Pagaya Technologies Ltd. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported GAAP net income of $50 million for Q3 2026, an increase of $27 million year-over-year, exceeding the prior outlook of $42 million to $52 million.
• Total revenue and other income reached $390 million in Q3 2026, up 12% year-over-year, beating the $370 million to $390 million guidance range.
• Adjusted EBITDA was $130 million in Q3 2026, a 22% year-over-year increase, meeting the upper end of the $120 million to $130 million guidance.
• Operating income hit a record $113 million in Q3 2026, up 41% year-over-year, driven by network volume growth and stable operating expenses.
• Fee Revenue Less Production Costs (FRLPC) totaled $146 million in Q3 2026, up 5% year-over-year.
• FRLPC as a percentage of network volume contracted 91 basis points year-over-year to 4.1% in Q3 2026, attributed to the short-term impact of higher benchmark rates.
• For the nine months ended September 30, 2026, GAAP net income was $119.7 million compared to $47.1 million in the prior year period.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $347.9 million, up from $272.9 million in the prior year period.
• Cash and cash equivalents stood at $247.1 million as of September 30, 2026, compared to $235.3 million at the end of 2025.
• Total liabilities were $1.1 billion as of September 30, 2026, including $472.3 million in long-term debt and $314.3 million in secured borrowings.

Guidance and Future Outlook:

• Raised full-year GAAP net income guidance to a range of $162 million to $182 million.
• Provided Q4 2026 guidance for network volume between $2.961 billion and $3.261 billion.
• Q4 2026 guidance for total revenue and other income is set between $355 million and $405 million.
• Q4 2026 guidance for adjusted EBITDA is between $117 million and $137 million.
• Q4 2026 guidance for GAAP net income is between $42 million and $62 million.
• Full-year 2026 guidance for network volume is between $12.725 billion and $13.025 billion.
• Full-year 2026 guidance for total revenue and other income is between $1.45 billion and $1.5 billion.
• Full-year 2026 guidance for adjusted EBITDA is between $465 million and $485 million.

Business Segments and Product Lines:

• Network volume reached a record $3.6 billion in Q3 2026, growing 29% year-over-year.
• Growth in network volume was driven by the Auto and Personal Loan verticals.
• Onboarded Citizens Financial Group and First National Bank of Omaha for Personal Loans and Point-of-Sale services.
• The total number of partners onboarded in the last 12 months reached 7.
• Closed over $2 billion of longer-duration committed capital, including an Auto Forward Flow, a Personal Loan Variable Funding Note (VFN) warehouse, and a revolving Personal Loan securitization.
• Revenue growth was driven by increases in fee revenue and interest income.

Market and Competitive Landscape:

• Management described the company's network as becoming "essential infrastructure for consumer lending."
• The company highlighted its strategic value to bank lenders through recent partner onboarding.
• The business is scaling with operating leverage while maintaining a focus on prudent underwriting.
• The company noted the impact of higher benchmark rates on FRLPC percentages but expects to offset these impacts with higher APRs.

Risks and Challenges:

• Risks include adverse global economic conditions, catastrophic events, and developments impacting the banking and financial services industries.
• The company faces concentration risk due to reliance on a limited number of partners for network volume and revenue.
• Regulatory risks involve the regulation of AI technologies by the FTC, CFPB, and other agencies, as well as compliance with consumer protection and fair lending laws.
• Operational risks include reliance on third-party vendors, the company's AI technology, and key employees including founders.
• Specific risks relate to single-family rental operations, including market volatility, lease renewal rates, and HOA regulations.
• Geopolitical risks include ongoing conflicts involving Russia, Ukraine, Israel, the United States, and Iran, as well as regional hostilities affecting operations in Israel.
• Risks associated with being a public company include limited management experience and increased costs.

Management Commentary and Tone:

• CEO and Co-Founder Gal Krubiner stated, "Our momentum is building on itself: more partners, more products, and more applications feeding a network that is becoming essential infrastructure for consumer lending."
• Management expressed confidence in the company's ability to withstand more difficult interest rate environments and maintain cost discipline.
• The tone reflects optimism regarding the company's growth flywheel in the auto sector and the scaling of the Point-of-Sale business.

Other Key Points:

• The company will hold a webcast and conference call on October 29, 2026, at 8:30 a.m. Eastern Time.
• A live webcast and replay will be available on the Investor Relations section of the company's website (investor.pagaya.com).
• Pagaya has offices in New York and Tel Aviv.
• The company utilizes non-GAAP financial measures including FRLPC, Adjusted EBITDA, and Core Operating Expenses to supplement GAAP results.
• The company cannot reconcile expected Adjusted EBITDA to expected net income or expected FRLPC % to expected operating income without unreasonable effort due to items out of the company's control.
• The company acquired Theorem Technology, Inc. in the prior period (indicated by acquisition cash flow in 2025).