Pagaya Technologies (PGY) Q4 2024 earnings summary

Executive summary

• Annual revenue for FY2024 exceeded $1.03 billion, up 27% year-over-year, with all key metrics at record levels and above prior guidance.

• Adjusted EBITDA reached $210 million, up 156% year-over-year, and adjusted net income was $67 million, up 304% year-over-year.

• Net loss attributable to shareholders for FY2024 was ($401 million), primarily due to significant non-cash fair value adjustments and credit-related impairments.

• The company expects to achieve GAAP net income profitability by Q2 2025, with FY2025 GAAP net income guidance between ($10 million) and $40 million.

• Over $28 billion in loans have been originated to 2 million people, with a business model focused on expanding credit access through lending partners.

Financial highlights

• Q4 network volume was $2.6 billion, up 9% year-over-year; FY2024 network volume reached $9.7 billion, up 17%.

• Q4 total revenue and other income was $279 million, up 28% year-over-year; Q4 fee revenue less production costs (FRLPC) was $117 million, up 55%.

• Adjusted EBITDA for Q4 was $64 million, up 88% year-over-year, with a margin of 23%.

• Adjusted net income was positive for the sixth consecutive quarter at $13 million, excluding share-based compensation and non-cash items.

• Core operating expenses for FY2024 were $226 million, up 6% year-over-year; Q4 core opex was $57 million, up 13%.

Outlook and guidance

• FY2025 guidance: network volume of $10.25–$11.75 billion, total revenue and other income of $1.15–$1.275 billion, and adjusted EBITDA of $265–$315 million.

• FY2025 GAAP net income expected between ($10 million) and $40 million, with profitability targeted in Q2 2025.

• Q1 2025 guidance: network volume $2.5–$2.7 billion, revenue $280–$295 million, adjusted EBITDA $65–$75 million, and GAAP net income between ($20 million) and breakeven.

• Management targets FRLPC % in the 3.5%–4.5% range for 2025.

• No material investments expected in 2025; profitability to be driven by operating efficiencies and lower fair value adjustments.