(UPST) 2021 Q1 法說會逐字稿

Good day, and welcome to the Upstart Q1 FY 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jason Schmidt, Head of Investor Relations. Please go ahead, sir.

美好的一天，歡迎參加 Upstart 2021 財年第一季度財報電話會議。今天的會議正在錄製中。此時，我想將會議轉交給投資者關係主管 Jason Schmidt 先生。請繼續，先生。

Good afternoon, and thank you for joining us on today's conference call to discuss Upstart's First Quarter 2021 Financial Results. With us on today's call are Dave Girouard, Upstart's Chief Executive Officer; and Sanjay Datta, our Chief Financial Officer.

下午好，感謝您參加今天的電話會議，討論 Upstart 的 2021 年第一季度財務業績。 Upstart 的首席執行官 Dave Girouard 與我們一起參加今天的電話會議；和我們的首席財務官 Sanjay Datta。

Before we begin, I wanted to remind you that shortly after the market close today, Upstart issued a press release announcing its first quarter 2021 financial results and published an Investor Relations presentation. Both are available on our Investor Relations website, ir.upstart.com.

在我們開始之前，我想提醒您，在今天收盤後不久，Upstart 發布了一份新聞稿，宣布了其 2021 年第一季度的財務業績，並發布了一份投資者關係報告。兩者都可以在我們的投資者關係網站 ir.upstart.com 上找到。

During the call, we will make forward-looking statements, such as guidance for the second quarter and full year 2021 related to our business. These statements are based on our current expectations and information available as of today and are subject to a variety of risks, uncertainties and assumptions. Actual results may differ materially as a result of various risk factors that have been described in our filings with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements as a result of new information or future event, except as required by law.

在電話會議期間，我們將做出前瞻性陳述，例如與我們的業務相關的第二季度和 2021 年全年的指導。這些陳述基於我們目前的預期和截至今天可用的信息，並受到各種風險、不確定性和假設的影響。由於我們在提交給美國證券交易委員會的文件中描述的各種風險因素，實際結果可能存在重大差異。因此，我們告誡您不要過分依賴這些前瞻性陳述。我們不承擔因新信息或未來事件而更新任何前瞻性陳述的義務，除非法律要求。

In addition, during today's call, unless otherwise stated, references to our results are provided as non-GAAP financial measures and are reconciled to our GAAP results, which can be found in the earnings release and supplemental tables. (Operator Instructions) Now I would like to turn it over to Dave Girouard, CEO of Upstart.

此外，在今天的電話會議中，除非另有說明，否則對我們結果的引用作為非公認會計原則財務指標提供，並與我們的公認會計原則結果相一致，可在收益發布和補充表格中找到。 （操作員說明）現在我想把它交給 Upstart 的首席執行官 Dave Girouard。

Good afternoon, everyone. Thank you for joining us on our quarterly earnings call covering our first quarter 2021 results. I'm Dave Girouard, Co-Founder and CEO of Upstart. I want to start by thanking the entire Upstart team for another amazing quarter. Despite the many obstacles the past year has put in front of you, you've continued to deliver. Most of you have never been in an Upstart office, yet the pace of innovation and the pursuit of our mission have never been stronger.

大家下午好。感謝您參加我們關於 2021 年第一季度業績的季度收益電話會議。我是 Upstart 的聯合創始人兼首席執行官 Dave Girouard。我想首先感謝整個 Upstart 團隊的另一個驚人的季度。儘管過去一年給你帶來了許多障礙，但你一直在努力。你們中的大多數人從未在Upstart辦公室工作過，但創新的步伐和對我們使命的追求從未如此強烈。

Upstart is a leader in the application of artificial intelligence to consumer lending, and our first quarter results continued to demonstrate our leadership in this emerging category. Our Q1 2021 revenues were up 90%. Our profits were up by a factor of 7 over the first quarter of 2020. Despite softer loan demand from consumers due to government stimulus programs, almost 170,000 loans were transacted by our bank partners in Q1, more than double the volume from just 2 quarters ago. Not unusual to see fast growth in a fintech company, but it's quite rare to see that growth paired with real profits. So it's worth explaining what's driving our core personal loan business and why we're so optimistic about its future.

Upstart 是將人工智能應用於消費貸款的領導者，我們的第一季度業績繼續證明我們在這一新興類別中的領導地位。我們 2021 年第一季度的收入增長了 90%。與 2020 年第一季度相比，我們的利潤增長了 7 倍。儘管由於政府刺激計劃導致消費者貸款需求疲軟，但我們的銀行合作夥伴在第一季度交易了近 170,000 筆貸款，是僅兩個季度前的兩倍多.看到金融科技公司的快速增長並不罕見，但很少看到這種增長與實際利潤相結合。因此，有必要解釋是什麼推動了我們的核心個人貸款業務，以及為什麼我們對其未來如此樂觀。

Our growth is primarily technology and model-driven, which manifests as increasing conversion rates in our borrower funnel. In the first quarter of 2021, we launched a variety of model and technology upgrades that together unleashed the growth that you're seeing. To help you understand this dynamic, let me call out 3 examples. First, we launched a new version of our core credit decisioning AI model that our bank partners use to price loans. This model is actually an ensemble or a blend of multiple machine learning models that work together to generate a more accurate risk assessment. Historically, we have achieved big wins by adding new and more sophisticated model forms to this ensemble. Other wins have come by simply upgrading one of the existing models. But the big win we saw in the first quarter included an upgrade to the algorithm that governs how these models are blended together. This upgrade led to higher approval rates and lower interest rates, which, of course, translates into more loans.

我們的增長主要是技術和模型驅動的，這表現為我們的借款人漏斗中的轉化率不斷提高。 2021 年第一季度，我們推出了多種車型和技術升級，共同釋放了您所看到的增長。為了幫助你理解這種動態，讓我舉出 3 個例子。首先，我們推出了新版本的核心信貸決策 AI 模型，我們的銀行合作夥伴使用該模型為貸款定價。該模型實際上是多個機器學習模型的集合或混合，它們協同工作以生成更準確的風險評估。從歷史上看，我們通過向這個整體添加新的和更複雜的模型形式而取得了巨大的勝利。其他勝利來自簡單地升級現有模型之一。但我們在第一季度看到的重大勝利包括對管理這些模型如何混合在一起的算法進行了升級。這種升級導致更高的批准率和更低的利率，這當然會轉化為更多的貸款。

Second, we launched some improvements to our verification models that reduce the amount of friction applicants experience in applying for a loan, including those coming back to Upstart for a second loan. These improvements included more refined fraud signaling and increased automation of income verification. This reduction in friction increased the conversion rate of our funnel, leading to more growth. It also helped us to more efficiently process the larger volume of applications that we experience, leading to higher profits. This is the essence of technology-driven growth.

其次，我們對驗證模型進行了一些改進，以減少申請人在申請貸款時遇到的摩擦，包括那些回到 Upstart 申請第二筆貸款的人。這些改進包括更精細的欺詐信號和更高的收入驗證自動化。這種摩擦的減少提高了我們漏斗的轉化率，從而帶來了更多的增長。它還幫助我們更有效地處理我們遇到的大量應用程序，從而帶來更高的利潤。這就是技術驅動增長的本質。

And third, we upgraded the models that underpin our marketing acquisition program. That means for every dollar we spent on marketing, we brought incrementally more consumers to the platform and to our bank partners. AI has almost unlimited potential in spend targeting, life cycle marketing and even content generation. Applying AI to our customer acquisition efforts is a relatively new area of investment for us, and we expect it will be a significant source of growth in the future.

第三，我們升級了支撐我們的營銷獲取計劃的模型。這意味著我們在營銷上花費的每一美元，都會為平台和我們的銀行合作夥伴帶來越來越多的消費者。人工智能在支出目標、生命週期營銷甚至內容生成方面具有幾乎無限的潛力。將人工智能應用於我們的客戶獲取工作對我們來說是一個相對較新的投資領域，我們預計它將成為未來增長的重要來源。

Of course, this growth couldn't happen without the confidence of our bank partners and institutional investors. We continue to add new bank partners to our platform, to see existing bank partners expand on their Upstart-powered lending programs and to add institutional investors who are happy to invest their capital into Upstart-powered bonds or high-quality loan assets with predictable yield. We've built an increasingly sophisticated supply chain of money that funds Upstart loans, from super efficient bank depository capital, to broad and deep institutional and capital markets funding.

當然，如果沒有我們的銀行合作夥伴和機構投資者的信心，這種增長是不可能實現的。我們繼續在我們的平台上增加新的銀行合作夥伴，以看到現有銀行合作夥伴擴展他們的 Upstart 貸款計劃，並增加機構投資者，他們樂於將資金投資於 Upstart 推動的債券或具有可預測收益的高質量貸款資產.我們已經建立了一個日益複雜的資金供應鏈，為 Upstart 貸款提供資金，從超高效的銀行存款資金到廣泛而深入的機構和資本市場資金。

While most consider money to be the ultimate commodity and lending to be a zero-sum game, we've built a proprietary platform that continues to accrue advantages by the day. It's the types of AI model upgrades described here, paired with the support of our bank partners, that have allowed Upstart to grow loan volumes by a factor of 20 in the last 4 years while reducing acquisition costs and generating real profit. Our optimism for the future comes from 2 facts: first, we continue to have a likely backlog of projects that will improve our funnel throughput and lead to more growth in the future; and second, we don't see competitors on the same AI-centric journey that Upstart is on.

雖然大多數人認為金錢是終極商品，而藉貸是一種零和遊戲，但我們已經建立了一個專有平台，該平台每天都在不斷積累優勢。正是這裡描述的 AI 模型升級類型，加上我們銀行合作夥伴的支持，使 Upstart 在過去 4 年中將貸款量增加了 20 倍，同時降低了購置成本並產生了實際利潤。我們對未來的樂觀來自兩個事實：首先，我們繼續有可能積壓的項目將提高我們的漏斗吞吐量並在未來帶來更多增長；其次，我們沒有看到競爭對手在與 Upstart 相同的以人工智能為中心的旅程中。

As we said in the past, auto lending is Upstart's next big opportunity. The auto lending industry is about 6x the size of personal lending, and we believe it has at least as much mispricing and inefficiency, with millions of consumers paying far more than they should to finance a vehicle through a process that is displeasing to all. Our early explanation in this market has confirmed our hypothesis that there's a wide-open opportunity for Upstart and our bank partners to deliver a superior product to the market, meaning more accurate pricing, instant approvals and elimination of friction.

正如我們過去所說，汽車貸款是 Upstart 的下一個重大機會。汽車貸款行業的規模大約是個人貸款的 6 倍，我們認為它至少有同樣多的錯誤定價和低效率，數百萬消費者支付的費用遠遠超過他們應該通過一個讓所有人都不滿意的過程來為汽車融資。我們在這個市場上的早期解釋證實了我們的假設，即 Upstart 和我們的銀行合作夥伴有廣闊的機會向市場提供優質產品，這意味著更準確的定價、即時批准和消除摩擦。

I'm happy to report that we're making very fast progress in this new and exciting category. Since January, we have expanded our auto refinance product, from a single state, to 33 states, representing more than 2/3 of the U.S. population. States have various rules and regulations that impact the process of refinancing a car loan, and we're building the best possible process for each.

我很高興地報告，我們在這個令人興奮的新類別中取得了非常快的進展。自 1 月以來，我們已將汽車再融資產品從單一州擴大到 33 個州，占美國人口的 2/3 以上。各州有各種影響汽車貸款再融資過程的規則和法規，我們正在為每個規則和法規建立最佳流程。

At the same time, we're actively encouraging the space that have yet to adopt modern conveniences, such as digital signatures and electronic means and titling that make it easier for consumers to access the best possible loan. This is one area where the COVID pandemic has helpfully pushed states toward adopting these remote-friendly technologies sooner.

與此同時，我們正在積極鼓勵尚未採用現代便利設施的空間，例如數字簽名和電子手段以及使消費者更容易獲得最佳貸款的標題。這是 COVID 大流行有助於推動各州更快採用這些遠程友好技術的一個領域。

We're also working to eliminate friction in the borrowing process, with the goal of delivering an auto refi product with the same quality experience and instant gratification that has made us a leading personal lending platform, only it's happening much faster this time. Given the complexities of auto lending, it's no small effort to build a refi product that is as simple and as accessible as an unsecured loan, but we're well on our way to doing that.

我們還在努力消除借貸過程中的摩擦，目標是提供具有相同質量體驗和即時滿足感的汽車 refi 產品，這使我們成為領先的個人借貸平台，只是這次的速度要快得多。鑑於汽車貸款的複雜性，構建一個像無抵押貸款一樣簡單和可訪問的 refi 產品是不小的努力，但我們正在努力做到這一點。

To date, we've activated only a couple of marketing channels to reach enough consumers to test and iterate on our auto refinance product. In fact, you can't yet find an auto loan offer on upstart.com. That will all change in the coming months as we begin to more proactively market and cross-sell our auto refinance product.

迄今為止，我們只激活了幾個營銷渠道來吸引足夠多的消費者來測試和迭代我們的汽車再融資產品。事實上，您還無法在 upstart.com 上找到汽車貸款優惠。隨著我們開始更積極地營銷和交叉銷售我們的汽車再融資產品，這一切都將在未來幾個月發生變化。

I'm also happy to report that we closed our acquisition of Prodigy, a leader in automotive commerce software. Prodigy is like Shopify for car dealerships, helping to create the modern multichannel car-buying experience that dealerships need and consumers rightfully expect in 2021. In addition to modernizing the car-buying experience, Prodigy will allow us to bring Upstart's AI-enabled auto loans to dealerships across the country, where the vast majority of loans are transacted.

我也很高興地報告，我們完成了對汽車商務軟件領導者 Prodigy 的收購。 Prodigy 就像汽車經銷商的 Shopify，幫助創造經銷商需要和消費者在 2021 年理所當然期望的現代多渠道購車體驗。除了使購車體驗現代化外，Prodigy 還將讓我們能夠帶來 Upstart 支持 AI 的汽車貸款到全國各地的經銷商，絕大多數貸款都是在這些經銷商處進行的。

Despite potential distractions from the merger, the small but mighty Prodigy team increased our dealership footprint by 45% in the first quarter. Even at this early stage, almost $800 million in vehicles were sold through Prodigy in Q1 2021. During the quarter, we became a certified digital retail provider for Subaru of America retailers. As I said last quarter, we believe Prodigy will enable Upstart to tap into one of the world's largest buy-now, pay-later market opportunities. To realize this potential, we're significantly increasing investment in Prodigy's technology and go-to-market teams.

儘管合併可能會分散注意力，但小而強大的 Prodigy 團隊在第一季度將我們的經銷商足跡增加了 45%。即使在這個早期階段，2021 年第一季度通過 Prodigy 售出了近 8 億美元的汽車。在本季度，我們成為了美國斯巴魯零售商的認證數字零售供應商。正如我上個季度所說，我們相信 Prodigy 將使 Upstart 能夠利用世界上最大的先買後付市場機會之一。為了實現這一潛力，我們正在顯著增加對 Prodigy 技術和上市團隊的投資。

The first quarter wasn't just a win from a financial perspective. We also made significant strides in our ongoing fair lending effort. From our perspective, if you want to be the industry leader in AI-enabled lending, you also need to be the leader in fairness, transparency and inclusiveness. And conversely, if you're not making clear and ongoing investments in fairness testing, it's questionable whether you're really doing AI.

從財務角度來看，第一季度不僅僅是一場胜利。我們還在正在進行的公平貸款工作中取得了重大進展。在我們看來，如果你想成為人工智能貸款的行業領導者，你還需要成為公平、透明和包容性的領導者。相反，如果你沒有在公平測試方面做出明確和持續的投資，那麼你是否真的在做人工智能是值得懷疑的。

Last fall, the Consumer Financial Protection Bureau, the nation's preeminent regulator in matters of consumer protection, renewed its No-Action Letter with Upstart. As a reminder, the purpose of so-called No-Action Letters is to reduce potential regulatory uncertainty for innovative products that may offer significant consumer benefit. While Upstart is now in our second 3-year No-Action Letter with the CFPB, we know of no other lending platform that has received a No-Action Letter from the Bureau related to fair lending.

去年秋天，美國消費者保護事務的卓越監管機構消費者金融保護局與 Upstart 續簽了其不採取行動的信函。提醒一下，所謂的無行動信函的目的是減少可能為消費者帶來重大利益的創新產品的潛在監管不確定性。雖然 Upstart 現在是我們與 CFPB 的第二份為期 3 年的不採取行動的信函，但我們知道沒有其他貸款平台收到該局關於公平貸款的不採取行動的信函。

As part of this renewal, we developed more sophisticated tests that raised the bar significantly in terms of how fairness is measured. Additionally, we increased our level of transparency by sharing the source code for the fairness tests we perform across every single Upstart loan applicant for all of our bank partners. In the first quarter, we executed these new tests for the first time and recently delivered the result to CFPB.

作為此次更新的一部分，我們開發了更複雜的測試，顯著提高了衡量公平性的標準。此外，我們通過共享我們對所有銀行合作夥伴的每個 Upstart 貸款申請人執行的公平測試的源代碼來提高透明度。在第一季度，我們首次執行了這些新測試，最近將結果提交給了 CFPB。

Our 2020 access to credit testing demonstrated once again that Upstart's platform improved access to credit in the form of increased approval rates and lower APRs for every traditionally underserved demographic testing. From my perspective, we've raised the bar on thoroughness and rigor of fairness testing. At the same time, when it comes to AI governance, I believe we're setting a standard for proactive cooperation between industry and government.

我們 2020 年獲得信用測試的機會再次證明，Upstart 的平台通過提高批准率和降低每項傳統服務不足的人口測試的 APR 的形式改善了獲得信用的機會。從我的角度來看，我們提高了公平測試的徹底性和嚴格性的標準。同時，在人工智能治理方面，我相信我們正在為行業和政府之間的積極合作設定標準。

2020 was a transformative year for Upstart. The COVID-19 pandemic presented an opportunity for our technology and our team to shine during a very difficult period, and they did just that. We came into 2021 from a position of strength, with a business that's growing very quickly and generating significant profits at the same time. And we're now building on that strength. We're upgrading our AI models and technology. We're adding bank partners to our platform. And we're expanding quickly into even larger market opportunity.

2020 年對於 Upstart 來說是變革的一年。 COVID-19 大流行為我們的技術和我們的團隊提供了在非常困難的時期大放異彩的機會，而他們正是這樣做的。進入 2021 年，我們處於強勢地位，業務增長非常迅速，同時產生了可觀的利潤。而我們現在正在建立這種實力。我們正在升級我們的人工智能模型和技術。我們正在向我們的平台添加銀行合作夥伴。我們正在迅速擴展到更大的市場機會。

It's clear to us that AI has unlocked a brighter future for lending, where consumers can access credit at a price that's fair and reasonable, with an experience worthy of 2021. AI lending is a transformational opportunity to create a better product for consumers and for banks, and Upstart has become synonymous with this exciting new category.

我們很清楚，人工智能為貸款開啟了更光明的未來，消費者可以以公平合理的價格獲得信貸，體驗值得 2021 年。人工智能貸款是一個轉型機會，可以為消費者和銀行創造更好的產品，而Upstart 已經成為這個令人興奮的新品類的代名詞。

Thank you. I would like to now turn it over to Sanjay, our Chief Financial Officer, to walk through our Q1 financial results and guidance. Sanjay?

謝謝你。我現在想把它交給我們的首席財務官 Sanjay 來介紹我們的第一季度財務業績和指導。桑傑？

Thank you, Dave, and thank you to everyone for joining us. Beyond some of the exciting details that Dave just walked us through, we aspire to be a company whose numbers speak for themselves. So with no further ado, we dive in.

謝謝你，戴夫，也感謝大家加入我們。除了 Dave 剛剛向我們介紹的一些令人興奮的細節之外，我們還渴望成為一家以數據說話的公司。因此，事不宜遲，我們潛入。

Our revenues in Q1 were $121.3 million, up 90% from the same quarter of the prior year and up 40% quarter-over-quarter. Of that amount, revenue from fees represented $160 million or 96% of the total. Underpinning this fee-based revenue was the origination of 170,000 loans by all of the bank partners across our platform, up 102% from the same quarter of the prior year and a conversion rate of 22% on rate requests, up from 14% over the prior year.

我們第一季度的收入為 1.213 億美元，比去年同期增長 90%，環比增長 40%。其中，收費收入為 1.6 億美元，佔總收入的 96%。支撐這一收費收入的是我們平台上所有銀行合作夥伴提供的 170,000 筆貸款，比去年同期增長 102%，利率請求的轉換率為 22%，高於上年同期的 14%。去年。

As Dave mentioned, our top line performance this quarter benefited from continuing improvements to model accuracy, some sizable advances achieved in targeting models we use to optimize our acquisition campaigns and work we completed to further reduce friction in our borrowing process, including beyond the initial transaction with the customer. Our contribution profit, a non-GAAP metric, which we define as revenue from fees minus variable costs for borrower acquisition, verification and servicing, was $55.8 million in Q1, up 117% year-over-year and representing a 48% contribution margin, up from a margin of 38% in the year prior.

正如 Dave 所提到的，我們本季度的最高業績得益於模型準確性的持續改進、我們用於優化收購活動的目標模型取得了一些可觀的進步，以及我們為進一步減少借貸過程中的摩擦而完成的工作，包括超出初始交易與客戶。我們的貢獻利潤是一個非 GAAP 指標，我們將其定義為費用收入減去借款人獲取、驗證和服務的可變成本，第一季度為 5580 萬美元，同比增長 117%，貢獻率為 48%，高於去年同期的 38%。

The margin improvement over the past year has been partially driven by improvements to marketing and operating efficiency, some of which were implemented in the wake of the pandemic in order to manage the business more conservatively through the turbulence. As we discussed on our last earnings call, this level of contribution margin continues to be slightly above our expected long-term trend line, and we expect it to normalize downwards moderately over the coming quarters as our marketing channels and operations hiring return to full scale.

過去一年利潤率的提高部分是由於營銷和運營效率的提高，其中一些是在大流行之後實施的，以便在動盪中更保守地管理業務。正如我們在上次財報電話會議上所討論的那樣，這一水平的邊際貢獻繼續略高於我們預期的長期趨勢線，我們預計隨著我們的營銷渠道和運營招聘全面恢復，在未來幾個季度它會適度向下正常化.

Q1 operating expenses were $105.8 million, up 67% year-over-year or 58% year-over-year when netting out the impact of stock-based compensation. Investment in engineering and R&D remains our priority, growing 171% year-over-year to $19 million in Q1. General and administrative spend grew slower than revenue in Q1, increasing 72% year-over-year to $20 million, boosted in part by additional costs incurred from the closing of our Prodigy acquisition.

扣除股票薪酬的影響後，第一季度運營費用為 1.058 億美元，同比增長 67% 或同比增長 58%。工程和研發投資仍然是我們的首要任務，第一季度同比增長 171% 至 1900 萬美元。第一季度的一般和行政支出增長低於收入，同比增長 72% 至 2000 萬美元，部分原因是我們收購 Prodigy 所產生的額外成本。

We continue to ramp our fixed expense base following lower-than-typical investments in 2020. The other expense categories of sales and marketing and customer operations were largely driven by the variable cost increases in borrower acquisition, verification and servicing previously discussed.

在 2020 年投資低於典型水平後，我們繼續擴大固定費用基數。銷售、營銷和客戶運營等其他費用類別主要是由前面討論的借款人獲取、驗證和服務方面的可變成本增加推動的。

Our Q1 GAAP net income was $10.1 million, up from $1.5 million in the prior year despite incurring a onetime $5.3 million expense from the voluntary repayment of our PPP loan. Adjusted EBITDA, which we adjust for stock-based compensation, came in at $21 million in Q1, up from $3.7 million in Q1 of 2020, despite being similarly impacted by the repayment of the PPP loan. Adjusted earnings per share for Q1 was $0.22 based on a diluted weighted average share count of 91.5 million.

我們的第一季度 GAAP 淨收入為 1010 萬美元，高於上一年的 150 萬美元，儘管自願償還 PPP 貸款產生了一次性 530 萬美元的費用。儘管受到 PPP 貸款償還的類似影響，但我們根據股票薪酬調整的調整後 EBITDA 在第一季度為 2100 萬美元，高於 2020 年第一季度的 370 萬美元。根據 9150 萬股的稀釋加權平均股數，第一季度調整後的每股收益為 0.22 美元。

Turning our attention to the balance sheet. We ended the quarter with $336 million in restricted and unrestricted cash, up from $72 million at the end of the first quarter 2020. This balance reflects the repayment of our $5.3 million PPP loan, but does not reflect the proceeds from the follow-on stock offering we completed on April 13, which resulted in an additional $265 million raised, net of underwriting discounts.

將注意力轉向資產負債表。我們在本季度末有 3.36 億美元的受限和非受限現金，高於 2020 年第一季度末的 7200 萬美元。該餘額反映了我們 530 萬美元 PPP 貸款的償還，但不反映後續股票的收益我們於 4 月 13 日完成了此次發行，扣除承銷折扣後，我們又籌集了 2.65 億美元。

In terms of loan assets, we carried an aggregate balance of loans, notes and residuals of $73.2 million, down from $227.5 million at the end of the same quarter in the prior year. This reflects the continuing reduction in the percentage of platform loans funded through our own balance sheet. As highlighted during our last earnings call, these loan assets represent the totality of the direct exposure we have to credit risk.

在貸款資產方面，我們的貸款、票據和殘差總額為 7,320 萬美元，低於去年同期的 2.275 億美元。這反映了通過我們自己的資產負債表融資的平台貸款比例持續下降。正如我們上次財報電話會議所強調的那樣，這些貸款資產代表了我們面臨的信用風險的全部直接風險。

Now turning to our near-term and full year outlook. As expressed in our full year guidance communicated last quarter, we are now seeing a catch-up in business results to where we believe our technology improved to over the course of 2020. As well, we continue to see our contribution margins as slightly above their historical trend, and we expect them to mildly contract as we return to a more normal operating spend.

現在轉向我們的近期和全年展望。正如我們在上個季度傳達的全年指導中所表達的那樣，我們現在看到業務業績正在追趕，我們認為我們的技術在 2020 年期間會有所改進。此外，我們繼續看到我們的邊際貢獻略高於他們的水平歷史趨勢，我們預計隨著我們恢復更正常的運營支出，它們將溫和收縮。

There are 2 additional trends we would like to call your attention to that will be impacting the margins in our guidance. The first is that we expect to direct incremental earnings upside towards accelerating the expansion of the Prodigy Software platform we recently acquired, consistent with our level of excitement at the magnitude of that opportunity. This will have an impact on our EBITDA margins through the duration of 2021. The second is that given the relatively sharp rise in our stock price since the beginning of the year, we anticipate that our stock-based compensation expenses for our recent grants will be rising disproportionately as we expense them over the next few quarters, which will impact our net income margins.

我們想提請您注意另外兩個趨勢，這將影響我們指導中的利潤率。首先是我們希望將增量收益直接用於加速我們最近收購的 Prodigy Software 平台的擴展，這與我們對這一機會的巨大興奮程度一致。這將對我們在 2021 年期間的 EBITDA 利潤率產生影響。第二，鑑於自今年年初以來我們的股價相對大幅上漲，我們預計我們最近贈款的基於股票的補償費用將為隨著我們在接下來的幾個季度中花費它們，不成比例地上升，這將影響我們的淨利潤率。

With these points in mind, for Q2, we are expecting total revenues of $150 million to $160 million, representing a quarter-over-quarter growth rate of 28% at the midpoint, we note that year-over-year growth rates for Q2 will become somewhat meaningless as we lap the peak impact of the pandemic; contribution margin of approximately 44%; net income of $8 million to $12 million; adjusted net income of $21 million to $25 million; adjusted EBITDA of $23 million to $27 million; and a diluted weighted average share count of approximately 94.9 million shares.

考慮到這些要點，我們預計第二季度的總收入為 1.5 億美元至 1.6 億美元，中點的季度環比增長率為 28%，我們注意到第二季度的同比增長率將隨著大流行的影響達到頂峰，變得有些毫無意義；貢獻率約為 44%；淨收入 800 萬至 1200 萬美元；調整後的淨收入為 2100 萬美元至 2500 萬美元；調整後的 EBITDA 為 2300 萬美元至 2700 萬美元；稀釋後的加權平均股數約為 9490 萬股。

As a result of the continuing strengthening in our business as well as in our underlying model technologies, for the full year of 2021, we now expect revenues of approximately $600 million, representing a growth rate of 157% year-over-year and up from the $500 million that we indicated last quarter; contribution margin of approximately 42%, up from 41% indicated last quarter; and we continue to expect an adjusted EBITDA margin of approximately 10%.

由於我們的業務和基礎模型技術的持續加強，我們現在預計 2021 年全年的收入約為 6 億美元，同比增長 157%，高於我們上個季度指出的 5 億美元；貢獻率約為 42%，高於上一季度的 41%；我們繼續預計調整後的 EBITDA 利潤率約為 10%。

That is all of the information we had to share with you today. I want to again thank you all for taking out time to join us and hear about our results. And to also reiterate Dave's gratitude to all of our hardworking teams at Upstart, whose talents and efforts are contributing to our progress, you all are making it very easy to be the financial mouthpiece of this company.

這就是我們今天必須與您分享的所有信息。我想再次感謝大家抽出時間加入我們並了解我們的結果。還要重申 Dave 對 Upstart 所有辛勤工作的團隊的感謝，他們的才能和努力為我們的進步做出了貢獻，你們都讓成為這家公司的財務代言人變得非常容易。

With that, Dave and I are now happy to open the call to any questions. Operator?

有了這個，戴夫和我現在很高興打開電話詢問任何問題。操作員？

(Operator Instructions) We'll take our first question from Ramsey El-Assal from Barclays.

（操作員說明）我們將向巴克萊的 Ramsey El-Assal 提出第一個問題。

I wanted to ask about your loan conversion rate, it came in well above our model. And I know you gave us some granularity on some of the improvements on the technical side that you've made. How do you expect that metric to trend through the year? It feels like that's a pretty decent contributor to the full year guidance raise and maybe a higher conversion rate than our models reflected. And also, just speak to what the upward limit might look like on that rate over time if there is one.

我想問一下你的貸款轉換率，它遠高於我們的模型。我知道你在技術方面的一些改進上給了我們一些細節。您預計該指標在全年的趨勢如何？感覺這是對全年指導提高的一個相當不錯的貢獻，並且可能比我們的模型所反映的轉換率更高。而且，如果有的話，只要談談隨著時間的推移該利率的上行限制可能會是什麼樣子。

Sure. Yes. Hey, Ramsey, thanks for your question. This is Sanjay. I guess what I would say is, so it's obviously the super important driver of our top line, the performance of the funnel. It is, in a sense, a beneficiary from the underlying accuracy of the models and the underlying strength of the technology. And that technology strength can manifest in one of 2 ways. It can show up as improvements to our conversion rates. Or sometimes, it can show up as improvements to the top of our funnel because as a conversion funnel improves, we then expand our marketing campaigns and scale.

當然。是的。嘿，拉姆齊，謝謝你的提問。這是桑傑。我想我想說的是，所以它顯然是我們頂線的超級重要驅動因素，即漏斗的性能。從某種意義上說，它受益於模型的潛在準確性和技術的潛在優勢。這種技術實力可以通過以下兩種方式之一體現出來。它可以顯示為我們轉化率的改進。或者有時，它可以顯示為我們漏斗頂部的改進，因為隨著轉化漏斗的改進，我們會擴大我們的營銷活動和規模。

And maybe one way to think about this is we sort of signaled that our contribution margins themselves are a little bit abnormally high right now. And that's related to what you're talking about because typically, as the conversion funnel improves, and if we can predict that accurately and anticipate that what we will do is expand our marketing campaigns, and the fact that our contribution margins are somewhat high right now, is maybe a signal that we haven't expanded our marketing campaigns appropriately. So we're still, in a sense, leaving some profitable loans on the table.

也許考慮這一點的一種方式是，我們有點暗示我們的邊際貢獻本身現在有點異常高。這與您所說的有關，因為通常情況下，隨著轉化漏斗的改善，如果我們能夠準確預測並預期我們將要做的就是擴大營銷活動，以及我們的邊際貢獻有點高的事實是對的現在，這可能是我們沒有適當擴大營銷活動的一個信號。因此，從某種意義上說，我們仍然在桌面上留下一些有利可圖的貸款。

So over time, what you might expect is that the technology will hopefully continue to improve, our conversion funnel will improve, but then expansion on the sort of acquisition side will bring it back down a little bit and will convert it more into top-of-funnel traffic. So that's the dynamic. It's a bit hard to predict how improvements to our technology will show up between the conversion rate improvements and just overall sort of marketing scale. And as for upper limits, for that very reason, it's a bit hard to predict the upper limit because a lot of what's driving the improvement of our technology, as you get to very high conversion rates, will just naturally result in larger acquisition campaign size.

因此，隨著時間的推移，您可能會期望技術會繼續改進，我們的轉化漏斗會改進，但隨後在獲取方面的擴展會使其回落一點，並將其更多地轉化為頂級- 漏斗流量。這就是動態。很難預測我們的技術改進將如何體現在轉化率改進和整體營銷規模之間。至於上限，正因為如此，很難預測上限，因為推動我們技術改進的許多因素，當你獲得非常高的轉化率時，自然會導致更大的收購活動規模.

But as Dave said, and I think the core point that's important is, the backlog of projects we have, that sort of have a very direct line to improving the accuracy of the model, is pretty long. And that's really the underlying driver of what's driving a lot of the business results that you're seeing.

但正如戴夫所說，我認為重要的核心點是，我們積壓的項目，對於提高模型的準確性有非常直接的影響，很長。這確實是推動您所看到的許多業務成果的潛在驅動因素。

Okay. A really quick follow-up for me is just on the Prodigy network and your kind of projected penetration rate of the auto dealers in that network. If you could just remind us, is that something where you have to go dealer-by-dealer and kind of convert them over to your loans? Or is that something where you can kind of make a back-end change and sort of migrate everybody over to you guys rather than other competitors offering loans?

好的。對我來說，一個非常快速的後續行動只是在 Prodigy 網絡上，以及您對該網絡中汽車經銷商的預計滲透率。如果你能提醒我們，那是不是你必須逐個經銷商去把它們轉換成你的貸款？或者你可以在這種情況下進行後端更改並將每個人都轉移到你們那裡，而不是其他提供貸款的競爭對手？

So it's a multistep process. I mean the first thing that needs to happen and the place that we're focused right now is in getting the Prodigy Software adopted by the dealers themselves. And as that sort of footprint expands, then within that transaction volume, we have the opportunity to offer our loans. Our loans still need to compete with the rest of the marketplace, obviously.

所以這是一個多步驟的過程。我的意思是需要發生的第一件事以及我們現在關注的地方是讓經銷商自己採用 Prodigy 軟件。隨著這種足蹟的擴大，在交易量內，我們就有機會提供貸款。顯然，我們的貸款仍然需要與市場的其他部分競爭。

At the end of the day, you need to have the best prices and the highest approval rates in order to win. And that's an area, I think, we're relatively confident in. So I think, to us, strategically, what's important is the expansion of the footprint of the commercial software that Prodigy is developing. From that will flow opportunity for loan volume, but that would be almost a sort of a second step, if you will.

歸根結底，您需要擁有最優惠的價格和最高的批准率才能獲勝。我認為，這是一個我們相對有信心的領域。所以我認為，對我們來說，從戰略上講，重要的是擴大 Prodigy 正在開發的商業軟件的足跡。從那將產生貸款量的機會，但這幾乎是第二步，如果你願意的話。

We'll move on to our next question from Pete Christiansen from Citi.

我們將繼續討論來自花旗的 Pete Christiansen 的下一個問題。

I just want to piggyback off of Ramsey's first question a little bit. I'm trying to understand the upgrades that you made to the platform this quarter and how that translated to a higher conversion, also notice that average loan size was down year-over-year. Are you just identifying more near-prime borrowers that are, according to your models, more creditworthy? Or is it a function of just getting more creditworthy borrowers into the funnel?

我只是想稍微背一下拉姆齊的第一個問題。我試圖了解您在本季度對平台所做的升級，以及如何轉化為更高的轉化率，還注意到平均貸款規模同比下降。您是否只是在識別更多接近優質的借款人，根據您的模型，這些借款人的信用度更高？還是只是讓更多信譽良好的借款人進入漏斗？

Thanks, Pete. This is Dave. I'll answer that question. Yes, the model accuracy does both of those things. It gets smarter about separating good credits from bad credits. It thereby helps us avoid offering loans to those who are more likely to default. And the effect of that, which is the most basic sort of building block of our business, is that it allows us to approve more people at generally lower rates. So that fundamental dynamic is about as core to what we do and how we do it as anything.

謝謝，皮特。這是戴夫。我會回答這個問題。是的，模型準確性可以做到這兩點。將好學分與壞學分區分開來變得更加聰明。因此，它可以幫助我們避免向更有可能違約的人提供貸款。其效果是我們業務最基本的組成部分，它使我們能夠以通常較低的費率批准更多的人。因此，這種基本動力是我們做什麼以及我們如何做任何事情的核心。

And we don't term anybody near-prime because a lot of times, that's a legacy label applied by a FICO score that's not very predictive any longer. So in our mind, we are looking for people with a very high likelihood to repay a loan as -- by a very specific model. And that dynamic is the core of what has driven the growth, along the reduction in friction for people who have seen a loan that they would like to get access to and have to just get through the approval process.

而且我們不會將任何人稱為近乎一流的，因為很多時候，這是 FICO 分數應用的傳統標籤，不再具有很好的預測性。因此，在我們看來，我們正在尋找很有可能通過非常具體的模式償還貸款的人。這種動態是推動增長的核心，同時減少了那些已經看到他們希望獲得的貸款並且必須通過審批程序的人的摩擦。

And so those are sort of the twin pillars of how our growth happens generally. At least at the first level, it is a more accurate credit model that tends to approve more people at lower rates. And secondly, a reduction in friction for those who want to get the loan. So those are the sort of the primary effect of growth, and that's exactly what happened in the first quarter.

因此，這些是我們總體增長方式的兩大支柱。至少在第一層，它是一個更準確的信用模型，傾向於以更低的利率批准更多的人。其次，減少那些想要獲得貸款的人的摩擦。所以這些是增長的主要影響，而這正是第一季度發生的事情。

That's helpful. I guess we all need to change our mindsets when thinking about your model. And then just as a follow-up question, as it relates to getting Prodigy in the hands of more dealers, is there a commission or a rebate issue that you would have to compete against other lenders into that category?

這很有幫助。我想我們都需要在考慮你的模型時改變我們的心態。然後作為一個後續問題，因為它與讓 Prodigy 交到更多經銷商手中有關，是否存在佣金或回扣問題，您必須與該類別的其他貸方競爭？

No. The Prodigy Software, as it exists today, is sold on a sort of subscription basis for a few thousand dollars to a dealership to sort of modernize their auto selling experience. We haven't changed that model to date. In the future, the Upstart loans will appear in there, and they will become an option to finance a vehicle for consumers. It's not likely the only option, but an option would be Upstart-powered loans. And there's certainly -- the money can flow in different directions on that, depending on the nature of the borrower and such. But in any case, we are extremely optimistic that it will be a source of what amounts to very low, if not even negative acquisition cost for loans, which is just an incredible opportunity. It's the nature of what point-of-sale finance generally does overall. And in this particular very large market opportunity, the auto lending market, it's just -- it's an incredible opportunity for us.

不。Prodigy 軟件，就像今天一樣，以幾千美元的訂閱方式出售給經銷商，以使他們的汽車銷售體驗現代化。迄今為止，我們尚未更改該模型。未來，Upstart 貸款將出現在那裡，它們將成為為消費者提供車輛融資的一種選擇。這可能不是唯一的選擇，但一個選擇是新貴提供的貸款。當然，根據借款人的性質等，資金可以流向不同的方向。但無論如何，我們非常樂觀地認為，這將是一個非常低的貸款來源，即使不是負的貸款購置成本，這只是一個難以置信的機會。這是銷售點金融總體上所做的事情的本質。在這個特殊的非常大的市場機會中，汽車貸款市場，這對我們來說是一個難以置信的機會。

We'll hear next from Ron Josey with JMP Securities.

接下來我們將聽取 JMP 證券公司的 Ron Josey 的發言。

Dave, I wanted to ask 2 things. One is just on your bank partner loans and as it relates to the Upstart Referral Network, we're seeing more and more partners join, and I think it's a shorter day to onboard, shorter to onboard. So if you can just talk about the process here as more bank partners join and just how that process is going. And then secondly, when you talked about, maybe to tie onto the question that was just asked, you talked about reducing friction in terms of newer products in 1Q. And I think around new and I heard repeat users for this improving automation, reducing friction, can you talk a little bit more about just the repeat process and how that's coming along?

戴夫，我想問兩件事。一個只是您的銀行合作夥伴貸款，因為它與 Upstart 推薦網絡有關，我們看到越來越多的合作夥伴加入，我認為這是一個更短的入職時間，更短的入職時間。因此，如果您可以在這裡談論隨著更多銀行合作夥伴加入的過程以及該過程的進展情況。其次，當您談到可能與剛剛提出的問題相關時，您談到減少第一季度新產品方面的摩擦。我想圍繞新的，我聽到重複用戶提高自動化，減少摩擦，你能多談談重複過程以及它是如何發生的嗎？

Sure. And those are great questions. So Upstart Referral Network is the term we use when a borrower comes to Upstart and then is referred to one of our bank partners, and Upstart Referral Network is the term we use to market that service to the banks themselves, just for clarity. And basically, yes, I mean, if banks are heavily regulated, they certainly have a lot of diligence to do if they're going to use technologies such as ours to originate credit. So that process, I think, will always be a significant lift.

當然。這些都是很好的問題。因此，Upstart Referral Network 是我們在藉款人來到 Upstart 然後被推薦給我們的銀行合作夥伴之一時使用的術語，而 Upstart Referral Network 是我們用來向銀行本身推銷該服務的術語，只是為了清楚起見。基本上，是的，我的意思是，如果銀行受到嚴格監管，如果他們要使用像我們這樣的技術來產生信貸，他們肯定需要做很多努力。所以我認為，這個過程將永遠是一個重大的提升。

But having said that, we're doing a lot of work to streamline that process, particularly for smaller community banks as well as credit unions. There's just a very quick -- quickly growing interest from credit unions in what we're doing. So we're really trying to do what I think almost any technology company tries to do to get enterprise adoption, which is to shrink the selling process, shrink the diligence process, shrink the onboarding process. And there's no sort of magic bullet there other than we continue to refine each part of that.

但是話雖如此，我們正在做很多工作來簡化該流程，特別是對於較小的社區銀行以及信用合作社。信用合作社對我們正在做的事情的興趣迅速增長。所以我們真的在嘗試做我認為幾乎所有技術公司都試圖做的事情來獲得企業採用，那就是縮小銷售流程，縮小盡職調查流程，縮小入職流程。除了我們繼續完善其中的每個部分之外，沒有任何靈丹妙藥。

And we have now, multiple times, been able to sign up a bank or a credit union in less than 90 days from our first conversation. And that, for us, is a massive step forward.

現在，我們已經多次能夠在我們第一次交談後不到 90 天的時間內註冊銀行或信用合作社。對我們來說，這是向前邁出的一大步。

It's not the standard yet. We would like it to be in the future. And we're also just kind of shrinking the diligence steps in the onboarding steps, just the refinement of the technology and having more sort of off-the-shelf diligence materials ready. So it's just an ongoing effort, and I don't think we'll ever be done with it, frankly. But we are making nice progress. There are, I think, 18 banks and credit unions on our platform today. And...

這還不是標準。我們希望它在未來。而且我們也只是縮小了入職步驟中的盡職調查步驟，只是對技術進行了改進，並準備了更多現成的盡職調查材料。所以這只是一項持續的努力，坦率地說，我認為我們永遠不會完成它。但我們正在取得不錯的進展。我認為，今天我們的平台上有 18 家銀行和信用合作社。和...

(technical difficulty)

（技術難度）

I do apologize for the interruption. It looks like we had a speaker disconnect. Give us just a moment to go ahead and get Dave reconnected. One moment.

我為中斷表示歉意。看起來我們的揚聲器斷開了連接。請給我們一點時間，讓我們重新連接 Dave。一瞬間。

Sorry. No, I'm not sure where I dropped, other than to say, we're shrinking the process. The second part of the question was on sort of repeat borrowers, if you will. Yes, that's something that we've been streamlining for some time. We are now, just in the first quarter, we began to actually market to those who had gotten loans in the past and might be eligible to get one again.

對不起。不，我不確定我在哪裡丟了，除了說，我們正在縮小流程。問題的第二部分是關於重複借款人的，如果你願意的話。是的，這是我們一段時間以來一直在精簡的東西。我們現在，就在第一季度，我們開始向那些過去獲得貸款並且可能有資格再次獲得貸款的人進行營銷。

So it's -- we're still a somewhat young platform compared to some others. And so this is still a modest part, and we have focused to date on making a profitable, growing a profitable business, really where we were just getting that first initial loan with the consumer. And so this is really upside to our business, and it seems to be coming together very quickly. This is really just personal loan and then a second personal loan, but of course, a bigger future is when we can cross-sell between products, a personal loan to an auto loan, or vice versa, and all that is in front of us.

所以它 - 與其他一些平台相比，我們仍然是一個年輕的平台。所以這仍然是一個適度的部分，到目前為止，我們一直專注於盈利，發展盈利的業務，實際上我們剛剛從消費者那裡獲得了第一筆初始貸款。所以這對我們的業務來說確實有好處，而且似乎很快就會融合在一起。這實際上只是個人貸款，然後是第二筆個人貸款，但是當然，更大的未來是我們可以在產品之間交叉銷售，個人貸款與汽車貸款，反之亦然，而這一切都擺在我們面前.

We'll take our next question from Arvind Ramnani from Piper Sandler.

我們將向 Piper Sandler 的 Arvind Ramnani 提出下一個問題。

Congrats on a terrific quarter. I just had a couple of questions. The first question is really around the market size for loans -- personal loans. So as more loans are processed through Upstart's platform, reducing acquisition costs, pricing risks more accurately and you start to gain scale, over time, does it pressure more banks to work with Upstart because you'll have a different approach, an AI-powered approach to solving this problem? Just really trying to understand what's the ceiling -- market share ceiling in the personal lending space.

祝賀一個了不起的季度。我只是有幾個問題。第一個問題實際上是關於貸款的市場規模——個人貸款。因此，隨著越來越多的貸款通過 Upstart 的平台處理，降低了購置成本，更準確地定價風險，並且您開始擴大規模，隨著時間的推移，是否會迫使更多的銀行與 Upstart 合作，因為您將採用不同的方法，由 AI 驅動解決這個問題的方法？只是真的想了解上限是什麼——個人借貸領域的市場份額上限。

Hi, Arvind. Let me just -- this is Dave. I'll answer that question. So personal loans is one of the fastest-growing categories of credit and because consumers love it. It's very simple and has high utility and fast to access, generally low rates, et cetera. So it's a very fast-growing category. I think it's taking market share away from credit cards. I think it's taken market share away from HELOCs, which have a much more difficult process and take more time. So we believe it's -- it will continue to be a very fast-growing category.

嗨，阿文德。讓我 - 這是戴夫。我會回答這個問題。因此，個人貸款是增長最快的信貸類別之一，因為消費者喜歡它。它非常簡單，實用性高，訪問速度快，通常費率低，等等。因此，這是一個增長非常迅速的類別。我認為它正在奪走信用卡的市場份額。我認為它從 HELOC 手中奪走了市場份額，HELOC 的過程更加困難，需要更多時間。所以我們相信它 - 它將繼續是一個非常快速增長的類別。

We also think we're really the first with a proprietary product that can -- because it's been sort of a fragmented market for a long time, but we really think we have a proprietary advantage that can allow us to grow market share very, very quickly and probably beyond what's been seen in the past. So we're very optimistic that it's a category in its early stages in terms of how big it can be. And we'll continue to improve and grow very quickly, particularly as better products come to market from people like Upstart.

我們還認為，我們確實是第一個擁有專有產品的公司——因為長期以來它一直是一個分散的市場，但我們真的認為我們擁有專有優勢，可以讓我們非常、非常地增加市場份額很快，可能超出了過去所見。因此，我們非常樂觀地認為，就它的規模而言，它是一個處於早期階段的類別。我們將繼續快速改進和發展，特別是當像 Upstart 這樣的人推出更好的產品時。

With respect to banks, and will banks feel the pressure to join Upstart or work with Upstart or somebody like us, I think that will certainly be an effect we would expect over time, particularly as AI moves into lending categories that are more and more meaningful and central to their business, and there's just more and more proof points of the better economic outcomes of using AI in lending. So personal loans, for example, is not a very central business for most banks. So they don't necessarily feel a lot of pressure by a personal lending product that's markedly better than another one.

關於銀行，銀行是否會感受到加入 Upstart 或與 Upstart 或像我們這樣的人合作的壓力，我認為這肯定會隨著時間的推移產生我們所期望的效果，特別是隨著人工智能進入越來越有意義的貸款類別並且是他們業務的核心，並且越來越多的證據表明在貸款中使用人工智能可以獲得更好的經濟成果。例如，對於大多數銀行來說，個人貸款並不是一項非常重要的業務。因此，他們不一定會對明顯優於其他產品的個人借貸產品感到壓力。

Auto lending is certainly much more central to more and more banks. So we are getting a lot of interest because there's a lot of large banks that have significant auto businesses. And now, naturally, this is an area of interest. The idea of being able to approve more people, have lower loss rates, have more profitable portfolio of loans is obviously compelling. And as we move to other categories over time, whatever those might be, I think we're going to just see more and more interest.

對於越來越多的銀行來說，汽車貸款無疑更為重要。所以我們引起了很多興趣，因為有很多大型銀行擁有重要的汽車業務。現在，自然而然地，這是一個令人感興趣的領域。能夠批准更多的人，降低損失率，擁有更有利可圖的貸款組合的想法顯然是令人信服的。隨著時間的推移，隨著我們轉向其他類別，無論這些類別是什麼，我認為我們會看到越來越多的興趣。

Our view generally is all flavors of lending are going to be AI-enabled in the future because the economics are so much better. And it's only a matter of time until all banks will get onboard, if not with Upstart, then with building something themselves or trying to source this type of technology somewhere.

我們普遍認為，未來所有類型的貸款都將支持人工智能，因為經濟狀況要好得多。所有銀行都加入進來只是時間問題，如果不加入 Upstart，然後自己構建一些東西或嘗試在某個地方採購這種類型的技術。

Terrific. And then I have a couple of questions on Prodigy. Like just from a kind of the way you're powering Prodigy, are you able to apply the same AI algorithms or data for Prodigy as you're doing in the personal lending space? And the second thing is like, certainly, there's been like a massive ramp. I think you mentioned $800 million in Q1. It's like a significant growth rate. How should we kind of think about volume, the volume you can deliver in 2021 with Prodigy?

了不起。然後我有幾個關於 Prodigy 的問題。就像您為 Prodigy 提供動力的方式一樣，您是否能夠像在個人借貸領域一樣為 Prodigy 應用相同的 AI 算法或數據？第二件事就像，當然，就像一個巨大的坡道。我想你在第一季度提到了 8 億美元。這就像一個顯著的增長率。我們應該如何考慮數量，您可以在 2021 年使用 Prodigy 交付的數量？

Sure. So just to quickly explain how Prodigy fits in. Prodigy is really about the point-of-sale auto lending, meaning at the dealership. There's a first step, even prior to that, that's already been in process for some time with us, and that is refinance of auto loans, which is done really through upstart.com for someone who got an auto loan elsewhere. And generally speaking, we are taking every bit of our model that is applied to personal loans and applying it to auto loans.

當然。所以只是為了快速解釋一下 Prodigy 是如何適應的。Prodigy 實際上是關於銷售點汽車貸款，意思是在經銷商處。第一步，甚至在此之前，我們已經進行了一段時間，那就是汽車貸款的再融資，這實際上是通過 upstart.com 為在其他地方獲得汽車貸款的人完成的。一般來說，我們正在將適用於個人貸款的所有模型都應用到汽車貸款中。

And what that really means is, when you underwrite an auto loan you have an individual to consider, and that's, of course, what we've been doing in our whole personal loan business, and you suddenly have an asset that is backing the loan that adds some more complexity and opportunity to the model. So it's really an extension of what we built and refined for years in the personal lending space. And it's now being applied, as I mentioned, in 33 states, still at the early stages, but in the auto refinance product.

這真正意味著，當您承保汽車貸款時，您需要考慮一個人，當然，這就是我們在整個個人貸款業務中一直在做的事情，您突然擁有支持貸款的資產這給模型增加了一些複雜性和機會。因此，它實際上是我們多年來在個人借貸領域建立和完善的擴展。正如我所提到的，它現在正在 33 個州應用，仍處於早期階段，但用於汽車再融資產品。

That exact model will then become part of what we offer through Prodigy to dealerships. So you can think of it as it's being initially refined and built as a refinance product, but more or less the same model will apply for a purchase -- a new vehicle purchase that will happen at the dealership. And that's obviously central to our success is we don't start from scratch on a new model. We actually learn from what we have and then extend it in some way or another to make it relevant to a new market. It's exactly what we're doing with the auto market and with Prodigy.

然後，該確切模型將成為我們通過 Prodigy 向經銷商提供的產品的一部分。所以你可以把它想像成它最初是作為再融資產品進行改進和建造的，但或多或少相同的模型將申請購買——將在經銷商處購買新車。顯然，我們成功的核心是我們不會從頭開始使用新模型。實際上，我們從現有的東西中學習，然後以某種方式擴展它，使其與新市場相關。這正是我們對汽車市場和 Prodigy 所做的事情。

So Arvind, hey, this is Sanjay. I was just going to tack on and maybe address the second part of your question, which is the fact that the Prodigy footprint is growing very quickly, which it is. But it's also a massive market, as Dave said, meaning the sort of the dealership financing market overall, and they're at the very early stages. And we think the opportunity is large, and we do believe it will grow fast.

所以阿文德，嘿，這是桑傑。我只是要繼續並可能解決您問題的第二部分，即 Prodigy 的足跡正在迅速增長，事實就是如此。但正如戴夫所說，這也是一個巨大的市場，這意味著整個經銷商融資市場，而且它們還處於非常早期的階段。我們認為機會很大，我們相信它會快速增長。

But I guess, suffice to say, I don't -- I'm -- my belief is their footprint and how quickly it grows won't be the limiting factor in our ability to scale the auto lending side of Upstart. I think they're going to provide plenty of transaction volume, and it will be up to the rest of the business to build the operations and funding infrastructure to scale. But I think as and when we can scale the sort of the lending part of our auto business, the sort of commercial software footprint that Prodigy's providing us, I think, will be more than ample sort of transaction volume and size for us to grow well into the future.

但我想，我只想說，我不——我是——我的信念是他們的足跡，它的增長速度不會成為我們擴大 Upstart 的汽車貸款方面的能力的限制因素。我認為他們將提供大量的交易量，這將取決於其他業務來建立運營和融資基礎設施以擴大規模。但我認為，當我們能夠擴展汽車業務的貸款部分時，Prodigy 為我們提供的那種商業軟件足跡，我認為，將不僅僅是足夠的交易量和規模，我們可以很好地增長進入未來。

Yes. I'm certainly excited about the auto offering and looking forward to more on that as the year progresses.

是的。我當然對汽車產品感到興奮，並期待隨著時間的推移更多。

(Operator Instructions) We will hear next from John Hecht from Jefferies.

（操作員說明）接下來我們將聽到 Jefferies 的 John Hecht 的講話。

Actually, a lot of my questions have been asked. And you did talk about getting the, call it, the sales cycle more productive with the banks and credit unions. I'm wondering, okay, is there a way -- can you share with us -- you mentioned 18 banks on the platform. Is there a characteristic that you're identifying of asset size or just balance sheet disposition of the banks that are, call it, migrating to you more rapidly? And same question with the credit unions.

事實上，我的很多問題都被問到了。你確實談到了讓銀行和信用合作社提高銷售週期的效率。我想知道，好吧，有沒有辦法——你能和我們分享一下——你提到了平台上的 18 家銀行。您是否正在確定資產規模的特徵，或者只是銀行的資產負債表處置，稱之為，更快地向您遷移？信用合作社也有同樣的問題。

Well, sure, that's a good question. I would say, first of all, it's obvious that we tend to be in smaller community or regional banks and credit unions. There are some, I mean, in the $40 billion-ish assets or more. So they're not the smallest banks. But our interest really is appealing to all of them, having a simple process that can work for a very small bank or a credit union that doesn't have a lot of resources. But of course, there's no reason we can't partner with and wouldn't hope to partner with the largest banks in the country over time.

嗯，當然，這是個好問題。我想說，首先，很明顯，我們傾向於在較小的社區或地區銀行和信用合作社中。我的意思是，在 400 億美元或更多的資產中，有一些。所以他們不是最小的銀行。但我們的興趣確實吸引了他們所有人，擁有一個可以為非常小的銀行或沒有大量資源的信用合作社工作的簡單流程。但當然，隨著時間的推移，我們沒有理由不能與該國最大的銀行合作，也不希望與該國最大的銀行合作。

I think today, because it's still an early-stage market, it's very helpful to have a bank where the CEO would have awareness, would be involved in this, the Credit Committee would be aware, the lending, the EVP of consumer lending, et cetera, would be involved. And so it tends to make it a little easier to be these smaller banks where you can get everybody on the same page. There will always be a process and the process is going to be more complicated the larger the bank is.

我認為今天，因為它仍然是一個早期市場，所以擁有一家讓首席執行官意識到的銀行會非常有幫助，會參與其中，信用委員會會意識到貸款，消費貸款的執行副總裁等等等，都會參與其中。因此，成為這些較小的銀行往往會更容易一些，您可以讓每個人都在同一頁面上。總會有一個過程，而且銀行越大，這個過程就越複雜。

So I think that's what we're seeing in the earlier stages as maybe not unlike technology adoption in any kind of new industry as it tends to happen a little bit smaller and then move up to the large and larger enterprises over time. That's exactly how we see this playing out. Though again, at the same time, we had started off a couple of years ago saying, look, we wanted banks between $5 billion and maybe $100 billion in assets as our target. And I think we've realized we can probably go below that and above that as we -- as the product matures. And so I think we're definitely broadening over time.

因此，我認為這就是我們在早期階段看到的情況，可能與任何類型的新行業中的技術採用沒有什麼不同，因為它往往會發生得更小一些，然後隨著時間的推移逐漸上升到越來越大的企業。這正是我們看到的結果。不過，與此同時，我們幾年前開始說，看，我們希望銀行資產在 50 億美元到 1000 億美元之間作為我們的目標。而且我認為我們已經意識到，隨著產品的成熟，我們可能會低於這個水平，也可以高於這個水平。所以我認為我們肯定會隨著時間的推移而擴大。

Okay. That's helpful. And then do you -- is there a resale cycle if someone's -- if the bank partners are buying unsecured loans, can they just, in a sense, hop in the queue for the auto loans? Or do you have to reengage them and go through a separate sales cycle?

好的。這很有幫助。然後你——如果有人——是否存在轉售週期——如果銀行合作夥伴正在購買無抵押貸款，他們是否可以在某種意義上加入汽車貸款的隊列？還是您必須重新吸引他們並經歷一個單獨的銷售週期？

Well, that's a great question. We are definitely working towards sort of standard agreements that you can add another product on with a sort of simple one-page exercise. So that's part of -- it's a very insightful question. Like you don't want to go through a full contracting process to add a new product to what the bank might be doing with us.

嗯，這是一個很好的問題。我們肯定在努力達成某種標準協議，您可以通過一種簡單的單頁練習添加另一種產品。這是一個非常有見地的問題的一部分。就像您不想通過完整的合同流程來添加新產品到銀行可能與我們一起做的事情。

So we've really moved towards kind of a master agreement style, where you can say, you started with personal loans, now you want to add auto loans. You might have started getting loans from upstart.com, now you actually want to use the technology on your own website, et cetera. So all these just trying to streamline that process of a bank starting with us in one place and then working with us multiple places over time, which is what we're seeing for sure.

所以我們真的轉向了一種主協議風格，你可以說，你從個人貸款開始，現在你想添加汽車貸款。您可能已經開始從 upstart.com 獲得貸款，現在您實際上想在自己的網站上使用該技術，等等。因此，所有這些只是試圖簡化銀行的流程，從我們開始在一個地方開始，然後隨著時間的推移與我們在多個地方合作，這是我們肯定看到的。

Okay. And then final question is -- and I apologize if this was addressed, I had some phone issues as well. Have you seen -- as the last round of stimulus gets absorbed, have you seen any changes in kind of payment patterns, like the payment rate may be slowing? Or are you seeing any indications that stimulus is getting absorbed into the system at this point?

好的。最後一個問題是——如果這個問題得到解決，我很抱歉，我也遇到了一些電話問題。你有沒有看到——隨著上一輪刺激措施被吸收，你有沒有看到支付模式的任何變化，比如支付速度可能會放緩？或者您是否看到任何跡象表明此時刺激正在被系統吸收？

Hey, John. This is Sanjay. Yes, we haven't seen too much change in the macro outlook as of right now. Obviously, on the one hand, the economy is beginning to open up a little bit. On the other hand, there was a fresh round of stimulus that has reduced people's demand for loans. And so I think, from the indicators, we have -- things have been pretty steady since last October, last November.

嘿，約翰。這是桑傑。是的，到目前為止，我們還沒有看到宏觀前景發生太大變化。顯然，一方面，經濟開始有點開放。另一方面，新一輪刺激措施減少了人們的貸款需求。所以我認為，從指標來看，我們有 - 自去年 10 月和去年 11 月以來，情況一直相當穩定。

And I think that's consistent with the macro metric we track most closely to, which is credit card balances since a lot of our loans are aimed at refi in those. And those balances have fallen in on the order of, I feel like, 10% since the beginning of the crisis, and they've only regained about 1% or 2% as of March. So I think our macro sort of indicators would sort of reflect that.

我認為這與我們最密切跟踪的宏觀指標一致，即信用卡餘額，因為我們的很多貸款都是針對這些的再融資。自危機開始以來，這些餘額已經下降了大約 10%，而截至 3 月份，它們只恢復了大約 1% 或 2%。所以我認為我們的宏觀指標會反映這一點。

We'll take a follow-up question from Ronald Josey from JMP Securities.

我們將回答 JMP Securities 的 Ronald Josey 的後續問題。

Just we're getting a lot of questions here on just the guidance. And so Sanjay, can you unpack a little bit more of the increase in the annual guidance and wondering if auto is just maybe a larger part there given, I think, Dave, you mentioned making fast progress overall, not just at Prodigy, but now in 33 states in general. So just any more insights, Sanjay, on the increase in annual guidance from the $500 million to $600 million would be great.

只是我們在這裡收到了很多關於指導的問題。所以桑傑，你能不能多解釋一下年度指導的增加，並想知道汽車是否只是其中的一個更大的部分，我想，戴夫，你提到整體進展很快，不僅僅是在 Prodigy，而是現在一般在 33 個州。因此，Sanjay 對年度指導從 5 億美元增加到 6 億美元的任何更多見解都會很棒。

Sure, Ron. I mean maybe just to put a point on it, it still includes really nothing meaningful from the auto side. We continue to be, I guess, you might call it an incubation mode there, developing the operations, expanding the Prodigy dealer footprint. So we're still not counting on any meaningful contribution. A lot of it boils down to the kinds of things that Dave talked about every single week. We are watching improvements to the credit models, improvements to the verification models, improvements to the acquisition-targeting models.

當然，羅恩。我的意思是也許只是為了說明這一點，它仍然包括從汽車方面來說沒有任何意義的東西。我想，我們仍然是那裡的孵化模式，發展業務，擴大 Prodigy 經銷商的足跡。所以我們仍然沒有指望任何有意義的貢獻。很多都歸結為戴夫每週都會談論的事情。我們正在關注信用模型的改進、驗證模型的改進、獲取目標模型的改進。

And as those improve, as those drive our daily and weekly numbers, we propagate them through with some statistical confidence interval, if you will. And so we just -- we've had a very good quarter, obviously. We're obviously leaving the quarter on a good front. Our guidance for the next quarter is a little bit under 30% quarter-over-quarter, and we're propagating that strength through to the end of the year.

隨著這些因素的改善，隨著這些因素推動我們的每日和每週數據，如果您願意，我們會通過一些統計置信區間來傳播它們。所以我們只是——顯然，我們有一個非常好的季度。我們顯然將本季度保持在良好的狀態。我們對下一季度的指導比上一季度略低於 30%，我們正在將這種優勢傳播到年底。

I think that's our last question. So I'll turn it back over to Dave.

我想這是我們的最後一個問題。所以我會把它交給戴夫。

All righty. Thanks, Jason. Again, I just want to repeat a thank you to the Upstart team for an amazing quarter. We're really thrilled with our results. And thanks to all of you for spending the time with us today. We will see you all next time.

好吧。謝謝，傑森。再次，我只想再次感謝 Upstart 團隊，感謝他們為我們帶來了令人驚嘆的季度。我們對我們的結果感到非常興奮。感謝大家今天與我們共度時光。我們下次再見。

Thank you. That does conclude today's conference. We do thank you all for your participation. You may now disconnect.

謝謝你。今天的會議到此結束。我們非常感謝大家的參與。您現在可以斷開連接。