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Can someone please let me know how a net income loss lead to a positive diluted adjusted EPS. Recently a stock with ticker symbol UPST has announced Q2 2023 results in which there was a net income loss of $28.2 million, but the diluted adjusted EPS happened to be 0.06. Can someone please explain how a net income loss can cause the positive EPS be positive for a given net income loss ?

Please see the detailed Q2 2023 results at https://ir.upstart.com/news-releases/news-release-details/upstart-announces-second-quarter-2023-results

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  • Just curious outside of economics or possibly homework, how is this affecting your personal finance exactly? Aug 12, 2023 at 22:16

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Finance is as much an art as a science. The key word in the metric you're referencing is "adjusted", which is a non-GAAP measure (i.e., not an official accounting metric). However, if a company reports a non-GAAP measure, it is required to reconcile it to GAAP metrics, which this company has done further down in the release you linked to in your question:

Reconciliation of non-GAAP EPS calculation

Based on this, one can see that for the quarter ended 6/30/23, the company calculates Adjusted Net Income by adding back Stock-Based Comp & Related Expenses (personally, adding back stock-based comp is fair and quite common since its non-cash, but the payroll tax add-back described in footnote (1) is pushing it). So, it's based on this Adjusted Net Income figure of $5.4mm that they then calculate Adjusted EPS of $0.06 per share.

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