Q3 2024 Pagaya Technologies Ltd Earnings Call Transcript
Key Points
- Pagaya Technologies Ltd (PGY) reported strong third-quarter results with an approximate annual revenue rate of $1 billion and $220 million in adjusted EBITDA.
- The company is experiencing increasing demand for its products, leading to improved fee generation and funding efficiency.
- Pagaya's network has grown significantly, generating over $24 billion in loans and adding approximately 2 million new customers.
- The company has successfully onboarded a top 5 bank in its point-of-sale vertical and is in advanced discussions with several other top 20 lenders.
- Pagaya has made significant progress in optimizing its ABS structures and diversifying funding sources, resulting in lower funding costs and improved capital efficiency.
- Pagaya Technologies Ltd (PGY) reported a net loss of $67 million in the third quarter, compared to a net loss of $22 million in the same quarter of 2023.
- The company recognized credit-related fair value adjustments amounting to negative $70 million, impacting its financial results.
- There are concerns about the sensitivity of ABS structures to small changes in credit performance, which led to impairments in 2023.
- Despite improvements, the conversion rate remains low, with less than 1% of application flow being converted into loans.
- The company faces challenges in scaling newer products like auto and point-of-sale loans to achieve the same profitability as its mature personal loan product.
Ladies and gentlemen, greetings and welcome to the Pagaya 3Q 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Josh Fagan. Thank you. Please go ahead.
Thank you and welcome to Pagaya's third-quarter 2024 earnings conference call. Joining me today to talk about our business and results are Gal Krubiner, Chief Executive Officer of Pagaya; Sanjiv Das, President; and Evangelos Perros, Chief Financial Officer. You can find the materials that accompany our prepared remarks and a replay of today's webcast on the Investor Relations section of our website at investor.begaia.com. Our remarks today will include forward-looking statements that are based on our current expectations and forecasts with respect to, among other things, our operations and financial performance, including our financial outlook for the third quarter and full year of 2024. Our actual results may differ materially from those contemplated by
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