Pagaya Technologies .(US:PGY)2026-02-09 11:58Financial Performance - Q4 network volume reached $2.7 billion, growing 3% year-over-year and 34% excluding SFR, surpassing the outlook of $2.65 - $2.9 billion[3] - Total revenue and other income for Q4 was $335 million, a 20% year-over-year increase, exceeding the forecast of $333 - $358 million[4] - Adjusted EBITDA for Q4 was $98 million, reflecting a 53% year-over-year growth and an adjusted EBITDA margin increase of over 6 points to 29%[6] - GAAP net income for Q4 was $34 million, representing a 10% margin and a significant increase of $272 million year-over-year, driven by fee revenue growth[7] - The company achieved a record full-year revenue of $1.3 billion, growing 26% year-over-year, with adjusted EBITDA for the year at $371 million, up 76%[15] - Full year 2025 revenue reached $1,301 million, up 26% year-over-year, with adjusted EBITDA of $371 million, reflecting a 76% increase compared to 2024[52] - Total revenue for Q4 2025 reached $334.8 million, a 19.8% increase from $279.4 million in Q4 2024[101] - Net income attributable to Pagaya Technologies Ltd. was $34.3 million in Q4 2025, compared to a net loss of $237.9 million in Q4 2024[101] - Operating income for the year ended December 31, 2025, was $263.8 million, significantly up from $66.8 million in 2024[101] - Non-GAAP adjusted net income for the year was $275.3 million, compared to $66.9 million in 2024, reflecting a substantial increase[102] Funding and Investments - The company issued $2.9 billion in ABS across 7 transactions in Q4, enhancing funding capacity and diversifying funding sources[9] - The company diversified its funding structure, with about two-thirds of personal loan business funded by ABS in 2025, compared to almost entirely in 2024[41] - The company announced a $350 million revolving Personal Loans ABS transaction, providing up to approximately $3 billion of funding capacity[79] - Discretionary investments in loans and securities totaled approximately $171 million during 2025, enhancing liquidity and interest income[81] - The company is leveraging its capital structure to make opportunistic investments, with one-third of Investments in Loans and Securities being discretionary[81] Operational Efficiency - Approximately half of Q4 originations came from outside decline monetization, indicating a successful conversion of a core Personal Loan partner into a multi-product relationship[13] - The onboarding pipeline is the most robust in the company's history, with three new partners launched and multiple additional partners expected to go live in the coming quarters[36] - The company signed several long-term agreements with leading partners to enhance application flow size and quality, which is expected to unlock accelerated growth[40] - The company experienced a significant reduction in general and administrative expenses, decreasing from $240.8 million in 2024 to $159.6 million in 2025[101] - Core operating expenses as a percentage of FRLPC improved to 36% in 2025 from 56% in 2024, demonstrating enhanced operational efficiency[109] Future Outlook - For 2026, the company anticipates more measured volume and revenue growth, prioritizing credit risk over market share gains[27] - The company expects 2026 revenue to be between $11.25 billion and $13.0 billion, supported by new products and partner growth[58] - For Q1 2026, the company expects Network Volume between $2.5 billion and $2.7 billion, and Total Revenue & Other Income between $315 million and $335 million[87] - The full-year 2026 outlook includes Total Revenue & Other Income projected between $1.4 billion and $1.575 billion, with GAAP Net Income expected between $100 million and $150 million[87] - The FRLPC margin is expected to be between 4.0% and 5.0% for the year, reflecting potential credit-related impairments[86] Credit Performance - Credit performance remains stable, with cumulative net losses for personal loans trending approximately 30% - 40% lower than peak levels in Q4 2021[70] Shareholder Returns - The company repurchased approximately $7 million of its 8.875% senior unsecured notes at a discount of approximately 12.5% to par[82] - The weighted average shares outstanding for basic shares increased to 81.9 million in 2025 from 74.3 million in 2024[102]