 31, June 30, 2020 2021 Fair value of loan servicing liabilities $ 8,254 $ 11,883 Expected market-servicing rates 10% market-servicing rates increase 22,974 3,562 20% market-servicing rates increase 45,948 7,465 Expected prepayment rates 10% adverse change 2,491 486 20% adverse change 5,089 985 Rollforward of Level 3 Fair Values The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy: Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2020 $ 6,622 $ 5,906 Sale of loans 465 244 Changes in fair value recorded in earnings (1,207) 465 Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2019 $ 4,725 $ 5,140 Sale of loans 3,170 1,490 Changes in fair value recorded in earnings (2,015) (15) Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2021 $ 8,734 $ 10,853 Sale of loans 6,477 4,308 Changes in fair value recorded in earnings 239 (3,278) Fair value at June 30, 2021 $ 15,450 $ 11,883 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2020 $ 6,831 $ 8,254 Sale of loans 9,929 7,827 Changes in fair value recorded in earnings (1,310) (4,198) Fair value at June 30, 2021 $ 15,450 $ 11,883 Trailing Fee Liabilities The Company pays certain bank partners monthly trailing fees based on the amount and timing of principal and interest payments made by borrowers of the underlying loans. Significant inputs used for estimating the fair value of trailing fee liabilities included discount rates of 3.50% to 17.27% and credit risk rates of 0.08% to 50.85%. The fair value sensitivity of trailing fee liabilities to adverse changes in key assumptions would not result in a material impact on the Company’s financial position. Rollforward of Level 3 Fair Values The following tables include a rollforward of trailing fee liabilities classified by the Company within Level 3 of the fair value hierarchy: Trailing Fee Liabilities Fair value at March 31, 2020 $ 762 Issuances 57 Repayments and settlements (76) Changes in fair value recorded in earnings (23) Fair value at June 30, 2020 $ 720 Trailing Fee Liabilities Fair value at December 31, 2019 $ 504 Issuances 369 Repayments and settlements (130) Changes in fair value recorded in earnings (23) Fair value at June 30, 2020 $ 720 Trailing Fee Liabilities Fair value at March 31, 2021 $ 1,775 Issuances 936 Repayments and settlements (246) Changes in fair value recorded in earnings 48 Fair value at June 30, 2021 $ 2,513 Trailing Fee Liabilities Fair value at December 31, 2020 $ 1,276 Issuances 1,605 Repayments and settlements (416) Changes in fair value recorded in earnings 48 Fair value at June 30, 2021 $ 2,513 |
Loans at Fair Value
Loans at Fair Value | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Loans at Fair Value | Loans at Fair Value The following table presents the aggregate fair value and aggregate principal outstanding of all loans and loans that were 90 days or more past due included in the condensed consolidated balance sheets: Loans Loans > 90 Days Past Due December 31, June 30, December 31, June 30, 2020 2021 2020 2021 Outstanding principal balance $ 97,497 $ 100,181 $ 2,018 $ 5,797 Net fair value and accrued interest adjustments (19,037) (17,870) (2,002) (5,762) Fair value (1) $ 78,460 $ 82,311 $ 16 $ 35 _________ (1) Includes $2.4 million and $23.8 million of auto loans as of December 31, 2020 and June 30, 2021, respectively, of which an immaterial amount is 90 days or more past due for each period presented. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2021 | |
Other Assets [Abstract] | |
Balance Sheet Components | Balance Sheet Components Other Assets Other assets consisted of the following: December 31, June 30, 2020 2021 Servicing fees and other receivables $ 11,656 $ 31,736 Deposits 7,947 8,150 Prepaid expenses 6,009 14,916 Loan servicing assets (at fair value) 6,831 15,450 Other assets 7,603 2,738 Total other assets $ 40,046 $ 72,990 Servicing fees and other receivables represent amounts recognized as revenue but not yet collected in relation to servicing and other agreements with institutional investors and bank partners. Property, Equipment, and Software, Net Property, equipment, and software, net consisted of the following: December 31, June 30, 2020 2021 Internally developed software $ 7,906 $ 11,074 Computer equipment 1,285 1,900 Furniture and fixtures 1,770 2,573 Leasehold improvements 2,763 3,412 Total property, equipment, and software 13,724 18,959 Accumulated depreciation and amortization (3,692) (5,410) Total property, equipment, and software, net $ 10,032 $ 13,549 For the three and six months ended June 30, 2020, depreciation and amortization expense on property, equipment, and software was immaterial. For the three and six months ended June 30, 2021, depreciation and amortization expense on property, equipment, and software was $0.9 million and $1.7 million, respectively. Capitalized internally developed software balances, net of accumulated amortization, were $6.0 million and $8.2 million as of December 31, 2020 and June 30, 2021, respectively. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: December 31, June 30, 2020 2021 Accrued expenses $ 10,974 $ 29,884 Accrued payroll 13,834 19,368 Loan servicing liabilities (at fair value) 8,254 11,883 Trailing fee liability (at fair value) 1,276 2,513 Other liabilities 1,331 6,731 Total accrued expenses and other liabilities $ 35,669 $ 70,379 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions In April 2021, the Company completed its acquisition of Prodigy Software, Inc. (“Prodigy”). Prodigy provides an e-commerce platform for car dealerships which enables both online and in-store vehicle discovery, credit application, and checkout. Prodigy provides a modern multi-channel car buying experience, helping dealerships serve consumers with a holistic software solution that integrates legacy systems. In addition to modernizing the car buying experience, Prodigy will bring Upstart's AI enabled auto loans to dealerships across the country where a significant number of auto loans are transacted. The total consideration the Company provided for Prodigy was approximately $89.0 million, comprised of the following: April 8, 2021 Fair value of Upstart common stock issued to Prodigy stockholders (1) $ 70,121 Cash paid to common and preferred stockholders, warrant holders, and vested option holders (2) 17,151 Fair value of assumed Prodigy options attributable to pre-combination service period 889 Transactions costs paid by Upstart on behalf of Prodigy 883 Total purchase consideration $ 89,044 _________ (1) The fair value is based on 568,539 shares of Company common stock at $123.33 per share, the closing stock price on April 8, 2021, and 87,339 shares are held in escrow as security for certain indemnification obligations of former Prodigy stockholders. (2) $1.9 million of the cash paid is being held in escrow as security for certain indemnification obligations of former Prodigy stockholders. Excluded from the total purchase consideration above are 82,201 shares of the Company’s restricted common stock ("restricted stock") with a fair value of $10.1 million issued to certain Prodigy employees. The restricted stock is subject to transfer restrictions and a repurchase option and is contingent upon the employees' continued employment with the Company. The repurchase option will lapse with respect to 1/8th of the shares of restricted stock at the end of each successive three-month period following the closing date of the Prodigy acquisition. The Company will record stock-based compensation expense straight-line over the two-year period that the repurchase option lapses. The acquisition has been accounted for as a business combination. The purchase consideration was allocated to the tangible and intangible assets and liabilities acquired as of the acquisition date, with the excess recorded to goodwill as shown below. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: April 8, 2021 Goodwill $ 66,866 Acquisition-related intangible assets 23,200 Cash 1,479 Deferred tax liability, net (2,328) Other assets acquired and liabilities assumed, net (173) Total purchase consideration $ 89,044 The goodwill recognized was primarily attributable to the opportunity to bring Upstart's AI enabled auto loans to dealerships across the country where the vast majority of loans are transacted. The goodwill is not deductible for U.S. federal income tax purposes. The Company recognized acquisition-related costs of approximately $1.2 million in the six months ended June 30, 2021 which are included in the general and administrative expense in the condensed consolidated statement of operations and comprehensive income (loss). Acquisition-related costs were immaterial in the three months ended June 30, 2021. Estimated fair values Estimated useful life (years) Developed technology $ 9,400 3.0 Trade name 100 2.0 Customer relationships 13,700 12.0 Total acquisition-related intangible assets $ 23,200 The fair values of the acquisition-related intangibles were determined using the following methodologies: replacement cost method, the relief from royalty method, and the with/without method, a form of the income approach, for developed technology, trade name, and customer relationships, respectively. The acquired intangible assets have a total weighted average amortization period of 8.3 years. We have included the financial results of the acquired business in our condensed consolidated financial statements from the date of acquisition. Revenues and expenses related to the acquisition for the three and six months ended June 30, 2021 were not material. Pro forma results of operations have not been presented because the effects of this acquisition were not material to our financial results. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The table below presents changes to the carrying amount of goodwill: December 31, 2020 Goodwill Acquired June 30, 2021 Goodwill $ — $ 66,866 $ 66,866 The goodwill acquired during the six months ended June 30, 2021 is associated with the acquisition of Prodigy. There was no impairment for the periods presented. Intangible Assets Acquired intangible assets subject to amortization are as follows: June 30, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (Years) Developed technology $ 9,400 $ 783 $ 8,617 2.8 Trade name 100 12 88 1.8 Customer relationships 13,700 286 13,414 11.8 $ 23,200 $ 1,081 $ 22,119 Amortization expense was $1.1 million for both the three and six months ended June 30, 2021. There were no acquired intangible assets subject to amortization prior to April 8, 2021. Expected future amortization expense for intangible assets as of June 30, 2021 is as follows: Fiscal Years: Remaining 2021 $ 2,163 2022 4,325 2023 4,287 2024 1,925 2025 1,142 Thereafter 8,277 Total $ 22,119 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The following table presents the aggregate principal outstanding of all loans mentioned in this note that are included in the condensed consolidated balance sheets: Borrowings December 31, June 30, 2020 2021 Term loan $ 15,000 $ — Revolving credit facility 5,500 — Warehouse credit facility 34,994 2,727 Risk retention funding loans 7,187 3,330 Total payments due 62,681 6,057 Unamortized debt discount (55) — Total borrowings $ 62,626 $ 6,057 Term Loan In October 2018, the Company and UNI entered into a mezzanine loan and security agreement to obtain a term loan of up to $15.0 million (the “Mezzanine Loan”). The Mezzanine Loan bears interest at the greater of prime rate plus 5.25% or 10.00% per annum, payable monthly. The principal balance was due upon maturity on October 1, 2021. In June 2021, the Company repaid in full the $15.0 million principal balance outstanding under the Mezzanine Loan, plus accrued interest and prepayment fees, and terminated the Mezzanine Loan. In connection with the termination, the Company recognized the remaining unamortized debt discount and recognized an immaterial loss on debt extinguishment. Revolving Credit Facility In September 2018, the Company and UNI entered into a revolving credit facility with a third-party lender for up to $5.5 million (the “UNI Credit Facility”). The UNI Credit Facility bears floating interest at the greater of prime rate plus 1.00% or 4.25% annum, payable monthly, subject to a monthly minimum interest requirement prior to maturity. The UNI Credit Facility had an original termination and maturity date of June 1, 2020. In 2020, the parties agreed to extend the maturity date of the UNI Credit Facility to June 1, 2021. In June 2021, the Company repaid in full the $5.5 million of outstanding principal, plus accrued interest, under the UNI Credit Facility and did not renew such facility. Warehouse Credit Facility In November 2015, the Company’s consolidated VIE, Upstart Loan Trust (“ULT”), entered into a revolving credit and security agreement with a third-party lender (the “ULT Warehouse Credit Facility”). The credit and security agreement for the ULT Warehouse Credit Facility was amended and restated in its entirety in May 2020 and further amended in June 2021. Under the revolving credit and security agreement, as amended from time to time, ULT may borrow up to $100.0 million (subject to a borrowing base capacity) until the earlier of June 15, 2023 or the occurrence of an accelerated amortization event. An accelerated amortization event includes, but are not limited to, failure to satisfy certain loan performance metrics or the occurrence of an event of default. The proceeds may only be used to purchase unsecured personal loans from Upstart’s platform and to pay fees and expenses related to the credit facility. The ULT Warehouse Credit Facility matures on the earlier of June 15, 2024 or acceleration of the facility following an event of default, upon which date 100% of the outstanding principal amount, together with any accrued and unpaid interest, becomes due and payable. The entire amount of the outstanding principal and interest may be prepaid at any time without penalty. The ULT Warehouse Credit Facility bears a floating interest rate of LIBOR (“ the Benchmark Rate”) plus a spread ranging from 1.90% to 4.00% per annum, due and payable monthly in arrears. In the event that LIBOR ceases to be available, the Benchmark Rate will be replaced with an alternative rate such as the Secured Overnight Financing Rate. The Company is subject to additional interest payments under a minimum utilization requirement of $30 million. The maximum advance rate under the ULT Warehouse Credit Facility on outstanding principal of loans held by ULT was 80% as of December 31, 2020 and 85% June 30, 2021. The ULT Warehouse Credit Facility contains certain financial covenants. As of December 31, 2020 and June 30, 2021, ULT was in compliance with all applicable covenants under the ULT Warehouse Credit Facility. The creditors of ULT have no recourse to the general credit of the Company, except for certain limited obligations of ULT to its creditors that are guaranteed by the Company. The Company does not guarantee the credit performance of the loans owned by ULT, and the loans and other assets owned by ULT are not available to settle the claims of creditors of the Company. The following table includes the aggregate balances held by ULT that were pledged as collateral for the ULT Warehouse Credit Facility and included in loans at fair value and restricted cash in the condensed consolidated balance sheets, respectively: ULT Warehouse Credit Facility December 31, 2020 June 30, Outstanding borrowings $ 34,994 $ 2,727 Aggregate outstanding principal of loans pledged as collateral 59,709 6,470 Aggregate fair value of loans purchased and held by ULT 60,231 26,741 Restricted cash pledged as collateral 11,270 28,974 Risk Retention Funding Loans In October 2018, Upstart RR Funding 2018-2, LLC (the “2018-2 RR entity”), a consolidated VIE of UNI, entered into a loan and security agreement (the “2018-2 RR Financing Agreement”) to finance the Company’s risk retention balance in the Upstart Securitization Trust 2018-2. Under this agreement, the balance borrowed by the 2018-2 RR entity has an interest rate of 4.00% per annum and is repaid using cash proceeds received by the 2018-2 RR entity as part of monthly cash distributions from the 2018-2 securitization on securitization notes and residual certificates. As of December 31, 2020, the outstanding principal balance under the 2018-2 RR Financing Agreement was immaterial. In April 2021, the Company repaid the outstanding principal and accrued interest in full. In September 2019, Upstart RR Funding 2019-2, LLC (the “2019-2 RR entity”), a consolidated VIE of UNI, entered into a loan and security agreement (the “2019-2 RR Financing Agreement”) to finance the Company’s risk retention balance in the Upstart Securitization Trust 2019-2. Under this agreement, the balance borrowed by the 2019-2 RR entity has an annual interest rate of 4.33% and is repaid using cash proceeds received by the 2019-2 RR entity as part of monthly cash distributions from the 2019-2 securitization on securitization notes and residual certificates. As of December 31, 2020 and June 30, 2021, the outstanding principal balance under the 2019-2 RR Financing Agreement was $6.6 million and $3.3 million, respectively. The borrowings are solely the obligations of the 2018-2 RR entity and 2019-2 RR entity, respectively, and the Company is not obligated thereon. The securities and other assets owned by each RR entity are not available to settle the claims of creditors of the Company. Assets pledged as collateral for the risk retention funding loans include $12.6 million and $8.7 million of securities held for risk retention for the 2018-2 and 2019-2 securitization transactions, included in notes receivables and residual certificates on the condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021, respectively. The following table summarizes the aggregate amount of maturities of all borrowings as of June 30, 2021: June 30, Remainder of 2021 $ — 2022 — 2023 3,330 2024 2,727 2025 — Total $ 6,057 |
Common Stock and Common Stock W
Common Stock and Common Stock Warrants | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Common Stock and Common Stock Warrants | Common Stock and Common Stock Warrants Common Stock In December 2020, the Company's amended and restated certificate of incorporation became effective, which authorized the issuance of 700,000,000 shares of common stock with a par value of $0.0001 per share. The Company had reserved shares of common stock for issuance, on an as-converted basis, as follows: December 31, June 30, 2020 2021 Options issued and outstanding 19,600,223 18,626,100 RSUs outstanding — 1,187,427 Shares available for future issuance under 2020 plan 2,537,181 10,249,442 Shares available for issuance under ESPP — 2,113,140 Warrants to purchase common stock 75,000 — Total 22,212,404 32,176,109 Common Stock Warrants In October 2018, the Company issued stock warrants to purchase 75,000 shares of common stock, with an exercise price of $2.16 per share. The estimated grant date fair value of the common stock warrants was recognized as debt issuance costs in the period granted. The common stock warrant has a contractual term of ten years and expire in October 2028. On December 1, 2020, the common stock warrant agreement was amended to include a repurchase option in the event of an IPO. Upon the completion of an IPO, or a qualified acquisition of the Company, the common stock warrant holders have the option to require the Company to repurchase the warrant in its entirety for a purchase price of $1.5 million. The repurchase option terminates on the earlier of (i) 30 days after the closing of a qualified sale of the Company or; (ii) 10 business days after the date on which the Company’s IPO price per share is confirmed by the Company’s underwriters. |
Equity Incentive Plans
Equity Incentive Plans | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Equity Incentive Plans Equity Incentive Plans In 2012, the Company adopted the Equity Incentive Plan (“2012 Equity Incentive Plan”) authorizing the granting of incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) to eligible participants. Under the 2012 Equity Incentive Plan, the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors. The exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors. Options generally vest over four years and are exercisable for up to 10 years after the date of grant if the employee provides service to the Company for at least three years. In October 2020, our Board of Directors adopted, and in November 2020 our Board of Directors amended and our stockholders approved, our 2020 Equity Incentive Plan which was effective on December 14, 2020. The Company terminated the 2012 Equity Incentive Plan immediately prior to effectiveness of the 2020 Equity Incentive Plan with respect to the grant of future awards. However, our 2012 Equity Incentive Plan continues to govern the terms and conditions of the outstanding awards granted under our 2012 Equity Incentive Plan. The 2020 Equity Incentive Plan authorizes granting of ISOs, NSOs, stock appreciation rights, restricted stock, restricted stock units, or RSUs, and performance awards. As of June 30, 2021, the Company is authorized to issue up to 10,249,442 shares of common stock under the 2020 Equity Incentive Plan. In addition, the 2020 Equity Incentive Plan also includes any shares subject to awards granted under our 2012 Equity Incentive Plan that, on or after December 15, 2020, expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by us for payment of an exercise price or for satisfying tax withholding obligations, or are forfeited to or repurchased by us due to failure to vest. The maximum number of shares that may be added to the 2020 Equity Incentive Plan pursuant to outstanding awards under the 2012 Equity Incentive Plan is 15,000,000 shares. The number of shares available for issuance under our 2020 Equity Incentive Plan also includes an annual increase on the first day of each fiscal year beginning with the 2021 in an amount equal to the lesser of 15,000,000 shares or 5% of the outstanding shares of our common stock on the last day of our immediately preceding fiscal year. In connection with the Company’s acquisition of Prodigy, the Company assumed the Prodigy Software, Inc. 2015 Stock Incentive Plan (the “Prodigy Plan”), under which certain unvested options under the Prodigy Plan were assumed by the Company. The assumed options are subject to the same terms and conditions that were applicable to them under the Prodigy Plan, except that (i) the assumed options relate to shares of Upstart’s common stock, and (ii) the number of shares of Upstart’s common stock was the result of an adjustment based upon a ratio as described further in the Registration Statement on Form S-8 filed with the SEC on April 16, 2021. Stock Options The following table summarized stock option activity for the six months ended June 30, 2021: Number of Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (years) Aggregate Balances at December 31, 2020 19,600,223 $ 4.27 6.8 $ 715,084 Options granted 606,830 $ 104.82 Options assumed upon acquisition 23,494 $ 9.06 Options exercised (1,284,977) $ 2.28 Options cancelled and forfeited (319,470) $ 6.80 Balances at June 30, 2021 18,626,100 $ 7.64 6.4 $ 2,184,219 Options exercisable – June 30, 2021 11,421,423 $ 1.99 5.0 $ 1,403,759 Options vested and expected to vest – June 30, 2021 18,331,294 $ 7.22 6.4 $ 2,157,331 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the Company’s stock as of June 30, 2021. The aggregate intrinsic value of options exercised for the six months ended June 30, 2020 and 2021, was $0.8 million and $122.7 million, respectively. The weighted-average grant date fair value of options granted during the six months ended June 30, 2020 and 2021, was $5.31 and $62.16 per share, respectively. The weighted-average fair value of options assumed in connection with an acquisition was $74.84 per share for the six months ended June 30, 2021. The total fair value of options vested for the six months ended June 30, 2020 and 2021, was $2.3 million and $12.3 million, respectively. In May 2021, the Company amended an employee stock option agreement which resulted in a modification of the vesting of a certain number of option shares. The Company valued the amended stock options as of the modification date. Based on the Black-Scholes option pricing model fair value, incremental stock-based compensation expense of $4.4 million resulting from the modification was recognized during the three and six months ended June 30, 2021. As of June 30, 2021, total unrecognized stock-based compensation expense related to unvested stock options was $70.3 million, which is expected to be recognized over a remaining weighted-average period of 2.2 years. Restricted Stock Units During the six months ended June 30, 2021, the Company began granting RSUs to employees and nonemployees. RSUs vest upon satisfaction of a service-based condition, which is generally satisfied over four years. The following table summarized RSU activity for the six months ended June 30, 2021: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2020 — RSUs granted 1,217,420 $ 107.81 RSUs vested (6,480) $ 102.52 RSUs cancelled and forfeited (23,513) $ 92.77 Unvested at June 30, 2021 1,187,427 As of June 30, 2021, total unrecognized stock-based compensation expense related to outstanding unvested RSUs was $119.4 million, which is expected to be recognized over a remaining weighted-average period of 3.3 years. Restricted Stock In connection with the Prodigy acquisition, 82,201 shares of the Company’s restricted stock were issued to certain Prodigy employees. The restricted stock is subject to restrictions which lapse on a quarterly basis over two years. Refer to “Note 6. Acquisitions ” for further information. The following table summarized Restricted Stock activity for the six months ended June 30, 2021: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2020 — Restricted 82,201 $ 121.65 Vested — $ — Unvested at June 30, 2021 82,201 As of June 30, 2021, total unrecognized stock-based compensation expense related to restricted stock was $9.0 million, which is expected to be recognized over a remaining weighted-average period of 1.8 years. 2020 Employee Stock Purchase Plan In October 2020, our Board of Directors adopted, and in November 2020 our Board of Directors amended and our stockholders approved, our ESPP which was effective on December 14, 2020. Our ESPP provides for consecutive six-month offering periods. The offering periods are scheduled to start on the first trading day on or after February 15 and August 15 of each year, except the first offering period commenced on December 16, 2020 and will end on the first trading day on or before August 15, 2021. The second offering period will commence on the last trading day on or after August 15, 2021. The ESPP permits participants to purchase shares in the amount of 85% of the lower of the fair market value of our shares of common stock on the first trading day of the offering period or on the exercise date. As of June 30, 2021, the maximum number of shares of common stock that can be issued under the employee stock purchase plan was 2,113,140 shares, in addition to any automatic annual evergreen increase. As of June 30, 2021, no shares of common stock have been purchased under the ESPP. As of June 30, 2021, total unrecognized stock-based compensation expense related to the ESPP was $1.0 million, which is expected to be recognized over a remaining weighted-average period of 0.1 years. Fair Value of Awards Granted In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. Fair Value of Common Stock –Prior to the completion of the IPO, the fair value of the shares of common stock was determined by the Company’s Board of Directors as there was no public market for the Company’s common stock. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market. Expected Term –The expected term represents the period that the Company’s stock options are expected to be outstanding. The Company determined the expected term for employee stock options based on historical terminations and exercise behavior, which factors in an extended post-termination exercise provision for vested awards for certain employees that provide more than three years of service to the Company. The Company uses the contractual term for all nonemployee awards. Volatility –Because the Company does not have an active trading market for its common stock for a sufficient period of time, the expected volatility is estimated based on the average volatility for comparable publicly-traded companies, over a period equal to the expected term of the stock option grants. Risk-free Interest Rate –The risk-free interest rate assumption is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the option. Dividends –The Company has never paid dividends on its common stock and does not anticipate paying dividends on common stock. Therefore, the Company uses an expected dividend yield of zero. The following assumptions were used to estimate the fair value of options granted: Three Months Ended Six Months Ended 2020 2021 2020 2021 Expected term (in years) 5.3– 10.0 * 5.3 – 10.0 5.3 – 6.9 Expected volatility 65.97% – 71.80% * 53.23% – 71.80% 63.12% – 65.01% Risk-free interest rate 0.37% – 0.82% * 0.37% – 1.50% 0.62% – 1.14% Dividend yield —% * —% — % * No options were granted during the three months ended June 30, 2021. The following assumptions were used to estimate the fair value of the Company’s ESPP for the initial offering period: Six Months Ended 2021 Expected term (in years) 0.6 Expected volatility 61.65% Risk-free interest rate 0.09% Dividend yield —% Stock-Based Compensation The Company recorded stock-based compensation in the following expense categories in its condensed consolidated statements of operations and comprehensive income (loss) for employees and nonemployees: Three Months Ended Six Months Ended 2020 2021 2020 2021 Sales and marketing $ 405 $ 1,427 $ 689 $ 2,180 Customer operations 205 1,624 404 2,376 Engineering and product development 1,112 12,472 2,038 16,779 General, administrative, and other 797 5,663 1,353 8,473 Total $ 2,519 $ 21,186 $ 4,484 $ 29,808 Stock-based compensation expense by award type was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Stock options $ 2,519 $ 11,265 $ 4,484 $ 16,385 RSUs — 7,094 — 8,539 ESPP — 1,779 — 3,836 Restricted Stock — 1,048 — 1,048 Total $ 2,519 $ 21,186 $ 4,484 $ 29,808 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company’s operating leases are primarily for its corporate headquarters in San Mateo, California and Columbus, Ohio. Both operating leases include early termination options, and one of the leases includes renewal options for two successive five-year periods. The exercise of these options was not recognized as part of the ROU assets and lease liabilities, as the Company did not conclude, at the commencement date of the leases, that the exercise of renewal options or termination options was reasonably certain. In connection with one of the leases, a letter of credit was issued on behalf of the Company for the benefit of the landlord in the amount of $2.0 million. The letter of credit is secured by a certificate of deposit which is included in restricted cash on the condensed consolidated balance sheets. As of June 30, 2021, future minimum non-cancelable lease payments are as follows: Operating Leases Remainder of 2021 $ 2,408 2022 5,221 2023 5,516 2024 2,567 2025 1,579 Thereafter 2,417 Total undiscounted lease payments 19,708 Less: Present value adjustment (1,930) Operating lease liabilities $ 17,778 As of June 30, 2021, the Company does not have any operating leases which are yet to commence. As of June 30, 2021 the Company did not have any material finance leases. The Company’s operating lease expense consists of rent and variable lease payments. Variable lease payments such as common area maintenance and parking fees, were included in operating expenses. Rent expense for the Company’s short-term leases was immaterial for the periods presented. Operating lease expense was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Rent expense $ 1,303 $ 1,467 $ 2,572 $ 2,995 Variable lease payments $ 348 $ 362 $ 704 $ 661 Supplemental information related to the Company’s operating leases was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Cash paid for amounts included in the measurement of lease liabilities $ 1,035 $ 1,075 $ 2,046 $ 2,132 Total right-of-use assets capitalized $ 187 $ — $ 187 $ — Supplemental cash flow and noncash information related to the Company’s operating leases was as follows: June 30, 2021 Weighted average remaining lease term (in years) 4.18 Weighted average discount rate 5.06% |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Loan Purchase Obligation Under the Company’s loan agreements with certain bank partners, the banks retain ownership of the loans facilitated through Upstart’s platform for three days or longer (the “holding period”) after origination, as required under the respective agreements. The Company has committed to purchase the loans at the unpaid principal balance, plus accrued interest, at the conclusion of the required holding period. As of December 31, 2020 and June 30, 2021, the total loan purchase commitment included outstanding principal balance of $39.3 million and $24.6 million, respectively. Repurchase and Indemnification Contingency Under the terms of the loan purchase and loan servicing agreements between the Company and institutional investors, as well as in agreements with investors in securitizations where the Company is not the sponsor, the Company may, in certain circumstances, become obligated to repurchase loans from such investors. Generally, these circumstances include the occurrence of verifiable identity theft, the failure of sold loans to meet the terms of certain loan-level representations and warranties that speak as of the time of origination or sale, the failure to comply with other contractual terms with the investors, or a violation of the applicable federal, state, or local lending laws. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the loans sold to the investors, which at December 31, 2020 and June 30, 2021, is $5,180.7 million and $8,153.6 million, respectively. The Company recognizes a liability for the repurchase obligation based on historical experience when the loans are issued. The liability is subsequently remeasured when a related loss is probable and can be reasonably estimated. Actual payments made relating to the Company’s repurchase and indemnification obligations were immaterial historically. The Company has recorded contingent liabilities as of December 31, 2020 and June 30, 2021 of immaterial amounts to cover estimated future obligations related to these contractual terms. These amounts are included in accrued expenses and other liabilities on the Company’s condensed consolidated balance sheets. Legal From time to time the Company is subject to, and it is presently involved in, litigation and other legal proceedings. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of December 31, 2020 and June 30, 2021, no loss contingency has been recorded in connection with legal proceedings arising in the ordinary course of business. Contingencies Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses material contingencies when it believes a loss is not probable but reasonably possible. Although the Company cannot reasonably determine the outcome of any litigation or tax matters, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on its condensed consolidated financial statements. Indemnifications |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rates for the three and six months ended June 30, 2020 and 2021, are as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Provision (benefit) for income taxes $ — $ (988) $ — $ (767) Effective Tax Rate — % (3.33) % — % (1.92) % The Company's effective tax rate is calculated by dividing total income tax expense by the sum of income before income tax expense and the net income attributable to noncontrolling interests. The decrease in the effective tax rate for the six months ended June 30, 2021 compared to prior quarter was primarily driven by an increase in stock based compensation related expenses. The effective tax rate differs from the U.S. statutory tax rate primarily due to the valuation allowance on the Company’s deferred tax assets as it is more likely than not that some or all of these deferred tax assets will not be realized. In addition, an income tax benefit was recorded in the quarter primarily from a partial valuation allowance release on the Company's deferred tax assets due to net deferred tax liabilities originating from acquisitions in the three months ended June 30, 2021. The tax benefit of $0.8 million recorded for the six months ended June 30, 2021 is primarily related to the release of valuation allowance related to the acquisition of Prodigy. The release of valuation allowance is attributable to ASC 805-740-30-3, acquisitions with deferred tax liabilities that, upon acquisition, allowed us to recognize certain deferred tax assets of approximately $1.8 million during the six months ended June 30, 2021 that had previously been offset by a valuation allowance. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsSince the Company’s inception, it has engaged in various transactions with its executive officers and directors, holders of more than 10% of its voting securities, and their affiliates.A related party investor and its affiliates also participated in securitization transactions co-sponsored and serviced by the Company in the six months ended June 30, 2020 by contributing loans and purchasing securitization notes or residual certificates. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders | Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders Basic net income (loss) per common share attributable to Upstart Holdings, Inc.’s common stockholders is based on the weighted-average common shares outstanding during the relevant period. Diluted net income (loss) per common share attributable to Upstart Holdings, Inc.’s common stockholders is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. Three Months Ended Six Months Ended 2020 2021 2020 2021 Numerator: Net income (loss) attributable to Upstart Holdings, Inc. common stockholders $ (6,193) $ 37,284 $ (4,713) $ 47,386 Denominator: Weighted-average common shares outstanding used to calculate net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic 14,657,399 76,674,129 14,641,333 75,160,037 Weighted-average effect of dilutive securities — 18,127,994 — 18,033,116 Weighted-average common shares outstanding used to calculate net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted 14,657,399 94,802,123 14,641,333 93,193,153 Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic $ (0.42) $ 0.49 $ (0.32) $ 0.63 Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted $ (0.42) $ 0.39 $ (0.32) $ 0.51 The following securities were excluded from the computation of diluted net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders for the periods presented, because including them would have been anti-dilutive for the three and six months ended June 30, 2020. Three Months Ended Six Months Ended 2020 2021 2020 2021 Convertible preferred stock 47,349,577 — 47,349,577 — Options to purchase common stock 18,853,815 451,493 18,853,815 500,065 Unvested RSUs — 262,914 — 1,117,330 Warrants to purchase convertible preferred stock 600,208 — 600,208 — Warrants to purchase common stock 319,669 — 319,669 — Total 67,123,269 714,407 67,123,269 1,617,395 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated the impact of events that have occurred subsequent to June 30, 2021, through August 12, 2021, the date which the condensed consolidated financial statements were available to be issued. Based on the evaluation, the Company has determined no subsequent events were required to be recognized or disclosed. |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements included in our Annual Report on Form 10-K and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated of any future annual or interim periods. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. |
Use of Estimates | The preparation of the condensed consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements, which management believes are critical in understanding and evaluating the Company’s reported financial results include: (i) fair value determinations; (ii) stock-based compensation; (iii) consolidation of VIEs; and (iv) provision for income taxes, net of valuation allowance for deferred tax assets. The Company bases its estimates on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. |
Stock-Based Compensation | Stock-Based Compensation The Company issues stock options, restricted stock units (“RSUs”), and restricted stock to employees and nonemployees, including directors and third-party service providers, and employee stock purchase rights granted under the Company’s employee stock purchase plan (“ESPP”). Stock options and employee stock purchase rights granted under the ESPP are initially measured at fair value at the date of grant using the Black-Scholes option-pricing model. RSUs and restricted stock are measured at the fair market value of our common stock at the grant date. Stock-based compensation expenses are recognized based on their respective grant-date fair values. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting which requires the fair values of assets acquired and liabilities assumed to be recognized in the interim condensed consolidated financial statements. Assets acquired and liabilities assumed in a business combination are recognized at their estimated fair value as of the acquisition date. The excess purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period, with the corresponding offset to goodwill. Acquisition-related costs, such as legal and consulting fees, are recognized separately from the business combination and are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is reviewed for impairment annually, or more frequently if an event or a change in circumstances indicates that goodwill may be impaired. We first assess qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the Company concludes the fair value is less than its carrying value a quantitative test is performed. We perform a quantitative goodwill impairment test by determining the fair value of the reporting unit and comparing it to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized on a straight-line basis over their estimated useful lives. Acquired intangible assets are presented net of accumulated amortization on the condensed consolidated balance sheets. The Company reviews the carrying amounts of intangible assets for impairment whenever an event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. We measure the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. Impairment is measured by the amount in which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. |
Recently Adopted And Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company adopted the following accounting standards during the six months ended June 30, 2021: In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance in Topic 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard is effective January 1, 2021 for emerging growth companies that have adopted the private company relief. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs after the date of adoption. The guidance became effective on January 1, 2021 and the Company adopted the standard on a prospective basis. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The standard removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and also simplifies the diluted earnings per share calculation in certain areas. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition. Early adoption is permitted. The Company early adopted ASU 2020-06 on January 1, 2021 with no material impact on the Company’s condensed consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which will be effective January 1, 2023 for emerging growth companies that have adopted the private company relief. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The Company accounts for its loans at fair value through net income (loss), which is outside the scope of Topic 326. For available for sale debt securities, the guidance will require recognition of expected credit losses by recognizing an allowance for credit losses when the fair value of the security is below amortized cost and the recognition of this allowance is limited to the difference between the security’s amortized cost basis and fair value. The Company is evaluating the impact this ASU will have on its condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive income (loss), condensed consolidated statements of cash flows and related disclosures. The Company plans to adopt Topic 326 effective as of January 1, 2021 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In March 2020 the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting followed by ASU 2021-01, Reference Rate Reform, Scop e issued in January 2021. ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and ASU 2021-01 on its condensed consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue By Type of Service | The Company disaggregates revenue from fees by type of service for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Revenue from fees, net: Platform and referral fees, net $ 7,612 $ 169,080 $ 67,842 $ 276,033 Servicing fees, net 5,693 18,217 13,476 $ 27,434 Total revenue from fees, net $ 13,305 $ 187,297 $ 81,318 $ 303,467 |
Gain (Loss) on Loan Servicing Rights | The Company recognized gains related to loan servicing rights upon loan sales for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Net gain related to loan servicing rights $ 221 $ 2,169 $ 1,680 $ 2,102 |
Schedule of Collection Agency And Borrower Fees | The Company recognized collection agency fees and borrower fees, which are included in servicing fees, net for the periods presented as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Collection agency fees $ 654 $ 991 $ 1,454 $ 1,854 Borrower fees $ 419 $ 1,095 $ 936 $ 1,980 |
Components of The Interest Income and Fair Value Adjustments, Net | The table below presents components of the interest income and fair value adjustments, net presented in the Company’s condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended Six Months Ended 2020 2021 2020 2021 Interest income and fair value adjustments, net: Interest income $ 7,724 $ 3,545 $ 16,907 $ 6,951 Interest expense (2,260) (1,497) (5,515) (2,527) Fair value and other adjustments, net (1,416) 4,601 (11,363) 7,400 Total interest income and fair value adjustments, net $ 4,048 $ 6,649 $ 29 $ 11,824 Amounts above include interest income, interest expense and fair value adjustments, net related to consolidated securitization trusts for the three and six months ended June 30, 2020 is as follows: Three Months Ended Six Months Ended Interest income and fair value adjustments, net related to consolidated securitization trusts: Interest income $ 1,794 $ 5,173 Interest expense (505) (1,074) Fair value and other adjustments, net (555) (3,555) Total interest income and fair value adjustments, net $ 734 $ 544 |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Financial Assets And Liabilities From Variable Interest Entities | The following tables present a summary of financial assets and liabilities from the Company’s involvement with consolidated VIEs: Assets Liabilities Net Assets December 31, 2020 Warehouse Entities $ 71,530 $ 35,109 $ 36,421 Majority-owned Affiliates 17,219 7,187 10,032 Other Consolidated VIEs 16,243 — 16,243 Total Consolidated VIEs $ 104,992 $ 42,296 $ 62,696 Assets Liabilities Net Assets June 30, 2021 Warehouse Entities $ 55,935 $ 2,759 $ 53,176 Majority-owned Affiliates 11,839 3,330 8,509 Other Consolidated VIEs 50,710 77 50,633 Total Consolidated VIEs $ 118,484 $ 6,166 $ 112,318 The following tables summarize the aggregate carrying value of assets and liabilities of unconsolidated VIEs in which the Company holds a variable interest but is not the primary beneficiary: Assets Liabilities Net Assets Maximum Exposure to Losses December 31, 2020 Securitizations $ 484,604 $ 390,252 $ 94,352 $ 24,434 Upstart Network Trust 39,754 39,754 — 1,707 Total Unconsolidated VIEs $ 524,358 $ 430,006 $ 94,352 $ 26,141 Assets Liabilities Net Assets Maximum Exposure to Losses June 30, 2021 Securitizations $ 326,832 $ 251,219 $ 75,613 $ 19,054 Upstart Network Trust 24,612 24,612 — 1,157 Total Unconsolidated VIEs $ 351,444 $ 275,831 $ 75,613 $ 20,211 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets And Liabilities Measure At Fair Value | The following table presents assets and liabilities measured at fair value and categorized as Level 3 in the fair value hierarchy: December 31, June 30, 2020 2021 Assets Loans $ 78,460 $ 82,311 Notes receivable and residual certificates 19,074 12,995 Loan servicing assets 6,831 15,450 Total assets $ 104,365 $ 110,756 Liabilities Loan servicing liabilities $ 8,254 $ 11,883 Trailing fee liabilities 1,276 2,513 Total liabilities $ 9,530 $ 14,396 |
Fair Value Of Classes of Loans Held | The following table presents the fair value of classes of loans held by the Company: December 31, June 30, 2020 2021 Loans held-for-sale $ 60,232 $ 26,741 Loans held-for-investment 18,228 55,570 Total $ 78,460 $ 82,311 |
Significant Unobservable Inputs | The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loans held-for-investment and held-for-sale: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 6.80 % 16.99 % 7.44 % 3.50 % 17.27 % 7.22 % Credit risk rate (1) 0.36 % 52.31 % 19.82 % 0.08 % 50.85 % 22.22 % Prepayment rate (1) 11.64 % 78.36 % 31.03 % 11.15 % 86.75 % 37.09 % (1) Expressed as a percentage of the original principal balance of the loans (2) Unobservable inputs were weighted by relative fair value The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements of assets related to securitization transactions: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Notes receivable and residual certificates Discount rate 3.01 % 14.00 % 5.84 % 2.98 % 14.00 % 5.89 % Credit risk rate (1) 0.04 % 50.69 % 17.12 % 0.04 % 50.69 % 17.90 % Prepayment rate (1) 15.60 % 36.88 % 27.63 % 15.60 % 36.88 % 27.70 % (1) Expressed as a percentage of the original principal balance of the loans underlying the financial instruments (2) Unobservable inputs were weighted by relative fair value |
Sensitivity Analysis of Fair Value | The below table presents the sensitivity of the loans held-for-sale and held-for-investment to adverse changes in key assumptions used in the valuation model as of December 31, 2020 and June 30, 2021, respectively. The estimated fair value of these loans is not sensitive to adverse changes in expected prepayment rates as such changes would not result in a significant impact on the fair value in either periods. December 31, June 30, 2020 2021 Fair value of loans $ 78,460 $ 82,311 Discount rates 100 basis point increase (979) (1,089) 200 basis point increase (1,939) (2,154) Expected credit loss rates on underlying loans 10% adverse change (1,303) (1,350) 20% adverse change (2,611) (2,700) |
Rollforward Of Level 3 Assets | The following tables include a rollforward of the loans classified within Level 3 of the fair value hierarchy: Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at March 31, 2020 $ 116,511 $ 16,758 $ 67,332 $ 200,601 Purchases of loans 677 39 — 716 Purchase of loans for immediate resale 66,694 — — 66,694 Immediate resale (66,694) — — (66,694) Repayments received (7,908) (1,317) (8,745) (17,970) Changes in fair value recorded in earnings (1,201) (229) (1,365) (2,795) Other changes 29 (61) — (32) Changes due to deconsolidation — — (57,222) (57,222) Fair value at June 30, 2020 $ 108,108 $ 15,190 $ — $ 123,298 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at December 31, 2019 $ — $ 141,555 $ 90,750 $ 232,305 Reclassification of loans from HFI to HFS 125,297 (125,297) — — Purchases of loans 98,601 2,794 — 101,395 Sale of loans (94,949) — — (94,949) Purchase of loans for immediate resale 915,234 — — 915,234 Immediate resale (915,234) — — (915,234) Repayments received (14,354) (2,628) (24,018) (41,000) Changes in fair value recorded in earnings (6,482) (1,248) (9,508) (17,238) Other changes (5) 14 (2) 7 Changes due to deconsolidation — — (57,222) (57,222) Fair value at June 30, 2020 $ 108,108 $ 15,190 $ — $ 123,298 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at March 31, 2021 $ 28,794 $ 28,395 $ — $ 57,189 Purchases of loans 20,071 29,601 — 49,672 Sale of loans (20,432) — — (20,432) Purchase of loans for immediate resale 2,119,597 — — 2,119,597 Immediate resale (2,119,597) — — (2,119,597) Repayments received (1,726) (3,800) — (5,526) Changes in fair value recorded in earnings (5) 1,174 — 1,169 Other changes 39 200 — 239 Fair value at June 30, 2021 $ 26,741 $ 55,570 $ — $ 82,311 Loans Held-for- Loans Held-for-Investment Loans Held-for- Total Fair value at December 31, 2020 $ 60,232 $ 18,228 $ — $ 78,460 Reclassification of loans from HFI to HFS (26) 26 — — Purchases of loans 38,311 42,548 — 80,859 Sale of loans (66,901) — — (66,901) Purchase of loans for immediate resale 3,414,231 — — 3,414,231 Immediate resale (3,414,231) — — (3,414,231) Repayments received (5,036) (6,129) — (11,165) Changes in fair value recorded in earnings 352 616 — 968 Other changes (191) 281 — 90 Fair value at June 30, 2021 $ 26,741 $ 55,570 $ — $ 82,311 The following tables include a rollforward of the notes receivable and residual certificates related to securitization transactions classified by the Company within Level 3 of the fair value hierarchy: Notes Receivable and Residual Certificates Fair value at March 31, 2020 $ 26,896 Repayments and settlements (3,588) Changes in fair value recorded in earnings 1,532 Fair value at June 30, 2020 $ 24,840 Notes Receivable and Residual Certificates Fair value at December 31, 2019 $ 34,116 Purchases and issuances of securitization notes and residual certificates 4 Repayments and settlements (7,616) Changes in fair value recorded in earnings (1,664) Fair value at June 30, 2020 $ 24,840 Notes Receivable and Residual Certificates Fair value at March 31, 2021 $ 16,033 Repayments and settlements (3,230) Changes in fair value recorded in earnings 192 Fair value at June 30, 2021 $ 12,995 Notes Receivable and Residual Certificates Fair value at December 31, 2020 $ 19,074 Repayments and settlements (6,349) Changes in fair value recorded in earnings 270 Fair value at June 30, 2021 $ 12,995 |
Level 3 Fair Value Assumptions for Loan Servicing Assets and Liabilities | The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for loan servicing assets and liabilities: December 31, 2020 June 30, 2021 Minimum Maximum Weighted-Average (2) Minimum Maximum Weighted-Average (2) Discount rate 15.00 % 35.00 % 22.69 % 13.00 % 20.00 % 15.83 % Credit risk rate (1) 0.03 % 52.78 % 17.19 % 0.03 % 52.78 % 9.23 % Market-servicing rate (3)(4) 0.75 % 0.75 % 0.75 % 0.75 % 0.75 % 0.75 % Prepayment rate (1) 9.07 % 89.01 % 31.62 % 8.39 % 92.60 % 36.29 % (1) Expressed as a percentage of the original principal balance of the loans underlying the servicing arrangement (2) Unobservable inputs were weighted by relative fair value (3) Excludes ancillary fees that would be passed on to a third-party servicer (4) Expressed as a percentage of the outstanding principal balance of the loan |
Fair Value Sensitivity of Loan Servicing Assets And Liabilities to Adverse Changes in Key Assumptions | The table below presents the fair value sensitivity of loan servicing assets and liabilities to adverse changes in key assumptions. The fair value of loan servicing assets and liabilities is not sensitive to adverse changes in discount rates as such changes would not result in a significant impact on the fair value as of December 31, 2020 and June 30, 2021, respectively. December 31, June 30, 2020 2021 Fair value of loan servicing assets $ 6,831 $ 15,450 Expected market-servicing rates 10% market-servicing rates increase (19,013) (2,742) 20% market-servicing rates increase (38,027) (5,144) Expected prepayment rates 10% adverse change (2,061) (28) 20% adverse change (4,212) (62) December 31, June 30, 2020 2021 Fair value of loan servicing liabilities $ 8,254 $ 11,883 Expected market-servicing rates 10% market-servicing rates increase 22,974 3,562 20% market-servicing rates increase 45,948 7,465 Expected prepayment rates 10% adverse change 2,491 486 20% adverse change 5,089 985 |
Servicing Liabilities at Fair Value Rollforward | The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy: Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2020 $ 6,622 $ 5,906 Sale of loans 465 244 Changes in fair value recorded in earnings (1,207) 465 Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2019 $ 4,725 $ 5,140 Sale of loans 3,170 1,490 Changes in fair value recorded in earnings (2,015) (15) Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2021 $ 8,734 $ 10,853 Sale of loans 6,477 4,308 Changes in fair value recorded in earnings 239 (3,278) Fair value at June 30, 2021 $ 15,450 $ 11,883 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2020 $ 6,831 $ 8,254 Sale of loans 9,929 7,827 Changes in fair value recorded in earnings (1,310) (4,198) Fair value at June 30, 2021 $ 15,450 $ 11,883 |
Servicing Assets at Fair Value Rollforward | The following tables present a rollforward of the loan servicing assets and liabilities classified by the Company within Level 3 of the fair value hierarchy: Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2020 $ 6,622 $ 5,906 Sale of loans 465 244 Changes in fair value recorded in earnings (1,207) 465 Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2019 $ 4,725 $ 5,140 Sale of loans 3,170 1,490 Changes in fair value recorded in earnings (2,015) (15) Fair value at June 30, 2020 $ 5,880 $ 6,615 Loan Servicing Assets Loan Servicing Liabilities Fair value at March 31, 2021 $ 8,734 $ 10,853 Sale of loans 6,477 4,308 Changes in fair value recorded in earnings 239 (3,278) Fair value at June 30, 2021 $ 15,450 $ 11,883 Loan Servicing Assets Loan Servicing Liabilities Fair value at December 31, 2020 $ 6,831 $ 8,254 Sale of loans 9,929 7,827 Changes in fair value recorded in earnings (1,310) (4,198) Fair value at June 30, 2021 $ 15,450 $ 11,883 |
Rollforward of Level 3 Liabilities | The following tables include a rollforward of trailing fee liabilities classified by the Company within Level 3 of the fair value hierarchy: Trailing Fee Liabilities Fair value at March 31, 2020 $ 762 Issuances 57 Repayments and settlements (76) Changes in fair value recorded in earnings (23) Fair value at June 30, 2020 $ 720 Trailing Fee Liabilities Fair value at December 31, 2019 $ 504 Issuances 369 Repayments and settlements (130) Changes in fair value recorded in earnings (23) Fair value at June 30, 2020 $ 720 Trailing Fee Liabilities Fair value at March 31, 2021 $ 1,775 Issuances 936 Repayments and settlements (246) Changes in fair value recorded in earnings 48 Fair value at June 30, 2021 $ 2,513 Trailing Fee Liabilities Fair value at December 31, 2020 $ 1,276 Issuances 1,605 Repayments and settlements (416) Changes in fair value recorded in earnings 48 Fair value at June 30, 2021 $ 2,513 |
Loans at Fair Value (Tables)
Loans at Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Aggregate Fair Value and Principal Outstanding of All Loans and Loans 90 days or More Past Due | The following table presents the aggregate fair value and aggregate principal outstanding of all loans and loans that were 90 days or more past due included in the condensed consolidated balance sheets: Loans Loans > 90 Days Past Due December 31, June 30, December 31, June 30, 2020 2021 2020 2021 Outstanding principal balance $ 97,497 $ 100,181 $ 2,018 $ 5,797 Net fair value and accrued interest adjustments (19,037) (17,870) (2,002) (5,762) Fair value (1) $ 78,460 $ 82,311 $ 16 $ 35 _________ (1) Includes $2.4 million and $23.8 million of auto loans as of December 31, 2020 and June 30, 2021, respectively, of which an immaterial amount is 90 days or more past due for each period presented. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following: December 31, June 30, 2020 2021 Servicing fees and other receivables $ 11,656 $ 31,736 Deposits 7,947 8,150 Prepaid expenses 6,009 14,916 Loan servicing assets (at fair value) 6,831 15,450 Other assets 7,603 2,738 Total other assets $ 40,046 $ 72,990 |
Schedule of Property, Equipment, and Software | Property, equipment, and software, net consisted of the following: December 31, June 30, 2020 2021 Internally developed software $ 7,906 $ 11,074 Computer equipment 1,285 1,900 Furniture and fixtures 1,770 2,573 Leasehold improvements 2,763 3,412 Total property, equipment, and software 13,724 18,959 Accumulated depreciation and amortization (3,692) (5,410) Total property, equipment, and software, net $ 10,032 $ 13,549 |
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following: December 31, June 30, 2020 2021 Accrued expenses $ 10,974 $ 29,884 Accrued payroll 13,834 19,368 Loan servicing liabilities (at fair value) 8,254 11,883 Trailing fee liability (at fair value) 1,276 2,513 Other liabilities 1,331 6,731 Total accrued expenses and other liabilities $ 35,669 $ 70,379 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Total Consideration | The total consideration the Company provided for Prodigy was approximately $89.0 million, comprised of the following: April 8, 2021 Fair value of Upstart common stock issued to Prodigy stockholders (1) $ 70,121 Cash paid to common and preferred stockholders, warrant holders, and vested option holders (2) 17,151 Fair value of assumed Prodigy options attributable to pre-combination service period 889 Transactions costs paid by Upstart on behalf of Prodigy 883 Total purchase consideration $ 89,044 _________ (1) The fair value is based on 568,539 shares of Company common stock at $123.33 per share, the closing stock price on April 8, 2021, and 87,339 shares are held in escrow as security for certain indemnification obligations of former Prodigy stockholders. (2) $1.9 million of the cash paid is being held in escrow as security for certain indemnification obligations of former Prodigy stockholders. |
Purchase Price Allocation | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: April 8, 2021 Goodwill $ 66,866 Acquisition-related intangible assets 23,200 Cash 1,479 Deferred tax liability, net (2,328) Other assets acquired and liabilities assumed, net (173) Total purchase consideration $ 89,044 |
Intangible Assets Acquired | Estimated fair values Estimated useful life (years) Developed technology $ 9,400 3.0 Trade name 100 2.0 Customer relationships 13,700 12.0 Total acquisition-related intangible assets $ 23,200 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Rollforward | The table below presents changes to the carrying amount of goodwill: December 31, 2020 Goodwill Acquired June 30, 2021 Goodwill $ — $ 66,866 $ 66,866 |
Acquired Intangible Assets | Acquired intangible assets subject to amortization are as follows: June 30, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (Years) Developed technology $ 9,400 $ 783 $ 8,617 2.8 Trade name 100 12 88 1.8 Customer relationships 13,700 286 13,414 11.8 $ 23,200 $ 1,081 $ 22,119 |
Expected Future Amortization Expense | Expected future amortization expense for intangible assets as of June 30, 2021 is as follows: Fiscal Years: Remaining 2021 $ 2,163 2022 4,325 2023 4,287 2024 1,925 2025 1,142 Thereafter 8,277 Total $ 22,119 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Aggregate Principal Outstanding Of All Loans | The following table presents the aggregate principal outstanding of all loans mentioned in this note that are included in the condensed consolidated balance sheets: Borrowings December 31, June 30, 2020 2021 Term loan $ 15,000 $ — Revolving credit facility 5,500 — Warehouse credit facility 34,994 2,727 Risk retention funding loans 7,187 3,330 Total payments due 62,681 6,057 Unamortized debt discount (55) — Total borrowings $ 62,626 $ 6,057 |
Schedule of Assets Pledge as Collateral | The following table includes the aggregate balances held by ULT that were pledged as collateral for the ULT Warehouse Credit Facility and included in loans at fair value and restricted cash in the condensed consolidated balance sheets, respectively: ULT Warehouse Credit Facility December 31, 2020 June 30, Outstanding borrowings $ 34,994 $ 2,727 Aggregate outstanding principal of loans pledged as collateral 59,709 6,470 Aggregate fair value of loans purchased and held by ULT 60,231 26,741 Restricted cash pledged as collateral 11,270 28,974 |
Schedule of Maturities of All Borrowings | The following table summarizes the aggregate amount of maturities of all borrowings as of June 30, 2021: June 30, Remainder of 2021 $ — 2022 — 2023 3,330 2024 2,727 2025 — Total $ 6,057 |
Common Stock and Common Stock_2
Common Stock and Common Stock Warrants (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of shares and warrants reserved for issuance | The Company had reserved shares of common stock for issuance, on an as-converted basis, as follows: December 31, June 30, 2020 2021 Options issued and outstanding 19,600,223 18,626,100 RSUs outstanding — 1,187,427 Shares available for future issuance under 2020 plan 2,537,181 10,249,442 Shares available for issuance under ESPP — 2,113,140 Warrants to purchase common stock 75,000 — Total 22,212,404 32,176,109 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summarized Stock Option Activity | The following table summarized stock option activity for the six months ended June 30, 2021: Number of Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (years) Aggregate Balances at December 31, 2020 19,600,223 $ 4.27 6.8 $ 715,084 Options granted 606,830 $ 104.82 Options assumed upon acquisition 23,494 $ 9.06 Options exercised (1,284,977) $ 2.28 Options cancelled and forfeited (319,470) $ 6.80 Balances at June 30, 2021 18,626,100 $ 7.64 6.4 $ 2,184,219 Options exercisable – June 30, 2021 11,421,423 $ 1.99 5.0 $ 1,403,759 Options vested and expected to vest – June 30, 2021 18,331,294 $ 7.22 6.4 $ 2,157,331 |
Summaries of Restricted Stock Units and Restricted Stock | The following table summarized RSU activity for the six months ended June 30, 2021: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2020 — RSUs granted 1,217,420 $ 107.81 RSUs vested (6,480) $ 102.52 RSUs cancelled and forfeited (23,513) $ 92.77 Unvested at June 30, 2021 1,187,427 The following table summarized Restricted Stock activity for the six months ended June 30, 2021: Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2020 — Restricted 82,201 $ 121.65 Vested — $ — Unvested at June 30, 2021 82,201 |
Stock Options Fair Value Assumptions | The following assumptions were used to estimate the fair value of options granted: Three Months Ended Six Months Ended 2020 2021 2020 2021 Expected term (in years) 5.3– 10.0 * 5.3 – 10.0 5.3 – 6.9 Expected volatility 65.97% – 71.80% * 53.23% – 71.80% 63.12% – 65.01% Risk-free interest rate 0.37% – 0.82% * 0.37% – 1.50% 0.62% – 1.14% Dividend yield —% * —% — % * No options were granted during the three months ended June 30, 2021. |
Employee Stock Purchase Plan Fair Value Assumptions | The following assumptions were used to estimate the fair value of the Company’s ESPP for the initial offering period: Six Months Ended 2021 Expected term (in years) 0.6 Expected volatility 61.65% Risk-free interest rate 0.09% Dividend yield —% |
Stock-Based Compensation Expense | The Company recorded stock-based compensation in the following expense categories in its condensed consolidated statements of operations and comprehensive income (loss) for employees and nonemployees: Three Months Ended Six Months Ended 2020 2021 2020 2021 Sales and marketing $ 405 $ 1,427 $ 689 $ 2,180 Customer operations 205 1,624 404 2,376 Engineering and product development 1,112 12,472 2,038 16,779 General, administrative, and other 797 5,663 1,353 8,473 Total $ 2,519 $ 21,186 $ 4,484 $ 29,808 Stock-based compensation expense by award type was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Stock options $ 2,519 $ 11,265 $ 4,484 $ 16,385 RSUs — 7,094 — 8,539 ESPP — 1,779 — 3,836 Restricted Stock — 1,048 — 1,048 Total $ 2,519 $ 21,186 $ 4,484 $ 29,808 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Future Minimum Non-Cancelable Lease Payments | As of June 30, 2021, future minimum non-cancelable lease payments are as follows: Operating Leases Remainder of 2021 $ 2,408 2022 5,221 2023 5,516 2024 2,567 2025 1,579 Thereafter 2,417 Total undiscounted lease payments 19,708 Less: Present value adjustment (1,930) Operating lease liabilities $ 17,778 |
Operating Lease Expense And Supplemental Cash and Non-Cash Information | Operating lease expense was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Rent expense $ 1,303 $ 1,467 $ 2,572 $ 2,995 Variable lease payments $ 348 $ 362 $ 704 $ 661 Supplemental information related to the Company’s operating leases was as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Cash paid for amounts included in the measurement of lease liabilities $ 1,035 $ 1,075 $ 2,046 $ 2,132 Total right-of-use assets capitalized $ 187 $ — $ 187 $ — Supplemental cash flow and noncash information related to the Company’s operating leases was as follows: June 30, 2021 Weighted average remaining lease term (in years) 4.18 Weighted average discount rate 5.06% |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Per Share Attributable to Common Stockholders | Basic net income (loss) per common share attributable to Upstart Holdings, Inc.’s common stockholders is based on the weighted-average common shares outstanding during the relevant period. Diluted net income (loss) per common share attributable to Upstart Holdings, Inc.’s common stockholders is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. Three Months Ended Six Months Ended 2020 2021 2020 2021 Numerator: Net income (loss) attributable to Upstart Holdings, Inc. common stockholders $ (6,193) $ 37,284 $ (4,713) $ 47,386 Denominator: Weighted-average common shares outstanding used to calculate net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic 14,657,399 76,674,129 14,641,333 75,160,037 Weighted-average effect of dilutive securities — 18,127,994 — 18,033,116 Weighted-average common shares outstanding used to calculate net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted 14,657,399 94,802,123 14,641,333 93,193,153 Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic $ (0.42) $ 0.49 $ (0.32) $ 0.63 Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted $ (0.42) $ 0.39 $ (0.32) $ 0.51 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities were excluded from the computation of diluted net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders for the periods presented, because including them would have been anti-dilutive for the three and six months ended June 30, 2020. Three Months Ended Six Months Ended 2020 2021 2020 2021 Convertible preferred stock 47,349,577 — 47,349,577 — Options to purchase common stock 18,853,815 451,493 18,853,815 500,065 Unvested RSUs — 262,914 — 1,117,330 Warrants to purchase convertible preferred stock 600,208 — 600,208 — Warrants to purchase common stock 319,669 — 319,669 — Total 67,123,269 714,407 67,123,269 1,617,395 |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Details) - USD ($) | Apr. 13, 2021 | Mar. 31, 2021 | Apr. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Short-term Debt [Line Items] | |||||
Offering price per share (in dollars per share) | $ 120 | ||||
Net proceeds from sale of stock | $ 263,900,000 | ||||
Underwriting discount | 11,000,000 | ||||
Offering expense | $ 1,000,000 | ||||
Period of payment deferral | 6 months | ||||
Repayments of debt | $ 62,455,000 | $ 86,848,000 | |||
Public Stock Offering | |||||
Short-term Debt [Line Items] | |||||
Shares sold in offering | 2,300,000 | ||||
Over-Allotment Option | |||||
Short-term Debt [Line Items] | |||||
Shares sold in offering | 300,000 | ||||
Paycheck Protection Program Loan, CARES Act | |||||
Short-term Debt [Line Items] | |||||
Debt, face amount | $ 5,300,000 | ||||
Stated interest rate | 1.00% | ||||
Repayments of debt | $ 5,300,000 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | $ 187,297 | $ 13,305 | $ 303,467 | $ 81,318 |
Platform and referral fees, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | 169,080 | 7,612 | 276,033 | 67,842 |
Servicing fees, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | $ 18,217 | $ 5,693 | $ 27,434 | $ 13,476 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Trailing fee liability (at fair value) | $ 2,513 | $ 2,513 | $ 1,276 | ||
Servicing fees and other receivables | 31,736 | 31,736 | 11,656 | ||
Accrued interest income | $ 900 | $ 900 | $ 900 | ||
Customer One | Customers | Total Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk (in percent) | 63.00% | 35.00% | 62.00% | 70.00% | |
Customer One | Customers | Accounts Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk (in percent) | 38.00% | 34.00% | |||
Customer Two | Customers | Total Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk (in percent) | 22.00% | 23.00% | |||
Customer Two | Customers | Accounts Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk (in percent) | 18.00% | 15.00% | |||
Platform and referral fees, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Loan premium and loan trailing fees recognized | $ 6,000 | $ 1,400 | $ 9,600 | $ 3,800 | |
Trailing fee liability (at fair value) | 2,500 | 2,500 | $ 1,300 | ||
Servicing fees and other receivables | $ 16,200 | $ 16,200 | $ 8,100 | ||
Capitalized cost amortization term | 3 years | 3 years |
Revenue - Loan Servicing Rights
Revenue - Loan Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Net gain related to loan servicing rights | $ 2,169 | $ 221 | $ 2,102 | $ 1,680 |
Revenue - Fees Collected (Detai
Revenue - Fees Collected (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | $ 187,297 | $ 13,305 | $ 303,467 | $ 81,318 |
Collection agency fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | 991 | 654 | 1,854 | 1,454 |
Borrower fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from fees, net | $ 1,095 | $ 419 | $ 1,980 | $ 936 |
Revenue - Interest Income and F
Revenue - Interest Income and Fair Value Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Interest income | $ 3,545 | $ 7,724 | $ 6,951 | $ 16,907 |
Interest expense | (1,497) | (2,260) | (2,527) | (5,515) |
Fair value and other adjustments, net | 4,601 | (1,416) | 7,400 | (11,363) |
Total interest income and fair value adjustments, net | $ 6,649 | 4,048 | $ 11,824 | 29 |
Variable Interest Entity, Primary Beneficiary | ||||
Disaggregation of Revenue [Line Items] | ||||
Interest income | 1,794 | 5,173 | ||
Interest expense | (505) | (1,074) | ||
Fair value and other adjustments, net | (555) | (3,555) | ||
Total interest income and fair value adjustments, net | $ 734 | $ 544 |
Securitizations and Variable _3
Securitizations and Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Restricted cash | $ 111,246 | $ 60,514 | |
Notes receivable and residual certificates (at fair value) | |||
Variable Interest Entity [Line Items] | |||
Loans, notes receivables, and residual certificates | 12,995 | 19,074 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 30,769 | 12,371 | |
Variable Interest Entity, Primary Beneficiary | Notes receivable and residual certificates (at fair value) | |||
Variable Interest Entity [Line Items] | |||
Loans, notes receivables, and residual certificates | 11,839 | 17,219 | |
Variable Interest Entity, Primary Beneficiary | Majority-owned Affiliates | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 20.00% | ||
Variable Interest Entity, Primary Beneficiary | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Variable Interest Entity [Line Items] | |||
Ownership interest sold | 80.00% | ||
Consideration received | $ 8,000 | ||
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 7,200 | 7,200 | |
Variable Interest Entity, Not Primary Beneficiary | Notes receivable and residual certificates (at fair value) | |||
Variable Interest Entity [Line Items] | |||
Loans, notes receivables, and residual certificates | $ 13,000 | $ 18,900 |
Securitizations and Variable _4
Securitizations and Variable Interest Entities - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Assets | [1] | $ 904,583 | $ 477,255 |
Liabilities | [1] | 188,487 | 177,003 |
Net Assets | 716,096 | 300,252 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Assets | 118,484 | 104,992 | |
Liabilities | 6,166 | 42,296 | |
Net Assets | 112,318 | 62,696 | |
Variable Interest Entity, Primary Beneficiary | Warehouse Entities | |||
Variable Interest Entity [Line Items] | |||
Assets | 55,935 | 71,530 | |
Liabilities | 2,759 | 35,109 | |
Net Assets | 53,176 | 36,421 | |
Variable Interest Entity, Primary Beneficiary | Majority-owned Affiliates | |||
Variable Interest Entity [Line Items] | |||
Assets | 11,839 | 17,219 | |
Liabilities | 3,330 | 7,187 | |
Net Assets | 8,509 | 10,032 | |
Variable Interest Entity, Primary Beneficiary | Other Consolidated VIEs | |||
Variable Interest Entity [Line Items] | |||
Assets | 50,710 | 16,243 | |
Liabilities | 77 | 0 | |
Net Assets | 50,633 | 16,243 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Assets | 351,444 | 524,358 | |
Liabilities | 275,831 | 430,006 | |
Net Assets | 75,613 | 94,352 | |
Maximum Exposure to Losses | 20,211 | 26,141 | |
Variable Interest Entity, Not Primary Beneficiary | Securitizations | |||
Variable Interest Entity [Line Items] | |||
Assets | 326,832 | 484,604 | |
Liabilities | 251,219 | 390,252 | |
Net Assets | 75,613 | 94,352 | |
Maximum Exposure to Losses | 19,054 | 24,434 | |
Variable Interest Entity, Not Primary Beneficiary | Upstart Network Trust | |||
Variable Interest Entity [Line Items] | |||
Assets | 24,612 | 39,754 | |
Liabilities | 24,612 | 39,754 | |
Net Assets | 0 | 0 | |
Maximum Exposure to Losses | $ 1,157 | $ 1,707 | |
[1] | The following table presents information on assets and liabilities related to variable interest entities (“VIEs”) that are consolidated by Upstart Holdings, Inc. at December 31, 2020 and June 30, 2021. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The holders of the beneficial interests do not have recourse to the general credit of Upstart Holdings, Inc. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. December 31, June 30, 2020 2021 Assets Restricted cash $ 12,371 $ 30,769 Loans (at fair value) 75,373 75,656 Notes receivable and residual certificates (at fair value) 17,219 11,839 Other assets 29 220 Total assets $ 104,992 $ 118,484 Liabilities Accounts payable $ 83 $ 28 Borrowings 42,181 6,057 Other liabilities 32 81 Total liabilities $ 42,296 $ 6,166 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Loan servicing assets | $ 15,450 | $ 6,831 |
Liabilities | ||
Loan servicing liabilities | 11,883 | 8,254 |
Fair Value, Inputs, Level 3 | ||
Assets | ||
Loans | 82,311 | 78,460 |
Notes receivable and residual certificates | 12,995 | 19,074 |
Loan servicing assets | 15,450 | 6,831 |
Total assets | 110,756 | 104,365 |
Liabilities | ||
Loan servicing liabilities | 11,883 | 8,254 |
Trailing fee liabilities | 2,513 | 1,276 |
Total liabilities | $ 14,396 | $ 9,530 |
Fair Value Measurement - Loans
Fair Value Measurement - Loans Held (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans held-for-sale | $ 26,741 | $ 60,232 |
Loans held-for-investment | 55,570 | 18,228 |
Total | $ 82,311 | $ 78,460 |
Fair Value Measurement - Measur
Fair Value Measurement - Measurement Inputs (Details) - Valuation Technique, Discounted Cash Flow - Fair Value, Inputs, Level 3 | Jun. 30, 2021 | Dec. 31, 2020 |
Minimum | Discount rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 3.50% | 6.80% |
Minimum | Discount rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 2.98% | 3.01% |
Minimum | Credit risk rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 0.08% | 0.36% |
Minimum | Credit risk rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 0.04% | 0.04% |
Minimum | Prepayment rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 11.15% | 11.64% |
Minimum | Prepayment rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 15.60% | 15.60% |
Maximum | Discount rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 17.27% | 16.99% |
Maximum | Discount rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 14.00% | 14.00% |
Maximum | Credit risk rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 50.85% | 52.31% |
Maximum | Credit risk rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 50.69% | 50.69% |
Maximum | Prepayment rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 86.75% | 78.36% |
Maximum | Prepayment rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 36.88% | 36.88% |
Weighted Average | Discount rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 7.22% | 7.44% |
Weighted Average | Discount rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 5.89% | 5.84% |
Weighted Average | Credit risk rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 22.22% | 19.82% |
Weighted Average | Credit risk rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 17.90% | 17.12% |
Weighted Average | Prepayment rate | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 37.09% | 31.03% |
Weighted Average | Prepayment rate | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loan receivable, measurement input | 27.70% | 27.63% |
Fair Value Measurement - Sensit
Fair Value Measurement - Sensitivity of Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Loans (at fair value) | ||
Discount rates | ||
100 basis point increase | $ (1,089) | $ (979) |
200 basis point increase | (2,154) | (1,939) |
Expected credit loss rates on underlying loans | ||
10% adverse change | (1,350) | (1,303) |
20% adverse change | (2,700) | (2,611) |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Aggregate fair value of loans purchased and held by ULT | 82,311 | 78,460 |
Fair Value, Inputs, Level 3 | Loans (at fair value) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Aggregate fair value of loans purchased and held by ULT | $ 82,311 | $ 78,460 |
Fair Value Measurement - Loan_2
Fair Value Measurement - Loans Rollforward (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Loans (at fair value) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value, beginning balance | $ 57,189 | $ 200,601 | $ 78,460 | $ 232,305 |
Reclassification of loans from HFI to HFS | 0 | 0 | ||
Purchases of loans | 49,672 | 716 | 80,859 | 101,395 |
Sale of loans | (20,432) | (66,901) | (94,949) | |
Purchase of loans for immediate resale | 2,119,597 | 66,694 | 3,414,231 | 915,234 |
Immediate resale | (2,119,597) | (66,694) | (3,414,231) | (915,234) |
Repayments received | (5,526) | (17,970) | (11,165) | (41,000) |
Changes in fair value recorded in earnings | 1,169 | (2,795) | 968 | (17,238) |
Other changes | 239 | (32) | 90 | 7 |
Changes due to deconsolidation | (57,222) | (57,222) | ||
Fair value, ending balance | 82,311 | 123,298 | 82,311 | 123,298 |
Loan Held For Sale | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value, beginning balance | 28,794 | 116,511 | 60,232 | 0 |
Reclassification of loans from HFI to HFS | (26) | 125,297 | ||
Purchases of loans | 20,071 | 677 | 38,311 | 98,601 |
Sale of loans | (20,432) | (66,901) | (94,949) | |
Purchase of loans for immediate resale | 2,119,597 | 66,694 | 3,414,231 | 915,234 |
Immediate resale | (2,119,597) | (66,694) | (3,414,231) | (915,234) |
Repayments received | (1,726) | (7,908) | (5,036) | (14,354) |
Changes in fair value recorded in earnings | (5) | (1,201) | 352 | (6,482) |
Other changes | 39 | 29 | (191) | (5) |
Changes due to deconsolidation | 0 | 0 | ||
Fair value, ending balance | 26,741 | 108,108 | 26,741 | 108,108 |
Loans Held For Investment | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value, beginning balance | 28,395 | 16,758 | 18,228 | 141,555 |
Reclassification of loans from HFI to HFS | 26 | (125,297) | ||
Purchases of loans | 29,601 | 39 | 42,548 | 2,794 |
Sale of loans | 0 | 0 | 0 | |
Purchase of loans for immediate resale | 0 | 0 | 0 | 0 |
Immediate resale | 0 | 0 | 0 | 0 |
Repayments received | (3,800) | (1,317) | (6,129) | (2,628) |
Changes in fair value recorded in earnings | 1,174 | (229) | 616 | (1,248) |
Other changes | 200 | (61) | 281 | 14 |
Changes due to deconsolidation | 0 | 0 | ||
Fair value, ending balance | 55,570 | 15,190 | 55,570 | 15,190 |
Securitized Loans Held For Investment | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value, beginning balance | 0 | 67,332 | 0 | 90,750 |
Reclassification of loans from HFI to HFS | 0 | 0 | ||
Purchases of loans | 0 | 0 | 0 | 0 |
Sale of loans | 0 | 0 | 0 | |
Purchase of loans for immediate resale | 0 | 0 | 0 | 0 |
Immediate resale | 0 | 0 | 0 | 0 |
Repayments received | 0 | (8,745) | 0 | (24,018) |
Changes in fair value recorded in earnings | 0 | (1,365) | 0 | (9,508) |
Other changes | 0 | 0 | 0 | (2) |
Changes due to deconsolidation | (57,222) | (57,222) | ||
Fair value, ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average effect of fair value of hypothetical 20% adverse change in expected credit loss rates (in percent) | 17.00% | |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Notes receivable and residual certificates | $ 12,995 | $ 19,074 |
Fair Value, Inputs, Level 3 | Notes Receivable | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average effect on fair value of a 100 basis point increase in discount rates (in percent) | 0.83% | 1.23% |
Average effect on fair value of a 200 basis point increase in discount rates (in percent) | 1.66% | 2.36% |
Fair Value, Inputs, Level 3 | Minimum | Discount rate | Valuation Technique, Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Trailing fees liability, measurement input | 3.50% | |
Fair Value, Inputs, Level 3 | Minimum | Credit risk rate | Valuation Technique, Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Trailing fees liability, measurement input | 0.08% | |
Fair Value, Inputs, Level 3 | Maximum | Discount rate | Valuation Technique, Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Trailing fees liability, measurement input | 17.27% | |
Fair Value, Inputs, Level 3 | Maximum | Credit risk rate | Valuation Technique, Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Trailing fees liability, measurement input | 50.85% |
Fair Value Measurement - Note R
Fair Value Measurement - Note Receivable Rollforward (Details) - Notes Receivable - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value, beginning balance | $ 16,033 | $ 26,896 | $ 19,074 | $ 34,116 |
Purchases and issuances of securitization notes and residual certificates | 4 | |||
Repayments and settlements | (3,230) | (3,588) | (6,349) | (7,616) |
Changes in fair value recorded in earnings | 192 | 1,532 | 270 | (1,664) |
Fair value, ending balance | $ 12,995 | $ 24,840 | $ 12,995 | $ 24,840 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Assumptions (Details) - Fair Value, Inputs, Level 3 - Valuation Technique, Discounted Cash Flow | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Minimum | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Discount rate | 13.00% | 15.00% |
Credit Risk Rate | 0.03% | 0.03% |
Market-servicing rate | 0.75% | 0.75% |
Prepayment rate | 8.39% | 9.07% |
Maximum | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Discount rate | 20.00% | 35.00% |
Credit Risk Rate | 52.78% | 52.78% |
Market-servicing rate | 0.75% | 0.75% |
Prepayment rate | 92.60% | 89.01% |
Weighted Average | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Discount rate | 15.83% | 22.69% |
Credit Risk Rate | 9.23% | 17.19% |
Market-servicing rate | 0.75% | 0.75% |
Prepayment rate | 36.29% | 31.62% |
Fair Value Measurement - Loan S
Fair Value Measurement - Loan Servicing Sensitivity (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||||||
Loan servicing assets | $ 15,450 | $ 6,831 | ||||
Loan servicing liabilities | 11,883 | 8,254 | ||||
Fair Value, Inputs, Level 3 | ||||||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||||||
Loan servicing assets | 15,450 | 6,831 | ||||
Loan servicing liabilities | 11,883 | 8,254 | ||||
Fair Value, Inputs, Level 3 | Loan Servicing Liabilities | ||||||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||||||
Loan servicing liabilities | 11,883 | $ 10,853 | 8,254 | $ 6,615 | $ 5,906 | $ 5,140 |
10% market-servicing rates increase | 3,562 | 22,974 | ||||
20% market-servicing rates increase | 7,465 | 45,948 | ||||
10% adverse change | 486 | 2,491 | ||||
20% adverse change | 985 | 5,089 | ||||
Fair Value, Inputs, Level 3 | Loan Servicing Assets | ||||||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||||||
Loan servicing assets | 15,450 | $ 8,734 | 6,831 | $ 5,880 | $ 6,622 | $ 4,725 |
10% market-servicing rates increase | (2,742) | (19,013) | ||||
20% market-servicing rates increase | (5,144) | (38,027) | ||||
10% adverse change | (28) | (2,061) | ||||
20% adverse change | $ (62) | $ (4,212) |
Fair Value Measurement - Loan_3
Fair Value Measurement - Loan Servicing Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | $ 6,831 | |||
Fair value, ending balance | $ 15,450 | 15,450 | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | 8,254 | |||
Fair value, ending balance | 11,883 | 11,883 | ||
Fair Value, Inputs, Level 3 | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | 6,831 | |||
Fair value, ending balance | 15,450 | 15,450 | ||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | 8,254 | |||
Fair value, ending balance | 11,883 | 11,883 | ||
Fair Value, Inputs, Level 3 | Loan Servicing Liabilities | ||||
Servicing Liability at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | 10,853 | $ 5,906 | 8,254 | $ 5,140 |
Sale of loans | 4,308 | 244 | 7,827 | 1,490 |
Changes in fair value recorded in earnings | (3,278) | 465 | (4,198) | (15) |
Fair value, ending balance | 11,883 | 6,615 | 11,883 | 6,615 |
Loan Servicing Assets | Fair Value, Inputs, Level 3 | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value, beginning balance | 8,734 | 6,622 | 6,831 | 4,725 |
Sale of loans | 6,477 | 465 | 9,929 | 3,170 |
Changes in fair value recorded in earnings | 239 | (1,207) | (1,310) | (2,015) |
Fair value, ending balance | $ 15,450 | $ 5,880 | $ 15,450 | $ 5,880 |
Fair Value Measurement - Traili
Fair Value Measurement - Trailing Fee Rollforward (Details) - Fair Value, Inputs, Level 3 - Trailing Fee Liabilities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fair value, beginning balance | $ 1,775 | $ 762 | $ 1,276 | $ 504 |
Issuances | 936 | 57 | 1,605 | 369 |
Repayments and settlements | (246) | (76) | (416) | (130) |
Changes in fair value recorded in earnings | 48 | (23) | 48 | (23) |
Fair value, ending balance | $ 2,513 | $ 720 | $ 2,513 | $ 720 |
Loans at Fair Value (Details)
Loans at Fair Value (Details) - Loans (at fair value) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Outstanding principal balance | $ 100,181 | $ 97,497 |
Net fair value and accrued interest adjustments | (17,870) | (19,037) |
Fair value | 82,311 | 78,460 |
Auto Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Fair value | 23,800 | 2,400 |
Loans > 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Outstanding principal balance | 5,797 | 2,018 |
Net fair value and accrued interest adjustments | (5,762) | (2,002) |
Fair value | $ 35 | $ 16 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Assets [Abstract] | ||
Servicing fees and other receivables | $ 31,736 | $ 11,656 |
Deposits | 8,150 | 7,947 |
Prepaid expenses | 14,916 | 6,009 |
Loan servicing assets (at fair value) | 15,450 | 6,831 |
Other assets | 2,738 | 7,603 |
Total other assets | $ 72,990 | $ 40,046 |
Balance Sheet Components - Prop
Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Total property, equipment, and software | $ 18,959 | $ 18,959 | $ 13,724 | |
Accumulated depreciation and amortization | (5,410) | (5,410) | (3,692) | |
Property, Plant and Equipment, Net | 13,549 | 13,549 | 10,032 | |
Depreciation and amortization | 2,799 | $ 1,050 | ||
Capitalized internally developed software balances, net of accumulated amortization | 8,200 | 8,200 | 6,000 | |
Internally developed software | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property, equipment, and software | 11,074 | 11,074 | 7,906 | |
Computer equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property, equipment, and software | 1,900 | 1,900 | 1,285 | |
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property, equipment, and software | 2,573 | 2,573 | 1,770 | |
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property, equipment, and software | 3,412 | 3,412 | $ 2,763 | |
Property, Equipment, And Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 900 | $ 1,700 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Accrued expenses | $ 29,884 | $ 10,974 |
Accrued payroll | 19,368 | 13,834 |
Loan servicing liabilities (at fair value) | 11,883 | 8,254 |
Trailing fee liability (at fair value) | 2,513 | 1,276 |
Other liabilities | 6,731 | 1,331 |
Total accrued expenses and other liabilities | $ 70,379 | $ 35,669 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Apr. 13, 2021 | Apr. 08, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | |||
Acquisition costs recognized | $ 1,200 | ||
Prodigy Software, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 89,044 | ||
Restricted stock issued (in shares) | 82,201 | ||
Value of restricted stock issued | $ 10,100 | ||
Estimated useful life (years) | 8 years 3 months 18 days | ||
Prodigy Software, Inc. | Restricted Stock | |||
Business Acquisition [Line Items] | |||
Repurchase option (in percent) | 12.50% | ||
Repurchase period | 3 months | ||
Share-based compensation expense period of recognition | 2 years |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 08, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Business Acquisition [Line Items] | |||
Fair value of Upstart common stock issued to Prodigy stockholders | $ 80,256 | $ 0 | |
Prodigy Software, Inc. | |||
Business Acquisition [Line Items] | |||
Fair value of Upstart common stock issued to Prodigy stockholders | $ 70,121 | ||
Cash paid to common and preferred stockholders, warrant holders, and vested option holders | 17,151 | ||
Fair value of assumed Prodigy options attributable to pre-combination service period | 889 | ||
Transactions costs paid by Upstart on behalf of Prodigy | 883 | ||
Consideration transferred | $ 89,044 | ||
Shares of common stock transferred (in shares) | 568,539 | ||
Value of common stock transferred (in dollars per share) | $ 123.33 | ||
Shares held in escrow (in shares) | 87,339 | ||
Cash payments held in escrow | $ 1,900 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Apr. 08, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 66,866 | $ 0 | |
Prodigy Software, Inc. | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 66,866 | ||
Acquisition-related intangible assets | 23,200 | ||
Cash | 1,479 | ||
Deferred tax liability, net | (2,328) | ||
Other assets acquired and liabilities assumed, net | (173) | ||
Total purchase consideration | $ 89,044 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets (Details) - Prodigy Software, Inc. $ in Thousands | Apr. 08, 2021USD ($) |
Business Acquisition [Line Items] | |
Acquisition-related intangible assets | $ 23,200 |
Estimated useful life (years) | 8 years 3 months 18 days |
Developed technology | |
Business Acquisition [Line Items] | |
Acquisition-related intangible assets | $ 9,400 |
Estimated useful life (years) | 3 years |
Trade name | |
Business Acquisition [Line Items] | |
Acquisition-related intangible assets | $ 100 |
Estimated useful life (years) | 2 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Acquisition-related intangible assets | $ 13,700 |
Estimated useful life (years) | 12 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 0 |
Goodwill Acquired | 66,866 |
Ending balance | $ 66,866 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 23,200 |
Accumulated Amortization | 1,081 |
Net Carrying Amount | 22,119 |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | 9,400 |
Accumulated Amortization | 783 |
Net Carrying Amount | $ 8,617 |
Developed technology | Weighted Average | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 2 years 9 months 18 days |
Trade name | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 100 |
Accumulated Amortization | 12 |
Net Carrying Amount | $ 88 |
Trade name | Weighted Average | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 1 year 9 months 18 days |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 13,700 |
Accumulated Amortization | 286 |
Net Carrying Amount | $ 13,414 |
Customer relationships | Weighted Average | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life (Years) | 11 years 9 months 18 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1.1 | $ 1.1 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Expected Amortization (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2021 | $ 2,163 |
2022 | 4,325 |
2023 | 4,287 |
2024 | 1,925 |
2025 | 1,142 |
Thereafter | 8,277 |
Net Carrying Amount | $ 22,119 |
Borrowings - Summary (Details)
Borrowings - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Schedule of Borrowings [Line Items] | ||
Total payments due | $ 6,057 | $ 62,681 |
Unamortized debt discount | 0 | (55) |
Total borrowings | 6,057 | 62,626 |
Term loan | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | 0 | 15,000 |
UNI credit facility | Revolving credit facility | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | 0 | 5,500 |
Warehouse credit facility | Revolving credit facility | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | 2,727 | 34,994 |
Risk retention funding loans | ||
Schedule of Borrowings [Line Items] | ||
Total payments due | $ 3,330 | $ 7,187 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Oct. 31, 2018 | Sep. 30, 2018 | Nov. 30, 2015 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2019 | |
Schedule of Borrowings [Line Items] | ||||||||
Repayments of debt | $ 62,455 | $ 86,848 | ||||||
Outstanding borrowings | $ 6,057 | 6,057 | $ 62,681 | |||||
Mezzanine Loan | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Debt, face amount | $ 15,000 | |||||||
Mezzanine Loan | Maximum | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Stated interest rate | 10.00% | |||||||
UNI credit facility | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Maximum borrowing capacity | $ 5,500 | |||||||
Repayments of credit facility | 5,500 | |||||||
Outstanding borrowings | $ 0 | $ 0 | $ 5,500 | |||||
Warehouse credit facility | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Maximum borrowing capacity | $ 100,000 | |||||||
Redemption price (in percent) | 100.00% | |||||||
Minimum utilization requirement | $ 30,000 | |||||||
Maximum advance rate (in percent) | 85.00% | 85.00% | 80.00% | |||||
Outstanding borrowings | $ 2,727 | $ 2,727 | $ 34,994 | |||||
Risk retention funding loans | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Outstanding borrowings | 3,330 | 3,330 | 7,187 | |||||
Assets pledged as collateral | 8,700 | 8,700 | 12,600 | |||||
2018-2 RR Financing Agreement | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Stated interest rate | 4.00% | |||||||
2019-2 RR Financing Agreement | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Stated interest rate | 4.33% | |||||||
Outstanding borrowings | 3,300 | 3,300 | 6,600 | |||||
Term loan | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Repayments of debt | 15,000 | |||||||
Outstanding borrowings | $ 0 | $ 0 | $ 15,000 | |||||
Prime Rate | Mezzanine Loan | Minimum | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Basis spread on variable rate (in percent) | 5.25% | |||||||
Prime Rate | UNI credit facility | Minimum | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Basis spread on variable rate (in percent) | 1.00% | |||||||
Prime Rate | UNI credit facility | Maximum | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Basis spread on variable rate (in percent) | 4.25% | |||||||
London Interbank Offered Rate (LIBOR) | Warehouse credit facility | Minimum | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Basis spread on variable rate (in percent) | 1.90% | |||||||
London Interbank Offered Rate (LIBOR) | Warehouse credit facility | Maximum | Revolving credit facility | ||||||||
Schedule of Borrowings [Line Items] | ||||||||
Basis spread on variable rate (in percent) | 400.00% |
Borrowings - Assets Pledged as
Borrowings - Assets Pledged as Collateral (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | $ 6,057 | $ 62,681 |
Restricted cash | 111,246 | 60,514 |
Variable Interest Entity, Primary Beneficiary | ||
Schedule of Borrowings [Line Items] | ||
Restricted cash | 30,769 | 12,371 |
Warehouse credit facility | Revolving credit facility | ||
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | 2,727 | 34,994 |
Warehouse credit facility | Revolving credit facility | Variable Interest Entity, Primary Beneficiary | ||
Schedule of Borrowings [Line Items] | ||
Outstanding borrowings | 2,727 | 34,994 |
Aggregate outstanding principal of loans pledged as collateral | 6,470 | 59,709 |
Aggregate fair value of loans purchased and held by ULT | 26,741 | 60,231 |
Restricted cash | $ 28,974 | $ 11,270 |
Borrowings - Maturity (Details)
Borrowings - Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Remainder of 2021 | $ 0 | |
2022 | 0 | |
2023 | 3,330 | |
2024 | 2,727 | |
2025 | 0 | |
Total | $ 6,057 | $ 62,681 |
Common Stock and Common Stock_3
Common Stock and Common Stock Warrants - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 13, 2021 | Dec. 01, 2020 | Oct. 31, 2018 | Jun. 30, 2021 | Dec. 31, 2020 |
Equity [Abstract] | |||||
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Stock warrants issued to purchase common stock (in shares) | 75,000 | ||||
Stock warrants issued, exercise price (in dollars per share) | $ 2.16 | ||||
Stock warrants issued, contractual term | 10 years | ||||
Stock warrants issued, required repurchase amount in event of IPO | $ 1.5 | ||||
Stock warrants reclassified from liability to equity (in shares) | 75,000 | ||||
Stock warrants issued, termination period after closing qualified sale | 30 days | ||||
Stock warrants issued, termination period after company IPO price is confirmed (in dollars per share) | 10 days | ||||
Exercise of common stock warrant (in shares) | 72,407 |
Common Stock and Common Stock_4
Common Stock and Common Stock Warrants - Reserved Shares of Common Stock for Issuance (Details) - shares | Jun. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Warrants to purchase common stock | 0 | 75,000,000 |
Total | 32,176,109,000 | 22,212,404,000 |
2020 Equity Incentive Plan | Common stock | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance | 10,249,442,000 | 2,537,181,000 |
Options to purchase common stock | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance | 18,626,100,000 | 19,600,223,000 |
Unvested RSUs | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance | 1,187,427,000 | 0 |
ESPP | ||
Class of Stock [Line Items] | ||
Shares reserved of common stock for issuance | 2,113,140,000 | 0 |
Equity Incentive Plans - Narrat
Equity Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 08, 2021 | Oct. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate intrinsic value of options exercised | $ 122,700 | $ 800 | |||||
Fair value of options vested during period | 12,300 | 2,300 | |||||
Stock-based compensation expense | $ 21,186 | $ 2,519 | 29,808 | $ 4,484 | |||
Unrecognized stock-based compensation expense related to unvested stock options | $ 70,300 | $ 70,300 | |||||
Prodigy Software, Inc. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock issued (in shares) | 82,201 | ||||||
Weighted Average | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average grant date fair value (in dollars per share) | $ 62.16 | $ 5.31 | |||||
Weighted average grant date fair value, assumed upon acquisition (in dollars per share) | $ 74.84 | ||||||
Common stock | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase, percent of outstanding shares (percent) | 5.00% | ||||||
Common stock | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase (in shares) | 15,000,000 | ||||||
2012 Equity Incentive Plan | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 15,000,000 | 15,000,000 | |||||
2020 Equity Incentive Plan | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 10,249,442,000 | 10,249,442,000 | |||||
ISOs and NSOs | 2012 Equity Incentive Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Exercise price as a percent of estimated fair value (percent) | 100.00% | ||||||
Award vesting period | 4 years | ||||||
Required service period | 3 years | ||||||
ISOs and NSOs | 2012 Equity Incentive Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 10 years | ||||||
ISOs | 2012 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stockholder ownership (percent) | 10.00% | ||||||
ISOs | 2012 Equity Incentive Plan | Minimum | Greater Than 10% Stockholders | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Exercise price as a percent of estimated fair value (percent) | 110.00% | ||||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 11,265 | 2,519 | $ 16,385 | $ 4,484 | |||
Stock options | Black-Scholes Option Pricing Model | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 4,400 | $ 4,400 | |||||
Stock options | Weighted Average | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Period of recognition | 2 years 2 months 12 days | ||||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Stock-based compensation expense | 7,094 | 0 | $ 8,539 | 0 | |||
Period of recognition | 3 years 3 months 18 days | ||||||
Unrecognized stock-based compensation expense | $ 119,400 | $ 119,400 | |||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 2,113,140 | 2,113,140 | |||||
Stock-based compensation expense | $ 1,779 | 0 | $ 3,836 | 0 | |||
Period of recognition | 1 month 6 days | ||||||
Unrecognized stock-based compensation expense | 1,000 | $ 1,000 | |||||
Purchase period | 6 months | ||||||
ESPP purchase price of common stock, percent of market price | 85.00% | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Stock-based compensation expense | 1,048 | $ 0 | $ 1,048 | $ 0 | |||
Period of recognition | 1 year 9 months 18 days | ||||||
Unrecognized stock-based compensation expense | $ 9,000 | $ 9,000 |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Balances at December 31, 2020 | shares | 19,600,223,000 | |
Options granted | shares | 606,830,000 | |
Options assumed upon acquisition | shares | 23,494,000 | |
Options exercised | shares | (1,284,977,000) | |
Options cancelled and forfeited | shares | (319,470,000) | |
Balances at June 30, 2021 | shares | 18,626,100,000 | 19,600,223,000 |
Stock Options Weighted Average Exercise Price Per Share | ||
Options outstanding, Weighted average exercise price per share (in dollars per share) | $ / shares | $ 4.27 | |
Options granted, Weighted average exercise price per share (in $ per share) | $ / shares | 104.82 | |
Options assumed upon acquisition, Weighted average exercise price per share (in $ per share) | $ / shares | 9.06 | |
Options exercised, Weighted average exercise price per share (in $ per share) | $ / shares | 2.28 | |
Options forfeited or expired, Weighted average exercise price per share (in $ per share) | $ / shares | 6.80 | |
Options outstanding, Weighted average exercise price per share (in dollars per share) | $ / shares | $ 7.64 | $ 4.27 |
Stock Option Activity, Additional Disclosures | ||
Options outstanding, Weighted average remaining contractual term | 6 years 4 months 24 days | 6 years 9 months 18 days |
Options outstanding, Aggregate intrinsic value (in dollars) | $ | $ 2,184,219 | $ 715,084 |
Options exercisable, Number of options | shares | 11,421,423,000 | |
Options exercisable, Weighted average exercise price per share (in dollars per share) | $ / shares | $ 1.99 | |
Options exercisable, Weighted average remaining contractual term | 5 years | |
Options exercisable, Aggregate intrinsic value (in dollars) | $ | $ 1,403,759 | |
Options vested and expected to vest | shares | 18,331,294,000 | |
Options vested and expected to vest, Weighted Average Exercise Price Per Share (in dollars per share) | $ / shares | $ 7.22 | |
Options vested and expected to vest, Weighted average remaining contractual term | 6 years 4 months 24 days | |
Options vested and expected to vest, Aggregate intrinsic value (in dollars) | $ | $ 2,157,331 |
Equity Incentive Plans - RSU an
Equity Incentive Plans - RSU and Restricted Stock Activity (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
RSUs | |
Stock Appreciation Rights Activity | |
Unvested at December 31, 2020 | 0 |
Granted and Restricted | 1,217,420,000 |
Vested | (6,480,000) |
RSUs cancelled and forfeited | (23,513,000) |
Unvested at June 30, 2021 | 1,187,427,000 |
Weighted Average Grant Date Fair Value | |
Granted and Restricted, Weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 107.81 |
Vested, Weighted average grant date fair value per share (in dollars per share) | $ / shares | 102.52 |
Forfeited, Weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 92.77 |
Restricted Stock | |
Stock Appreciation Rights Activity | |
Unvested at December 31, 2020 | 0 |
Granted and Restricted | 82,201,000 |
Vested | 0 |
Unvested at June 30, 2021 | 82,201,000 |
Weighted Average Grant Date Fair Value | |
Granted and Restricted, Weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 121.65 |
Vested, Weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 0 |
Equity Incentive Plans - Weight
Equity Incentive Plans - Weighted-Average Assumptions (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum | 65.97% | 63.12% | 53.23% |
Expected volatility, maximum | 71.80% | 65.01% | 71.80% |
Risk free rate, minimum | 0.37% | 0.62% | 0.37% |
Risk free rate, maximum | 0.82% | 1.14% | 1.50% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 3 months 18 days |
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 10 years | 6 years 10 months 24 days | 10 years |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 7 months 6 days | ||
Expected volatility | 61.65% | ||
Risk-free interest rate | 0.09% | ||
Dividend yield | 0.00% |
Equity Incentive Plans - Expens
Equity Incentive Plans - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 21,186 | $ 2,519 | $ 29,808 | $ 4,484 |
Stock options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 11,265 | 2,519 | 16,385 | 4,484 |
RSUs | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 7,094 | 0 | 8,539 | 0 |
ESPP | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,779 | 0 | 3,836 | 0 |
Restricted Stock | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,048 | 0 | 1,048 | 0 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,427 | 405 | 2,180 | 689 |
Customer operations | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,624 | 205 | 2,376 | 404 |
Engineering and product development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 12,472 | 1,112 | 16,779 | 2,038 |
General, administrative, and other | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 5,663 | $ 797 | $ 8,473 | $ 1,353 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)optionToExtend | |
Leases [Abstract] | |
Number of options to renew | optionToExtend | 2 |
Renewal term | 5 years |
Letter of credit outstanding | $ | $ 2 |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Remainder of 2021 | $ 2,408 | |
2022 | 5,221 | |
2023 | 5,516 | |
2024 | 2,567 | |
2025 | 1,579 | |
Thereafter | 2,417 | |
Total undiscounted lease payments | 19,708 | |
Less: Present value adjustment | (1,930) | |
Operating lease liabilities | $ 17,778 | $ 19,432 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Rent expense | $ 1,467 | $ 1,303 | $ 2,995 | $ 2,572 |
Variable lease payments | 362 | 348 | 661 | 704 |
Cash paid for amounts included in the measurement of lease liabilities | 1,075 | 1,035 | 2,132 | 2,046 |
Right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 187 | $ 0 | $ 187 |
Weighted average remaining lease term (in years) | 4 years 2 months 4 days | 4 years 2 months 4 days | ||
Weighted average discount rate | 5.06% | 5.06% |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||
Loan purchase obligation | $ 24.6 | $ 39.3 |
Obligation to Repurchase Loans | Maximum | ||
Loss Contingencies [Line Items] | ||
Estimate of potential loss | $ 8,153.6 | $ 5,180.7 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) for income taxes | $ (988) | $ 0 | $ (767) | $ 0 |
Net effective tax rate | (3.33%) | 0.00% | (1.92%) | 0.00% |
Recognition of deferred tax assets | $ 1,800 |
Net Income (Loss) Per Share A_3
Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders - Calculation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net income (loss) attributable to Upstart Holdings, Inc. common stockholders | $ 37,284 | $ (6,193) | $ 47,386 | $ (4,713) |
Denominator: | ||||
Weighted-average number of shares outstanding used in computing net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic (in shares) | 76,674,129 | 14,657,399 | 75,160,037 | 14,641,333 |
Weighted-average effect of dilutive securities (in shares) | 18,127,994 | 0 | 18,033,116 | 0 |
Weighted-average number of shares outstanding used in computing net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted (in shares) | 94,802,123 | 14,657,399 | 93,193,153 | 14,641,333 |
Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, basic (in dollars per share) | $ 0.49 | $ (0.42) | $ 0.63 | $ (0.32) |
Net income (loss) per share attributable to Upstart Holdings, Inc. common stockholders, diluted (in dollars per share) | $ 0.39 | $ (0.42) | $ 0.51 | $ (0.32) |
Net Income (Loss) Per Share A_4
Net Income (Loss) Per Share Attributable to Upstart Holdings, Inc. Common Stockholders - Antidilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 714,407,000 | 67,123,269 | 1,617,395,000 | 67,123,269 |
Convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 0 | 47,349,577 | 0 | 47,349,577 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 451,493,000 | 18,853,815 | 500,065,000 | 18,853,815 |
Unvested RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 262,914,000 | 0 | 1,117,330,000 | 0 |
Warrants to purchase convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 0 | 600,208 | 0 | 600,208 |
Warrants to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities were excluded from the computation of diluted net income per share attributable to Upstart Holdings, Inc. common stockholders because including them would have been anti-dilutive | 0 | 319,669 | 0 | 319,669 |