Pagaya Technologies Ltd. · NASDAQ:PGY
Pagaya Technologies — Q2 2022 Earnings Presentation
30 slides from Pagaya Technologies's earnings presentation, Aug 16, 2022
Slide 1: Pagaya Technologies Ltd. 2Q 2022 Results
Pagaya Technologies Ltd. 2Q 2022 Results August 16, 2022 ©2022 Pagaya. Confidential 1 1
Slide 2: Legal Disclaimer
Legal Disclaimer Cautionary Note About Forward-Looking Statements This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. T
Slide 3: Today's Agenda
1 Pagaya’s mission and platform 2 2Q’22 highlights Today’s 3 Agenda Financials and outlook 4 Q&A ©2022 Pagaya. Confidential 3
Slide 4: Our Mission
Our Mission Pagaya makes life-changing financial products and services available to more people ©2022 Pagaya. Confidential
Slide 5: Our business model is a B2B2C platform
Our business model is a B2B2C platform We sit in the middle of the ecosystem, creating value for consumers, partners, and institutional investors with a white-label solution Partners Institutional (fintechs, banks, other Investors Consumers financial services companies) (ABS, funds, other institutio
Slide 6: "Win-win-win" proposition for partners, their customers and institutional investors
“Win-win-win” proposition for partners, their customers and institutional investors Partners Partners’ Investors win Customers win win • Deepened customer • Convenience and access • Diversified exposure to relationships financial products and unique asset flows services • Expanded customer base • Ab
Slide 7: AI ecosystem designed to deliver better outcomes than traditional models
AI ecosystem designed to deliver better outcomes than traditional models AI Ecosystem Data-Rich AI Fully Automated Real-Time Reaction ~63 million applications1 AI network enables us to spot 260+ data scientists evaluated since beginning of trends early and react quickly refining models 2019, utilizi
Slide 8: 2Q'22 highlights
2Q’22 highlights ©2022 Pagaya. Confidential
Slide 9: 2Q financial highlights
2Q financial highlights Record network volume and total revenue driven by faster growth in newer products and expansion of existing partnerships Network volume Total revenue and other income Adjusted EBITDA 1 $1.9B $181.5M $4.9M +79% Vs 2Q‘21 +83% Vs 2Q‘21 3% Adjusted EBITDA Margin ©2022 Pagaya. Con
Slide 10: 2Q operating highlights
2Q operating highlights Business Consistently raising Strengthening our Newly listed public momentum capital leadership team company Scaling existing partners ~$1.8B in funding raised Ashok Vaswani, NASDAQ: PGY and adding meaningful President new partners • 5 new programs with • Raised across ABS an
Slide 11: Our unique platform
Our unique platform ©2022 Pagaya. Confidential
Slide 12: Business model that drives consistent growth
Business model that drives consistent growth 01 02 03 Differentiated funding model Ability to react quickly to Enabling growth for partners consumer behavior trends through macro cycles A fully automated, data-rich AI AI capabilities become even more Pagaya raises capital in financing network that e
Slide 13: Differentiated funding model that limits balance sheet utilization
01 Differentiated funding model that limits balance sheet utilization STEP 1 STEP 2 STEP 3 Traditional Lender originates loan Funded on-balance Loans are sold to Funding Model using own capital sheet (inventory risk) investors STEP 1 STEP 2 STEP 3 Pagaya’s Pagaya raises capital Pagaya’s AI enables F
Slide 14: Flexibility to opportunistically deploy institutional investor capital
01 Flexibility to opportunistically deploy institutional investor capital Consistently raising capital across Funding model enables flexible deployment diverse sources Cumulative funding raised in financing vehicles since 2020 Illustrative financing vehicle deployment ($M) ($B) $12 $10B+ $64 $225 $1
Slide 15: Relative value of AI during changing market conditions
02 Relative value of AI during changing market conditions In Fall 2021, Pagaya’s AI spotted changes in consumer behavior, enabling us to react quickly Unsecured Personal Loans 30-day+ delinquency rates Pagaya AI-enabled loans by select cohorts Pagaya vs. market benchmark1 3.0% Oct-21 2.70% 2.5% Dec-
Slide 16: Enabling growth for partners through macro cycles
03 Enabling growth for partners through macro cycles Pagaya enabled volume to partners during COVID-19 In current environment, Pagaya is seeing rapid growth in application flow Single partner case study Top 3 partners applications evaluated 160 2% Indexed application count 33% 37% 127 102 104 98% 10
Slide 17: Bringing it all together: consistent value creation through cycles
Bringing it all together: consistent value creation through cycles Exponential growth in application flow powered by AI capabilities and differentiated funding model Covid-19 shock Improved credit environment Interest rate shock 5.0% 70 ~63M $1,946 cumulative applications60 Cumulative applications (
Slide 18: Significant runway within existing products and partnerships
Significant runway within existing products and partnerships Capturing less than 1% of opportunity in existing 5 new programs launched year-to-date, delivering products today over $200M in Network Volume ~$4 trillion Total Addressable Market Personal Auto Credit Cards / Real Loans 1 Loans 2 POS 3 Es
Slide 19: Onboarding bank partners can step-change volume growth
Onboarding bank partners can step-change volume growth $650B <2% of this Pagaya’s Network Volume opportunity = incremental $10B in annual network volume $4.9B $1.6B 1 2020 2021 Annual volume of the top-25 largest U.S banks 1. Represents estimated annual origination volume of credit card, personal lo
Slide 20: Pagaya's flywheel
Pagaya’s flywheel Differentiated funding model Scale existing partners Significant Fully-automated AI uncaptured TAM in capabilities Stability Growth current verticals Consistently adding Onboard new value through cycles partners, including large US banks ©2022 Pagaya. Confidential 20 20
Slide 21: Financials & Outlook
Financials & Outlook ©2022 Pagaya. Confidential
Slide 22: Pagaya has delivered extraordinary growth to date
Pagaya has delivered extraordinary growth to date Network Volume ($B) Total Revenue & Other Income ($M) 183% $1.9 Growth 116% Growth $182 $1.7 $171 $1.6 $1.5 $153 $138 $1.1 $99 $84 $0.7 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 ©2022 Pagaya. Confidential 22
Slide 23: Financial operating model
Financial operating model Six months ending June 2022 $M Description and drivers Network Volume $3,597 • Assets originated by partners and acquired by Financing Vehicles Revenue from fees 322 • ~9% take rate Interest & investment income 30 • Consists of interest income and investment income Total re
Slide 24: Pagaya 2Q'22 financial highlights
Pagaya 2Q’22 financial highlights ($ in millions) 2Q’22 1Q’22 ∆ 2Q’21 ∆ Key highlights Driven by faster growth in newer products, such as Network $1,947 $1,650 18% $1,088 79% auto, credit card and single-family residential and Volume scaling of existing partnerships Total Revenue from fees grew by 7
Slide 25: 2022 Outlook
2022 Outlook 2022E Network Volume $7.2B to $7.8B Total Revenue and Other Income $700M to $725M Adjusted EBITDA ($20M) to $10M ©2022 Pagaya. Confidential 25
Slide 26: Medium term ambition
$25B+ Network volume Medium term ambition ~20% Adjusted EBITDA margin ©2022 Pagaya. Confidential 26
Slide 27: Q&A
Q&A ©2022 Pagaya. Confidential
Slide 28: Thank You
© 2022 Pagaya. Confidential pagaya.com Thank You
Slide 29: Appendix
Appendix ©2022 Pagaya. Confidential
Slide 30: Reconciliation of Non-GAAP Financial Measures
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net Loss Attributable to Pagaya Technologies Ltd. ($146,274) ($5,874) ($16