Pagaya Technologies Ltd - Class A (NASDAQ:PGY) Surpasses Earnings Estimates, Raises Full-Year Guidance
Earnings Overview
PAGAYA TECHNOLOGIES LTD -A (NASDAQ:PGY) reported financial results for the third quarter ended 2025, delivering a significant outperformance against analyst expectations. The fintech company, which develops AI infrastructure for the financial ecosystem, posted record results across several key metrics, prompting a positive reassessment of its full-year potential.
The company reported total revenue and other income of $350.2 million for the quarter, comfortably exceeding the analyst consensus estimate of $342.3 million. This represents a 36% increase compared to the same period last year. More strikingly, Pagaya's non-GAAP earnings per share (EPS) came in at $1.02, dramatically outpacing the analyst estimate of $0.18.
Market Reaction
The market responded favorably to the strong earnings beat and raised outlook. In pre-market trading following the announcement, PGY shares advanced over 22%. This bullish price action suggests investors are rewarding the company for not only exceeding current quarter expectations but also for demonstrating a clear path to sustained profitability and growth through its upgraded guidance.
Key Quarterly Highlights
Pagaya's third-quarter performance was marked by several record-breaking achievements and strategic milestones that underscore its operational strength.
- Record GAAP Net Income: The company achieved a record GAAP net income attributable to shareholders of $23 million, a substantial improvement from a loss in the prior year and above its own outlook of $10-$20 million.
- Strong Network Volume: Network volume reached a record $2.8 billion, a 19% year-over-year increase, driven by growth in its Auto and Point-of-Sale lending verticals.
- Robust Profitability Metrics: Adjusted EBITDA hit a record $107 million, surpassing the high end of the company's guidance. The key metric of revenue from fees less production costs (FRLPC) grew 39% to $139 million.
- Strategic Financial Moves: The quarter was also notable for a $500 million corporate debt raise, an expansion of its revolving credit facility, and new partnerships, including an auto forward flow agreement with Castlelake to purchase up to $500 million in auto loans.
Updated Financial Outlook
Bolstered by its strong quarterly results, Pagaya raised its full-year 2025 guidance for the third consecutive quarter. The company's new outlook appears optimistic when compared to existing analyst projections.
- Full-Year 2025 Revenue: Pagaya expects total revenue and other income between $1.30 billion and $1.325 billion. This range is notably aligned with the analyst sales estimate of $1.32 billion for the full year.
- Full-Year 2025 Profitability: The company anticipates full-year Adjusted EBITDA between $372 million and $382 million.
- Fourth Quarter 2025: For the final quarter of the year, Pagaya provided an implied outlook for total revenue and other income between $333 million and $358 million. The midpoint of this range is slightly above the analyst sales estimate of $354.7 million for Q4.
Conclusion
Pagaya's third-quarter earnings report paints a picture of a company hitting its stride, with explosive growth in profitability leading to a substantial earnings beat. The combination of record results, strategic advancements in funding, and a third consecutive guidance raise provides a strong fundamental backdrop for the positive market reaction. The company's raised outlook for the full year suggests management has high confidence in its ability to maintain this momentum.
For a detailed look at Pagaya's historical earnings, future estimates, and analyst ratings, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Investors should conduct their own research before making any investment decisions.
