AI Financial Technology Company Reports Loss and Lower Revenue
Shares of Upstart Holdings, the AI financial technology company, dropped 23% in premarket trading following the release of their third-quarter financial results. The company, known for its machine learning approach to credit risk assessment, reported a loss of $40.3 million, or 48 cents a share, for the quarter ended in September. While this represents a narrower loss compared to the previous year, it fell short of investors’ expectations.
Adjusted Loss and Declining Revenue
Upstart Holdings posted an adjusted loss of 5 cents a share after excluding certain one-off items. However, their third-quarter revenue saw a significant decline of 14%, amounting to $134.6 million. Looking ahead, the company expects fourth-quarter revenue to remain steady at $135 million but anticipates a loss of around $48 million.
Analysts Lower Price Target as a Result
The disappointing results prompted analysts at brokerage Piper Sandler to reduce their price target on Upstart’s shares. Although the company continues to innovate in the AI financial technology space, it will need to address its revenue decline and strive for better financial performance to regain investor confidence.
By Rob Curran