Pagaya Technologies Ltd. · NASDAQ:PGY
Pagaya Technologies — Q4 2024 Earnings Presentation
26 slides from Pagaya Technologies's earnings presentation, Feb 13, 2025
Slide 1: 4Q'24 Earnings Supplement
PA G AYA T E C H N O L O G I E S LT D . 4Q’24 Earnings Supplement February 13, 2025
Slide 2: Forward Looking Statements and Non-GAAP Information
Forward Looking Statements and Non-GAAP Information Certain comments made in this presentation may be characterized as forward looking under However, non-GAAP financial measures have limitations in their usefulness to investors because the Private Securities Litigation Reform Act of 1995. Forward lo
Slide 3: Contents
01 Financial Metrics 02 Contents Operating Metrics 03 Non-GAAP Reconciliations
Slide 4: Financial Metrics
01 Financial Metrics
Slide 5: 2024 financial highlights
2024 financial highlights ($ in millions) FY2024 FY2023 %∆ 4Q’2024 4Q’2023 %∆ Network Volume $9,705 $8,299 17% $2,604 $2,380 9% Total revenue & other income $1,032 $812 27% $279 $218 28% Revenue from fees $1,005 $773 30% $276 $210 31% Production costs $598 $509 17% $158 $134 18% Fee revenue less pro
Slide 6: Key financial metrics
Key financial metrics $ in millions; % in YoY growth Total Revenue FRLPC Adjusted EBITDA $279 $64 $117 28% 55% 88% $76 $218 $34 4Q'23 4Q'24 4Q'23 4Q'24 4Q'23 4Q'24 Note: “Fee revenue less production costs (FRLPC)” and “Adjusted EBITDA” are Non-GAAP metrics; see “Appendix” for a reconciliation of non
Slide 7: Evolution of FRLPC
Evolution of FRLPC Components of FRLPC as a % of network volume (FRLPC %) 10.4% 10.6% 10.6% 9.8% 8.8% 6.2% 6.3% 6.1% 6.0% Targeting 5.6% 3.5%-4.5% 4.5% FRLPC% in 2025 4.2% 4.3% 3.8% 3.2% 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Fee revenue % of network volume Production costs % of network volume FRLPC % “FRLPC
Slide 8: 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 (FRLPC %) – breakdown by product 4.5% 4.3% 4.2% 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% 71% 99% 75% 68% 57% 42% 40
Slide 9: Evolution of FRLPC by line item
Evolution of FRLPC by line item $ in millions 4Q’23 1Q’24 2Q’24 3Q’24 4Q’24 AI integration $184 $206 $216 $221 $244 Contract $20 $22 $21 $20 $26 Capital markets $7 $10 $6 $8 $6 Total Fee Revenue $210 $237 $243 $249 $276 Production costs ($134) ($145) ($146) ($149) ($158) Total FRLPC $76 $92 $97 $100
Slide 10: Core operating expenses
Core operating expenses $ in millions Total operating expenses excluding share-based compensation expense, one-time expenses, and depreciation $61 $57 $55 $53 $51 67% 66% 57% 52% 49% 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Core Opex Core Opex as a % of FRLPC “Core Opex” is a Non-GAAP metric; see “Appendix” fo
Slide 11: Adjusted EBITDA
Adjusted EBITDA $ in millions $64 $56 $50 $40 $34 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24
Slide 12: Operating Metrics
O02 Operating Metrics
Slide 13: Network volume
Network volume $ in millions $2,604 $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 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Source: Pagaya internal data, as of 12/31/2024.
Slide 14: 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 2024 by investor type $6.6 $6.1 $6.2 132 125 120 116 98 $4.5 89 81 77 67 67 52 47 47 50 42 36 $1.9 2
Slide 15: Applications evaluated vs conversion rate %
Applications evaluated vs conversion rate % Applications per quarter ($ in billions) versus conversion rate of applications into network volume (%) $197B Applications evaluated in 4Q24 <1% Conversion rate of applications to issued loans in 4Q24 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2
Slide 16: Credit performance: personal loan portfolio
Credit performance: personal loan portfolio Pagaya personal loan portfolio weighted average coupon (“WAC”) vs. 30-day+ DQs plus cumulative gross loss (“DQ”) Figures represent performance 3 months from issuance 25% 4% 20% 3% 15% WAC (%) DQ (%) 2% 10% 1% 5% 0% 0% 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q
Slide 17: Credit performance: auto loan portfolio
Credit performance: auto loan portfolio Pagaya auto loan portfolio effective weighted average coupon (“EWAC”) vs. 60-day+ DQs plus cumulative gross loss (“DQ”) Figures represent performance 6 months from issuance 25% 16% 20% 12% 15% EWAC (%) DQ (%) 8% 10% 4% 5% 0% 0% 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q
Slide 18: Investments in loans and securities – composition
Investments in loans and securities – composition Composition by vintage and security type, as of December 31, 2024 Composition by vintage year Composition by type of security ($ in millions, % of total) $ in millions Fair Value % of Total $93, 12% Securitization Notes $238 31.1% $151, 20% Securitiz
Slide 19: Investments in loans and securities
Investments in loans and securities Change in investments in loans and securities Key unobservable inputs compared to September 30, 2024 compared to September 30, 2024 Three months ended Weighted Average Weighted Average ($ in thousands) December 31, 2024 December 31, 2024 September 30, 2024 Balance
Slide 20: Fair value adjustments
Fair value adjustments 4Q’24 Fair value adjustments* by vintage year, 2024 Impairment composition, net of Noncontrolling Interest net of Noncontrolling Interest ($ in millions, % of total) $ in millions 1Q’24 2Q’24 3Q’24 4Q’24 $12, 7% Credit-related fair value adjustments ($11) ($44) ($70) ($229) Wh
Slide 21: Investments in loans & securities – sensitivity analysis, stress scenarios
Investments in loans & securities – sensitivity analysis, stress scenarios Full Year 2025 GAAP Net Income guidance reflects the implied fair value adjustments from Scenario A Illustrative scenarios Base Case ($ in millions) Scenario A Scenario B (as of 12/31/2024) Change in expected cash flows – man
Slide 22: Non-GAAP Reconciliations
03 Non-GAAP Reconciliations
Slide 23: Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS AND YEAR ENDED DECEMBER 31, 2024 AND 2023 (in thousands) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Net Loss Attributable to Pagaya Technologies Ltd. ($237,922) ($14,4
Slide 24: Reconciliation of Non-GAAP Financial Measures: FRLPC
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS AND YEAR ENDED DECEMBER 31, 2024 AND 2023 (in thousands, unless otherwise noted) Three Months Ended December 31, Year Ended December 31, Fee revenue less production costs (FRLPC) 2024 2023 2024 2023 R
Slide 25: Reconciliation of Non-GAAP Financial Measures: Core operating expenses
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS AND YEAR ENDED DECEMBER 31, 2024 AND 2023 (in thousands) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Operating expenses ($89,451) ($72,910) ($367,756) ($327,507) Adjust
Slide 26: Summary Cap Table and Diluted Share Calculation
PAGAYA TECHNOLOGIES LTD. Summary Cap Table and Diluted Share Calculation Cap Table as of December 31, 2024 (Shares in millions) Shares Outstanding Preferred Shares 5 Exchangeable notes 11 Class A ordinary shares 61 Class B ordinary shares 13 Share options with $7.70 weighted-average exercise price 4