Pagaya Technologies Ltd. · NASDAQ:PGY
Pagaya Technologies — Q3 2024 Earnings Presentation
23 slides from Pagaya Technologies's earnings presentation, Nov 12, 2024
Slide 1: 3Q24 Earnings Supplement
PA G AYA T E C H N O L O G I E S LT D . 3Q24 Earnings Supplement November 12, 2024
Slide 2: Contents
01 Financial Metrics 02 Contents Operating Metrics 03 Non-GAAP Reconciliations
Slide 3: Financial Metrics
01 Financial Metrics
Slide 4: 3Q'24 financial highlights
3Q’24 financial highlights ($ millions) Q3 2023 Q3 2024 %∆ Network Volume $2,112 $2,351 11% Total revenue & other income $212 $257 21% Revenue from fees $201 $249 24% Production costs $129 $149 16% Revenue from fees less production costs (FRLPC)* $73 $100 38% Core operating expenses* $52 $53 1% Net
Slide 5: Key financial metrics
Key financial metrics In $ millions; % in YoY growth Total Revenue FRLPC Adjusted EBITDA $257 $56 $100 21% 38% 98% $73 $212 $28 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24
Slide 6: Evolution of FRLPC
Evolution of FRLPC Components of FRLPC as a % of network volume 10.4% 10.6% 9.5% 9.8% 8.8% 6.1% 6.2% 6.3% 6.0% 5.6% Targeting 4.2% 4.3% 3.5%-4.5% 3.8% FRLPC% in 2H’24 3.4% 3.2% 3Q23 4Q23 1Q24 2Q24 3Q24 Fee revenue % of network volume (take rate) Production costs % of network volume FRLPC %
Slide 7: Evolution of FRLPC by product
Evolution of FRLPC by product % contribution from lending partner and investor products Fee revenue less production costs as a % of network volume – breakdown by product 4.2% 4.3% 3.8% 3.3% 3.4% 3.2% 3.0% 2.9% 3.0% 2.7% 1% 25% 32% 43% 58% 60% 63% 63% 69% 71% 99% 75% 68% 57% 42% 40% 37% 37% 31% 29% 2
Slide 8: Evolution of FRLPC by line item
Evolution of FRLPC by line item ($ in millions) 3Q23 4Q23 1Q24 2Q24 3Q24 AI integration $174 $184 $206 $216 $221 Contract $17 $20 $22 $21 $20 Capital markets $10 $7 $10 $6 $8 Total Fee Revenue $201 $210 $237 $243 $249 Production costs ($129) ($134) ($145) ($146) ($149) Total FRLPC $73 $76 $92 $97 $1
Slide 9: Core operating expenses
Core operating expenses In $ millions Total operating expenses excluding share-based compensation expense, one-time expenses, and depreciation $61 $55 $53 $52 $51 72% 67% 66% 57% 52% 3Q23 4Q23 1Q24 2Q24 3Q24 Core Opex Core Opex as a % of FRLPC *Note: See “Appendix” for a reconciliation of non-GAAP m
Slide 10: Adjusted EBITDA
Adjusted EBITDA In $ millions $56 $50 $40 $34 $28 3Q23 4Q23 1Q24 2Q24 3Q24 *Note: See “Appendix” for a reconciliation of non-GAAP measures to the most comparable GAAP measure
Slide 11: Operating Metrics
O02 Operating Metrics
Slide 12: Network volume
Network volume in $ millions $2,380 $2,419 $2,331 $2,351 $2,112 $1,947 $1,924 $1,957 $1,850 $1,786 $1,621 $1,650 $1,522 $1,088 $673 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Source: Pagaya internal data, as of 9/30/2024
Slide 13: Our ABS funding network
Our ABS funding network Growing ABS ABS Investor Base ABS Issuance Investors in Pagaya’s financing vehicles Pagaya ABS issuance across all products (in $billions) investor base Capital contributed in TTM 3Q’24 by investor type $6.6 $6.1 $6.1 125 120 $4.5 116 98 89 81 77 67 67 52 $1.9 47 47 50 42 36
Slide 14: Applications evaluated vs conversion rate %
Applications evaluated vs conversion rate % Applications per quarter (in $ billions) versus conversion rate of applications into network volume (%) $203B Applications evaluated in 3Q24 <1% Conversion rate of applications to issued loans in 3Q24 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 15: Credit performance: personal loan portfolio
Credit performance: personal loan portfolio Pagaya personal loan portfolio weighted average coupon (“WAC”) vs. 30-day+ DQs plus cumulative gross loss (“DQ”) Figures represent performance 3 months from issuance 25% 4% 20% 3% 15% WAC (%) DQ (%) 2% 10% 1% 5% 0% 0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 16: Credit performance: auto loan portfolio
Credit performance: auto loan portfolio Pagaya auto loan portfolio effective weighted average coupon (“EWAC”) vs. 60-day+ DQs plus cumulative gross loss (“DQ”) Figures represent performance 6 months from issuance 25% 16% 20% 12% 15% EWAC (%) DQ (%) 8% 10% 4% 5% 0% 0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q
Slide 17: Investments in loans and securities: composition
Investments in loans and securities: composition Composition by vintage and security type, as of September 30, 2024 Composition by Vintage Year (% of Total) Composition by Type of Security $ in millions Fair Value % of Total 15% Securitization Notes $278 30.1% 55% Securitization Certificates $640 69
Slide 18: Investments in loans and securities: change in fair value
Investments in loans and securities: change in fair value Change in fair value for three months ending September 30, 2024 Change in fair value Change in key unobservable inputs compared to June 30, 2024 compared to June 30, 2024 Three months ended Weighted Average Weighted Average September 30, 2024
Slide 19: Non-GAAP Reconciliations
03 Non-GAAP Reconciliations
Slide 20: Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income and EBITDA
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 Three Months Ended September 30, (in thousands) 2024 2023 Net Loss Attributable to Pagaya Technologies Ltd. ($67,476) ($21,752) Adjusted to exclude the following: Sha
Slide 21: Reconciliation of Non-GAAP Financial Measures: FRLPC
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (in thousands) Three Months Ended September 30, Fee revenue less production costs (FRLPC) 2024 2023 Revenue from fees $249,283 $201,447 Production costs ($148,965) ($
Slide 22: Reconciliation of Non-GAAP Financial Measures: Core operating expenses
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (in thousands) Three Months Ended September 30, 2024 2023 Operating expenses ($85,885) ($82,803) Adjusted to exclude the following: Share-based compensation $12,333 $
Slide 23: Summary Cap Table and Diluted Share Calculation
PAGAYA TECHNOLOGIES LTD. Summary Cap Table and Diluted Share Calculation Cap Table as of September 30, 2024 (Shares in millions) Shares Outstanding Preferred Shares 5 Class A ordinary shares 60 Class B ordinary shares 13 Share options with $6.40 weighted-average exercise price 3 Options to restricte