Pagaya Technologies Ltd - Class A
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −4.02%.
Did PGY Beat Earnings? Q4 2025 Results
Pagaya Technologies closed out 2025 with a strong fourth quarter, posting earnings per share of $0.80 against a consensus estimate of $0.77, a beat of 3.90%, while revenue climbed 21.4% year-over-year to $334.81 million. The headline story, however, was the company's full swing to GAAP profitability, with Q4 net income reaching $34.30 million compared to a loss of $237.92 million in the same period last year, a turnaround fueled by 16% fee revenue growth, sharply lower operating expenses, and normalized impairment charges. Core operating expenses as a percentage of fee revenue fell to 36% from 49% a year ago, reflecting meaningful operating leverage that underpinned the bottom-line improvement. Despite the clean quarter, shares fell sharply in pre-market trading after management issued cautious 2026 guidance, with full-year revenue projected at $1.40 billion to $1.58 billion and GAAP net income of $100 million to $150 million, as the company prioritizes credit quality over volume growth amid ongoing consumer uncertainty.
- Improved unit economics in Personal Loan and Auto verticals driving FRLPC growth
- Operating leverage with core operating expenses declining to 36% of FRLPC from 49% a year ago
- Revenue growth outpacing volume growth reflecting improved monetization per unit of volume
- Lower interest expense from refinancing through corporate notes issuance
- Normalized impairment levels versus prior year elevated charges
- Positive $9 million impact from non-recurring tax-related benefits and debt extinguishment in Q4
“Our fourth quarter and full-year results demonstrate, again, the benefits of years of work to position our company for long-term durable growth with a focus on increasing profitability, benefitting from our prior investments across the entire enterprise. Looking ahead, we will continue to leverage our platform and our disciplined risk framework, to further bridge the gap between Main Street and Wall Street.”
Pagaya Technologies CEO, on the earnings call
Forward Guidance & Outlook
For Q1 2026, Pagaya expects network volume of $2.5B to $2.7B, total revenue and other income of $315M to $335M, adjusted EBITDA of $80M to $95M, and GAAP net income of $15M to $35M. For full year 2026, the company expects network volume of $11.25B to $13B, total revenue and other income of $1.4B to $1.575B, adjusted EBITDA of $410M to $460M, and GAAP net income of $100M to $150M. FRLPC margin is expected to be between 4.0% and 5.0% for 2026, reverting lower within that range due to POS expansion, new partner contributions, and diversified funding mix. Management is prioritizing credit risk management over market share gains in the current environment, and risk reduction actions taken in late 2025 are assumed not to be reversed during 2026.
PGY YoY Financials
Figures from SEC filings and company reports. Not investment advice.