Pagaya Technologies NASDAQ: PGY reported first-quarter 2026 results that marked its fifth consecutive quarter of GAAP profitability, while management emphasized disciplined underwriting, continued partner onboarding momentum, and a funding strategy designed to remain flexible amid market volatility.
Leadership transition: Dobres to become CFO
Chief Executive Officer Gal Krubiner opened the call by announcing that Chief Financial Officer Evangelos Perros will step down effective June 15 after nearly five years with the company, and will remain a strategic advisor through year-end. Krubiner credited Perros with helping “lay[] the foundation for positive GAAP net income and cash flow.”
Krubiner also announced that Jon Dobres, currently Chief Strategy Officer, will become CFO. Krubiner said Dobres has worked closely on “corporate strategy and key financing initiatives,” including the company’s term loan and high-yield bond offering. Perros said the transition is focused on “continuity across, particularly in the areas of investor engagement and capital efficiency,” while Dobres said the company’s “priorities and financial strategy remain unchanged.”
Quarterly results: revenue, profitability, and margins
Perros said Pagaya generated GAAP net income of $25 million in the first quarter. Krubiner described the period as “another strong quarter” achieved despite “a macro environment full of volatility.”
Perros detailed first-quarter 2026 financial results:
- Total revenue and other income: $318 million (up 10% year-over-year)
- Revenue from fees: $299 million (up 6% year-over-year)
- Fee revenue less production cost (FRLPC): $121 million (up 5% year-over-year)
- Adjusted EBITDA: $94 million (up $15 million year-over-year)
- Adjusted EBITDA margin: 29.6% (up 200 basis points year-over-year)
- Network volume: $2.6 billion (up 9% year-over-year; up 23% excluding SFR from the year-ago quarter)
- FRLPC as a percent of network volume: 4.6% (down 19 basis points year-over-year)
Perros said operating income was $80 million, up 68% year-over-year, while GAAP net income was up $17 million versus the first quarter of 2025, driven by revenue growth, cost discipline, and lower interest expense. He also noted that gains and losses on investments in loans and securities amounted to a $38 million loss during the quarter.
On operating efficiency, Perros said core operating expenses were “well controlled,” flat sequentially and modestly higher year-over-year, and represented 39% of FRLPC. In Q&A, he said operating leverage remains a “key differentiator,” arguing the company can grow the top line without significant incremental investment due to infrastructure already in place. Krubiner added that management aims to run “a very laser-focused, slim… company that is highly leveraged with technology” and said AI could further increase productivity.
Credit posture and consumer trends
Management repeatedly emphasized that growth is intended to come from more partners, products, and channels rather than expanding credit risk. Krubiner said credit performance was “in line with expectations,” with some benefit from seasonal tax trends, but stressed the company is “not relying on those tailwinds to extend risk.” He said Pagaya maintained the same credit posture in the first quarter after pulling back originations in selected segments in the fourth quarter.
Perros said all asset classes were performing in line with underwriting expectations. In personal loans, he said early-stage delinquencies are stabilizing and loss trends remain consistent with expectations, though additional seasoning is still needed. In auto, he said recent vintages continue to perform well relative to prior periods, with delinquencies and losses within expected ranges and recoveries improving. He added that point-of-sale credit performance remains stable.
In response to a question from Citi’s Pete Christiansen, Krubiner said consumer behavior was in line with expectations in the quarter and the company made no change to its credit posture. He said management continues to monitor risks such as potential inflation impacts tied to geopolitical developments. Krubiner also highlighted borrower income levels, saying that while personal loan FICO scores are around 660–670, the average annual income of borrowers “lately has reached as high as $115,000,” and that auto borrowers are around $80,000–$85,000 in annual income.
Partner onboarding, product expansion, and asset class mix
President Sanjiv Das said the quarter’s focus was to “drive GAAP net income through disciplined execution,” describing the strategy as “more partners, more products, more channels” without expanding the credit box. Das said four partners were onboarded year-to-date: Global Lending Services (GLS), Upstart, Sezzle, and Flex Pay (Upgrade’s buy now, pay later solution). He said the company is also onboarding regional banks it expects to announce soon.
Das described the platform’s move from “a single product, single channel company” to a “multi-product, multi-channel platform,” citing products such as the Affiliate Optimizer Engine and Direct Marketing Engine. He provided an example where volume with one partner increased 37% year-over-year in the quarter “simply by onboarding them onto a leading affiliate marketplace.” Das also said the company partnered with Experian to enable personal loan partners to join Experian Activate, and that the Direct Marketing Engine has completed 12 campaigns across five partners, providing data to improve future campaigns.
By asset class, Das said personal loans represented 63% of production in the quarter. He described auto as a key growth driver, supported by “access to additional flow sources, improved ABS execution, optimized offers and pricing,” and “some tax season tailwinds.” Das said auto volumes reached a record annualized run rate of $2.3 billion, double the first quarter of last year. Krubiner separately said the auto loan business reached “record performance” with all-time high volumes, calling it a “structural growth engine.”
On point-of-sale, Krubiner said the business is evolving beyond enabling POS, with Pagaya embedding “longer-term, larger-ticket lending capabilities” inside POS platforms such as Sezzle, Flex Pay, and Upgrade’s buy now, pay later solutions.
Funding strategy: ABS focus, new ratings, and re-securitizations
Management pointed to continued strength in the company’s funding channels. Krubiner said the company raised $2.1 billion in the quarter, attracted five new investors, and executed its “first ever auto re-securitization.” He also said Pagaya welcomed Fitch into its capital markets platform alongside Kroll, which he said provides additional stability and reinforces confidence in asset performance.
Perros said Pagaya issued $2.1 billion through its ABS program across four transactions marketed to a network of more than 160 institutional funding partners, and said new investor participation accelerated quarter-over-quarter. He highlighted two milestones: the company’s first AAA rating from Fitch on its personal loan re-securitization shelf, and the first auto re-securitization.
Perros and Krubiner said re-securitization is becoming an increasingly important tool. Perros said it provides a repeatable mechanism to return capital from prior vintages on an accelerated basis and can lower funding costs by refinancing seasoned collateral. He said that over the last 12 months, Pagaya generated $44 million in net cash flows from these types of transactions while attracting new investors. He also noted that the company completed another $800 million ABS transaction “this week,” which was upsized from $600 million.
During Q&A, Perros said the company is leaning more into public consumer ABS markets while monitoring repricing in private credit markets, noting that stress has been more visible in private corporate credit than consumer credit. Krubiner said the company does not manage to a “ceiling” for ABS as a share of funding; instead, it focuses on building diversified “infrastructure” across multiple channels so it can shift based on pricing and market conditions.
On balance sheet actions, Perros said the company drew on its revolver late in the quarter as a precaution amid geopolitical uncertainty and repaid it in April. He also said Pagaya repurchased $7 million of corporate notes in February and another $4 million in April.
Guidance updates
Perros said the company expects full-year FRLPC margin of 4% to 5%, assuming cost of capital remains elevated. For the second quarter of 2026, Pagaya guided to:
- Network volume: $2.875 billion to $3.075 billion
- Total revenue and other income: $345 million to $365 million
- Adjusted EBITDA: $100 million to $115 million
- GAAP net income: $25 million to $45 million
For full-year 2026, Pagaya guided to network volume of $11.45 billion to $13.0 billion, raising the low end by about $200 million versus prior guidance. The company maintained total revenue and other income guidance of $1.4 billion to $1.575 billion, while raising adjusted EBITDA guidance to $420 million to $460 million and increasing GAAP net income guidance to $110 million to $160 million.
In closing remarks, Krubiner said the quarter demonstrated the company’s “B2B2C model in action” and reiterated the company’s “discipline in the way we think about underwriting and growth.”
About Pagaya Technologies NASDAQ: PGY
Pagaya Technologies is a financial technology company that applies artificial intelligence and machine learning to the credit and asset management industries. Through its proprietary data-driven platform, Pagaya analyzes vast datasets from consumer credit portfolios to build predictive risk models, enabling institutional investors to gain access to alternative credit products. The company’s solutions streamline underwriting, optimize portfolio construction and facilitate the efficient securitization of consumer loans, credit card receivables and other asset classes.
Founded in 2016 and headquartered in New York, Pagaya has expanded its operations to serve financial institutions and asset managers primarily in the United States.
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