Pagaya Technologies (PGY) Q2 2024 earnings summary

Executive summary

• Achieved record total revenue, FRLPC, and adjusted EBITDA in Q2 2024, raising full-year outlook and exceeding guidance.

• Network volume reached $2.33 billion in Q2 2024, up 19% year-over-year, with strong growth in personal loans, POS, and auto segments.

• Adjusted EBITDA surged to $50 million, adjusted net income rose to $7.2 million, while net loss widened to $75 million due to non-cash and non-recurring expenses.

• Raised full-year 2024 outlook for revenues and EBITDA, reflecting strong first-half momentum and path to profitability in 2025.

• Announced acquisition of Theorem Technology, expected to close in Q4 2024, to enhance institutional asset management capabilities.

Financial highlights

• Total revenue and other income grew 28% year-over-year to $250 million in Q2 2024, with FRLPC up 49% to $97 million and margin improving to 4.2%.

• Adjusted EBITDA was $50 million, up from $17 million in Q2 2023; adjusted net income was $7 million.

• Operating income was $5 million; net loss attributable to shareholders was $75 million, mainly due to share-based compensation and fair value adjustments.

• Core operating expenses were 22% of total revenue, down from 28% year-over-year.

• Cash, cash equivalents, and restricted cash totaled $267.9 million as of June 30, 2024.

Outlook and guidance

• Q3 2024: network volume expected at $2.3–$2.5 billion, revenue at $250–$260 million, Adjusted EBITDA at $50–$60 million.

• Full year 2024: network volume outlook $9.25–$10.25 billion; revenue $975 million–$1.05 billion; Adjusted EBITDA $180–$210 million.

• FRLPC % target for 2H 2024 raised to 3.5%–4.5%, up from previous 3.0%–4.0%.

• On track to achieve positive net cash flow and GAAP net income in 2025.

• Management expects continued growth in network volume and revenue, supported by partner expansion.