Q2 2024 Pagaya Technologies Ltd Earnings Call Transcript
Key Points
- Pagaya Technologies Ltd (PGY) delivered a strong quarter, beating guidance on revenue and adjusted EBITDA.
- The company achieved a critical financial milestone by making incremental volume growth contribute positively to total cash flow.
- Pagaya Technologies Ltd (PGY) expanded its network by adding new partners ahead of schedule, including a significant partnership with OneMain Financial.
- The company signed its first forward flow agreement with Castlelake for $1 billion in personal loans, enhancing capital efficiency.
- Pagaya Technologies Ltd (PGY) received its first AAA rating on its personal loan ABS program, reducing the cost of capital.
- Despite positive adjusted net income, Pagaya Technologies Ltd (PGY) reported a net loss of $75 million, primarily due to share-based compensation and fair value adjustments.
- Interest expenses increased to $22 million, reflecting higher secured borrowings and the addition of a term loan facility.
- Net credit impairments amounted to $58 million, driven by fair value adjustments on risk retention assets and losses on whole loans from past deals.
- The company continues to face challenges in managing macroeconomic conditions and consumer health, requiring close monitoring.
- Operational expenses remain a focus, with efforts to drive further efficiencies, especially in third-party vendor and consultant spend.
Greetings, and welcome to Pagaya's second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Ms. Jency John, Head of Investor Relations. Thank you. Ms. John, you may begin.
Thank you, and welcome to Pagaya's second-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.pagaya.com.
Our remarks today will include forward-looking statements that are based on our current expectations and forecasts and involve certain risks and uncertainties. These statements include, but are not limited to, our competitive advantages and strategy, macroeconomic conditions and outlook, future
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