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Hi, everyone. I'm Trey Brown. I work together with Joe Hall on our U.S. Small and Mid-Cap Strategy team within B of A Global Research. We have a few sessions going on concurrently, but Joe and I just wanted to welcome everyone to our two-day annual Mid-Cap Executive Insights event, which provides opportunities to hear from corporates across the small mid-cap space, where B of E has great breadth of coverage. Our analysts cover nearly 1,000 small mid-caps in the U.S., and Joe and I have also been expecting continued leadership from SMIC caps in the back half of this year. So please feel free to reach out if you need the schedule or want to sign up for any additional sessions today or tomorrow. We have nearly 20 companies joining, or if we can help signing up for either our small midcap strategy research or our daily compilation of SMIC cap fundamental research. But with that, I'd like to pass over to Mahir Bhatia, our Consumer Finance Analyst, to introduce Upstart Holdings. Thanks, Trey. Thanks everyone for joining and especially to the Upstart team and Paul. I really appreciate you guys joining us today. Before we get started, one quick disclosure statement that I've been asked to read. So today's discussion may contain forward-looking statements that relate to future results and events which are based on Upstart's information available as of today and are subject to risks and uncertainties. Actual results may differ materially from these forward-looking statements. The discussion may also include non-GAAP financial measures, which are not a substitute for GAAP results. Please refer to the company's filings with the SEC and its IR website for additional information, including GAAP to non-GAP reconciliations, along with other disclosures. Okay, with that out of the way, the lawyers should be happy, so we can get started. Again, like I said, a lot of you already know Upstart. I think I see, I recognize most of the names of the folks joining, but we'll go through, I think, right at the start, I'll ask Paul to give us a quick overview of the company. But before that, again, just want to say thank you to Paul and the Upstart team for doing this conference with us today and for the opportunity to host you all today. So thank you, Paul, for joining and let's get started. So maybe I'll just kick it off with that, Paul. You've been with Upstart right from the start, 14 years now, I think. You recently took over as CEO. Maybe for the benefit of anyone who's newer to the story, just give us the quick 90-second version of what Upstart is today. And then I think the part that matters for investors, that excites investors, why does this business compound for 35% over the next few years? Yeah, a really short tagline would be AI for consumer lending. We operate a marketplace business where consumers can go and shop for offers of credit. We do personal loans, auto loans, HELOCs, really over time, we will offer the entire suite of consumer credit products. And our real strategy from the beginning has been to say, hey, there's a whole bunch of transformative technology innovation happening around how we use models to make better predictions and understand patterns and data. But that innovation has largely not made its way into consumer lending, which is arguably the most important place for it to go. Because if you think about the history of consumer lending—this is the world's oldest industry, almost everybody borrows at some point in time—and actually, surprisingly, a large number of people, depending on your exact metric of preference, something like 50% or more of people in the U.S. we think are underserved in how they access credit. Either it costs too much, they can't get approved, it takes too long. And it's all fundamentally because the ability of the models and the lending companies to understand their risk is too limited. And so what we've done over time is we've built models that can both better understand the risk, which we call better risk separation, and automate away a bunch of the process. And as a result, we're able to radically reduce the cost and complexity of credit for everyday Americans who are looking to borrow. And that's just about everybody. Great. Maybe just on the second part of that question, though, why is this going to be growing at a very high rate for the next few years? Yeah, it's exactly those two things I said. This is one, this is an industry that's relevant to almost everybody. The sort of addressable market here is enormous. It's almost kind of laughably large if you try to do any kind of math against it. And then at the same time, usually industries that are that big are really saturated, really well addressed. All the sort of innovations have already gotten plugged in. And that's just not the case in the consumer lending world, which I think for various reasons historically has tended to move slowly in adopting new technologies. And so we really have been for a number of years here the first, and we think we have quite a large lead in taking a lot of the innovation happening in AI and applying it to this space. And we think it's one of the best possible applications there is for AI to do good and serve the consumer. And so I think you put those things together, disruptive technology transformation against a huge market that hasn't really fully ingested that disruption. And I think naturally, you're going to get a business that has the ability to compound for a very long time. Got it. And I do want to dig in on that advantage that you all have, but we'll get to that in a few minutes. Before that, I did want to just highlight that you recently took over. While you've been with the company a long time, you just recently took over as CEO in the last few months. And I think when you took over one of the last few weeks, I think I was reading, you've called it the second leg of the race, right? Taking over as CEO. So maybe just talk about that a little bit. And specifically, I thing one question we get from investors is, well, Paul's been there a while. What's really changing? So maybe talk a little bit about what investors can expect in terms of changes. What is going to be different under Paul than maybe under Dave? Yeah. Yeah. Obviously, Dave and I worked together in close partnership for a long time. We started this business, as you said, 14 years ago. And the thing about this business is that it surprised us in how long it took to build. Well, at first, I think when we started, we thought, oh, we'll just do this. And within a few years, everybody's going to be, you know, chasing us on this same race of applying AI to credit, realizing how large the opportunity is. And I think we've just been consistently surprised how slowly it's taken to happen. And i think it's actually for a lot of the reasons that it took us to build so long to build the sort of first what we call the first leg of the race, which has a lot to do with the fact that, you, know, consumer credit, maybe credit in general, but certainly consumer credit. You know, obviously it's highly regulated. It's an industry that has a lot of kind of entrenched ways of doing things. And so think about what does it take if you're going to say, hey, we have this completely new way of understanding credit risk. What do you need to do to actually make that a market reality and do that at scale? Well, it turns out you need a whole bunch of different kinds of very old institutions to buy in, right? So you need rating agencies to understand the risk of this stuff so they can rate these things in a sort of risk appropriate way that unlocks financing for capital partners. The capital partners themselves, of course, have to buy in, regulators have to understand it, you know, banks, etc. And so you have all of these different kinds of institutions that really sort of form this network around kind of maybe the traditional way of understanding consumer risk. And we came in and said, hey, we have this completely different way of doing things, you never mind that this person's FICO score may look like this or that. And it took actually a bunch of years to overcome that, because then once these people buy in, then you are able to start making the loans, then the loans themselves take two, three, four years to prove themselves as actually good performing loans. And, you know, guess what? The reality is like the first time you build a model, it's not going to be very good. So the first model is going to have a few things that gets wrong, and then you're going to have to tune that model and guess then you have to start that two to four year clock again. And so it ended up taking us really the better part of a decade to really get the sort of first leg of the race done where we'd really built the foundation for the company, which was we had acquired, we acquired really valuable proprietary data. We talk about this in terms of rows and columns of data that the company uniquely has, where we gathered thousands of columns of data about people's sort of characteristics at time of taking out a loan. And then we had millions of rows of repayment data. And it's that sort of matrix that actually allows you to train the types of models that we've developed. Of course, we had many years where we actually developed proprietary algorithms to understand the patterns in that data. Those two things work together, high volume of data, high complexity of algorithms, you really can't have one without the other. And so that was on the technology side. At the same time, we had to build up the sort of credibility with institutional capital markets, the rating agencies, the regulators to really believe that this is something that can work and to see the evidence and prove it out. And we finally got to this place where we said, okay, it's indisputable at this point that this is just a better way to lend. If you do this, then you get a tremendous accuracy advantage that unlocks either much higher approval rates at the same loss rates or equivalently much lower loss rates at same approval rate. And so that's something that we kind of think we proved in phase one of the company, of course, you know, we took the company public, we sort of built an incredible team that's able to operate this business with leverage and scale. And we started taking the same idea and going, hey, we're not just going to do this in unsecured personal loans, which was our first product. We're going to be doing this in every category of credit that's relevant to the consumer. And so we rolled it out across auto and home and sort of short-term lending. And, and so that's, that's where the company sat at the sort of moment of transition. And that's what we called it the leap from the first leg of the race to the second leg of the race. And in the second lake of the rice, I think we have exactly the foundation that we need for the company. And now it's about really tactically and strategically applying it to the right places at the right time. And so the very first thing that I prioritized, you know, in 2026, they said, well, you look at the state of the business today, you Look at the stock price today, one thing that's very clear is that the business is operating with an inordinately high cost of capital implicit in the stock place where investors and you know that the market just sort of is skeptical that this is a business that can sustainably deliver high rate of profit growth. And we said, well, actually, the market is wrong about that. And we know just the way to fix that. And so instead of saying we're going to invest in every possible thing we could do at once, we streamlined the company priorities down to a very short list, very centered around what we call contribution profit, which is our sort of single best measure of the operating progress of the business. And We delivered exactly that in Q2. And you can sort of see it in our results, We said, well, first thing we're going to show you is that in our core personal loans business, we don't have any kind of intensifying competitive threat or, you know, sort of declining margins or any kind of structural compression there. Actually, this is just, you Know, not been our number one focus for a little bit. And now it is. And we did, you Now, three and a half times the growth of the prior three quarters put together in a single quarter. And that that drove then a massive increase in our contribution profits. We got to record contribution profits in Q2. that surpassed Q4 of 2021, back when macro conditions were much, much more generous in 2021, of course, than now in 26, whether you're looking at interest rates or consumer default levels, I mean, just sort of night and day market difference. And we still did record contribution profits in Q2 of 26. And secondly, we said it was, well, we have a few new products that we're really excited about. And in the last few quarters, we've proven that these products have real borrower demand. They have investor demand. But we haven't really shown that these products are going to be profitable, good businesses for Upstart. And so we said, let's make the number one priority of these teams to get to contribution profitable in these segments, these are home and auto. And and so in Q2, we expanded their contribution margins by 61 percentage points. They're not all the way there, but they're they're well on their way to getting towards contribution profitable. And we've said that we're going to Be there by the end of this year um so that's that's been really really strong and then i think the last sort of big question has been like is this going to be a business that just structurally constantly needs like more equity capital in order to like support the balance sheet or uh you know make make the whole business work and um you know q2 i think was also a really good uh proof point on that on that question which is like you know we did 23 percent uh sequential growth right 23 percent growth and originations in a single quarter that's like 760 million dollars it's way higher than the sort of normalized rate of growth that I think most people would be ecstatic about in the business. And we did that while predominantly funding that with third-party funding. Our balance sheet loans declined to almost a two-year low in terms of the percent of total outstanding loans. So really, I think just a quarter that where we were really hyper-focused on proving to the market that this is a business where you can expect all of the sort underlying businesses to have really strong margins because their underlying tech differentiation is very strong for that to be able to grow at a nice rate and for us to do so in a very capital-efficient manner. Got it. Now, that's interesting, and particularly on 2Q results, one thing that struck us on 2Q result, and there's a few, I would say, highlights in the results, you mentioned the unsecured margin improving so much, but what was also interesting was the growth in core personal loans. I think you are 27%. Sequentially, the growth was probably, I think it was like faster than the prior three quarters combined. Now, to be fair, you had called it out in one queue. But I did want to dig in a little bit on that. Maybe just like bridge for us. How much of it was the model and the funnel improving versus you're just much more focused on driving that product and marketing investments in that product? Some of it is, of course, a little easier comp. But what drove that big improvement in 2Q and what should we expect for 3Q with core personal loans? Yeah, I do think ultimately it's all downstream of management focus. And so I think the different categories of why it grew are really not so different in our mind. So as a reminder, the number one way that our business grows is we invest in better funnel. And that can be better models, better user experience, more automation. those are to us sort of all ways of doing roughly the same thing which is increasing the percentage of people that convert holding constant the applicant pool at the same time of course you know the applicant pull is not fixed we're always putting effort into growing the number of consumers that we have relationships with the numberof consumers that know about upstart the number that are coming to us and if you think about you know you always every single quarter have these trade-offs you're making and like which pockets are you going to focus on and so i think in the preceding year, we had been a little more focused in some other segments. We had been a little bit more focused maybe on going kind of broader. And in Q2, we were extremely focused on this core segment because it's a segment that we have such strong margins in. We have such a strong level of differentiation in. And we just wanted to prove and make clear that with a little Bit of focus on this, there wasn't any kind of fundamental like change in the size of our advantage or, you know, compression in the margins, it was just actually a thing of like, if we focus on this, then it's going to grow a lot. And that the sort of untapped opportunity here is just a very large and, you know, we will I think that was disproportionate maybe in Q2, but we certainly will continue to focus onthis as a strategy because it's just it's just such a good way for the business to generate contribution profits and contribution profits kind of pay for everything else we want to do. Right. I guess maybe if I push you a little bit on that, exactly where you ended, right? If you continue to focus on it and it has such a large market, you can drive a lot of contribution margin, which lets you invest in the rest of the business. why not push even harder on this and really generate the cash flow if you will to help you invest in the rest of the business like i guess where's the choice between investing in growth of other products versus investing a more of your time in just driving personal loans like how do you take us through that decision like when paul sits there looks at it how does he say well that's enough for that let's we need to feed or water you know whatever energy you want to use some of the other products too yeah it's it's an evergreen debate at at upstart um you know we uh we probably could uh go even harder uh in core personal loans and i think that would start to come at a pretty uh significant expense to uh to our new product growth and our ability to invest there. And so ultimately, you know, we're like, well, you don't want to like, you don't wanna just solve for the very long term. Maybe if you just solve for the long term and you don t worry about anything in the short term, then you just have, you're just gonna invest a ton and it's gonna take a long time to show profitability. And if you only invest in the very short term then I think you're never gonna reach your potential as a business. And to me, like you have to land somewhere in between and you have do it in a way that's mindful of what your implied cost of capital is and how much sort of credibility with investors and markets. And we hope to earn more and more of that over time. And I think certainly, you know, there are businesses that have earned the right to invest more aggressively and invest for a longer duration. And We hope to be there one day, but I think I'm just cognizant of the fact that today, you know the reality of our implied cost to capital is very high. And so I always say like, well, you there, there are these really great investments. Maybe this will pay off in five years or something. And that's really nice. And you know, if you do the math on that, and you put it in a model, it says that your your IRR on that is really good. But then I look at the stock price, I'm like, Oh, well, you know the the sort of you know what I think the implied IRR and the stock price is like even higher than that. And so those are I think some of the questions that go through my head in terms of thinking about how far out we should be investing. And, and we want to be really smart, really rational capital allocators in in how we think about those decisions. And I do think we're landing in a place that's a good in between where we are, I think, going to do a really nice job of continuing to grow our profitability as a business. And at the same time, we are keeping open sort of the entire addressable market of this business over our relevant lifetime. And, you know, I'm not super old, but I also like not going to like wait around for the rest of my life for us to achieve the whole market opportunity here. And so I think that's kind of the balance we're trying to strike. Yeah, I think one thing that really impressed or struck a lot of investors in 2Q is the sharp improvement in contribution margin for some of the secured products. I think you mentioned it earlier, also 61 percentage points of improvement, right there in contribution margin. Can you talk a little bit about that? Like, what clicked? Why is this suddenly seeing this hockey stick almost, if you will, growth and contribution margin? Is it just a matter of these products are now at scale and have found their product market fit, if we will? And what should we expect from here beyond, go beyond 4Q where you're getting to break even, like what are the contribution margins of this product looks like at scale? Yeah. So both home and auto in the preceding quarters had really achieved kind of what I think was the first steps in building on a new product, which is like proving that borrowers want this thing, proving that investors want this thing. You know, real marketplace that works. And so it was time for these products to prove the next thing, which was that these are things that can actually make money and be good businesses for us. And so we really kind of fairly sharply turned the focus of these teams over the last few months to be, you know, your number one goal is to get to contribution profitable. We don't care how much you grow the business. Then your number 1 goal is no longer proving demand. It is now sort of proving unit economics. And so that just reshuffles the sort of order of things that you're going to be doing. there are a bunch of course a bunch of things help both but if you think about like what has to happen for these businesses to be to have good unit economics well you got to do some optimization of costs these really matter and secure products if you look at HELOC HELOC has pretty significant costs when it comes to verifying verifying an applicant for a loan much more than personal loans levels of automation are much lower and there's just number of things that you could possibly automate is just so much more you know when you have to deal with liens and all of that. And so, so a lot more focus on the kind of cost side of it. And then also a lot More focus on optimizing our take rates, which in new products tend to be totally unoptimized, where, you know, the starting point is just like, you just pick some kind of slightly arbitrary flat fee and just charge it, you Know, on equally on everything. And, and really, if you if you compare that to what we do, and say, personal loans, the big difference in personal loans, we have intelligence when it comes to knowing which offers we are adding a lot of value to the consumer in, which ones we're only adding a little bit of value, trying to set our take rates in proportion to how much value we're creating. And there's a very similar thing going on now in some of these businesses where if you take auto as an example, there's just a huge amount of variation in the dealership. Some deals, we're uniquely the only offer, the only way you're going to buy this car is with an upstart loan because no one else can understand that risk right. And then there are other deals where it's like it's a fiercely competitive free market. And in that case, you know, it just doesn't make sense to try to like take the same amount of economics in each case. And so we're just starting to get smart to that and optimize around our take rates. And So those will continue to be dimensions that we optimize along. And I've said a few times that, you Know, that is going to be both a fast story and a slow one, in the sense that I think there's going to be this very fast ramp to contribution profitable. You just were very focused on it. It's our number one priority. And then it's not like we're going to be done. Like if you look at our personal margins, they continue to expand for years and years after that product was mature. And that should just come as a function of how much value we create. That's ultimately what I care about doing in this business is I want consumers to get a delightful product, something that saves them a ton of money compared to the next best option. And I want us to make more money as we save people more money. So I don't want to try to take too much at all at once up front. And I think that can be a pretty bad trap for these sorts of businesses where you say, well, I'm your best offer. So I'm just going to take every last dollar on the table. I want to always leave plenty of money for the consumer on the table. And then as the amount of money that we bring to the table grows, we can keep an increasing amount of it. So that that's something that I think will play out more slowly over the years. Got it. Yeah, we're about halfway through. So I just wanted to flag for any of the listeners, if you have any questions, you know, you can raise your hand or shoot me a Bloomberg or email, and I'm happy to ask it on your behalf. Or if you want to just raise your hands, we can call on you. But one question that I know we'll get, just because I've gotten a ton, is around UMI, the increase in UMI to the top end of your, I think for this year, the guidance is, you know, 1.4, you'd assume 1.5, UMI is probably close to the Top End of that range, but you've held your guidance. I guess what's the offset, like what's helping you, you know keep coming within your full year guidance despite UMI being higher? And at what level of UMI, does the math stop working and force a revisit either to medium-term or short-term guy? Yeah. So we've shared that every five points of change in UMI is worth 5% to 10% in relative size of originations, which tends to be pretty proportional to everything else, kind of revenue and contribution profits. And so if you do the math on that, I mean, it's a pretty sizable effect. I think if we were in the lower mid part of the UMI range for the year that we thought we might be in, probably we would have been raising guidance. And I think that's because we had a pretty extraordinary Q2 in terms of execution on what's in our control. We control our ability to build better models. We control ability to build better user experiences, more automation, reach more customers, and all of those things. I think we have done exactly the right things on, prioritized exactly the right areas and businesses. And I think the results show that. So I think, you know, if not for the rise in UMI, I think we probably would have landed in a pretty different spot on guidance. And as it is, you Know, I Think We, You Know, We Look At Those Two Things And Say, Well, There's You Know Kind Of A Great Execution On The One Hand And Sailing Against A Bit Of A Macro Headwind On The Other And Those Kind Of Net Out. So That's How We Landed Where We Did On Guidance. Of Course, You Know We Also Want To Make Sure That The Bar For You Know Making Any Changes To Guidance Is just high. And we always want to make sure that people understand that if we're going to affirmatively come out and say something, we really mean it, and we have a lot of confidence behind that statement. Got it. I actually see a couple of hands up already. So Luke, why don't we go to you first, and then Jeremy will come to you next. Luke, if you want to go ahead. Yeah, great. Thanks. Can you hear me okay? Yes. Okay, great, thank you guys for doing this. Um, I have a couple of quick questions. The first is, um, just on kind of the commentary on, you know, the focus on the core in 2Q, obviously you put a lot of emphasis on it and it was, you know,, really strong growth year over year. It sounds like that was a big push for you guys through the first half. And then the second half is kind of getting to contribution profit neutral. I think it was breakeven by 4Q and the secured product. Should we basically like say that the growth rate that we saw in the core personal should flatten out in the back half of the year or like as we look into next year and obviously beyond like how should we think about the sustainability of the growth rate on the unsecured versus the secured because obviously you know getting to contribution profit margin break even on the secured side will will you know rising tide lifts all boats on the overall contribution profit dollars yeah so the our kind of strategic focuses and priorities aren't really changing. So growing in core personal loans is still very, very high priority for us. We've also shared that getting our secured products contribution profitable is a top priority for US. And so you're certainly right. Those are some of our top priorities. I would not say that we are significantly de-emphasizing core personal loans compared to before or anything like that. It's still right up there at the top. Now, having said that, our guidance is our guidance. We have two pieces of guidance out there. One is around this year and one is around our growth rate that you can expect over the next few years. And we've been guiding to a 35% compounded growth rate. And of course, because the core business is such an important part of that, those are going to be somewhat tightly related to each other. And so, you know, I would just point you back to that if, you know, you're looking to model something in terms of what kind of growth rate we think is sustainable for this business. And then, of course, you Know, our, our job is to execute as best we can and do the very best possible job against that, that guidance we possibly can. And it is, of force, in context of what's going on in the macro, because our very first, you know, maybe the meta priority of the business is always do credit, right. And so if you get a bit of credit tailwind, you know, that's going to probably push you a fair bit ahead. And, you know, if you get some of a credit headwind, then, then you know maybe the opposite direction. So central TLDR is sort of like, look, you look at our kind of long-term guidance. And I think that probably is going to be closely related to what's going on in the core business. And from an execution perspective, you know on things that are within our control and AKA things that aren't macro the core continues to be very important to us. And we're going to do everything in our power to grow that business. Okay. I only have one other one and then I'll let Jeremy go. Just as we think about kind of the adjusted net income, obviously it sounds like you think that the stock price is undervalued. I mean, can you give us some benchmarks? Because as a traditional financial investor, a lot of my focus is on price to earnings, price to book, but then also understanding the capital contribution. I know you guys highlight that I think it's 5.9% of your loans held on balance sheet are uh or outstanding are held on balance sheet but that doesn't actually include the co-invests which also include you know i think another five percent plus um of like you know capital required on the on the balance sheet relative to overall so how do you guys like you give us guide rails as to like i was surprised to see the stock buyback in the first quarter just because if we think about your your overall um kind of call it return on capital from maybe the co-invest I think you guys have said it's high teens over time and if we're looking at a stock that's you know three times tangible book value and and you know 12 15 times kind of adjusted earnings but really 30 times earnings if you back out SBC like how should we think about the guide or the guardrails around like capital allocated towards the stock price versus capital allocated towards you know the core business um yeah a lot a lot to unpack there let's see so um probably the first thing i would say is that um we don't we don' t uh we don'T see the business uh we DON'T see the business um as primarily being funded by our own equity capital And so it is certainly true that we have some amount of equity capital that's required to operate the business. We think that over time, there's going to be increasingly efficient ways to do that. And so that's why we've talked about this 5.9% number, which sort of starts to nudge people towards thinking about this in terms of like as a proportion of the total size of the pie of originations that, of course, has been growing very quickly and we expect to continue to grow. um and um and so maybe that that's the first thing which is like uh we're going to be really efficient about you know what uh what what fraction of all the sort of outs of all the originations requires upstart equity capital and how much upstart equity capital is required you know whether that's in the form of directly on balance sheet or to your point uh the sort of risk capital co-invest which you know which is sort of a a nice thing for us you know it works out because it uh secures these long-term capital commitments from partners that's fairly unique in the market, gives the business a lot of resilience, is a really good thing. But then, you know, really like the value of the business doesn't come from the ROE of the money that goes onto the balance sheet or the risk capital. I think of those almost as like, you know, this sort of just a part of the supply, a necessary part ofthe supply chain to make it all work. The real value is coming from the growth in the contribution profits of the business. That's sort of mostly fee revenue that's getting earned on transaction. And the growth rate in that, I think, is actually like, you know, that's probably like the one place I would look and say, like, well, that is actually the thing that is extremely uncommon for, you know, I take your typical kind of comp that you might look at and say oh, you know, what is the sort of typical price to book or price to earnings? I think like any kind of multiple is fine over a sufficiently long timeframe if you are considering the growth rate of the underlying business. And so I think it is just really hard to be like, well, I am going to compute an average financial services business on a sort of price to book basis in 2027, when, you know, that business is probably growing at a rate that is a fraction of the rate that that our business is growing in. And so that that's, you Know, that's of course, what it ultimately comes down to is the growth rate in in the business. And in our case, I would say the growth right in the contribution profit, which is, of course real, like fee revenue. And that's that is it is true that it's powered and made possible by by the amount of equity capital that's either supporting balance sheet or risk capital. And that's why, you know, I've laid out sort of my kind of framework of priorities. It's like, we want to grow contribution profits and we want do it in a way that's really, really efficient with equity capital. And I think if you believe those two things about the business, then you get to a pretty different view of the stock. Okay. My only pushback would be, I mean, like obviously contribution profits have grown, you Know, significantly over the last year, but on the fixed cost basis, those are also up 30 plus percent, which doesn't necessarily lean into the operating leverage that I think you guys are trying to kind of, obviously over time that should manufacture like the operating coverage, just given the growth and the TAMs of the businesses. But if you're growing contribution profits by, you know, a certain amount and you have in the last year, you would think more of that would fall to the bottom line when in fact, 30% plus in the fixed expense base year over year hasn't really let that kind of come to the investors. Yeah, you're absolutely right. The operating costs have been growing. Some of that is intentional investment in some new areas that we think are going to pay off nicely. But in any event, we've, I think, made it pretty clear at this point that I think the lion's share of that growth and the rate of it has happened and that looking forward for the rest of This year, the growth rate is going to be much, much slower. And so I think it'll, you know, it'll just be the operating leverage will start to get a little clearer as time goes on. Why don't we go to Jeremy? And then I actually had a couple coming over email too. And then Oren will come to you after I go through the email ones. But let's go to Jamie next. All right. Thanks so much. I appreciate it, Paul. Appreciate you doing this. I guess in terms of, you knows, what happened on the quarter and the messaging, that was all quite clear to me. You know, from our vantage point, you guys did exactly what you said you'd do, exactly what the investment community, I think, wanted you to do. The profitability is inflecting. You executed well, despite the UMI taking up a bit. You have a much stickier capital base now. You're buying back stock, both personally and as a company. And you and Andrew are both incredibly incentivized for the stock to appreciate and be a multivaggar from here. So like my question is like, what has been the investor feedback? Because I just, I'm trying to like understand why, you know, the, the stock is where it is and, and sort of like what the feedback from the investment community has been, because objectively that like just the reaction to the last quarter and like the, this stock sort of like not getting more attention given what has changed over the last six months for the company, which seems like a real inflection point to me across a number of dimensions. Like what do you think has been from, I'm sure you've had a ton of investor conversations, like has been underappreciated or misunderstood? Yeah, we've certainly spent a lot of time with investors since the meeting. And I do think that across the board, there's been some pretty strong appreciation of the quarter. And, you know, I think us doing the things that we said we would do this quarter, and I think everybody's appreciated that. I think the sort of outstanding questions, and, you Know, I never felt like it would just be one quarter, and everybody would be sold on on the business or, you know, it's its outlook. I think, you know, there's some outstanding questions. I think, you know you just heard one around OpEx, which is like people are like confused why our OpEx keeps going up. And I think it makes it a little harder to model how much operating leverage you should believe this business has over the next few years. I think that there is some concern and questions around the like the sort of, you know, kind of what how much over time, how much equity capital this business will need. And, you knows, what there's this bank thing coming up and what is that and what are the implications of that? And I think maybe just a bit of a new thing that that not everybody's really familiar with yet. And on that particular point, we've stated, I think, pretty unambiguously that we think we have sufficient capitalization to open Upstart Bank early next year and that it's going to be pretty accretive to us operationally because it's both sort of economically more efficient and operationally more efficient, lets us sort of get to more states and make more offers. So it's a really good thing for us. But I think there's just a little bit of consternation around that. Um, and then I think probably most fundamentally it's just like one quarter is probably just not enough. If you're just fearful that, you know, actually like if you look at, you Know, the past end quarters of this business and you say, well, okay, there's this one quarter where it seems like, you're able to grow profitably. And then there's all these other quarters where you weren't, maybe this quarter was just like a lucky fluke. Maybe it was only because, you the macro was, uh, was supportive or something and that's about to change. And, you know, you, you look at that and you just have, I think, reason to worry that one quarter is not enough to prove the thesis. And and you know I can't, I can blame anybody for feeling like they want to see more proof points. So you know what's in our control is we're going to keep doing is just like this short list of priorities. We're going to continue proving that you know our core personal and business is really strong really differentiated and something that can grow for a long time to come that we've got these new horizon businesses in home and auto that have enormous TAMs that are going to become real businesses that are unit economic positive and something that you can believe in to give us a runway to grow for even more years to come. And that we're going to do all this while still operating in a really capital disciplined, capital efficient way. And I think if we can show those things, then whether it's one quarter or two quarters or five quarters, I think that eventually lots investors are going to have to change their minds. So maybe I'm going to preempt it a little bit here and just jump in. I was going to ask this question at the end, but Paul, wondering, since you became CEO, you've obviously increased your engagement with investors, analysts. What is the one thing that you think people get most wrong about Upstart or struggle to understand about Upstart? Is there something that when you meet with them compared to your understanding and from your seat is just baffling, something that people are just not getting or not understanding? Well, I said this on the original earnings call. I mean, I think the answer is everything. It's like I think when, you know, I took the seat earlier this year, there just really had never been a bigger gap between like how we saw ourselves at Upstart and how the rest of the market saw us. It was like our business was stronger than ever. It wasn't like we had the best tech we'd ever had, the most committed capital we'd never had. We had more borrower relationships more customers but traction and home and auto used to just be a one product personal loans business and all of these are things you know real wins that kind of durable no matter what the macro environment is and the opportunity has just so big you know given this kind of like intersection of the ai disruption meets like one of the largest oldest industries in in the world and i think just like the market was like you know every element of of the business was was an area of concern. It was just like, hey, your margins seem to be compressing. You have been growing for multiple quarters, but not actually growing your contribution profits. You've just dipped back into gap unprofitability. How are you going to fund all of these loans? And are these new businesses ever going to be real businesses? Or are they just kind of like things where you can grow originations, but again, not make profits out of it? And I think that it's actually a lot of different concerns, each of which is a little related to the others, but sort of an independent thing that you have to get right. And I think we're just going to go and take all of these questions head on because we have a lot of confidence that actually the trajectory the business is on is going to naturally show that you can get a ton of profitable growth for a very long time in a really capital efficient way. And of course, the great news is if we do that, kind of no matter what I think what investors of the market like wants to do with us in terms of, you know, what kind of multiple they want to use or valuation framework at the end of the day, you know. I think all of them are going to go up with profit. And of course, if you have the profits, then you get to bet on your own future. And that's what we're planning to do. Got it. So I think we have about five, seven minutes left. So one question, I'm going to go back to investor questions now. So, one question that we did get was about the 4Q24 vintage. It looks like it's been, I think, underperforming a little bit targets. What's driving that there? I think this quarter it moved towards underperformING targets. So like what's driving that? Is there something specific in that vintage that we need to be aware of or that you're watching? No, nothing terribly specific. I mean, overall, credit performance has been really strong. We've been really happy with the returns that have been getting delivered to investors. You know, we always talk about, you know, how the returns have been consistently many hundreds of basis points above the spread of treasuries, averaging, I think, something like 600. And so they're really, really strong returns. Just kind of naturally, you're going to have some vintages that are a little over, some vintges that are little under. I think that's pretty par for the course and not something that worries us terribly much. Some of that variation, which vintuges do well and not well, is just going to be correlated to the changes in UMI. Because you can, as a first order approximation, think of us as underwriting to the UMIs at the time of the underwriting. If UMI subsequently goes up a lot or goes down a lot, that's going to give either a tailwind or headwind to the credit performance of that particular vintage, of course, because UMI mathematically is just going to be something that is linearly correlated to the rate of defaults. So that's part of it. And then there's sometimes some idiosyncratic factors that matter a little bit to each vintage. But no, when we talk about underperformance of these vintages, I would say the effects are, our effects are overall tend to be pretty modest. And except for, you know, that period of time right after the stimulus ended, when there was this huge upswing in UMI, obviously, that was a larger effect. But really, since then, we've been very happy with the credit performance. And it's just kind of some natural variation and then some UMI driven variation. Got it. Oren, I know you've had your hand up for a while. Why don't we go to you? no problem uh thanks for here uh thanks paul thanks thanks for the time um yeah i'll be brief i think i think maybe a couple uh other things is cash flow generation it's probably a another focus of the market but um in terms of balance sheet growth that's probably another thing people are focusing on which i think you're doing a great job of of pulling that back but um related to that on the balance sheet just curious on your convertible bonds since you're buying back shares, why not go after those since those maturities are trading in the 70s? Perhaps just thinking if that's a good use of capital. Thanks. It's certainly something we looked at when we last did some share repurchases. But we mostly just looked at the like, you know, what we expected the sort of IRRs on each to be. And we just thought that the stocks IRR was just higher. And it was so much higher that it was like, oh, even though the other thing is, you know, more debt-like and there's some, you know, value in getting that down, you know, whatever, they're risk-adjusted, not the same. But nonetheless, the delta, we just thought that the stock IRR was just so high. So that's how we think about these things is just we're trying to, you know, maximize the IRR of where we deploy capital. And that could be internal uses or stock uses or, you know, various kinds of buybacks. And that's How we'll generally compare them. Yeah, it makes sense. Yeah. I'm always wondering what you think that IRR is and where you think the stock goes. But just maybe lastly, on just the cash flow generation, how low, you know, in terms of cash flow generation, you don't really have much at this point, but just curious to know how low you're willing to take cash in termsof those share rate purchases. And when do you expect to kind of ramp up on free cash flow? Well, you know, the business is growing a lot and we expect it to continue growing a lot. And I've said that we really it's really important to us that we we keep a sufficient level of investment that the sort of long-term kind of addressable market here is on the table. And so that basically means that, you know, I think we need to keep an adequate amount of cash for all our various initiatives. Of course, like capitalizing this bank is something that's going to use cash. So that's, you Know, we're being mindful around that and we want to be mindful around the amount of Cash. And so, yeah, I would like to generate more cash. And when we generate more cash, then we get more options of what we do. And until we do that, You know, options are more limited. Thank you. Appreciate your time. Maybe just turning very quickly to the Cashline product. It's one of your newer products. Talk a little bit about that product, just from how you work, how you're funding it today, what the end state looks like. And then also maybe just spend a little time on the modeling aspect of it, because it is a little different product than your personal loan or even the, you know, like the always on credit, if you will. So maybe just spend a few minutes on that and just to help us understand like how big of a lift was it to put that into practice? Yeah, the Cashland product is a great product for us. It's one that I wish we had launched sooner and earlier in our history. It's a product, you Know, where you have to be really good at underwriting because you're serving a consumer that's fairly financially stressed most of the time. And so it's really important to underwrite that consumer well. But it's also a product that can be extremely high demand. It's a product people search for proactively. Most credit products, you have to find your borrower, and this is one where the borrauer finds you. And that's a pretty amazing a fact about that as a business. And as a result, it's a business that if you do right, I think can be a very profitable business. So we're really early stages on that, in my steps one, two, three, four, building a new product. It's just cleared step one, which is it's proven, wow, people really want this thing. And then you got to prove everything else about it and figure out the right funding rails for it, the right lock in credit calibration on it, and then get you economics. So there's still a bunch of work to do on this product, but it's extremely high potential. It's a really good match for the core competencies we have as a business. And so I wish we started sooner, but next best time is now. Got it. I am being flagged that we are now past time. So I will have to stop it there, though. There are a few more questions we'd have loved to get to, but I think it was a really great discussion. Appreciate all the investors being super engaged and asking questions too. And thank you again, Paul, Sonia, and team. Thank you so much for taking the time and joining us today. Thank you.