Upstart CEO discusses Q4 earnings, margins, plans to step down

Yahoo Finance Video and Josh Lipton

Thu, February 12, 2026 at 9:03 AM GMT+9

In this video:

UPST

XLF

After the company reported fourth quarter results that topped revenue estimates, Upstart Holdings (UPST) co-founder and CEO Dave Girouard joins Josh Lipton on Market Domination to discuss the earnings results and guidance, its margins, and the company’s economic outlook.

Girouard announced that he will be stepping down as chief executive, effective May 1, transitioning into an executive chairman role.

To watch more expert insights and analysis on the latest market action, check out more Market Domination.

Video Transcript

00:00 Josh

Well, AI powered lending platform Upstart topping revenue estimates in its fourth quarter and issuing upbeat guidance. That company is also announcing big changes in its C suite with co-founder and current Chief Technology Officer, Paul Gu, set to take the helm as CEO in May. Joining me now, we’ve got Upstart’s current CEO and co-founder, that would be Dave Girard. Dave, always great to see you to have you on the show. Let’s let’s dig into this earnings print, Dave, talk about this because it looks like 35% revenue growth I see here. Volume growth, Dave, clocks in 52%.

00:46 Josh

Uh you’re guiding to about 1.4 billion in revenue this year. That looks better than what analysts have been expecting. What what gives you the confidence to make that that forecast, Dave? What are you seeing in the business?

01:02 Dave

Yeah, well, we’re a business, Josh that grows when our technology gets better. We are an AI centric company. So when our models get better at separating risk and calibrating risk, it means we can approve more people at lower loss rates. And that has just been the way the company has grown year after year. So we kind of do a bottom’s up view on our our technology and our pipeline and feel very comfortable that, you know, we actually provided three-year guidance and and uh guided towards 35% revenue growth annually for three years.

01:42 Dave

So we are entering into large lending categories, home and auto that there’s just so much upside. And we have a a very foundational view that AI is going to be central to the future of credit and lending. And we are in really, we think the poll position in terms of helping to drive that change.

02:01 Josh

Dave, I also want to dig a bit into uh the margin guidance because I was reading through the notes, analysts reacting, uh and they were pointing out, it looks like adjusted EBIDA margin guidance around 21% for 2026, Dave. And I I do see some analysts who cover you all telling clients to them that that did seem conservative. And I I was just hoping you could kind of walk me through the profitability mix, Dave, because I I I wonder if some investors saw that and thought, okay, you know, solid growth for Dave, but maybe it’s coming from

02:37 Josh

from lower margin products or maybe competition is heating up. Just walk me through that bogey.

02:44 Dave

Yeah, really we’re entering into much, much larger categories, a much larger time when we enter into mainstream markets like auto and home. Those are just giant lending categories. And in those there are there are sort of tighter margins. you don’t expect to have the same margins you would have in unsecured lending, which has been, you know, the lion share of our business in the past. But at the same time, we tend to look at dollar margins more than percent margins and the potential for profit in these industries is enormous and much larger than where we’ve been.

03:22 Dave

So, you know, at the margin we, you know, we might take a little less margin, but the scale and the dollar margin opportunity is probably an order of magnitude larger than where we’ve been. and we’re pretty sure we’ll prove that over time.

03:31 Josh

Dave, um, also looks like a a reporting shift away from quarterly guidance to annual guidance. Why make that shift Dave and and what does it mean for for line of sight for investors into the company?

03:49 Dave

Yeah, we made a few changes really trying to help people appreciate both the near term and not spend so much money worrying about the near term. We are now releasing the volume of loans originated on our platform every month. So that’s a new change that will just give people simple, uh easy visibility into what’s going on the platform today. And at the same time, for the first time, we we actually provided, as I mentioned, three-year guidance. So a little bit like trying to get people to just get the data and understand where the platform’s moving today.

04:21 Dave

but hopefully be able to spend some energy on understanding, you know, the long-term potential of the company along with annual guidance given the three-year guidance. So we think that’s sort of uh our way of trying to signal like we’re looking for long-term investors who believe in the direction of the company, but at the same time, you know, we’re going to give you a front row seat to see what’s happening every month.

04:47 Josh

Dave, I also want to talk about changes for you. Uh you’re stepping down, you’re becoming executive chairman. Why why now Dave? and why is Paul Gu the right man uh to take the top job?

05:00 Dave

Yeah, so Paul and I co-founded the company, you know, 14 years ago and um, you know, at the time literally Paul was uh just barely old enough to drink. I was older than his parents at in uh then and now. And so, you know, we have a 25-year age gap between us. So, um, I think we figured out probably, you know, at least five if not six or seven years ago, there would be a transition, you know, maybe around this time frame where we made sense for Paul to take over. Now, for us, I mean this is such an incredible opportunity to have

05:40 Dave

a founder led company, which to us is a very special thing. founders can operate in a nimble way that I think hired CEOs can’t. And to have, you know, Paul coming who’s just 35 years old now means we have an opportunity to be a founder led technology company, AI company, you know, potentially for decades to come. and I think that’s a very unique opportunity.

06:06 Josh

Dave, you know, we got that jobs report this morning. You always have you unique line of sight into the consumer and I’m just curious Dave, based on what you see in your business, you know, how healthy, how resilient does the consumer look, Dave? Has there been meaningful shifts if I’d asked you that, you know, six months ago or 12 months ago?

06:26 Dave

Yeah, we, you know, this is so important to us. It’s not just kind of like, you know, reading Fed reports and all. It is fundamentally important to our business that our models very quickly adapt to changes going on in the larger economy. So we developed this thing a couple years back now called the up Upstart macro index. And that really tracks exactly how the economy is impacting loan performance and and and the health of the consumer. And what we see, first of all, I would say is a lot of stability and probably some improvements in the health of the of the consumer.

07:07 Dave

So, you know, for us this has been very good. I mean, this is the direction we hope and expected to go since sort of the post Covid time. And and we’re seeing that. Now that doesn’t necessarily mean it’s all great news for retailers or or or etc because you know, people might be spending less, saving more, which generally is good from our perspective. Um so we we see a healthy consumer. We we’ve seen it go sort of steady and then slowly improving bit by bit and and that’s exactly what we like to see.

07:44 Josh

Dave, as always, so great to have you on the show. Thank you.

07:49 Dave

Thank you, Josh.

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