Financial Performance - Record total revenue and other income of $250 million, exceeding the outlook of $235 to $245 million and growing 28% year-over-year[2] - Record adjusted EBITDA of $50 million, surpassing the outlook of $40 to $45 million and nearly 3x higher than Q2 2023[2] - Revenue from fees less production costs (FRLPC) reached $97 million, a 49% year-over-year increase, with FRLPC % improving to 4.2%[2][3] - Raised full-year outlook for total revenue, adjusted EBITDA, and FRLPC % target range to 3.5% to 4.5%[7][8] - Second quarter network volume grew by 19% year-over-year to $2.3 billion, driven by strength in personal loan, single-family rental (SFR), and POS businesses, with personal loan contributing approximately 60% of network volume[27] - Fee revenue less production costs (FRLPC) grew by 49% to $97 million in the second quarter, with FRLPC % reaching a record 4.2%, up 84 basis points year-over-year and 35 basis points compared to 1Q'24[28] - Adjusted EBITDA increased by $33 million year-over-year to a record $50 million, with an adjusted EBITDA margin of 20%, the highest level since the company went public in 2022[31] - The company expects to achieve an FRLPC % between 3.5% and 4.5% for the remainder of 2024, up from the previous target range of 3.0% to 4.0%[30][42] - The company raised its full-year 2024 outlook for total revenue & other income to $975M to $1,050M and adjusted EBITDA to $180M to $210M, while tightening the network volume outlook to $9.25B to $10.25B[42] - Revenue from fees for Q2 2024 increased to $242.594 million, up from $185.685 million in Q2 2023[49] - Total Revenue and Other Income for Q2 2024 reached $250.344 million, compared to $195.612 million in Q2 2023[49] - Adjusted Net Income (Loss) for Q2 2024 was $7.188 million, compared to $886,000 in Q2 2023[50] - Adjusted EBITDA for the six months ended June 30, 2024, was $90,120 thousand, compared to $19,542 thousand for the same period in 2023[53] - Fee Revenue Less Production Costs (FRLPC) for the six months ended June 30, 2024, was $189,115 thousand, up from $115,269 thousand for the same period in 2023[54] - Network Volume for the six months ended June 30, 2024, was 4,750 million, compared to 3,807 million for the same period in 2023[54] - Fee Revenue Less Production Costs % (FRLPC %) for the six months ended June 30, 2024, was 4.0%, up from 3.0% for the same period in 2023[54] - Revenue from fees for the six months ended June 30, 2024, was $479,598 thousand, up from $360,939 thousand for the same period in 2023[54] Partnerships and Agreements - Signed a $1 billion forward flow purchase agreement with Castlelake and achieved an AAA rating on the personal loan ABS program[4][18] - Onboarded OneMain Financial, a top 5 nationwide personal loan originator with $13 billion in annual originations and over 3 million customers[3][10] - Expanded partnership with LendingClub and secured exclusivity arrangements with select partners for second-look application flow[11] - POS lending is expected to contribute over 30% of the business at scale, with partnerships including Elavon, Mastercard, and Klarna[13][15] - The company signed its first $1 billion forward flow agreement, which is expected to fund over 15% of annual personal loan network volume based on 2Q'24 run-rate[36][40] - The company achieved its first AAA rating on its personal loan ABS program, lowering the cost of capital and risk retention requirements[36][41] Operational Efficiency and Cost Management - Reorganized the business to reduce core opex by $25 million annually and $10 million in H2 2024[5] - The company expects to deliver positive cash flow by early 2025, driven by continued top-line growth, disciplined expense management, and capital efficiency[37] - The company aims to achieve positive net cash flow by 2025[46] - Share-based compensation expense for Q2 2024 totaled $18.044 million, down from $20.208 million in Q2 2023[50] Funding and Capital - The company secured an additional $825 million in funding across 3 ABS deals in the second quarter, adding 22 new funding partners for a total of 120 institutional investors on the platform[35] - Net cash provided by financing activities for the six months ended June 30, 2024, was $362,434 thousand, compared to $213,359 thousand for the same period in 2023[52] Financial Position and Assets - Total assets increased to $1,452,977 thousand as of June 30, 2024, compared to $1,208,376 thousand as of December 31, 2023[51] - Cash and cash equivalents grew to $233,593 thousand as of June 30, 2024, up from $186,478 thousand as of December 31, 2023[51] - Total current liabilities increased to $241,254 thousand as of June 30, 2024, compared to $74,925 thousand as of December 31, 2023[51] Risks and Challenges - The company faces risks related to market interest rates, inflation, and geopolitical conflicts, which could impact future performance[46] Non-GAAP Metrics and Financial Outlook - Adjusted EBITDA is used as a key metric for evaluating the company's financial performance, excluding non-cash and non-recurring items[48] - Fee Revenue Less Production Costs (FRLPC) as a percentage of network volume is a key non-GAAP measure used internally for decision-making[48] - Pagaya provides financial outlook for Q3 2024 and full-year 2024 on a non-GAAP basis, including Adjusted EBITDA[48] Net Loss and Liabilities - Net Loss Attributable to Pagaya Technologies Ltd. for Q2 2024 was $74.785 million, compared to $31.297 million in Q2 2023[49] - Net loss including noncontrolling interests was $(114,341) thousand for the six months ended June 30, 2024, compared to $(130,762) thousand for the same period in 2023[52]

Generally accepted accounting principles (GAAP) net income is still in the red at $21 million, but that was an improvement of $40 million from last year. Wall Street expects Pagaya to become net profitable on a GAAP basis next year. It delivered another solid quarter, but it's also recently done some interesting things that investors need to know about. Artificial intelligence (AI) credit company Pagaya Technologies (PGY -0.54%) stock jumped 21% in May according to data provided by S&P Global Market Intelli ...

Core Viewpoint - Pagaya Technologies Ltd. presents an intriguing investment opportunity in the fintech sector, despite its stock trading at all-time lows due to market complexities and reliance on funding partners [1][10]. Financial Performance - Pagaya reported a strong Q1 with revenues increasing by 31% to $245 million, surpassing analyst estimates by $17 million and beating EPS targets by $0.04 [2]. - The company achieved record network volumes of $2.4 billion and improved Fee Revenue Less Production Costs (FRLPC) to $92 million, resulting in a 3.8% margin [2]. - Adjusted EBITDA rose significantly to $38 million from just $2 million in Q1 '23, driven by an 84% year-over-year growth in cost efficiency [3]. Funding and Capital Structure - Pagaya relies heavily on bank partners for funding new loan originations, attracting $1.9 billion in funding across five transactions during the quarter [4]. - The company has a net loan and securities balance of $804 million and a cash balance of $310 million, offset by $458 million in debt, resulting in a net capital position of $656 million [7]. - A recent equity offering raised $95 million, part of a larger strategy to secure $330 million in capital for loan retention [6]. Market Valuation - The stock has a market cap of approximately $800 million, with 2024 revenue guidance approaching $1 billion and targeted adjusted EBITDA of $150 to $190 million, indicating a valuation of less than 5x targets [8]. - Investors are effectively paying a minimal amount for the AI lending platform, which generates nearly $1 billion in fee income [8]. Strategic Initiatives - Pagaya is developing a new point-of-sale (POS) product as an alternative to traditional buy now, pay later solutions, with U.S. Bank's Merchant Services recently signing on [5]. - The company faces challenges in scaling its lending platform, similar to other fintechs that have either acquired digital banks or built their own to diversify income sources [9]. Investor Considerations - The stock's low valuation, combined with strong revenue growth, presents a compelling investment case, although patience may be required as fintech stocks are currently out of favor [11].

Klaus Vedfelt/DigitalVision via Getty Images In my previous article, I approached Pagaya (NASDAQ:PGY) from the standpoint of a new company dealing with numerous short-term negatives, during possibly the most volatile chapter in its exceedingly volatile history. I am happy to say that its recent earnings report has allayed many fears and attracted a large number of new institutional investors. Institutional Purchases I follow a particular site, Fintel, that tracks institutional investments (13 F filings) in ...

Financial Performance - Net loss including noncontrolling interests for Q1 2024 was $31.66 million, compared to $98.62 million in Q1 2023, representing a significant improvement[22] - Total revenue and other income for Q1 2024 was $245.28 million, up 31.4% from $186.64 million in Q1 2023[19] - Revenue from fees in Q1 2024 was $237.00 million, a 35.2% increase from $175.25 million in Q1 2023[19] - Operating income for Q1 2024 was $7.69 million, a turnaround from an operating loss of $24.98 million in Q1 2023[19] - Net loss attributable to Pagaya Technologies Ltd. for Q1 2024 was $21.22 million, compared to $60.97 million in Q1 2023[19] - Basic and diluted net loss per share for Q1 2024 was $0.33, improved from $1.03 in Q1 2023[19] - Comprehensive loss attributable to Pagaya Technologies Ltd. for Q1 2024 was $45.95 million, compared to $61.52 million in Q1 2023[22] - Net loss for the three months ended March 31, 2024, was $31.662 million, compared to a net loss of $21.223 million for the same period in 2023[25] - Net Loss Attributable to Pagaya Technologies Ltd. improved to $21.2 million in Q1 2024 from $61.0 million in Q1 2023[182] - Adjusted Net Income improved to $13.3 million in Q1 2024 from a loss of $11.0 million in Q1 2023[204] - Adjusted EBITDA rose to $39.8 million in Q1 2024 from $2.0 million in Q1 2023[204] - Net loss per share attributable to ordinary shareholders for Class A and Class B shares was $0.33 for the three months ended March 31, 2024, compared to $1.03 for the same period in 2023[127] Revenue and Fees - Revenue from fees for Q1 2024 increased by $61.8 million (35%) to $237.0 million, driven by a $65.1 million increase in Network AI fees[186] - Network AI fees totaled $215.3 million for Q1 2024, up from $150.2 million in Q1 2023[43] - Contract fees for Q1 2024 were $21.7 million, down from $25.1 million in Q1 2023[45] - Total revenue from fees for Q1 2024 was $237.0 million, compared to $175.3 million in Q1 2023[50] - Revenue from related parties totaled $178.5 million for Q1 2024, up from $153.8 million in Q1 2023, primarily from securitization vehicles[90] - Revenue from fees grew by 35% to $237.0 million in Q1 2024 compared to $175.3 million in Q1 2023[185] - Total Revenue and Other Income increased by 31% to $245.3 million in Q1 2024 from $186.6 million in Q1 2023[185] - Interest income decreased by 26% to $7.7 million in Q1 2024 from $10.4 million in Q1 2023[185] - Investment income declined by 46% to $528,000 in Q1 2024 from $987,000 in Q1 2023[185] - Fee Revenue Less Production Cost (FRLPC) increased to $92.1 million in Q1 2024 from $50.2 million in Q1 2023[204] Expenses and Costs - Production Costs rose to $144.9 million in Q1 2024, up from $125.1 million in Q1 2023, driven by increased Network Volume[173] - Technology, data, and product development expenses decreased to $19.4 million in Q1 2024 from $21.1 million in Q1 2023[182] - Sales and marketing expenses dropped to $10.3 million in Q1 2024 from $14.3 million in Q1 2023[182] - General and administrative expenses increased to $63.1 million in Q1 2024 from $51.1 million in Q1 2023[182] - General and administrative costs rose by $11.9 million (23%) to $63.1 million in Q1 2024, driven by transaction-related expenses and miscellaneous costs[195] - Other expense, net decreased by $32.6 million (49%) in Q1 2024, primarily due to lower credit-related impairment losses[196] - Share-based compensation expense was $17.30 million in Q1 2023[24] - Share-based compensation expense for the three months ended March 31, 2024, was $15.5 million, compared to $16.4 million for the same period in 2023[119] Balance Sheet and Assets - Total cash, cash equivalents, and restricted cash decreased to $310.048 million as of March 31, 2024, compared to $316.762 million as of December 31, 2023[28] - Total assets increased to $1.483 billion as of March 31, 2024, up from $1.208 billion as of December 31, 2023[17] - Total liabilities rose to $683.026 million as of March 31, 2024, compared to $468.377 million as of December 31, 2023[17] - Shareholders' equity increased to $725.911 million as of March 31, 2024, up from $665.749 million as of December 31, 2023[17] - Cash and cash equivalents increased to $274.495 million as of March 31, 2024, up from $186.478 million as of December 31, 2023[17] - Investments in loans and securities increased to $892.853 million as of March 31, 2024, compared to $714.303 million as of December 31, 2023[17] - Secured borrowing increased to $331.156 million as of March 31, 2024, up from $271.713 million as of December 31, 2023[17] - Accumulated deficit increased to $563.860 million as of March 31, 2024, compared to $542.637 million as of December 31, 2023[17] - Secured borrowings as of March 31, 2024, were $331.2 million, up from $271.7 million as of December 31, 2023[54] - The outstanding principal balance under repurchase agreements was $310.1 million as of March 31, 2024, with a weighted average interest rate of approximately 14%[55] - Investments in loans and securities available for sale had unrealized losses of $3.166 million as of March 31, 2024[68] - The allowance for credit losses for investments in loans and securities was $126.36 million as of March 31, 2024[70] - Proceeds from sales/maturities/prepayments of investments in loans and securities were $35.897 million for Q1 2024[70] - Total investments in Pagaya SmartResi F1 Fund, LP and other proprietary investments amounted to $26.9 million as of March 31, 2024, up from $26.4 million in December 2023[71][72] - The company's consolidated VIEs (Risk Retention Entities) held net assets of $122.9 million as of March 31, 2024, down from $132.7 million in December 2023[76] - The company's direct interest in unconsolidated VIEs had a carrying amount of $777.5 million and maximum exposure to loss of $777.5 million as of March 31, 2024, up from $591.0 million in December 2023[79] - Operating lease liabilities totaled $48.5 million as of March 31, 2024, with maturities of $59.7 million through 2032[82] - The company has a remaining contractual obligation of $7.3 million with a cloud computing provider, with $4.9 million due in the next 12 months[84] - The maximum potential future payments under guarantees totaled $29.0 million as of March 31, 2024[85] - Investments in loans and securities available for sale had a fair value of $894.2 million as of March 31, 2024, with gross unrealized losses of $31.3 million[65] - The warrant liability decreased to $1.3 million as of March 31, 2024 from $3.2 million in December 2023 due to a $1.9 million change in fair value[95] - The company's long-term debt outstanding was $235.0 million as of March 31, 2024[61] - Cash, cash equivalents, and restricted cash increased to $310.0 million as of March 31, 2024, up from $222.5 million as of December 31, 2023[100] - Total assets not measured at fair value on a recurring basis were $432.6 million as of March 31, 2024, compared to $336.2 million as of December 31, 2023[100] - Investments in loans and securities available for sale increased to $894.2 million as of March 31, 2024, up from $507.2 million as of March 31, 2023[97] Capital and Financing - The company completed a 1-for-12 reverse share split on March 8, 2024, with all share amounts retroactively adjusted[31] - The company entered into a Credit Agreement on February 2, 2024, providing a $25 million Revolving Credit Facility, later increased to $35 million, and a $255 million Term Loan Facility[57] - As of March 31, 2024, the company had $10.0 million in letters of credit issued and $25.0 million remaining capacity under the Revolving Credit Facility[62] - The company issued 298,057 shares under the Equity Financing Purchase Agreement for net proceeds of $5.2 million during Q1 2024[108] - The company priced an offering of 7,500,000 Class A Ordinary Shares, raising approximately $90.0 million in net proceeds[109] - The company has the right to sell up to $300 million of Class A Ordinary Shares to B. Riley Principal Capital II under the Equity Financing Purchase Agreement, with 298,057 shares issued for net proceeds of $5.2 million in Q1 2024[220][221] - The company filed a shelf registration statement allowing it to offer and sell up to $500 million of Class A ordinary shares, debt securities, and/or warrants[222] - The company priced an offering of 7,500,000 Class A Ordinary Shares, generating approximately $90.0 million in proceeds after deducting underwriting discounts and fees[223] - The company expects to fund operations with existing cash, cash equivalents, and cash generated from operations, including cash flows from investments in loans and securities, and additional secured borrowings[215] - The company may raise additional capital through borrowings under a new credit facility entered into in February 2024, or through the sale or issuance of equity or debt securities, including up to 1,666,666 Series A Preferred Shares[215] - The company could receive up to $169.6 million in proceeds if all public and private placement warrants are exercised for cash, with each warrant entitling the holder to purchase one Class A Ordinary Share at $138 per share[217] - As of May 8, 2024, the price of the company's Class A Ordinary Shares was $10.50 per share, making it unlikely for warrant holders to exercise warrants if the market price remains below $138[218] Cash Flow - Net cash provided by operating activities was $20.47 million for Q1 2024, compared to a net cash outflow of $23.67 million in Q1 2023[224] - Net cash used in investing activities was $230.89 million in Q1 2024, compared to $99.67 million in Q1 2023[224] - Net cash provided by financing activities was $298.74 million in Q1 2024, compared to $103.02 million in Q1 2023[224] AI and Technology - The company has evaluated over $2.0 trillion in application volume since inception, driven by improvements in AI technology and data network[154] - The company's AI technology enables partners to increase originations by up to 25% in some cases[152] - The company's economic model is evaluated using the metric FRLPC (fee revenue less Production Costs), which is highly correlated to Network Volume[149] - Network Volume increased to $2,419 million in Q1 2024, up from $1,850 million in Q1 2023, reflecting a 30.8% growth[164] - Network Volume grew by 31% from $1.9 billion in Q1 2023 to $2.4 billion in Q1 2024[186] Taxes and Compensation - The company's income from Preferred Technological Enterprise (PTE) is subject to a 12% tax rate, effective for tax years 2020 through 2024[120] - The company's effective tax rate for the three months ended March 31, 2024, was -18.8%, compared to -7.3% for the same period in 2023[124] - The company's tax rate is affected by recurring items such as tax rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions[124] - Unrecognized compensation expense related to unvested share options was approximately $46.7 million as of March 31, 2024, expected to be recognized over 1.0 year[112] - Unrecognized compensation expense related to RSUs was approximately $31.2 million as of March 31, 2024, expected to be recognized over 0.9 years[114] - Unrecognized compensation expense related to options to restricted shares was approximately $18.0 million as of March 31, 2024, expected to be recognized over 1.5 years[117] Fair Value and Valuation - The weighted average discount rate for Level 3 fair value measurement of loans and securities as of March 31, 2024, was 16.7%, with a range of 8.0% to 20.0%[98] - The weighted average loss rate for Level 3 fair value measurement as of March 31, 2024, was 17.2%, with a range of 6.2% to 31.0%[98] - The weighted average prepayment rate for Level 3 fair value measurement as of March 31, 2024, was 9.1%, with a range of 0.0% to 40.0%[98] Related Party Transactions - Total fee receivables from related parties increased to $88.7 million as of March 31, 2024, up from $84.8 million as of December 31, 2023[88] - Revenue from related parties totaled $178.5 million for Q1 2024, up from $153.8 million in Q1 2023, primarily from securitization vehicles[90] Noncontrolling Interests - Net loss attributable to noncontrolling interests decreased by $27.2 million (72%) in Q1 2024, driven by consolidated VIEs' performance[199]

Pagaya Technologies Ltd. (NASDAQ:PGY) Q1 2024 Earnings Conference Call May 9, 2024 8:30 AM ET Company Participants Jency John – Head-Investor Relations Gal Krubiner – Chief Executive Officer Sanjiv Das – President Evangelos Perros – Chief Financial Officer Conference Call Participants John Hecht – Jefferies Joseph Vafi – Canaccord Genuity Michael Legg – Benchmark David Scharf – Citizens JMP Hal Goetsch – B. Riley Steven Kwok – KBW Operator Good day, and welcome to the Pagaya 1Q 2024 Earnings Conference Call ...

1Q24 Earnings Supplement 01 Operating Metrics 01 *Note: See "Appendix" for a reconciliation of non-GAAP measures to the most comparable GAAP measure PA G AYA T E C H N O L O G I E S LT D. Contents 02 Non-GAAP Reconciliations 1Q'24 financial highlights 4 $270 $45 $250 $210 $170 In $ millions; % in YoY growth FRLPC $40 1Q23 1Q24 1Q23 1Q24 ද 12.0% 8.0% 4.0% 0.0% 9.5% 9.5% 9.5% 8.8% 9.8% 6.8% 6.2% 6.1%5.6% 6.0% 2.7% 3.3% 3.4% 3.2% 3.8% 3 -4 % FRLPC target range D PAGAYA % contribution from lending partner and i ...

2 PAGAYA PAGAYA TECHNOLOGIES LTD. Q1 Letter to Shareholders $2.42B Record network volume of $2.42 billion exceeded our outlook of $2.2 to $2.4 billion and grew 31% year-over-year. $245M Record total revenue and other income of $245M exceeded our outlook of $225 to $240 million and grew 31% year-over-year, driven primarily by a 35% growth in revenue from fees, as we continued to monetize our lending partner product. Q3 2024 Q2 2024 Q1 2024 DATE ISSUED May 9, 2024 Q4 2024 "Disciplined execution drove another ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-41430 Pagaya Technologies Ltd. (Exact name of Registrant as specified in its charter) Israel 87-3083236 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECU ...