Pagaya Technologies reported its third‑quarter 2025 results, posting a revenue of $350 million—up 36% year‑over‑year—and a GAAP net income of $23 million, a turnaround from a $67 million loss in Q3 2024 and a $17 million profit in Q2 2025. The earnings beat analyst expectations by $0.84 per share, with a non‑GAAP EPS of $1.02 versus the consensus of $0.18, a 466% upside that reflects disciplined cost management and a favorable mix shift toward higher‑margin personal‑loan and auto‑loan segments.
The company’s adjusted EBITDA margin expanded to 30.6% from 27.7% a year earlier, driven by a 9‑percentage‑point lift in fee‑based revenue and operating leverage as the platform scales. The margin improvement signals that Pagaya’s AI‑driven underwriting model is delivering pricing power and cost efficiencies, even as it expands its network of 31 lending partners.
Revenue growth was largely fueled by a 45% increase in auto‑loan volume and a 30% rise in point‑of‑sale financing, while personal‑loan revenue grew 25%. The stronger performance in the auto and point‑of‑sale verticals offset a modest decline in personal‑loan volume, illustrating the company’s successful diversification strategy. Management noted that the improved economics in these segments—larger fee structures and lower acquisition costs—were key to the quarter’s upside.
Pagaya raised its full‑year 2025 guidance, lifting total revenue outlook to $4.40 billion from $4.15 billion, adjusted EBITDA to $2.15 billion from $1.95 billion, and GAAP net income to $120 million from $100 million. The upward revision reflects management’s confidence in sustained demand for its AI platform and the continued monetization of its growing partner network.
CEO Gal Krubiner highlighted that the company’s “pipeline has never been stronger” and that the quarter’s results demonstrate “prudent underwriting and consistent execution.” He emphasized that the raised guidance signals a belief that the platform’s scalability will continue to drive profitability, while acknowledging that the company remains focused on cost discipline and strategic investments in high‑return verticals.
The market reacted strongly, with the stock surging nearly 20% in pre‑market trading and maintaining gains throughout the day. Analysts cited the earnings beat, revenue growth, and guidance raise as primary drivers of the positive reaction, underscoring investor confidence in Pagaya’s business model and growth trajectory.
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