Slide 1: 4Q23 Earnings Supplement
PA G AYA T E C H N O L O G I E S LT D . 4Q23 Earnings Supplement February 21st, 2024
Slide 2: Contents
01 Financial Metrics 02 Contents Operating Metrics 03 Non-GAAP Reconciliations
Slide 3: Financial Metrics
01 Financial Metrics
Slide 4: 2023 financial highlights
2023 financial highlights ($ millions) FY2023 FY 2022 %∆ Q4 2023 Q4 2022 %∆ Network Volume $8,299 $7,307 14% $2,380 $1,786 33% Total revenue & other income $812 $749 8% $218 $193 13% Revenue from fees $773 $685 13% $210 $178 18% Production costs $509 $451 13% $134 $125 8% Revenue from fees less $264
Slide 5: Key financial metrics
Key financial metrics In $ millions; % in YoY growth Total Revenue FRLPC Adjusted EBITDA $230 $80 $40 $76 $34 $218 $35 $220 $75 13% $30 $210 $70 $25 42% $20 $200 $65 $193 $15 +$43 $190 $60 $10 $180 $55 $53 $5 $0 $170 $50 ($5) $160 $45 ($10) ($9) $150 $40 ($15) 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23
Slide 6: Evolution of FRLPC
Evolution of FRLPC Components of FRLPC as a % of network volume 12.0% 10.0% 10.0% 9.5% 9.5% 9.5% 8.8% 8.0% 7.0% 6.8% 6.2% 6.1% 6.0% 5.6% 3.4% 4.0% 3.0% 2.7% 3.3% 3.2% 3 -4 % FRLPC target range 2.0% 0.0% 4Q22 1Q23 2Q23 3Q23 4Q23 Fee revenue % of network volume (take rate) Production costs % of networ
Slide 7: Evolution of FRLPC by product
Evolution of FRLPC by product % contribution from lending partner and investor products Fee revenue less production costs as a % of network volume – breakdown by product 4.0% 160% 4.0% 140% 3.5% 3.3% 3.4% 3.0% 3.0% 120% 2.9% 3.2% 3.0% 2.7% 100% 2.5% 1% 25% 32% 43% 80% 2.0% 58% 60% 63% 1.5% 60% 100%
Slide 8: Evolution of FRLPC by line item
Evolution of FRLPC by line item AI integration, contract, and capital markets fees shown gross ($ in millions) 4Q22 1Q23 2Q23 3Q23 4Q23 AI integration $144 $148 $159 $174 $184 Contract $26 $21 $18 $17 $20 Capital markets $9 $6 $9 $10 $7 Total Fee Revenue $178 $175 $186 $201 $210 Production costs ($1
Slide 9: Core operating expenses
Core operating expenses In $ millions Total operating expenses excluding share-based compensation expense, one-time expenses, and depreciation $62 $57 $55 $52 $51 32% 30% 28% 25% 23% 4Q22 1Q23 2Q23 3Q23 4Q23 Core Opex Core Opex as a % of Revenue
Slide 10: Adjusted EBITDA
Adjusted EBITDA In $ millions $40 $34 $35 $30 $28 $25 $20 $17 $15 $10 $5 $2 — ($5) ($10) ($9) ($15) 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 11: Operating Metrics
O02 Operating Metrics
Slide 12: Operating highlights
Operating highlights $ application volume from our Network volume Growing ABS lending partners (in $ millions) investor base (in $ billions) 33% $2,500 $2,380 $185 $183 120 7% $180 98 $2,000 100 $1,786 89 $175 81 77 $170 80 $1,500 67 67 $170 60 52 $165 47 47 50 $1,000 42 40 36 $160 22 $500 $155 20 5
Slide 13: Network volume
Network volume in $ millions $2,380 $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 Source: Pagaya internal data
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 (%) $225 2.5% $183B Applications evaluated in $175 4Q23 2.0% $125 1.5% $75 <1% Conversion rate of applications to1.0% $25 issued loans in 4Q23 1Q21 2Q21 3Q2
Slide 15: Our ABS funding network
Our ABS funding network ABS Issuance ABS Investor Base Investors in Pagaya’s financing vehicles Pagaya ABS issuance across all products (in $billions) Capital contributed in FY23 by investor type $6.6 $6.1 $4.5 $1.9 Asset Manager Sovereign Wealth Fund Bank / Depository Hedge Fund 2020 2021 2022 2023
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% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q2
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% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q
Slide 18: Non-GAAP Reconciliations
03 Non-GAAP Reconciliations
Slide 19: Reconciliation of Non-GAAP Financial Measures
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) FOR THREE MONTHS AND YEAR ENDED SEPTEMBER 30, 2023 AND 2022 (In thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net Loss Attributable to Pagaya Technologies Ltd. ($14,418) ($33,9
Slide 20: 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, 2023 AND 2022 (in thousands) Three Months Ended December 31, Year Ended December 31, Fee revenue less production costs (FRLPC) 2023 2022 2023 2022 Revenue from fees $210,42