Upstart Holdings, Inc.UPST
Upstart Holdings, Inc. Stock Compensation Disclosure
Stockholders' Equity
Common Stock Reserved for Future Issuance
In December 2020, the Company's amended and restated certificate of incorporation became effective, which authorizes the issuance of 700,000,000 shares of common stock with a par value of $0.0001 per share. Shares of common stock reserved for issuance, on an as-converted basis, are as follows:
| December 31, 2024 | December 31, 2025 | |||||||||||||
| Options issued and outstanding | 10,709,898 | 9,204,983 | ||||||||||||
| Restricted stock units outstanding | 3,703,631 | 2,276,156 | ||||||||||||
| Shares available for future issuance under 2020 plan | 7,669,374 | 10,922,232 | ||||||||||||
| Shares available for issuance under employee stock purchase plan | 3,425,952 | 4,140,207 | ||||||||||||
| Total | 25,508,855 | 26,543,578 | ||||||||||||
Share Repurchase Program
In February 2022, the Board of Directors authorized the Company to purchase up to $400.0 million of common stock of the Company. The Company may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1. The repurchase program does not obligate the Company to acquire any particular amount of its common stock, and may be suspended or terminated by the Company at any time at its discretion without prior notice.
The Company records share repurchases on the settlement date. Repurchased shares are subsequently retired and returned to the status of authorized but unissued. The Company’s policy for share retirements is to allocate the excess between par value and the repurchase price, including costs and fees, to additional paid-in capital. During the year ended December 31, 2025, the Company made no repurchases of common stock. As of December 31, 2025, $222.1 million remains available for future purchases of our common stock under the share repurchase program.
At-the-Market Program
On February 14, 2025, in connection with the commencement of an “at the market” offering program, the Company entered into a sales agreement (the “Sales Agreement”) with BTIG, LLC, under which the Company may offer and sell, from time to time, up to an aggregate of $500.0 million of its common stock. The Company will pay a commission of up to 2% of the gross proceeds of shares sold, if any, under the Sales Agreement and intends to use
the net proceeds from sales for working capital and general corporate purposes. As of December 31, 2025, no shares were issued under the program.
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 (“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, RSUs, and performance awards to eligible participants. 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 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.
Stock Options
The following table summarizes stock option activity for the year ended December 31, 2025:
| Number of Options | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| Balances at December 31, 2024 | 10,709,898 | $ | 18.35 | 5.9 | $ | 495,359 | ||||||||||||||||||||
| Options granted | 791,546 | 66.21 | ||||||||||||||||||||||||
| Options exercised | (1,580,432) | 10.67 | ||||||||||||||||||||||||
| Options cancelled and forfeited | (716,029) | 26.98 | ||||||||||||||||||||||||
| Balances at December 31, 2025 | 9,204,983 | 23.11 | 5.3 | 247,040 | ||||||||||||||||||||||
| Options exercisable – December 31, 2025 | 7,187,200 | 19.57 | 4.6 | 215,603 | ||||||||||||||||||||||
| Options vested and expected to vest – December 31, 2025 | 9,196,475 | $ | 23.09 | 5.3 | $ | 246,960 | ||||||||||||||||||||
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 December 31, 2025. The aggregate intrinsic value of options exercised for the years ended December 31, 2023, 2024 and 2025 was $28.9 million, $139.6 million, and $84.6 million respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2023, 2024 and 2025 was $8.19, $15.11 and $35.61 per share, respectively. The total fair value of options vested for the years ended December 31, 2023, 2024 and 2025 was $34.7 million, $30.5 million, and $21.9 million, respectively.
As of December 31, 2025, total unrecognized stock-based compensation expense related to unvested stock options was $35.2 million, which is expected to be recognized over a remaining weighted-average period of 1.9 years.
Restricted Stock Units
The Company grants RSUs to employees and non-employees. RSUs vest upon satisfaction of a service-based condition, which is generally satisfied over to four years. The following table summarizes RSU activity for the year ended December 31, 2025:
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||||||||
| Unvested at December 31, 2024 | 3,703,631 | $ | 33.46 | |||||||||||
| RSUs granted | 2,021,781 | 62.12 | ||||||||||||
| RSUs vested | (2,763,508) | 41.78 | ||||||||||||
| RSUs cancelled and forfeited | (685,748) | 38.06 | ||||||||||||
| Unvested at December 31, 2025 | 2,276,156 | $ | 47.43 | |||||||||||
As of December 31, 2025, total unrecognized stock-based compensation expense related to outstanding unvested RSUs was $78.2 million, which is expected to be recognized over a remaining weighted-average period of 1.1 years.
Performance-based Restricted Stock Units
On February 24, 2023, the Company’s Compensation Committee of the Board of Directors approved the cancellation of PRSUs that may be settled for 687,500 shares of the Company’s common stock granted to an executive in February 2022.
At the time the PRSUs were granted, the PRSUs were intended to be the executive’s primary compensation through calendar year 2029. The Compensation Committee later determined that the grant no longer provided the intended retention and incentive value to the executive and believed it was in the best interest of the Company and its stockholders to cancel the PRSUs in exchange for the reinstatement of the executive’s cash compensation.
Compensation expense associated with the PRSUs was recognized using the straight-line attribution method for each of the nine vesting tranches over the respective derived service period. The weighted-average grant date fair value using the Monte Carlo simulation was $68.76 per share. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether these conditions will be achieved or not, and stock-based compensation expense for any such awards is not reversed if the market condition is not met. The cancellation of the grant was treated by the Company as a settlement for no consideration and remaining unrecognized compensation expense of $39.0 million associated with the grant was accelerated and recorded by the Company as part of engineering and product development expense on the consolidated statements of operations and comprehensive income (loss) during the year ended December 31, 2023.
There were no PRSUs outstanding during the years ended December 31, 2024 and 2025.
2020 Employee Stock Purchase Plan
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. 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. During the year ended December 31, 2025, 219,818 shares of common stock were purchased under the ESPP.
As of December 31, 2025, total unrecognized stock-based compensation expense related to the ESPP was immaterial.
Fair Value of Awards Granted
In determining the fair value of stock-based awards, the Company uses a Black-Scholes option-pricing model for its options granted and ESPP purchase rights. The inputs used for estimating the fair values of options and ESPP purchase rights granted during the period include:
Fair Value of Common Stock–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 and ESPP purchase rights are expected to be outstanding. We estimate the expected term for stock options based on the simplified method, which is the weighted-average time to vesting and the contractual maturity. For ESPP, the expected term represents the term from the first day of the offering period to the purchase date.
Volatility–The Company estimates the expected volatility for stock options based on the weighted-average historical volatility of the Company’s common stock and the average volatility for comparable publicly-traded companies, over a period equal to the expected term. Previously, expected volatility was based solely on historical volatility of comparable publicly-traded peer companies. For ESPP, the expected volatility is estimated using historical volatility of the Company’s common stock over the expected term.
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 for the foreseeable future. Therefore, the Company uses an expected dividend yield of zero.
The following assumptions were used to estimate the fair value of options granted:
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||
| Expected term (in years) | 5.1 – 7.0 | 5.1 – 7.0 | 5.1 – 7.0 | |||||||||||||||||
| Expected volatility | 50.96% – 53.76% | 50.32% – 67.85% | 50.66% – 67.40% | |||||||||||||||||
| Risk-free interest rate | 3.45% – 4.86% | 3.76% – 4.43% | 3.72% – 4.09% | |||||||||||||||||
| Dividend yield | —% | —% | —% | |||||||||||||||||
The following assumptions were used to estimate the fair value of ESPP purchase rights:
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||
| Expected term (in years) | 0.5 | 0.5 | 0.5 | |||||||||||||||||
| Expected volatility | 97.74% – 131.05% | 88.37% – 96.69% | 95.30% – 99.09% | |||||||||||||||||
| Risk-free interest rate | 4.97% – 5.55% | 5.04% – 5.30% | 4.12% – 4.34% | |||||||||||||||||
| Dividend yield | —% | —% | —% | |||||||||||||||||
Stock-Based Compensation
The Company recorded stock-based compensation in the following expense categories in its consolidated statements of operations and comprehensive income (loss) for employees and non-employees:
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||
| Sales and marketing | $ | 8,166 | $ | 11,705 | $ | 12,679 | ||||||||||||||
| Customer operations | 10,683 | 7,038 | 7,200 | |||||||||||||||||
| Engineering and product development | 110,381 | 70,786 | 65,691 | |||||||||||||||||
| General, administrative, and other | 45,809 | 43,871 | 46,380 | |||||||||||||||||
| Total | $ | 175,039 | $ | 133,400 | $ | 131,950 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2021 | Feb 18, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.