Pagaya Technologies Reports 18% Revenue Growth and Profitability Turnaround in Q1 2025

Pagaya Technologies Ltd. reported a significant increase in financial performance for the first quarter of 2025, with total revenue and other income reaching $289.99 million, an 18% increase from $245.28 million in the same period of 2024. The company's revenue from fees, which includes network AI fees and contract fees, rose by 19% to $282.70 million, driven primarily by a $38.1 million increase in network AI fees. This growth reflects improved economics from AI integration fees, which increased by 25% year-over-year. Despite a slight decline in investment income, the overall financial results indicate a strong operational performance.

In terms of profitability, Pagaya reported an operating income of $47.69 million, a substantial increase from $7.69 million in the prior year. The net income attributable to Pagaya Technologies Ltd. was $7.89 million, compared to a net loss of $21.22 million in the first quarter of 2024. This turnaround in profitability is attributed to effective cost management, with total costs and operating expenses increasing only marginally to $242.30 million from $237.59 million, despite a rise in production costs associated with the growth in network volume.

Strategically, Pagaya has continued to expand its operations, including the acquisition of Theorem Technology, Inc. in late 2024, which is expected to enhance its capabilities in the consumer credit space. The company has also focused on onboarding new partners, which has contributed to a diverse funding network and increased market share. As of March 31, 2025, Pagaya had 527 employees, a reduction from 892 a year earlier, reflecting a strategic decision to streamline operations and reduce costs.

Operationally, Pagaya's network volume for the first quarter of 2025 was $2.40 billion, slightly down from $2.42 billion in the previous year. The company continues to leverage its AI technology to improve asset origination and enhance the customer experience for its partners. The filing also noted that the company is actively monitoring macroeconomic conditions, including inflation and interest rates, which could impact its operations and funding availability.

Looking ahead, Pagaya remains optimistic about its growth trajectory, emphasizing the importance of its AI technology and data network in driving better outcomes for financial institutions and their customers. The company plans to continue investing in technology and expanding its partner network while navigating the challenges posed by the current economic environment.