Pagaya Technologies Ltd. · NASDAQ:PGY
Pagaya Technologies — Q3 2022 Earnings Presentation
28 slides from Pagaya Technologies's earnings presentation, Nov 10, 2022
Slide 1: Pagaya Technologies Ltd. 3Q 2022 Results
Pagaya Technologies Ltd. 3Q 2022 Results November 10, 2022 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 3Q’22 highlights 2 Expansion of our infrastructure Today’s agenda 3 Financials and outlook 4 Q&A
Slide 4: 3Q operating highlights
3Q operating highlights Network expansion Consistently raising capital Strengthening our network infrastructure Ashok Vaswani,Sustained access to public and Penetrating new & existing Partners Growing application flow President private capital markets, despite continuously improves decisioning chall
Slide 5: 3Q financial highlights
3Q financial highlights Network volume and total revenue growth driven by expansion of existing partnerships and faster growth in newer products Network volume Total revenue and other income Adjusted EBITDA 1 $1.9B $204.0M ($5.2M) +26% Vs 3Q‘21 +49% Vs 3Q‘21 NA Adjusted EBITDA Margin 1. See Appendix
Slide 6: Pagaya makes life-changing financial products and services available to more people
Our mission Our mission Pagaya makes life-changing financial products and services available to more people
Slide 7: 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 8: Partners join Pagaya’s network because…
Partners join Pagaya’s network because… Incremental revenue growth Sophisticated technology & decreased acquisition costs Proprietary machine learning technology; no alternative data used More Satisfied Brand affinity leads to increased LTV Customers Seamless customer experience Partners improve fin
Slide 9: Power of Pagaya’s A.I. network
Power of Pagaya’s A.I. network Applications evaluated since 2019 77M Partners Training data points (in millions) 25+ 16M+ 80 70 60 Products Channels 50 5 50+ 40 30 20 Application volume processed LTM (as of 9/30/22) 10 $595B 0 1Q'19 3Q'19 1Q'20 3Q'20 1Q'21 3Q'21 1Q'22 3Q'22 Source: Pagaya Internal D
Slide 10: Building financial infrastructure to power the real economy
Building financial infrastructure to power the real economy ~$1 trillion application volume evaluated since inception* Cumulative applications Partner headquarters <1M apps Personal loan partner Between 1M and 2M apps Credit card/PoS partner > 2M apps Auto partner * Auto and personal loan applicatio
Slide 11: The engine behind the infrastructure
The engine behind the infrastructure Our products & partners Personal loan Auto loan Credit card PoS Housing Originators Dealerships Originators Retailers MLS Banks Banks Banks Banks Individual buyers Aggregators Aggregators Card Networks BNPL Providers Off-Market Decision ~1 trillion layer applicat
Slide 12: Additional ways participants benefit from Pagaya’s infrastructure
Additional ways participants benefit from Pagaya’s infrastructure Partners • Enhanced fraud monitoring and detection Partners Institutional enabled by Pagaya’s vantage point across (financial institutions) investors platforms • Operations and servicing improvement insights Investors • One-stop shop
Slide 13: Delivering results for partners and investors
Our mission Delivering results for partners and investors
Slide 14: Driving growth for partners through cycles
Driving growth for partners through cycles Pagaya enabled volume to Partners during COVID-19… … and continues to do so in the current environment Partner #1 Partner #2 2% 11% 12% 18% 33% 37% 98% 89% 88% 82% 67% 63% 1Q'20 COVID-19 shock (3Q'20) 2021 1Q'22 2Q'22 3Q'22 Partner Origination Pagaya-enable
Slide 15: Consistent value creation over time
Consistent value creation over time Delivering growth for partners and investors while dynamically adapting to changing market conditions 5.0% +120% 90 application Covid-19 shock Improved credit environment Interest rate shock flow growth 80 9M’22 vs. prior year Cumulative applications (m) 4.0% 70 C
Slide 16: Auto and point-of-sale
Our mission The next phase of expansion Auto and point-of-sale
Slide 17: Auto
Auto Rapid growth in Auto since launching in 2019 42% more application flow in 9M’22 than FY’21 Pagaya’s solution is connected to 10+ auto lenders in thousands of dealerships across 48 states 14 $80 $70 12 Franchise Dealership Penetration (in 000’s) ~17,000 12,000+ $60 10 Application Volume ($B) $50
Slide 18: Auto credit performance vs weighted market benchmark
Auto credit performance vs weighted market benchmark Auto loans 10 months on book: 30-day+ delinquency rates(1) Each month represents the origination period of a given cohort 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 89% 87% Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-2182% 89% Pagaya We
Slide 19: PoS
PoS Powering our network with new partners, channels and consumer insights New strategic partner onboarded in 3Q ✓ Significant market opportunity - sales at point-of-purchase represent over $50B in annual volume(1) U.S. 30 ✓ Deliver a frictionless experience for more PoS customers Fastest growing of
Slide 20: Financials & outlook
Our mission Financials & outlook
Slide 21: Driving strong network volume and revenue growth to date
Driving strong network volume and revenue growth to date Network Volume ($B) Total Revenue & Other Income ($M) $556 $5.5 $475 $4.9 3x 5x Growth Growth $1.6 $3.3 $320 9M’21 $99 9M’21 89% 2020 2021 2022 YTD 2020 2021 2022 YTD
Slide 22: Upfront funding model
Upfront funding model Cumulative funding raised in financing vehicles since 2020 ($B) ~$13B Positioning Pagaya to deliver consistent growth to partners & investors through cycles $14 $12 Step 1 Pagaya raises capital via financing vehicles, $10 locking in cash and cost of funding ahead of ~$2B in sou
Slide 23: Raised ~$2.1B in capital in 3Q across multiple products
Raised ~$2.1B in capital in 3Q across multiple products Personal loan / Single-family Auto loan credit lines rental Capital raised ~$1.4B ~$300M ~$400M Funding Sources Public capital markets ✓ ✓ ✓ Private capital markets ✓ ✓ ✓ Bank financing ✓ ✓ ✓ • Personal loan ABS deal upsized by • Inaugural rate
Slide 24: Balance sheet and risk management
Balance sheet and risk management Balance-sheet light Strong liquidity position Limited direct credit exposure • Cash of $367M: 35% of total assets • $290M net-cash proceeds from PIPE in June • ~$220M net economic interest from risk 2022 bolstered cash available to facilitate retention holdings • In
Slide 25: 3Q’22 financial highlights
3Q’22 financial highlights ($ in millions) 3Q’22 2Q’22(2) ∆ 3Q’21 ∆ Key highlights Network $1,924 $1,947 (1%) $1,522 26% Driven by faster growth in newer products Volume Revenue from $186 $163 14% $128 45% Take rate of 9.6% fees Revenue from fees less Slight decrease QoQ as a result of lower financi
Slide 26: Q&A
Our mission Q&A
Slide 27: Thank You
Our mission Thank You
Slide 28: Reconciliation of Non-GAAP Financial Measures
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 (In thousands) Three Months Ended Sept. 30, Nine Months Ended Sept. 30, 2022 2021 2022 2021 Net Loss Attributable to Pagaya Technologies Ltd. ($74,789) ($28,