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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Pagaya Technologies Ltd | NASDAQ:PGY | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.77 | 11.52% | 17.14 | 17.11 | 17.15 | 18.61 | 17.01 | 17.33 | 7,173,879 | 18:58:38 |
From Feb 2024 to Feb 2025
Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”, the “Company” or “we”), a global technology company delivering artificial intelligence infrastructure for the financial ecosystem, today announced financial results for the quarter ending March 31, 2024.
For additional information, view Pagaya's first quarter 2024 letter to shareholders here.
“Disciplined execution drove another record quarter across our key metrics. We began onboarding a bank partner in our POS vertical, enhanced our unit economics and strengthened our funding capabilities,” said Gal Krubiner, co-founder and CEO of Pagaya Technologies. “These results reflect the strength of our business and our unwavering commitment to deliver more financial opportunity for U.S. consumers.”
First Quarter 2024 Highlights
All comparisons are made versus the same period in 2023 and on a year-over-year basis unless otherwise stated.
Second Quarter 2024 Outlook
2Q24
Network Volume
Expected to be between $2.2 billion and $2.4 billion
Total Revenue and Other Income
Expected to be between $235 million and $245 million
Adjusted EBITDA
Expected to be between $40 million and $45 million
Full Year 2024 Outlook
FY24
Network Volume
Expected to be between $9.0 billion and $10.5 billion
Total Revenue and Other Income
Expected to be between $925 million and $1,050 million
Adjusted EBITDA
Expected to be between $150 million and $190 million
Webcast
The Company will hold a webcast and conference call today, May 9, 2024 at 8:30 a.m. Eastern Time. A live webcast of the call will be available via the Investor Relations section of the Company’s website at investor.pagaya.com. To listen to the live webcast, please go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly before the call, the accompanying materials will be made available on the Company’s website. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.
The conference call can also be accessed by dialing 1-844-826-3035 or 1-412-317-5195. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 10187845. The telephone replay will be available starting shortly after the call until Thursday, May 23, 2024. A replay will also be available on the Investor Relations website following the call.
About Pagaya Technologies
Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide. By using machine learning, a vast data network and an AI-driven approach, Pagaya provides comprehensive consumer credit and residential real estate solutions for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. Pagaya has offices in New York and Tel Aviv. For more information, visit pagaya.com.
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. These forward-looking statements generally are identified by the words “anticipate,” “believe,” “continue,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “future,” “strategy,” “might,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. All statements other than statements of historical fact are forward-looking statements, including statements regarding: The Company’s strategy and future operations, including the Company’s ability to continue to deliver consistent results for its lending partners and investors; the Company’s ability to continue to drive sustainable gains in profitability; the Company’s ability to achieve continued momentum in its business; the Company’s ability to achieve positive net cash flow by 2025; and the Company’s financial outlook for Network Volume, Total Revenue and Other Income and Adjusted EBITDA for the full year 2024. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and assumptions include factors relating to: the Company's ability to attract new partners and to retain and grow its relationships with existing partners to support the underlying investment needs for its securitizations and funds products; the need to maintain a consistently high level of trust in its brand; the concentration of a large percentage of its investment revenue with a small number of partners and platforms; its ability to sustain its revenue growth rate or the growth rate of its related key operating metrics; its ability to improve, operate and implement its technology, its existing funding arrangements for the Company and its affiliates that may not be renewed or replaced or its existing funding sources that may be unwilling or unable to provide funding to it on terms acceptable to it, or at all; the performance of loans facilitated through its model; changes in market interest rates; its securitizations, warehouse credit facility agreements; the impact on its business of general economic conditions, including, but not limited to rising interest rates, inflation, supply chain disruptions, exchange rate fluctuations and labor shortages; the effect of and uncertainties related to public health crises such as the COVID-19 pandemic (including any government responses thereto); geopolitical conflicts such as the war in Israel; its ability to realize the potential benefits of past or future acquisitions; anticipated benefits and savings from our recently announced reduction in workforce; changes in the political, legal and regulatory framework for AI technology, machine learning, financial institutions and consumer protection; the ability to maintain the listing of our securities on Nasdaq; the financial performance of its partners, and fluctuations in the U.S. consumer credit and housing market; its ability to grow effectively through strategic alliances; seasonal fluctuations in our revenue as a result of consumer spending and saving patterns; pending and future litigation, regulatory actions and/or compliance issues including with respect to the merger with EJF Acquisition Corp.; and other risks that are described in and the Company’s Form 10-K filed on April 25, 2024 and subsequent filings with the U.S. Securities and Exchange Commission. These forward-looking statements reflect the Company's views with respect to future events as of the date hereof and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. The forward-looking statements are made as of the date hereof, reflect the Company’s current beliefs and are based on information currently available as of the date they are made, and the Company assumes no obligation and does not intend to update these forward-looking statements.
Financial Information; Non-GAAP Financial Measures
Some of the unaudited financial information and data contained in this press release and Form 8-K, such as Fee Revenue Less Production Costs (“FRLPC”), FRLPC Margin, Adjusted EBITDA and Adjusted Net Income (Loss), have not been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). To supplement the unaudited consolidated financial statements prepared and presented in accordance with U.S. GAAP, management uses the non-GAAP financial measures FRLPC, FRLPC Margin, Adjusted Net Income (Loss) and Adjusted EBITDA to provide investors with additional information about our financial performance and to enhance the overall understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our business. Management believes these non-GAAP measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our unaudited consolidated financial statements prepared and presented in accordance with U.S. GAAP. To address these limitations, management provides a reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to net income (loss) attributable to Pagaya’s shareholders and a calculation of FRLPC and FRLPC Margin. Management encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Adjusted Net Income (Loss) and Adjusted EBITDA in conjunction with its respective related GAAP financial measures.
Non-GAAP financial measures include the following items:
Fee Revenue Less Production Costs (“FRLPC”) is defined as revenue from fees less production costs. FRLPC Margin is defined as FRLPC divided by Network Volume.
Adjusted Net Income (Loss) is defined as net income (loss) attributable to Pagaya Technologies Ltd.’s shareholders excluding share-based compensation expense, change in fair value of warrant liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, and non-recurring expenses associated with mergers and acquisitions.
Adjusted EBITDA is defined as net income (loss) attributable to Pagaya Technologies Ltd.’s shareholders excluding share-based compensation expense, change in fair value of warrant liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, non-recurring expenses associated with mergers and acquisitions, interest expense, depreciation expense, and income tax expense (benefit).
These items are excluded from our Adjusted Net Income (Loss) and Adjusted EBITDA measures because they are noncash in nature, or because the amount and timing of these items is unpredictable, is not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful.
We believe FRLPC, FRLPC Margin, Adjusted Net Income (Loss) and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, we have included FRLPC, FRLPC Margin, Adjusted Net Income (Loss) and Adjusted EBITDA because these are key measurements used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. However, this non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. The tables below provide reconciliations of Adjusted EBITDA to Net Loss Attributable to Pagaya Technologies Ltd., its most directly comparable U.S. GAAP amount.
In addition, Pagaya provides outlook for the fiscal year 2024 on a non-GAAP basis. The Company cannot reconcile its expected Adjusted EBITDA to expected Net Loss Attributable to Pagaya under “Full-Year 2024 Outlook” without unreasonable effort because certain items that impact net income (loss) and other reconciling items are out of the Company's control and/or cannot be reasonably predicted at this time, which unavailable information could have a significant impact on the Company’s U.S. GAAP financial results.
PAGAYA TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
Three Months Ended March 31,
2024
2023
Revenue
Revenue from fees
$
237,004
$
175,254
Other Income
Interest income
7,744
10,397
Investment income (loss)
528
987
Total Revenue and Other Income
245,276
186,638
Production costs
144,881
125,057
Technology, data and product development (1)
19,380
21,131
Sales and marketing (1)
10,257
14,300
General and administrative (1)
63,068
51,126
Total Costs and Operating Expenses
237,586
211,614
Operating Income (Loss)
7,690
(24,976
)
Other income (expense), net
(34,349
)
(66,980
)
Income (Loss) Before Income Taxes
(26,659
)
(91,956
)
Income tax expense (benefit)
5,003
6,667
Net Income (Loss) Including Noncontrolling Interests
(31,662
)
(98,623
)
Less: Net income (loss) attributable to noncontrolling interests
(10,439
)
(37,652
)
Net Income (Loss) Attributable to Pagaya Technologies Ltd.
$
(21,223
)
$
(60,971
)
Per share data:
Net loss per share:
Basic and Diluted (3)
$
(0.33
)
$
(1.03
)
Non-GAAP adjusted net income (loss) (2)
$
13,331
$
(11,015
)
Non-GAAP adjusted net income (loss) per share:
Basic (3)
$
0.21
$
(0.19
)
Diluted (3)
$
0.20
$
(0.19
)
Weighted average shares outstanding:
Basic (3)
64,504,458
59,255,864
Diluted (3)
65,890,518
59,972,806
(1)
The following table sets forth share-based compensation for the periods indicated below:
Three Months Ended March 31,
2024
2023
Technology, data and product development
$
2,905
$
2,458
Selling and marketing
2,852
2,754
General and administrative
9,718
11,155
Total
$
15,475
$
16,367
(2)
See “Reconciliation of Non-GAAP Financial Measures.”
(3)
Share amounts have been retroactively adjusted to reflect the 1-for-12 reverse share split effected on March 8, 2024.
PAGAYA TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(In thousands)
March 31,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
274,495
$
186,478
Restricted cash
16,872
16,874
Fees and other receivables
87,370
79,526
Investments in loans and securities
1,298
2,490
Prepaid expenses and other current assets
19,059
18,034
Total current assets
399,094
303,402
Restricted cash
18,681
19,189
Fees and other receivables
35,230
34,181
Investments in loans and securities
892,853
714,303
Equity method and other investments
26,911
26,383
Right-of-use assets
53,631
55,729
Property and equipment, net
42,757
41,557
Goodwill
10,945
10,945
Intangible assets
1,913
2,550
Prepaid expenses and other assets
1,172
137
Total non-current assets
1,084,093
904,974
Total Assets
$
1,483,187
$
1,208,376
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
3,136
$
1,286
Accrued expenses and other liabilities
36,712
28,562
Current maturities of operating lease liabilities
6,663
6,931
Current portion of long-term debt
12,750
—
Secured borrowing
108,054
37,685
Income taxes payable
2,069
461
Total current liabilities
169,384
74,925
Non-current liabilities:
Warrant liability
1,342
3,242
Revolving credit facility
—
90,000
Long-term debt
222,298
—
Secured borrowing
223,102
234,028
Operating lease liabilities
41,838
43,940
Long-term tax liabilities
24,955
22,135
Deferred tax liabilities, net
107
107
Total non-current liabilities
513,642
393,452
Total Liabilities
683,026
468,377
Redeemable convertible preferred shares
74,250
74,250
Shareholders’ equity:
Additional paid-in capital
1,214,969
1,101,914
Accumulated other comprehensive income (loss)
(24,279
)
444
Accumulated deficit
(563,860
)
(542,637
)
Total Pagaya Technologies Ltd. shareholders’ equity
626,830
559,721
Noncontrolling interests
99,081
106,028
Total shareholders’ equity
725,911
665,749
Total Liabilities, Redeemable Convertible Preferred Shares, and Shareholders’ Equity
$
1,483,187
$
1,208,376
PAGAYA TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three Months Ended March 31,
2024
2023
Cash flows from operating activities
Net loss including noncontrolling interests
$
(31,662
)
$
(98,623
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity method income (loss)
(528
)
(987
)
Depreciation and amortization
6,317
3,516
Share-based compensation
15,475
16,367
Fair value adjustment to warrant liability
(1,900
)
(190
)
Impairment loss on investments in loans and securities
26,851
68,347
Write-off of capitalized software
408
1,549
Other non-cash items
739
—
Change in operating assets and liabilities:
Fees and other receivables
(8,875
)
(345
)
Deferred tax liabilities, net
—
(45
)
Prepaid expenses and other assets
(1,936
)
3,528
Right-of-use assets
1,879
2,197
Accounts payable
1,885
999
Accrued expenses and other liabilities
8,298
(22,573
)
Operating lease liability
(1,524
)
(3,530
)
Income tax receivable / payable
5,043
6,117
Net cash provided by (used in) operating activities
20,470
(23,673
)
Cash flows from investing activities
Proceeds from the sale/maturity/prepayment of:
Investments in loans and securities
35,897
25,985
Cash and restricted cash acquired from Darwin Homes, Inc.
—
1,608
Payments for the purchase of:
Investments in loans and securities
(261,638
)
(121,732
)
Property and equipment
(5,145
)
(5,526
)
Net cash used in investing activities
(230,886
)
(99,665
)
Cash flows from financing activities
Proceeds from sale of ordinary shares, net of issuance costs
89,938
—
Proceeds from long-term debt
244,725
—
Proceeds from secured borrowing
97,448
82,031
Proceeds received from noncontrolling interests
2,815
10,128
Proceeds from revolving credit facility
44,000
100,000
Proceeds from exercise of stock options
161
484
Proceeds from issuance of ordinary shares from the Equity Financing Purchase Agreement
5,338
—
Distributions made to noncontrolling interests
(2,515
)
(12,194
)
Payments made to revolving credit facility
(134,000
)
(20,000
)
Payments made to secured borrowing
(38,005
)
(57,425
)
Payments made to long-term debt
(3,188
)
—
Long-term debt issuance costs
(7,974
)
—
Net cash provided by financing activities
298,743
103,024
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(820
)
—
Net increase (decrease) in cash, cash equivalents and restricted cash
87,507
(20,314
)
Cash, cash equivalents and restricted cash, beginning of period
222,541
337,076
Cash, cash equivalents and restricted cash, end of period
$
310,048
$
316,762
PAGAYA TECHNOLOGIES LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) ($ in thousands, unless otherwise noted)
Three Months Ended March 31,
2024
2023
Net Loss Attributable to Pagaya Technologies Ltd.
$
(21,223
)
$
(60,971
)
Adjusted to exclude the following:
Share-based compensation
15,475
16,367
Fair value adjustment to warrant liability
(1,900
)
(190
)
Impairment loss on certain investments
19,483
26,412
Write-off of capitalized software
—
1,524
Restructuring expenses
820
3,820
Transaction-related expenses
400
—
Non-recurring expenses
276
2,023
Adjusted Net Income (Loss)
$
13,331
$
(11,015
)
Adjusted to exclude the following:
Interest expenses
15,164
2,880
Income tax expense (benefit)
5,003
6,667
Depreciation and amortization
6,317
3,516
Adjusted EBITDA
$
39,815
$
2,048
Three Months Ended March 31,
2024
2023
Fee Revenue Less Production Costs (FRLPC):
Revenue from fees
$
237,004
$
175,254
Production costs
144,881
125,057
Fee Revenue Less Production Costs (FRLPC)
$
92,123
$
50,197
Fee Revenue Less Production Costs Margin (FRLPC Margin):
Fee Revenue Less Production Costs (FRLPC)
$
92,123
$
50,197
Network Volume (in millions)
2,419
1,850
Fee Revenue Less Production Costs Margin (FRLPC Margin)
3.8
%
2.7
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508751651/en/
Investors & Analysts Jency John Head of Investor Relations IR@pagaya.com
Media & Press Emily Passer Head of PR & External Communications Press@pagaya.com
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