(UPST) 2023 Q3 法說會逐字稿

Good day, and welcome to the Upstart Third Quarter 2023 Earnings. Today's conference is being recorded. At this time, I would like to turn the conference over to Jason Schmidt, Head of Investor Relations. Please go ahead, sir.

美好的一天，歡迎來到 Upstart 2023 年第三季財報。今天的會議正在錄製中。現在，我想將會議交給投資者關係主管 Jason Schmidt。請繼續，先生。

Good afternoon, and thank you for joining us on today's conference call to discuss Upstart's Third Quarter 2023 financial results. With us on today's call are Dave Girouard, Upstart's Chief Executive Officer; and Sanjay Datta, our Chief Financial Officer. Before we begin, I want to remind you that shortly after the market closed today, Upstart issued a press release announcing its third quarter 2023 financial results and published an Investor Relations presentation. Both are available on our Investor Relations website, ir.upstart.com.

下午好，感謝您參加今天的電話會議，討論 Upstart 2023 年第三季的財務表現。參加今天電話會議的有 Upstart 執行長 Dave Girouard；以及我們的財務長 Sanjay Datta。在我們開始之前，我想提醒您，今天收盤後不久，Upstart 發布了一份新聞稿，宣布其 2023 年第三季財務業績，並發布了投資者關係簡報。兩者均可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 fourth quarter of 2023 relating to our business and plans to expand our platform in the future. 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 the result of new information or future events, except as required by law.

在電話會議期間，我們將做出前瞻性陳述，例如與我們業務相關的 2023 年第四季度指引以及未來擴展我們平台的計劃。這些陳述是基於我們目前的預期和截至目前可獲得的信息，並受到各種風險、不確定性和假設的影響。由於我們向 SEC 提交的文件中所述的各種風險因素，實際結果可能會存在重大差異。因此，我們提醒您不要過度依賴這些前瞻性陳述。我們不承擔因新資訊或未來事件而更新任何前瞻性聲明的義務，除非法律要求。

In addition, during today's call, unless otherwise stated, references to our results are provided as a non-GAAP financial measure and are reconciled to our GAAP results which can be found in the earnings release and supplemental tables. To ensure that we can address as many analyst questions as possible during the call, we request that you please limit yourself to 1 initial question and 1 follow-up. Later this quarter, Upstart will be participating in the JMP Securities AI Forum, November 29, and Wedbush's Disruptive Finance Virtual Conference, December 1.

此外，在今天的電話會議中，除非另有說明，否則對我們業績的引用均作為非公認會計準則財務指標提供，並與我們的公認會計準則業績進行了調整，這些業績可在收益發布和補充表中找到。為了確保我們能夠在電話會議期間解決盡可能多的分析師問題，我們要求您將自己限制在 1 個初始問題和 1 個後續問題。本季度晚些時候，Upstart 將參加 11 月 29 日舉行的 JMP 證券人工智慧論壇和 12 月 1 日舉行的 Wedbush 顛覆性金融虛擬會議。

Now I'd like to turn it over to Dave Girouard, CEO of Upstart.

現在我想把它交給 Upstart 執行長 Dave Girouard。

Good afternoon, everyone. Thank you for joining us on our earnings call, covering our third quarter 2023 results. I'm Dave Girouard, Co-Founder and CEO of Upstart. While 2023 continues to be a difficult environment for consumer lending, I can state with confidence that we're making rapid progress in building the world's first and best AI lending platform. We do this with a focus on our mission and with an optimistic eye toward the transformation of an industry that is inevitable over the next decade and beyond.

大家下午好。感謝您參加我們的財報電話會議，了解我們 2023 年第三季的業績。我是戴夫·吉魯亞德 (Dave Girouard)，Upstart 的共同創辦人兼執行長。雖然 2023 年對消費貸款來說仍然是一個困難的環境，但我可以自信地說，我們在打造世界上第一個也是最好的人工智慧貸款平台方面正在快速取得進展。我們專注於我們的使命，並對未來十年及以後不可避免的產業轉型持樂觀態度。

In the third quarter, rates were at an all-time high in our marketplace, higher than we expected them to be, reflecting both decades-high interest rates and significantly elevated risk in the consumer economy. This is not a path we would have chosen and is obviously not constructive to our growth, but it reflects the reality of operating responsibly in this environment. That said, we believe the economic trends continue in the right direction. Inflation is waning, interest rates presumably are peaking or have peaked. The jobs market remains strong and many retailers are suggesting that consumer spending is softening. We continue to look for a return to normal for personal savings rates, which are highly correlated with risk and, therefore, with pricing on our platform.

第三季度，我們市場的利率處於歷史最高水平，高於我們的預期，反映出數十年來的高利率和消費經濟中顯著升高的風險。這不是我們會選擇的道路，顯然對我們的成長沒有建設性，但它反映了在這種環境下負責任運作的現實。也就是說，我們相信經濟趨勢繼續朝著正確的方向發展。通貨膨脹正在減弱，利率可能正在見頂或已經見頂。就業市場依然強勁，許多零售商表示消費者支出正在疲軟。我們繼續尋求個人儲蓄率恢復正常，這與風險高度相關，因此也與我們平台上的定價高度相關。

From a financial perspective, we'd of course, prefer to be growing quickly, but this is a time when it's wise to be operating in a conservative mode. In that light, we were EBITDA-positive for the second straight quarter. Our contribution margins are still near record highs. And finally, we remain confident that our personal loan models are calibrated and Upstart-powered credit is performing as expected right now. Not only are we financially superior, we also continue to invest in our AI platform.

從財務角度來看，我們當然希望快速成長，但現在以保守模式運作是明智之舉。有鑑於此，我們連續第二季 EBITDA 為正值。我們的貢獻率仍接近歷史高點。最後，我們仍然相信我們的個人貸款模型得到了校準，並且新貴驅動的信貸目前的表現符合預期。我們不僅在財務上具有優勢，而且還繼續投資於我們的人工智慧平台。

Last quarter, we launched Model 15.0, the latest version of our core personal loan underwriting model. This new version increased our model accuracy by about 15%, the largest improvement we have seen since we began tracking improvements in 2018 by about a factor of 1.5.

上季度，我們推出了模型15.0，這是我們核心個人貸款承銷模型的最新版本。這個新版本將我們的模型準確率提高了約 15%，這是自 2018 年開始追蹤改進以來我們所看到的最大改進，提高了約 1.5 倍。

Our previous most impactful model launch added personalized timing curves, what we have come to call our loan month model, for a giant accuracy improvement. This version improves the accuracy and precision of these personalized timing curves and also adds personalized macro effects for the first time. Last week, we also launched an upgraded version of the Upstart Macro Index to account for seasonal patterns and repayment behaviors. Over the last decade, we've measured a distinct seasonal pattern with respect to loan repayments.

我們之前推出的最具影響力的模型添加了個性化的時間曲線，我們稱之為貸款月模型，以實現巨大的準確性提高。此版本提高了這些個人化計時曲線的準確度和精確度，也首次加入了個人化巨集效果。上週，我們也推出了升級版的新貴宏觀指數，以考慮季節性模式和還款行為。在過去的十年中，我們測量了貸款償還的明顯季節性模式。

The time from January to April represents the best seasonal loan performance in our experience, likely due to borrowers receiving extra cash in the form of state and federal tax refunds. Performance then generally degrades marginally each month until the early fall and then flattens or modestly improve through the end of the year. With the seasonally adjusted UMI, we'll offer more accurate lens into changes in the financial health of consumers and that should result in less volatility in loan pricing and approvals from month to month.

根據我們的經驗，一月至四月是最好的季節性貸款表現，這可能是因為借款人以州和聯邦退稅的形式獲得了額外的現金。然後，績效通常每個月都會略有下降，直到初秋，然後到年底趨於平緩或略有改善。透過季節性調整的 UMI，我們將更準確地了解消費者財務健康狀況的變化，這應該會減少貸款定價和批准的每月波動。

Our auto retail platform saw a huge boost recently as we partnered with a major OEM, to implement our software in support of the launch of a new vehicle. Our technology powered their consumer reservation, deposit and customization system for this amazing new vehicle and was implemented quickly at more than 99% of all their dealerships in the U.S. We see this as a harbinger to a future where consumers can choose exactly the car they want online and have it delivered directly to them with none of the friction and inconvenience many associate with the car buying experience. We're partnering with leaders in the industry to unlock this feature.

最近，我們與一家主要 OEM 合作，實施我們的軟體以支援新車的推出，因此我們的汽車零售平台取得了巨大的進步。我們的技術為他們的消費者預訂、押金和定制系統提供了這款令人驚嘆的新車的支持，並在美國超過99% 的經銷商中得到了快速實施。我們認為這預示著未來消費者可以準確選擇他們想要的汽車在線並將其直接交付給他們，而不會出現許多與汽車購買體驗相關的摩擦和不便。我們正在與行業領導者合作來解鎖此功能。

Separately, we also expanded our roster of car dealerships that have gone live with Upstart lending from 61 to 69, and we've added support from rooftops in Arkansas, Maryland and Virginia, expanding our reach to 70% of the U.S. population. We also signed agreements with 2 of the largest national nonprime auto lenders to help fund our auto lending solutions.

另外，我們還將支持 Upstart 貸款的汽車經銷商名單從 61 家擴大到 69 家，並增加了阿肯色州、馬裡蘭州和弗吉尼亞州屋頂的支持，將我們的覆蓋範圍擴大到了 70% 的美國人口。我們還與兩家最大的全國性非主要汽車貸款機構簽署了協議，為我們的汽車貸款解決方案提供資金。

I'm also excited about the progress with our home equity product. As of today, the Upstart HELOC is available to homeowners in Colorado, Michigan, Washington and Utah. And we expect to be live in Alabama, Kentucky, Tennessee and Washington, D.C. in the coming weeks. We have received encouraging feedback from applicants about how fast and easy the process is even at this nascent stage. Our home equity product helps diversify our business in 2 critical ways. First, it's a very prime product with annual loss rates expected to be 1% or less. And second, it's a countercyclical to a refinance product because it's an effective way to tap equity in a home during a higher rate environment, such as we have today. More than 90% of HELOCs are offered by banks and credit unions today, so it's a good fit with the Upstart platform and our partners.

我也對我們的房屋淨值產品的進展感到興奮。截至今天，Upstart HELOC 可供科羅拉多州、密西根州、華盛頓州和猶他州的房主使用。我們預計未來幾週將在阿拉巴馬州、肯塔基州、田納西州和華盛頓特區上線。我們收到了申請人的令人鼓舞的回饋，他們表示即使在這個初期階段，這個過程也非常快速和簡單。我們的房屋淨值產品透過兩種關鍵方式幫助我們實現業務多元化。首先，它是一種非常優質的產品，年損失率預計為 1% 或更低。其次，它是再融資產品的反週期產品，因為它是在當今高利率環境下利用房屋淨值的有效方法。如今，超過 90% 的 HELOC 由銀行和信用合作社提供，因此它非常適合 Upstart 平台和我們的合作夥伴。

We'll bring some pricing advantage to the HELOC market over time, but there are 2 predominant advantages we expect to see sooner. The first is speed and ease of access because the banks and credit means that originate most HELOCs today take more than a month on average for the applicant to receive funds. We're aiming for less than 5 days. Second, our existing platform unlocks customer acquisition advantages that others can't match.

隨著時間的推移，我們將為 HELOC 市場帶來一些定價優勢，但我們預計很快就會看到兩個主要優勢。首先是速度和便捷性，因為銀行和信貸意味著如今發起大多數 HELOC 的申請人平均需要一個多月的時間才能收到資金。我們的目標是不到 5 天。其次，我們現有的平台具有其他平台無法比擬的客戶獲取優勢。

Each month, more than 80,000 homeowners apply for a personal loan on Upstart. Some large fraction of them can and will be better served with a home equity product that offers a lower rate. After all, personal loans and HELOCs are just 2 different ways to solve the same customer need. By integrating our personal loan and HELOC application processes, which we expect to do before year-end, we'll take a giant step towards becoming customer-centric rather than product-centric. The trade-offs between price, time and effort will change over time and will help applicants choose the best product for them.

每個月都有超過 80,000 名房主在 Upstart 上申請個人貸款。其中很大一部分人可以而且將會透過提供較低利率的房屋淨值產品得到更好的服務。畢竟，個人貸款和 HELOC 只是解決同一客戶需求的兩種不同方式。透過整合我們的個人貸款和 HELOC 申請流程（我們預計在年底前完成），我們將朝著以客戶為中心而非以產品為中心邁出一大步。價格、時間和精力之間的權衡將隨著時間的推移而改變，並將幫助申請人選擇最適合他們的產品。

Now let's talk about the funding side. Despite the difficult lending environment, we have seen some great success with credit unions in the last couple of years. We attribute this to the fact that credit unions are extremely focused on delivering the products that their members want, with an intense focus on the quality of experience. They also map well into current and future upstart products, with approximately $29 billion in personal loans, $266 billion in auto loans and $82 billion in HELOCs funded by credit unions each year. So we're doubling down on credit unions by building features and capabilities that will strengthen our partnerships.

現在我們來談談資金方面。儘管貸款環境困難，但我們在過去幾年中看到信用合作社取得了一些巨大的成功。我們將此歸因於這樣一個事實：信用合作社非常注重提供其會員想要的產品，並且非常注重體驗品質。它們也很好地繪製了當前和未來的新興產品，每年由信用合作社資助的個人貸款約為 290 億美元，汽車貸款為 2,660 億美元，HELOC 為 820 億美元。因此，我們正在加倍努力建立信用合作社的特色和能力，以加強我們的合作夥伴關係。

In recent weeks and months, we upgraded the upstart performance console to enhance visibility into originations and loan performance trends; improved connectivity to the core systems that power credit unions financials and operations; delivered features that make it easier for new members to join the credit union; and enhanced our partners' ability to cross-sell other products to existing members. We're also unlocking loan participation, where a loan originated by one credit union can be fractionalized and sold to a network of other credit unions. This significantly improves liquidity in the system and allows us to reach the long tail of small credit unions in an economic and constructive way.

最近幾週和幾個月，我們升級了新貴績效控制台，以提高對貸款發放和貸款績效趨勢的可見性；改善與信用社財務和營運核心系統的連結；提供了使新會員更容易加入信用合作社的功能；並增強了我們的合作夥伴向現有會員交叉銷售其他產品的能力。我們也開放了貸款參與，其中一個信用社發放的貸款可以分割並出售給其他信用社網路。這顯著提高了系統的流動性，並使我們能夠以經濟和建設性的方式觸及小型信用合作社的長尾。

On the capital market side, we continue to pursue a large number of committed funding partnerships in order to strengthen the liability of loan funding on Upstart. With banks retrenching paying more for deposits and likely facing even more imposing capital requirements, we believe it's important to find alternative sources of funding even for the primes of loans. We're in discussions about partnerships and structures that can enable at-scale funding across the entire credit spectrum and are excited to innovate in this space.

在資本市場方面，我們繼續尋求大量的承諾融資合作夥伴，以加強Upstart的貸款融資責任。隨著銀行削減存款費用，並可能面臨更嚴格的資本要求，我們認為，即使是優質貸款，尋找替代資金來源也很重要。我們正在討論能夠在整個信貸範圍內實現大規模融資的合作夥伴關係和結構，並很高興在這一領域進行創新。

Lastly, we're investing significantly in servicing and collections, a vital part of our business, where improvements can go directly to the bottom line. We recently launched a new version of our funded borrower dashboard, which is -- the experienced borrowers see while in the process of repaying a loan. We also recently launched our first mobile application, which is initially focused on loan repayment. Servicing and collections is clearly an area where AI can lead to better results, and we believe the surface area upon which we can apply our AI expertise is broad. We've brought some incredible new talent to this aspect of our business, and are excited about its potential.

最後，我們在服務和收款方面進行了大量投資，這是我們業務的重要組成部分，改進可以直接影響利潤。我們最近推出了新版本的融資借款人儀表板，經驗豐富的借款人在償還貸款的過程中會看到。我們最近還推出了第一個行動應用程序，最初專注於貸款償還。服務和收款顯然是人工智慧可以帶來更好結果的領域，我們相信我們可以應用人工智慧專業知識的領域很廣泛。我們為這方面的業務帶來了一些令人難以置信的新人才，並對它的潛力感到興奮。

To wrap up my remarks today, there are plenty of reasons to remain optimistic about Upstart. First, even with our rates at all-time highs, we continue to grow fee revenue and invest in our teams and core AI. Second, our models are learning and improving at an unprecedented pace, creating more separation from traditional approaches to lending. Third, the competition to serve mainstream American consumers with responsible lending products has waned considerably given the challenges in the markets in recent years. And fourth, we believe there's an inevitable period of normalization on both rates and risk levels' return to long-term averages. That will provide Upstart with a tailwind over a multiyear period in the future. We aren't waiting around for that period, but we'll certainly be ready when it arise.

總結我今天的發言，有很多理由對 Upstart 保持樂觀。首先，即使我們的費率處於歷史最高水平，我們仍繼續增加費用收入並投資於我們的團隊和核心人工智慧。其次，我們的模型正在以前所未有的速度學習和改進，與傳統的貸款方法更加分離。第三，鑑於近年來市場面臨的挑戰，為美國主流消費者提供負責任貸款產品的競爭已大大減弱。第四，我們認為利率和風險水準將不可避免地回歸長期平均。這將為 Upstart 提供未來數年的順風車。我們不會等待那個時期，但當它出現時我們一定會做好準備。

Speaking of the future, last week, I had the privilege of participating in the U.S. Senate's AI Insight Forum. It was a very productive bipartisan discussion on how to maximize the benefits of AI while mitigating risks. I focus my remarks on the lessons we've learned on our journey to use AI responsibly to help establish America as a global leader in AI-enabled lending. Hearing about the challenges other industries are facing deploying AI reinforced me that lending is one of the most compelling examples how AI can clearly improve the lives of all Americans. I left more excited than ever about the opportunities ahead of us.

談到未來，上週我有幸參加了美國參議院的人工智慧洞察論壇。這是一次非常富有成效的兩黨討論，討論瞭如何在降低風險的同時最大限度地發揮人工智慧的優勢。我的演講重點是我們在負責任地使用人工智慧以幫助美國成為人工智慧貸款領域全球領導者的過程中學到的教訓。聽說其他行業在部署人工智慧方面面臨的挑戰讓我更加確信，貸款是人工智慧能夠明顯改善所有美國人生活的最引人注目的例子之一。我離開時對我們面前的機會比以往任何時候都更加興奮。

Thank you. And I'd like now to turn it over to Sanjay, our Chief Financial Officer, to walk through our Q3 2023 financial results and guidance. Sanjay?

謝謝。現在我想將其交給我們的財務長 Sanjay，讓他詳細介紹我們的 2023 年第三季財務表現和指導。桑傑？

Thanks, Dave, and thanks to all of you for joining us today. We're coming off a quarter of mixed results in Q3 with narrow misses on revenue and margins against success nonetheless in maintaining positive adjusted EBITDA and sequential growth in fee revenue. We continue to operate in a challenging and fluid macro environment. Real consumption continues to hover at levels, which we believe to be unsustainable. Incomes continue to lag consumption growth despite the positive trend in labor participation as the ongoing decline in government transfers, still receding from stimulus era highs, offsets any wage gains from the return to work.

謝謝戴夫，也謝謝大家今天加入我們。我們在第三季的業績好壞參半，儘管在收入和利潤率方面仍取得了成功，但仍保持了調整後的正 EBITDA 和費用收入的環比增長。我們繼續在充滿挑戰和變化的宏觀環境中運作。實際消費繼續徘徊在我們認為不可持續的水平。儘管勞動參與率呈現正面趨勢，但收入仍持續落後於消費成長，因為政府轉移支付的持續下降（仍低於刺激時代的高點）抵消了重返工作崗位帶來的工資成長。

The residual savings rates in the economy have consequently continued to languish at historically low levels. This consumer reality continues to be reflected in elevated borrower default trends in an Upstart Macro Index now adjusted for seasonality, which indicates a stable level of loan defaults throughout most of this past year, albeit one which remains remarkably high. Our ability to approve borrowers in this environment has remained the constraint on platform growth for most of the past quarter.

因此，經濟中的剩餘儲蓄率繼續徘徊在歷史低點。這種消費者現實繼續反映在新貴宏觀指數中藉款人違約趨勢的上升中，該指數現已根據季節性進行調整，這表明過去一年的大部分時間裡貸款違約水平保持穩定，儘管仍然非常高。在過去一個季度的大部分時間裡，我們在這種環境下批准借款人的能力仍然是平台成長的限制因素。

On the funding side of our business, the banks continue to manage balance sheet conservatively and seek to unwind existing asset positions in secondary markets. The decline in aggregate deposit base, which started in mid-2022 has now thankfully eased but anemic savings rates are so far hindering a rebound in liquidity. Correspondingly, the institutional funding markets remain distracted with a bounty of trading opportunities coming from the banking sector. On the other hand, significant amounts of institutional capital has been recently raised for upcoming deployment into credit and the volume of discussion and negotiation aimed at setting up for 2024 remains encouraging.

在我們業務的融資方面，銀行繼續保守地管理資產負債表，並尋求解除二級市場上的現有資產部位。值得慶幸的是，自 2022 年中期開始的總存款基礎下降現已有所緩解，但迄今為止，儲蓄率低迷阻礙了流動性反彈。相應地，機構融資市場仍然受到來自銀行業的大量交易機會的干擾。另一方面，最近籌集了大量機構資本用於即將部署到信貸領域，旨在為 2024 年做好準備的討論和談判數量仍然令人鼓舞。

With these items as context, here are some financial highlights from the third quarter of 2023. Revenue from fees was $147 million in Q3, slightly below our guidance of $150 million and marginally up from $144 million last quarter. Our underwriting of primary higher-income borrowers has become more conservative over this past quarter, as their loss rates accelerate and converge with the broader default trends across the borrower spectrum. This has been a headwind for our volumes and fee revenues over this past quarter versus our contemplated guidance.

以這些項目為背景，以下是 2023 年第三季的一些財務亮點。第三季的費用收入為 1.47 億美元，略低於我們 1.5 億美元的指導，略高於上季的 1.44 億美元。在過去的一個季度中，我們對主要高收入借款人的承保變得更加保守，因為他們的損失率加速並與借款人範圍內更廣泛的違約趨勢趨同。與我們預期的指導相比，這對我們上個季度的銷售和費用收入來說是一個不利因素。

Net interest income was negative $12 million in Q3, owing to continued elevated charge-offs in our R&D portfolio as well as a onetime change in our charge-off process for loans and bankruptcy that had the effect of pulling some charges forward into Q3. Taken together, net revenue for Q3 came in at $135 million, slightly below guidance and representing a 14% contraction year-over-year.

第三季淨利息收入為負 1,200 萬美元，原因是我們的研發投資組合沖銷持續增加，以及貸款和破產沖銷流程的一次性變化，導致部分費用提前到第三季。總而言之，第三季淨收入為 1.35 億美元，略低於預期，年減 14%。

The volume of loan transactions across our platform in Q3 was approximately 114,000 loans, up roughly 5% sequentially and representing over 70,000 new borrowers. Average loan size of $11,000 was up 9% versus the same period last year and sequentially flat. Our contribution margin, a non-GAAP metric, which we define as revenue from fees, minus variable costs for borrower acquisition, verification and servicing as a percentage of revenue from fees, came in at 64% in Q3, up 11 percentage points from 54% last year, but 1 percentage point below our guidance for the quarter. We continue to benefit from high levels of loan processing automation and fraud modeling efficacy, achieving another new high in percentage of loans fully automated at 88%.

第三季度我們平台上的貸款交易量約為 114,000 筆貸款，比上一季增長約 5%，代表超過 70,000 名新借款人。平均貸款規模為 11,000 美元，比去年同期成長 9%，與上一季持平。我們的貢獻利潤率是一項非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佔費用收入的百分比，第三季度為64%，比54 上升了11 個百分點% 去年，但比我們本季的指引低 1 個百分點。我們持續受益於高水準的貸款處理自動化和詐欺建模功效，完全自動化的貸款比例再創新高，達到 88%。

Operating expenses were $178 million in Q3, down 17% year-over-year, but up 5% sequentially as increasing sales and marketing spend somewhat offset continued savings in engineering and product. Altogether, Q3 GAAP net loss was $40.3 million, and adjusted EBITDA was positive $2.3 million, both roughly in line with guidance. Adjusted earnings per share was negative $0.05 based on a diluted weighted average share count of $84.4 million.

第三季營運費用為 1.78 億美元，年減 17%，但環比成長 5%，因為銷售和行銷支出的增加在一定程度上抵消了工程和產品方面的持續節省。整體而言，第三季 GAAP 淨虧損為 4,030 萬美元，調整後 EBITDA 為正 230 萬美元，兩者大致符合指引。根據 8,440 萬美元的稀釋加權平均股數計算，調整後每股收益為負 0.05 美元。

We ended the quarter with loans on our balance sheet of $776 million before the consolidation of securitized loans, down sequentially from $838 million the prior quarter. Of that balance, loans made for the purposes of R&D, principally auto loans, sat at $447 million of the total.

本季結束時，在證券化貸款合併之前，我們資產負債表上的貸款為 7.76 億美元，比上一季的 8.38 億美元有所下降。其中，用於研發目的的貸款（主要是汽車貸款）佔總額的 4.47 億美元。

In addition to loans owned directly, we have consolidated an additional $196 million of loans that were sold from our balance sheet into an ABS transaction earlier this quarter, from which we retained a total net equity exposure of $43 million. As described in our prior earnings call, this transaction was somewhat unusual for us, and designed to serve as a visible market reset as well as a public vote of confidence in our current degree of model calibration. Our corporate liquidity position at the end of Q3 remains strong with $517 million of unrestricted cash on the balance sheet and approximately $425 million in net loan equity at fair value.

除了直接擁有的貸款外，我們還整合了本季早些時候從資產負債表中出售的額外1.96 億美元貸款，並將其納入ABS 交易中，從中我們保留了4,300 萬美元的總淨股權敞口。正如我們在先前的財報電話會議中所描述的，這筆交易對我們來說有些不尋常，旨在作為一次可見的市場重置以及公眾對我們當前模型校準程度的信任投票。截至第三季末，我們的企業流動性狀況依然強勁，資產負債表上有 5.17 億美元的不受限制現金，以公允價值計算的淨貸款權益約為 4.25 億美元。

We continue to watch for signs of moderating consumption, improved savings rates and reduced credit defaults in our economy as precursors to a broader normalization of consumer fiscal health. Until we see such signals, our operating assumption is that the macro environment will remain constant. And in such a scenario, our business growth will predominantly come from model upgrades and from improved underwriting accuracy both of which we consider to be squarely in our set of core technical competencies and ones in which we have demonstrated a strong historical record of delivering growth over the years.

我們持續關注經濟中消費放緩、儲蓄率提高和信貸違約減少的跡象，作為消費者財政健康更廣泛正常化的先兆。在我們看到此類訊號之前，我們的操作假設是宏觀環境將保持不變。在這種情況下，我們的業務成長將主要來自模型升級和核保準確性的提高，我們認為這兩者完全屬於我們的核心技術能力，並且我們在這些能力中展現了強勁的成長歷史記錄。這些年。

With this context in mind, for Q4 of 2023, we expect total revenues of approximately $135 million, consisting of revenue from fees of $150 million and net interest income of approximately negative $15 million. Contribution margin of approximately 62%, net income of approximately negative $48 million; adjusted net income of approximately negative $14 million; adjusted EBITDA of approximately 0 and a diluted weighted average share count of approximately 85.6 million shares.

考慮到這一背景，我們預計 2023 年第四季的總收入約為 1.35 億美元，其中費用收入為 1.5 億美元，淨利息收入約為負 1,500 萬美元。貢獻率約62%，淨利約負4,800萬美元；調整後淨利約負1400萬美元；調整後 EBITDA 約 0，稀釋加權平均股數約 8,560 萬股。

That is all for our prepared remarks this afternoon. A shout out to all of the Upstart teams, who have kept their heads down and their results strong over the course of the past year spent in an expecting external environment. Our business today is a much stronger one in a number of very tangible ways than it was before the onset of this post stimulus hangover. And when the wins eventually settle, your work will be manifest and brightly shine.

這就是我們今天下午準備好的發言的全部內容。向所有 Upstart 團隊致敬，他們在過去的一年裡在充滿期待的外部環境中保持低調，取得了強勁的成績。我們今天的業務在許多非常明顯的方面比刺激後的宿醉開始之前要強大得多。當勝利最終塵埃落定時，你的工作就會變得顯而易見並閃閃發光。

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

至此，戴夫和我很樂意為您解答任何問題。操作員？

(Operator Instructions). We will take our first question from Simon Clinch with Redburn Atlantic.

（操作員說明）。我們將回答 Redburn Atlantic 的 Simon Clinch 提出的第一個問題。

I was wondering if I could start with your comments around private credit and the encouraging pipeline for 2024 in terms of long-term funding commitments. Could you just expand on that a little bit more in terms of, I guess, the scale of long-term funding that you would hope to get and how that -- how we should think about that in terms of visibility into potential growth beyond this year?

我想知道我是否可以先談談您對私人信貸的評論以及 2024 年長期融資承諾方面令人鼓舞的管道。我想，您能否進一步闡述您希望獲得的長期資金規模以及如何獲得資金——我們應該如何從對超出此範圍的潛在增長的可見性方面考慮這一點年？

Yes, Simon, Sanjay here. Thanks for your question. Yes. I guess the comment was maybe an allusion to the fact that in the ongoing discussions that we're having with a number of counter-parties, obviously, in the vein of securing longer-term commitment to capital I think the volume and the depth of those discussions has been on a good trend. And it feels like there's a lot of counter-parties that are exploring this asset class that are newer to the asset class that have freshly raised capital, it's probably related to what we all read about in the press at the private credit space is becoming very big and very interested.

是的，西蒙，桑傑在這裡。謝謝你的提問。是的。我想這個評論可能是在暗示這樣一個事實：在我們與一些交易對手正在進行的討論中，顯然，為了確保對資本的長期承諾，我認為這些討論一直呈現良好趨勢。感覺有很多交易對手正在探索這一資產類別，這些資產類別比剛剛籌集資金的資產類別更新，這可能與我們在媒體上讀到的私人信貸領域正在變得非常重要有關。大而且很感興趣。

What that means with respect to 2024 and future plans or maybe sort of visibility we have into the capital base, nothing concrete yet, unfortunately. I think it's just an encouraging trend for us, and it sort of reinforces our view of the direction we're taking.

不幸的是，這對 2024 年和未來的計畫意味著什麼，或者可能是我們對資本基礎的了解，目前還沒有具體的資訊。我認為這對我們來說是一個令人鼓舞的趨勢，它在某種程度上強化了我們對我們所採取的方向的看法。

Okay. And just as a follow-up, I'm just turning to the very high level of automation 88%, coupled with the sort of very low conversion rates and the high contribution margins. So I'm just wondering, when we get to the stage where volumes start to recover, just for modeling purpose. Should we effectively assume that as conversion rates rise, that level of automation is not sustainable. And so we would expect, I guess, the incremental cost to rise and push that contribution margin down? Is that the kind of math that we should be thinking about?

好的。作為後續行動，我只是轉向 88% 的非常高的自動化水平，再加上非常低的轉換率和高的貢獻利潤。所以我只是想知道，當我們達到銷售開始恢復的階段時，僅出於建模目的。我們是否應該有效地假設，隨著轉換率的上升，這種自動化程度是不可持續的。因此，我猜，我們預期增量成本會上升並導致邊際收益下降？這是我們應該考慮的數學嗎？

Simon, this is Dave. I don't think so. There is an obvious relationship between the rest of the funnel and the sort of automation level. So it could go up and down because of just changes in who's applying and things like fraud rings that could drive the automation level down when our systems are kind of blocking fraud rings, things like that. So there are some reasons it can not always go up and to the right, and in fact, has over time. Having said that, I don't think it sort of has the relationship that you are suggesting.

西蒙，這是戴夫。我不這麼認為。漏斗的其餘部分與自動化等級之間有明顯的關係。因此，它可能會上下波動，因為申請者的變化以及欺詐圈之類的事情可能會導致自動化水平下降，當我們的系統阻止欺詐圈之類的事情時。所以有一些原因它不能總是向上和向右，事實上，隨著時間的推移。話雖如此，我認為這與您所暗示的關係並不存在。

We will take our next question from David Scharf with JMP Securities.

我們將回答 JMP 證券公司的 David Scharf 提出的下一個問題。

Maybe following up the last round of questions, kind of similar vein focusing on not so much funding, Sanjay but, I guess, balance sheet retention. We've been obviously seeing a lot of non-prime lenders announce more kind of private capital partnerships lately, forward flow arrangements. The ABS market, spreads are still wide, but they are tightening.

也許是在跟進上一輪問題，桑傑，類似的思路不是關注太多資金，而是關注資產負債表保留。顯然，我們最近看到許多非主要貸款機構宣布了更多類型的私人資本合作夥伴關係，即遠期流動安排。 ABS市場的價差仍然很大，但正在收緊。

Given all of that context, irrespective of the demand environment, is there a planned trajectory in mind that investors should think about in terms of effectively winding down the balance sheet exposure? I mean we realize there are always going to be so-called testing loans. But when the residual from the securitization is factored in, it looked like it was kind of flattish quarter-to-quarter. I'm kind of wondering when you would imagine the loans held for investment or orders for sale to be substantially lower.

考慮到所有這些背景，無論需求環境如何，投資者是否應該考慮有效減少資產負債表風險的計畫軌跡？我的意思是我們意識到總是會有所謂的測試貸款。但當考慮到證券化的剩餘部分時，季度環比似乎持平。我有點想知道什麼時候您會想像為投資而持有的貸款或銷售訂單會大幅降低。

Yes, David, thank you for the question. I guess at a headline level, nothing explicit to really share with respect to how we would view the balance sheet evolving over the course of the next year. As we said in our remarks, the explicit constraint on growth right now is on the demand. It's on the borrower side and the approvability of the borrowers. And as that relaxes presumably over the course of time, and as our platform rescales obviously, the goal is to use as much third-party capital. as is available in that rescaling and that will be our goal. But it's -- I don't think we have any explicit guidance or predictions on how that will evolve over the coming quarters.

是的，大衛，謝謝你的提問。我想在標題層面上，對於我們如何看待明年資產負債表的演變，沒有什麼明確的內容可以真正分享。正如我們在演講中所說，目前成長的明確限制在於需求。這是藉款人方面以及借款人的認可程度。隨著時間的推移，這種情況可能會有所緩解，並且隨著我們的平台大幅重新調整規模，我們的目標是使用盡可能多的第三方資本。在重新調整中可以實現這一點，這將是我們的目標。但我認為我們對於未來幾季將如何發展沒有任何明確的指導或預測。

Understood. And maybe just a follow-up on credit. It looks like the fair value adjustment, it was about another negative kind of $40 million this quarter. I would imagine that, that's typically made up of current period losses as well as any mark-to-market adjustment. Can you kind of give us the breakdown of those? And also, as we think about sort of your guidance in Q4 for net interest income, I mean, embedded in that is another kind of fair value adjustment and loss figure. Is it possible to give us kind of the charge-off figures for the retained balances that was embedded in the Q3 number as well as the Q4 guide?

明白了。也許只是信用的後續行動。看起來像是公允價值調整，本季又出現了 4,000 萬美元的負數。我想，這通常由當期損失以及任何按市值計價的調整組成。能給我們詳細介紹一下這些內容嗎？而且，當我們考慮您在第四季度對淨利息收入的指導時，我的意思是，其中嵌入的是另一種公允價值調整和損失資料。是否可以向我們提供第三季數位和第四季指南中嵌入的保留餘額的沖銷資料？

Yes. I mean I think I will just say that -- well, first of all, the components of fair value are the actual charge-offs being incurred by the loans in the balance sheet. Any unrealized fair value adjustments we're taking to those loans when we mark them up and down as the assumptions valuation change and then any realized gains or losses we take on sales or securitizations.

是的。我的意思是，我想我只想說——首先，公允價值的組成部分是資產負債表中貸款產生的實際沖銷。當我們隨著假設估值的變化而上下標記這些貸款時，我們會對這些貸款進行任何未實現的公允價值調整，然後我們對銷售或證券化所承擔的任何已實現的收益或損失。

And I'll just say that, by far, the biggest component in Q3 are the charge-offs themselves. And a lot of that, as we said, we've got about $0.5 billion of auto loans on our book that were made sort of in the vein of R&D almost 1.5 years ago now, back when we were in a very different environment. And that half of our loan book is unsurprisingly taking on excess defaults right now. And I think all of those facts will remain true in Q4 as well. The largest component of fair value in general is the actual charge-offs being incurred by the loan book.

我只想說，到目前為止，第三季最大的組成部分是沖銷本身。正如我們所說，其中許多汽車貸款在我們的帳簿上大約有 5 億美元，這些貸款是在大約 1.5 年前以研發方式發放的，當時我們處於一個非常不同的環境中。不出所料，我們的貸款帳簿中有一半現在出現了超額違約。我認為所有這些事實在第四季度也將保持不變。一般來說，公允價值的最大組成部分是貸款帳簿發生的實際沖銷。

We will take our next question from Lance Jessurun with BTIG.

我們將接受 BTIG 的 Lance Jessurun 提出的下一個問題。

A lot of the pressure on the top line has been -- the rates coming in above 36%. As we come into an environment where it's more likely than not that we see rate cuts possibly next year, combined with the UMI it looks like your UMI is starting to kind of level off a little bit. How should we think about the interplay kind of between the 2 and how that impacts your conversion rate and where the APRs are coming in below 36%. So is it just a linear like-for-like basis, whereas the rates start to come down and then the conversion rate starts to go up? Or what are the contribution between that and the UMI and where rates are?

收入面臨很大的壓力——利率超過 36%。當我們進入明年很可能降息的環境時，結合 UMI，您的 UMI 似乎開始趨於平穩。我們應該如何考慮兩者之間的相互作用以及它如何影響您的轉換率以及年利率低於 36% 的情況。那麼，這是否只是一個線性的同類基礎，而利率開始下降，然後轉換率開始上升？或者它與 UMI 之間的貢獻是什麼以及費率在哪裡？

Lance, this is Dave. Great question. Generally speaking, both UMI and kind of underlying rates have both been, as we've said, moving up pretty much constantly for the last 1.5 years or even longer. And those -- each time that happens to either of them, they are additive in effect to the price of a loan in the marketplace. And as you said, because we have a kind of a sharp line at 36% where we don't offer loans above that, that means people are being knocked out of the approval box and declined increasingly as that -- as those two go up. I would say, generally speaking, the UMI effect is maybe -- is larger than the interest effect, the interest rate effect. But they both push in the same direction. They both work to make prices higher.

蘭斯，這是戴夫。很好的問題。一般來說，正如我們所說，UMI 和某種基礎利率在過去 1.5 年甚至更長時間內幾乎持續上升。而這些——每次發生在其中任何一個人身上，它們都會對市場上的貸款價格產生附加效果。正如你所說，因為我們有一條 36% 的明確界限，我們不提供高於此的貸款，這意味著人們被排除在批准框之外，並且隨著這兩者的上升而日益下降。我想說，一般來說，UMI 效應可能比利息效應、利率效應還要大。但他們都朝著同一個方向努力。他們都致力於提高價格。

So to your point, not to project where things will go, but assuming rates do come down and assuming over time, UMI comes down, those will both certainly become tailwinds to us and essentially lower rates and improve approvability and thus the funnel metrics that's driven by those. So it's very fair to say as those things go down, it would be what we would consider a normalization of our funnel and our overall pricing and everything else, and we certainly look forward to that.

因此，就你的觀點而言，不是預測事情會走向何方，而是假設利率確實下降，並假設隨著時間的推移，UMI 下降，這些肯定會成為我們的順風車，從根本上降低利率並提高可批准性，從而推動漏斗指標由那些。因此，可以公平地說，隨著這些事情的進展，我們將考慮對我們的管道、整體定價和其他一切進行標準化，我們當然對此充滿期待。

Got it. Appreciate it. And then pivoting a little bit to the HELOC product, I'd be interested to kind of hear the first reactions, essentially, what is the approval to funding time? What are the margins looking like for the product? How is consumer feedback been? Any color that you can give there would be great.

知道了。欣賞它。然後轉向 HELOC 產品，我有興趣聽到第一個反應，本質上是，資助時間的批准是多少？該產品的利潤率是多少？消費者反饋如何？你可以給那裡任何顏色都會很棒。

I would say generally -- again, this is Dave. I would say it's probably too early to quote conversion rates, things of that nature. It's still in its early stage. We are still kind of -- this is kind of the part of the product where we're very quickly making funnel improvements that can be leaps and bounds, but they're off of a very modest start. So -- but I will say, generally, the world expects HELOCs to take a long time and to be a very difficult process. That's just the backdrop of us coming into the market.

我想說的是──再說一次，這是戴夫。我想說，現在引用轉換率之類的東西可能還為時過早。目前仍處於早期階段。我們仍然是——這就是產品的一部分，我們正在非常迅速地進行漏斗改進，這些改進可能是跨越式的，但它們的起步非常有限。所以，但我要說的是，一般來說，世界預計 HELOC 需要很長時間，並且是一個非常困難的過程。這就是我們進入市場的背景。

So it's not -- we can look really good and people can be very pleasantly surprised, and we're still kind of saying, wow, we're just a shadow of where we're going to be in 6 months or a year with that product. And that's kind of where we are. I think we have a process that's probably still better than you can get elsewhere in the market. Maybe not everywhere, but what most people are experiencing when they go out looking for HELOC. But at the same time, we're not even a shadow of the way where we're going to be down the road. So -- but it's working. It's good. We're launching more states, and each week or 2 of development is typically a big step forward for us because there's just so many obvious things that we're improving as we get started.

所以這不是——我們可以看起來非常好，人們可以感到非常驚喜，但我們仍然會說，哇，我們只是 6 個月或一年後我們將達到的目標的影子。那個產品。這就是我們現在的處境。我認為我們的流程可能比市場其他地方更好。也許不是在所有地方，但大多數人在外出尋找 HELOC 時都會遇到這種情況。但同時，我們甚至不是我們將要走的路的影子。所以——但它正在發揮作用。很好。我們正在啟動更多的狀態，每兩週的開發通常對我們來說都是一大進步，因為在我們開始時，我們正在改進很多明顯的事情。

We will take our next question from Peter Christiansen with Citi.

我們將回答花旗銀行的 Peter Christiansen 提出的下一個問題。

I was just curious, with loan size being kind of flattish sequentially, just curious if we should think of average loan size as a function of available capital or capital supply or, I guess, more or less an issue of what's going on in consumer credit right now. And I guess as a follow-up, just curious if we should think of loan size impacting the contribution profit margin.

我只是好奇，貸款規模連續持平，只是好奇我們是否應該將平均貸款規模視為可用資本或資本供應的函數，或者我想，或多或少是現在消費信貸中正在發生的事情的問題。我想作為後續行動，只是好奇我們是否應該考慮貸款規模影響貢獻利潤率。

Pete, it's Sanjay. Thanks for your question. So I think your question was about loan size, not loan volume, correct?

皮特，我是桑傑。謝謝你的提問。所以我認為你的問題是關於貸款規模，而不是貸款數量，對嗎？

Correct. Correct. Yes.

正確的。正確的。是的。

Yes, loan size, let's see. I mean there's a couple of different impacts. I would say the biggest one is borrower mix. So all else equal, the sort of more low-risk borrowers you could think of maybe in a traditional sense, the primary borrowers that you have will tend to be able to be approved for larger loan sizes. And riskier borrowers in contrast, lower loan sizes. So if you have, for example, a macro event such as we've had, where there's a lot of people being nudged outside of the approval box at the riskier side and then consequently, you have a prime borrower mix than before, you would expect to have a larger loan size and vice versa. So borrower mix is one.

是的，貸款規模，讓我們看看。我的意思是有幾個不同的影響。我想說最大的一個是藉款人組合。因此，在其他條件相同的情況下，您可能會想到傳統意義上的風險較低的借款人，您擁有的主要藉款人往往能夠獲得更大貸款規模的批准。相較之下，風險較高的借款人的貸款規模較小。因此，例如，如果發生像我們這樣的宏觀事件，很多人被推到風險較高一方的批准框之外，因此，你擁有比以前更好的借款人組合，你會期望獲得更大的貸款規模，反之亦然。因此，借款人組合就是其中之一。

Overall, sort of risk and approvability is another, all else equal, as loss rates get higher in the macro, UMI gets higher, we would generally sort of on the margin be approving folks for smaller loans than in a very constructive environment.

總體而言，風險和可批准性是另一回事，在其他條件相同的情況下，隨著宏觀損失率變得更高，UMI 變得更高，我們通常會在邊緣批准人們提供比在非常建設性的環境中較小的貸款。

So I would say it's really down to mix. I wouldn't necessarily view loan size as a sort of inherent or fundamental metric for our business in any sort of significant way. Although it is true, just answering your last question. It is true that all else equal, a larger loan size will lead to a healthier contribution margin.

所以我想說這真的取決於混合。我不一定將貸款規模視為我們業務的一種固有或基本指標。雖然這是真的，只是回答你的最後一個問題。確實，在其他條件相同的情況下，較大的貸款規模將帶來更健康的邊際效益。

That's helpful. And sorry, just as a quick follow-up, I guess, how should we think about what borrowers are requesting versus what they're being approved for? Is there a meaningful difference there in this environment?

這很有幫助。抱歉，我想，作為快速跟進，我們應該如何考慮借款人的請求與他們被批准的內容？在這個環境中是否存在有意義的差異？

Yes. I would say that in relative terms, they've gone in very much in the opposite directions. I think the request for credit, the underlying fundamental demand for credit is as high as we've seen it in quite a while. And there's a lot of underlying demand from borrowers. Conversely, our ability to approve them is as limited as it's been in our company's history as a reflection of the UMI. And so you sort of have them at cross purposes right now.

是的。我想說的是，相對而言，他們的發展方向非常相反。我認為對信貸的需求，對信貸的潛在基本需求，是我們長期以來所看到的最高水準。借款人有很多潛在需求。相反，我們批准它們的能力是有限的，因為它在我們公司的歷史上反映了 UMI。所以現在他們的目的有點互相矛盾。

We will take our next question from James Faucette with Morgan Stanley.

我們將接受摩根士丹利的詹姆斯·福塞特提出的下一個問題。

I want to follow up on that last question. Clearly, you guys had to tighten things up and given the low savings rates is that demand for credit seems understandable. But what are you seeing in terms of actual conversion that is offers for loans that are actually converted into loans and what that origination looks like? Are you seeing any movement in that metric?

我想跟進最後一個問題。顯然，你們必須收緊政策，鑑於儲蓄率較低，對信貸的需求似乎是可以理解的。但是，您在實際轉換方面看到了什麼，即實際轉換為貸款的貸款報價以及該來源是什麼樣的？您看到該指標有任何變化嗎？

James, so you're asking about the conversion rates?

詹姆斯，你是在問轉換率嗎？

Yes.

是的。

Yes. I think our metric for this quarter was around 8.5%. So meaning of all applicants, who fill in an application and submit, about 8.5% of them become funded loans. I think at our peak, that number was closer to 24%.

是的。我認為本季我們的指標約為 8.5%。因此，在所有填寫申請並提交的申請人中，約有 8.5% 成為資助貸款。我認為在我們的巔峰時期，這個數字接近 24%。

Got it. And can I just ask for a clarification. What about -- that's of all applicants, what about the approved loans that actually ultimately convert? Any sense what that looks like?

知道了。我可以要求澄清一下嗎？那麼——在所有申請人中，最終實際轉換的核准貸款又如何呢？你知道那看起來像什麼嗎？

From loans that are approved and offered to funded loans, I believe, is on the order of about 1/3.

我認為，從批准並提供的貸款到融資貸款，大約為 1/3。

About 1/3. Okay. That's helpful. And then I wanted to go back to the committed capital partners, just any additional color that you can provide in terms of the things that they are looking for, whether it be specific metrics or catalysts to get them moving forward. And do you feel like for them, maybe it's done the same thing as we're talking about for borrowers that would kind of like to -- people would like to see underlying rates come down and then for your own metrics, UMI come down. Just wondering if your potential committed capital partners are kind of waiting for a similar relief across the market or if there are other issues that they're watching.

大約1/3。好的。這很有幫助。然後我想回到承諾的資本合作夥伴，只要你可以為他們正在尋找的東西提供任何額外的顏色，無論是具體的指標還是推動他們前進的催化劑。你覺得對他們來說，也許這和我們為那些想要的借款人談論的事情是一樣的——人們希望看到基本利率下降，然後根據你自己的指標，UMI 下降。只是想知道您潛在的承諾資本合作夥伴是否正在等待整個市場的類似緩解，或者他們是否正在關注其他問題。

Sure. Yes. Thanks, James. Let's see. Well, certainly, for counter-parties that are -- so is newer to unsecured consumer credit, there's a lot of investigation of the asset class itself. With respect to upstart, I don't think it's as much about whether rates are going to move or UMI is going to move. It's more about developing a confidence in their diligence that we are going to hit the targets that we claim, meaning when we predict loss estimates, they are accurate. And so they care a lot better accuracy rather than the absolute direction of rates in the economy right now.

當然。是的。謝謝，詹姆斯。讓我們來看看。嗯，當然，對於無擔保消費信貸領域較新的交易對手來說，對資產類別本身進行了大量調查。就新貴而言，我認為利率是否會變動或 UMI 是否會變動並不那麼重要。更多的是要讓他們對我們的勤奮工作充滿信心，相信我們將實現我們聲稱的目標，這意味著當我們預測損失估計時，它們是準確的。因此，他們更關心的是準確性，而不是目前經濟中利率的絕對方向。

And then there's clearly a macro component as well. All of these counter-parties have credit committees and macro committees that take point of view on broad asset allocation and what the right timing is for these investments. And so many of them are actively engaged with us in asking what we're seeing in our data with respect to macro trends and loss rates in the different segments of the borrower base.

顯然還有一個宏觀組成部分。所有這些交易對手都有信貸委員會和宏觀委員會，它們就廣泛的資產配置以及這些投資的正確時機發表意見。他們中的許多人都積極與我們互動，詢問我們在數據中看到的有關借款人基礎不同部分的宏觀趨勢和損失率的資訊。

So that's sort of, I think, at the highest level, how they would think about the framework of investing with us. And then with respect to specific deals, as we've said before, you could sort of broadly class counter-parties into some that are interested in maybe earning a premium on the return right now and they're trying to understand where that can come from, certainly in a high rate environment like today is that they can lock something in. It can look very good down the road a year from now if the economy changes.

我認為，這就是他們在最高層面上對與我們一起投資的框架的看法。然後，就具體交易而言，正如我們之前所說，您可以將交易對手大致分為一些有興趣立即賺取回報溢價的交易對手，並且他們正在嘗試了解這可能會發生在哪裡當然，在像今天這樣的高利率環境下，他們可以鎖定一些東西。如果經濟發生變化，一年後看起來會非常好。

And then there are others, who are less interested in return premiums, they're interested in predictability. And that's where, as we've said in the past, in some instance, because we have a very precise understanding of our model calibration, we can sort of co-invest with them, put some skin in the game, give them some level of comfort on that dimension.

還有一些人對回報溢價不太感興趣，他們對可預測性感興趣。正如我們過去所說，在某些情況下，因為我們對模型校準有非常精確的了解，所以我們可以與他們共同投資，在遊戲中加入一些皮膚，給他們一些水平那個維度上的舒適度。

We will take our next question from Ramsey El-Assal with Barclays.

我們將接受巴克萊銀行拉姆齊·阿薩爾 (Ramsey El-Assal) 提出的下一個問題。

This is John Coffey on for Ramsey. My first question is on Slide 21, and you may have already answered this and I missed it. But when I look at the cadence of the auto secured loans, it looks like that halved from Q2 of -- well, last quarter to this quarter. I was wondering if you could just talk a little bit about the drivers there of what caused that.

這是拉姆齊的約翰·科菲。我的第一個問題在幻燈片 21 上，您可能已經回答了這個問題，但我錯過了。但當我觀察汽車擔保貸款的節奏時，看起來從上個季度到本季第二季減少了一半。我想知道你是否可以談談那裡的司機以及造成這種情況的原因。

Yes, John, thank you for the question. Yes, auto lending, I would say is currently subject to all of the same sort of dynamics in force as our core business. Meaning rates themselves have risen and default trends look very similar to what they look like in the unsecured world, maybe there's some slight timing differences. But in terms of the sort of relative level of increase in default rates, they very much mirror what we've seen in our core business. And just as our core business has had to retrench as we've had to recalibrate our models as a lot of people, as Dave described, have fallen above the 36% line and out of the approval box, a lot of those dynamics are very similar in auto as well.

是的，約翰，謝謝你的提問。是的，我想說的是，汽車貸款目前受到與我們的核心業務相同的動態的影響。這意味著利率本身已經上升，違約趨勢看起來與無擔保世界中的情況非常相似，也許存在一些細微的時間差異。但就違約率增加的相對水平而言，它們在很大程度上反映了我們在核心業務中所看到的情況。正如戴夫所描述的，我們的核心業務不得不緊縮，我們不得不重新校準我們的模型，因為很多人已經跌破了 36% 的線並超出了批准範圍，其中許多動態都非常重要。汽車領域也類似。

With the difference that auto being a more nascent product for us, we've been calibrating a newer model in real time in that, whereas with personal lending, I think we've got a very sophisticated model that we're just kind of make sure that it stays calibrated to the macro environment. So I guess the short answer is a lot of the things that have happened to our core business have also conspired to restrain auto lending volumes a little bit as well.

不同之處在於，汽車對我們來說是一個更新生的產品，我們一直在即時校準一個更新的模型，而對於個人貸款，我認為我們已經有了一個非常複雜的模型，我們只是在做確保它與宏觀環境保持校準。因此，我想簡短的回答是，我們的核心業務發生的許多事情也共同限制了汽車貸款量。

All right. That's very helpful. And I just have one follow-up question. Last quarter, when you reported in August, you already had a month behind you, that being July. So given that you had your Q3 guide, what was the biggest surprise given that you still had 2 months to go? What was the factor that I know it wasn't a big miss of guidance, but there was a miss. What was the thing that you thought essentially was the thing you were wrong on? Or what's the biggest surprise there versus what you originally thought of?

好的。這非常有幫助。我只有一個後續問題。上個季度，當您在八月報告時，您已經落後了一個月，即七月。那麼，考慮到您已經有了第三季指南，那麼距離您還有 2 個月的時間，最大的驚喜是什麼？我知道這不是一個重大的指導失誤，而是有一個失誤。你認為本質上你錯了的事情是什麼？或者與您最初的想法相比，最大的驚喜是什麼？

Yes. Thanks, great question. I'll highlight 2 things that we sort of alluded to in our remarks. One of them is just with respect to the transaction volume, the transaction revenue. One of our model launches this quarter allowed us to essentially measure the sort of macro impact along the lines of what we do for UMI but at a borrower and a segment level, which is a greater level of granularity in terms of macro sensitivity in the borrower base.

是的。謝謝，很好的問題。我將強調我們在演講中提到的兩件事。其中之一就是交易量、交易收入。本季度推出的一個模型使我們能夠基本上按照我們為 UMI 所做的工作來衡量宏觀影響，但在藉款人和細分市場層面上，這在藉款人的宏觀敏感性方面具有更大的粒度根據。

And what that model quickly understood is that what's happening in very recent months, is that the -- what you might think of as the primary or the more affluent borrowers are sort of starting to accelerate in their default trends. Whereas the less affluent borrowers, who were earlier affected last year, in the sort of -- in the environment that we've been through are now much more stable. And it led us to be, I would say, a little bit more conservative in our approval of more affluent primary borrowers. So that was one impact that I think versus what we had contemplated in our guidance was a bit of a delta.

該模型很快就理解了最近幾個月發生的情況，即您可能認為的主要或更富裕借款人的違約趨勢開始加速。而去年早些時候受到影響的不太富裕的借款人，在我們經歷過的環境中，現在要穩定得多。我想說，這導致我們在批准更富裕的主要藉款人時變得更加保守。因此，我認為，與我們在指導中預期的影響相比，這是一個三角洲影響。

And the second one was just sort of a mechanical thing that showed up in net interest income. But it had to do with essentially a process change around the timing with which we're charging off bankruptcy loans. We went from the resolution of the bankruptcy to essentially the announcement of the bankruptcy and it had the effect of pulling some charges forward from future quarters up into Q3, and that's something that we weren't expecting when we announced guidance.

第二個只是一種機械的東西，體現在淨利息收入中。但這本質上與我們沖銷破產貸款的時間的流程變化有關。我們從破產決議到本質上宣布破產，它的作用是將一些費用從未來幾季推遲到第三季度，這是我們在宣布指導時沒有預料到的。

We will take our next question from Rob Wildhack with Autonomous Research.

我們將接受自治研究中心的 Rob Wildhack 提出的下一個問題。

I wanted to ask about the co-investment summary on Slide 20. Last quarter, the $40 million co-investment was marked up $11 million, so up $30 million. And now the $66 million is up, but it's only up $7 million or like 11%. What were the drivers behind that markdown versus the second quarter?

我想詢問幻燈片 20 上的聯合投資摘要。上個季度，4000 萬美元的聯合投資被標記為 1100 萬美元，因此增加了 3000 萬美元。現在 6600 萬美元增加了，但只增加了 700 萬美元，即 11% 左右。與第二季相比，降價背後的驅動因素是什麼？

Yes. Thanks, Rob. It's a great question. Yes, what you're seeing there is maybe a bit of retrenching in how we're valuing that. So it's representative of what you might think of some headwinds over the past 90 days in how all of that system is performing. Look, one of the things that's on our minds that I think is relevant here is we're not necessarily adjusting this valuation for current seasonality. And it occurs to us, we're in the worst seasonal part of credit right now. So credit is at its best from a seasonal standpoint in the sort of February to April time frame, and it's sort of at its worst in the October, November time frame.

是的。謝謝，羅布。這是一個很好的問題。是的，你所看到的可能是我們對它的評估方式有所縮減。因此，它代表了您可能認為的過去 90 天內整個系統的運作遇到的一些阻力。看，我認為與此相關的一件事是我們不一定會根據當前的季節性調整此估值。我們突然意識到，我們現在正處於信貸最糟糕的季節性時期。因此，從季節性角度來看，信貸在 2 月至 4 月期間處於最佳狀態，而在 10 月和 11 月期間則處於最差狀態。

And so I think some of what's happening here is that like the seasonal headwinds, the credit performance are making this asset maybe look a little bit worse than it will in 6 months, and we haven't necessarily gone to the level of sophistication of adjusting for seasonality. So I think that's part of the story there. But some of it also may be durable. And therefore, what it would indicate is that stuff is performing marginally worse than it looked 90 days ago.

因此，我認為這裡發生的一些事情是，就像季節性逆風一樣，信貸表現使該資產看起來可能比 6 個月後的情況更糟糕，而且我們還沒有達到調整的複雜程度。為了季節性。所以我認為這就是故事的一部分。但其中一些也可能是耐用的。因此，這表明產品的表現比 90 天前略有下降。

Okay. And then on the committed funding partners, those initial agreements, the ones in place now. I think they were described as $2 billion in funding for the next 12 months. So that was roughly spring '23 to spring '24. So of the existing agreements, could you remind us what's locked in for beyond spring '24? And for anything that's not, what's the process or arrangement for extending or renewing those agreements?

好的。然後是關於承諾的資助合作夥伴、那些最初的協議以及現在已經到位的協議。我認為他們被描述為未來 12 個月的 20 億美元資金。那大約是 23 年春季到 24 年春季。那麼，關於現有協議，您能否提醒我們 24 年春季之後的鎖定內容是什麼？對於不存在的情況，延長或續約這些協議的流程或安排是什麼？

Sure. Yes, thanks. I guess I would say we haven't necessarily given specific numbers beyond the spring. I do think there were some announcements out there in the public, which alluded to some longer time frames for some of those agreements. And so some of those we expect to continue. I think with the other ones, as we get towards the sort of 1-year mark and depending on how happy the counter-parties are and how happy we are and how well everything is performing, you might imagine that there will be discussions around renewal. So I think we'll be undertaking those probably in the new year.

當然。對了謝謝。我想我想說的是，我們不一定會在春季之後給出具體數字。我確實認為公開發布了一些公告，其中暗示了其中一些協議的更長的期限。因此，我們預計其中一些會繼續下去。我認為對於其他的，當我們接近一年的標誌時，根據交易對手的快樂程度、我們的快樂程度以及一切的表現如何，你可能會想像將會有關於續訂的討論。所以我認為我們可能會在新的一年裡進行這些工作。

We will take our next question from John Hecht with Jefferies.

我們將回答約翰·赫克特和傑弗里斯提出的下一個問題。

So just I think you did about $1.2 billion of loan originations, and it looks like you cleared nearly 1/4 of that through your on-balance sheet securitization. So for the remaining 75-ish percent, I'm wondering, could you just let us know what was the characteristic? Were they kind of bank buyers that have been around for a while? Are they more credit funds? Were they more tied to the counter-parties and the forward flow agreements that you just were talking about? How do we think about the mix of that disposition?

因此，我認為您發放了約 12 億美元的貸款，而且看起來您透過資產負債表內證券化清算了其中近 1/4。那麼對於剩下的 75% 左右，我想知道，您能否讓我們知道其特徵是什麼？他們是已經存在了一段時間的銀行買家嗎？他們更多的是信貸資金嗎？它們是否與您剛才談論的交易對手和遠期流量協議關係更緊密？我們如何看待這種配置的組合？

Sure. Yes. Thanks for the question. And maybe just one clarification about the securitization. It was executed in Q3, but a lot of the loans that were sold into the securitization were originated in Q2. So it wasn't necessarily a component of Q3 origination. I think at a higher level, yes, we sort of have these 3 channels, if you will, of funding. One is the bank and credit union channel, where they are typically doing the origination themselves as a lender. There is our sort of traditional forward flow channel. And now there's a newer channel, what you might think of as committed capital.

當然。是的。謝謝你的提問。也許只是對證券化的一項澄清。它是在第三季執行的，但許多出售到證券化的貸款都源自於第二季。所以它不一定是第三季起源的組成部分。我認為在更高的層面上，是的，如果你願意的話，我們有這 3 個融資管道。一種是銀行和信用合作社管道，他們通常會作為貸款人自己進行發放。這是我們傳統的前向流動通道。現在有一個更新的管道，您可能會認為它是承諾資本。

I think in rough terms, the forward flow and the bank channel numbers are somewhat comparable. And the channel by which we are providing loans into committed partnerships where we co-invest is slightly larger than the other 2. But there's a pretty good balance across the 3.

我認為粗略地說，前向流量和銀行管道數量有一定的可比性。我們向共同投資的承諾合作夥伴提供貸款的管道比其他兩個管道稍大。但這三個管道之間保持著相當好的平衡。

We will take our next question from Giuliano Bologna with Compass Point.

我們將接受 Compass Point 的 Giuliano Bologna 提出的下一個問題。

Just going back to the committed capital co-investment disclosure that you have, I'm curious, it may have come up earlier in the call. Roughly speaking what's the balance of loans that you have outstanding that you have co-investment structure attached to at this point?

回到您所承諾的資本共同投資披露，我很好奇，它可能在電話會議的早些時候就出現過。粗略地說，您目前擁有共同投資結構的未償還貸款餘額是多少？

Yes. Thanks, Giuliano. I think that's disclosed in the Q. I don't know the exact number on my fingertips right now. Last quarter, if you recall, the co-investment represented approximately 5% of the total and I think that's probably still a relatively consistent ratio.

是的。謝謝，朱利亞諾。我認為這已經在問題中披露了。我現在還不知道確切的數字。如果你還記得的話，上個季度的聯合投資約佔總額的 5%，我認為這可能仍然是一個相對穩定的比例。

That's very helpful. And this a similar brief question, related to the revenue from fees. Is there any -- do you have the numbers for the platform of royalties versus the servicing income for the quarter and how that breaks down for the period? And the genesis of that is to kind of back into what the take rate was on originations.

這非常有幫助。這是一個類似的簡短問題，與費用收入有關。您是否有該季度特許權使用費與服務收入的平台數據以及該期間的細分情況？其起源是為了回歸原創的接受率。

Yes, Giuliano, I think those numbers are also disclosed in the Q in one of the notes. And I don't have them off of my fingertips again. But I think you will see something like transaction revenue is maybe 3x to 4x the servicing revenue. Transaction revenue is up about 7%. Servicing revenue is declining slightly as the outstanding balance in the platform declines. But if you want the specific numbers, they'll be in one of the notes in the Q. We can point you to it off-line, if that's helpful.

是的，朱利亞諾，我認為這些數字也在其中一份註釋的 Q 中披露。我再也沒有把它們從我的指尖上拿走。但我認為你會看到交易收入可能是服務收入的 3 到 4 倍。交易收入成長約7%。隨著平台未償餘額下降，服務收入略有下降。但如果您想要具體數字，它們將位於問題的註釋之一中。如果有幫助的話，我們可以離線向您指出它。

That's helpful. I appreciate it. And then thinking about the cadence of kind of where you are on the funding side, I realize this is a question that's been asked a few different ways at this point. But when you think about where you are from an operating perspective, you have seen a bit more volumes to get incremental margin, can cover your fixed costs. I'm curious how you're thinking about the cadence of how funding could come back or how you're preparing to kind of manage the business for the foreseeable future if this environment persists for a number of quarters beyond 4Q.

這很有幫助。我很感激。然後考慮一下你在資金方面的節奏，我意識到這個問題目前已經以幾種不同的方式被問到了。但當你從營運角度考慮你的處境時，你會發現增加一點銷售可以獲得增量利潤，可以涵蓋你的固定成本。我很好奇，如果這種環境持續到第四季度之後的多個季度，您如何考慮資金如何回流的節奏，或者您如何準備在可預見的未來管理業務。

Sure. Yes. Let's see. Well, as I said in the remarks, I think there's a lot of good conversations happening on the funding side. The platform constraint today on growth is on the borrower side and our inability to approve. But in anticipation of that eventually changing, and as we said to one of the earlier questions, that could change because rates dropped. It could change because sort of default trends normalize and UMI drops. In anticipation of that, we definitely want to have a few more agreements teed up and some partnerships ready to go at that time. But it isn't the gating item on platform growth currently.

當然。是的。讓我們來看看。嗯，正如我在發言中所說，我認為在資金方面正在進行很多良好的對話。如今，平台對成長的限制在於借款人方面以及我們無法批准。但預計這種情況最終會發生變化，正如我們在回答之前的問題之一時所說的那樣，由於利率下降，這種情況可能會發生變化。它可能會改變，因為預設趨勢正常化並且 UMI 下降。考慮到這一點，我們肯定希望屆時能達成更多協議並建立一些合作夥伴關係。但目前它並不是平台成長的限制因素。

We will take our next question from Reggie Smith with JPMorgan.

我們將接受摩根大通雷吉史密斯的下一個問題。

Most of might have been answered, but I was curious, you were talking earlier. I think a previous analysts had asked about approvals and sounds like you suggested that roughly 1/3 of the loans that are approved are ultimately funded. Can you tell us kind of how that has trended as it changed over time? And then the second part of your question, do you ever approve borrowers for less than they request? And do people tend to take those loans if you do?

大多數問題可能已經得到解答，但我很好奇，你之前就說過了。我認為之前的一位分析師曾詢問過有關批准的問題，聽起來您建議大約 1/3 的批准貸款最終會得到資助。您能告訴我們隨著時間的推移，這種趨勢是如何變化的嗎？然後你的問題的第二部分，你是否曾經批准借款人低於他們要求的金額？如果你這樣做，人們會傾向於接受這些貸款嗎？

Sure. Thank you, Reggie. Let's see, the answer to the first question -- well, the first question was what has happened to what we call acceptance rates, which is the instance where a loan is approved and an offer is made, and what percentage of those are accepted by the borrower, and those are currently at the 30% level. They definitely trended down. I think they probably used to be in the 60s a couple of years ago before the environment sort of became very challenging.

當然。謝謝你，雷吉。讓我們看看，第一個問題的答案 - 嗯，第一個問題是我們所說的接受率發生了什麼變化，即貸款獲得批准並提出要約的情況，以及其中被接受的百分比是多少借款人，目前處於30% 的水平。他們確實呈下降趨勢。我認為他們可能是在幾年前的 60 年代，當時的環境變得非常具有挑戰性。

And the intuition is obvious as rates have gotten very high even though borrowers are getting approved under 36%, in some instances, the rates that they are being approved for are quite high. And their propensity to accept those rates is a lot lower than it was before. And the second question had to do -- sorry, remind me of your second question Reggie.

直覺是顯而易見的，因為儘管借款人獲得的批准利率低於 36%，但利率已經變得非常高，在某些情況下，他們獲得批准的利率相當高。他們接受這些利率的傾向比以前低了很多。第二個問題必須要做──抱歉，讓我想起你的第二個問題雷吉。

Yes. I was curious if -- so somebody comes in with a loan request and it's totally out of whack with their income or debt levels. Do you ever approve them for less? Or can you do things like that to improve acceptance rates? Or is there a size below it just doesn't make economic sense to do a loan? Any color there will be helpful.

是的。我很好奇，如果有人提出貸款請求，而他們的收入或債務水準完全不正常。你曾經以更少的錢批准過他們嗎？或者你可以做類似的事情來提高錄取率嗎？或者是否存在低於該規模的貸款在經濟上沒有意義？任何顏色都會有幫助。

That's a great question, Reggie. And we absolutely do that. There are many applicants, who are asking for loan levels that we are not able to approve them for. But what we can do is say, well, we can approve you for a lower amount. And very often, those are accepted instead. And so that is a component of our acceptance rates and is a business practice we have.

這是一個很好的問題，雷吉。我們絕對會這樣做。有許多申請人要求我們無法批准他們的貸款水準。但我們能做的是，好吧，我們可以批准您支付較低的金額。而且很多時候，這些都被接受了。因此，這是我們接受率的一部分，也是我們的商業慣例。

And do you find that those loans tend to perform as well as you would expect? What insights are you gleaning from those types of transactions?

您是否發現這些貸款的表現往往與您預期的一樣好？您從這些類型的交易中獲得了哪些見解？

They perform as expected on a risk-adjusted basis. Meaning there's -- they -- because we are approving them for a lower amount, that adjustment to the risk is commensurate with the risk that we perceive. And so they -- at the end of the day, for investors, perform as expected, just as full offers do compared to what we call these counter-offers.

它們在風險調整的基礎上表現符合預期。這意味著，因為我們以較低的金額批准它們，所以對風險的調整與我們感知的風險相稱。因此，最終，對於投資者來說，它們的表現符合預期，就像全額報價與我們所說的還盤相比一樣。

That makes sense. Okay. And then last question for me. Marketing, so was up sequentially. It had been obviously down a lot from the previous year. Anything to call out there on the marketing side, competition, is it advertising? What's driven that?

這就說得通了。好的。然後是我的最後一個問題。行銷，因此依序上漲。與去年相比，明顯下降了很多。在行銷方面有什麼值得指出的，競爭，是廣告嗎？是什麼推動了這一點？

Reggie, the -- I think the thing to call out is that we're at the point now where -- as we -- we are, as we said, a borrower-constrained platform and as we regrow into prior volumes, all of that growth will be paid growth. So obviously, as we've contracted over the past 18 months, we've prioritized organic and unpaid volume, repeat volume, if you will. And we've got a great benefit from that. But I think the incidents of repeat loans will start to subside just given the recent volumes on the platform.

雷吉，我認為需要指出的是，我們現在正處於這樣的階段，正如我們所說，我們是一個借款人受限的平台，當我們重新增長到之前的數量時，所有的這種增長將是有代價的成長。很明顯，正如我們在過去 18 個月中簽訂的合約一樣，我們優先考慮的是有機和未付費量，以及重複量（如果您願意的話）。我們從中受益匪淺。但我認為，鑑於該平台最近的交易量，重複貸款的事件將會開始減少。

And as we sort of regrow into higher volumes, such as where we've been previously, that you'll see higher incidents of paid growth versus unpaid growth. And that will have the effect of bringing up the overall average acquisition cost.

當我們重新成長到更高的產量時，就像我們之前的情況一樣，你會看到有償成長與無償成長的發生率更高。這將導致整體平均採購成本上升。

There are no further questions at this time. Mr. Girouard, I will turn the conference back to you for any additional or closing remarks.

目前沒有其他問題。吉魯阿爾先生，我將把會議轉回給您，請您發表補充或結束語。

All right. Well, thanks all for joining us today. We continue to make strides in building the first and best AI lending platform in the market. There is not a company better positioned than Upstart to lead this transformation of the financial services industry. So thank you, and we'll see you next time.

好的。好的，感謝大家今天加入我們。我們在打造市場上第一個也是最好的人工智慧借貸平台方面不斷取得進展。沒有一家公司比 Upstart 更有能力引領金融服務業的轉型。所以謝謝你，我們下次再見。

This concludes today's call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。