The company, which uses artificial intelligence to inform lending decisions, also models a loss of $25 million on the basis of earnings before interest, taxes, depreciation and amortization. The FactSet consensus was calling for roughly $5 million in adjusted Ebitda.

Chief Financial Officer Sanjay Datta said on the earnings call that Upstart was “becoming increasingly conservative in our underwriting of higher FICO borrowers,” meaning those with higher credit scores.

The weak outlook “and management’s observation of weaker credit performance among prime borrowers will likely further delay the company’s turn​​around story,” Barclays analyst Ramsey El-Assal wrote in a note to clients.

Upstart’s stock has doubled over a 12-month span but is off some 90% from its all-time high of $390 set in October 2021.

Piper Sandler’s Arvind Ramnani saw some positives in the latest results, including that Upstart has nearly 90% of its unsecured loans fully automated and has seen a tripling of approval rates for its small-dollar loans.

“While these benefits are masked in the current environment, we believe these enhancements will improve Upstart’s competitive differentiation in a healthier macro,” he wrote.

At the same time, he noted that Upstart is doing business in “a persistently uncertain and a challenging environment.”

The company posted a fourth-quarter net loss of $42.4 million, or 50 cents a share, compared with $55.3 million, or 67 cents a share, in the year-earlier quarter.

On an adjusted basis, Upstart lost 11 cents a share, matching the consensus view based on analysts tracked by FactSet.

Upstart’s revenue dropped to $140.3 million from $146.9 million a year before, whereas the FactSet consensus was for $134.8 million.

Chief Executive Dave Girouard called the company’s latest results “solid,” though he was also blunt in discussing the year that just wrapped.

“Without question, 2023 was a challenging year for both Upstart and the lending industry, and we’re glad to be done with it,” he said on the earnings call.