Upstart Holdings, Inc.UPST
Upstart Holdings, Inc. Segments Disclosure
Segment Information
The Company’s organization and management structure is designed to support development of different lending product offerings, which are grouped into three operating segments - Personal Lending (unsecured personal loans and small dollar loans), Auto Lending (auto refinance, auto retail loans, and auto secured personal loans(1)), and Other (HELOCs and other). These operating segments are separately managed and evaluated by the Chief Operating Decision Maker (“CODM”), the Company’s Chief Executive Officer, who allocates resources and assesses performance at this level. The Company has determined that only one operating segment, Personal Lending, meets the definition of a reportable segment.
The Company generates all its revenue in the U.S. and a majority is earned in exchange for the use of the Company’s platform and for borrower referrals as well as for loan servicing activities provided to its lending partners and institutional investors. Refer to “Note 2. Revenue” for further information related to the Company's disaggregation of revenue from fees by type of service.
Contribution Profit is the primary measure of segment profit and loss reviewed by the CODM to assess business performance and strategy, prepare the Company’s annual operating budget and financial forecasts, and communicate with the Company’s Board of Directors concerning the Company’s financial performance. The significant segment expenses regularly reviewed by the CODM in evaluating Contribution Profit include borrower acquisition costs and borrower verification and servicing costs. To derive Contribution Profit, the Company subtracts the sum of borrower acquisition costs as well as borrower verification and servicing costs from revenue from fees, net.
The following table presents financial information, including Contribution Profit, for the Company’s Personal Lending segment:
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||
| Personal Lending | ||||||||||||||||||||
| Revenue from fees, net | $ | 552,447 | $ | 624,832 | $ | 929,218 | ||||||||||||||
Borrower acquisition costs(2) | (85,599) | (115,198) | (235,371) | |||||||||||||||||
Borrower verification and servicing costs(3) | (99,906) | (107,388) | (130,284) | |||||||||||||||||
| Contribution Profit for Personal Lending | $ | 366,942 | $ | 402,246 | $ | 563,563 | ||||||||||||||
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(1)Beginning in the third quarter of 2025, the Company reclassified auto secured personal loans from Personal Lending to Auto Lending operating segment. Prior period segment information reflects the change, which was immaterial to the Company’s consolidated financial statements.
(2)Borrower acquisition costs consist of the Company’s sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for the Company’s business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses.
(3)Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of the Company’s customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses.
The following table presents a reconciliation of total Contribution Profit to Net income (loss) before income taxes:
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||
Contribution Profit: | ||||||||||||||||||||
| Personal Lending | $ | 366,942 | $ | 402,246 | $ | 563,563 | ||||||||||||||
| Reconciling items: | ||||||||||||||||||||
Other Contribution Profit/(Loss)(1) | (13,648) | (20,713) | (32,469) | |||||||||||||||||
Sales and marketing, net of borrower acquisition costs(2) | (36,626) | (41,783) | (45,270) | |||||||||||||||||
Customer operations, net of borrower verification and servicing costs(3) | (33,798) | (29,080) | (25,697) | |||||||||||||||||
| Engineering and product development | (280,138) | (253,653) | (257,602) | |||||||||||||||||
| General, administrative, and other | (212,388) | (230,935) | (253,740) | |||||||||||||||||
| Interest income, interest expense, and fair value adjustments, net | (46,869) | 1,062 | 93,846 | |||||||||||||||||
| Other income, net | 21,206 | 18,793 | 24,324 | |||||||||||||||||
| Expense on convertible notes | (4,706) | (7,694) | (19,872) | |||||||||||||||||
| Gain on debt extinguishment | — | 33,361 | 7,246 | |||||||||||||||||
| Net income (loss) before income taxes | $ | (240,025) | $ | (128,396) | $ | 54,329 | ||||||||||||||
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(1)Includes Auto Lending and Other operating segments, which did not meet the separate reporting or aggregation criteria under GAAP.
(2)Borrower acquisition costs were $90.5 million, $125.0 million and $256.2 million for the years ended December 31, 2023, 2024 and 2025, respectively. Borrower acquisition costs consist of the Company’s sales and marketing expenses adjusted to exclude costs not directly attributable to attracting a new borrower, such as payroll-related expenses for the Company’s business development and marketing teams, as well as other operational, brand awareness and marketing activities. These costs do not include reorganization expenses.
(3)Borrower verification and servicing costs were $116.6 million, $128.9 million and $162.7 million for the years ended December 31, 2023, 2024 and 2025, respectively. Borrower verification and servicing costs consist of payroll and other personnel-related expenses for personnel engaged in loan onboarding, verification and servicing, as well as servicing system costs. It excludes payroll and personnel-related expenses and stock-based compensation for certain members of the Company’s customer operations team whose work is not directly attributable to onboarding and servicing loans. These costs do not include reorganization expenses.
The CODM does not evaluate operating segments using asset information and, accordingly, the Company does not report asset information by segment.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.