Pagaya Tech Q4 2025 Pagaya Technologies Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Pagaya Technologies Ltd Earnings Call
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to Josh Vegan head of Investor Relations.
And C O O of finance. Thank you you may begin.
Thank you and welcome to the guidance fourth quarter and full year 2025 earnings Conference call. Joining me today to talk about our business. Our results are <unk> <unk>, Chief Executive officer of <unk>.
<unk>, President and Evangelists Perez Chief Financial Officer, you could 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 <unk> Com.
Our remarks today will include forward looking statements that are based on current expectations and forecast with respect to among other things our operations and financial performance, including our financial outlook for the first quarter and full year of 2026, our actual results may differ materially from those contemplated by those forward looking statements.
Factors that could cause these results to differ materially from expectations include but are not limited to those risks described in today's press release and our filings with the U S Securities and Exchange Commission, we undertake no obligation to update any forward looking statements as a result of new information or future events. Please refer to the documents we file from time.
At a time with the SEC, including our 10-K 10-Q and other reports for a more detailed discussion of these factors. Additionally, non-GAAP financial measures, including adjusted EBITDA adjusted EBITDA margin adjusted net income fee revenue less production costs or F. RPC fr LPC percentage of network volume and core <unk>.
Operating expenses will be discussed on the call.
Reconciliations to the most directly comparable GAAP financial measures are available to the extent available without unreasonable efforts in our earnings release and other materials, which are posted on our Investor Relations website. We encourage you to review the shareholder letter, which was furnished with the SEC form 8-K today for detailed commentary on our business and performance.
In conjunction with the accompanying earnings supplement and press release with that let me turn the call over to golf.
Thank you and welcome everyone.
2025 was a hallmark of <unk>.
In Q4, we achieved $34 million of GAAP net income and $80 million in operating cash flow.
In the beginning of 2024, we set the goal to become GAAP net income and cash flow positive, which we continue to accelerate in the fourth quarter lithium.
For the full year, we achieved revenues of $1 3 billion.
Up 26% <unk>.
Adjusted EBITDA of 371 million.
Up 76% year over year, and GAAP net income of $81 million.
Up $483 million.
Versus 2024, with an EPS of zero point $93.
More importantly, these results and achievements were the outcome of growing and diversifying our business across verticals.
Those are the expansion into first look and second look close and optimizing our unit economics and balance sheets.
Before discussing our results and outlook. It is important to recall the 2025 was the Eagles disciplined for Gaia.
We fine tuned the foundations of our business and approach towards risk management and underwriting.
In turn.
These drive further consistency for our investors as we continue to serve our lending partner needs.
All of that while building an enterprise focused on sustainable through the cycle growth.
This discipline.
Speaker #1: Mentioned into First Look and Second Look loans, and optimizing our unit economics and balance sheet. Before discussing our results in Outlook, it is important to recall that 2025 was a year of discipline for Pagaya.
Rove is to proactively take action later in the fourth quarter in face of persistent consumer uncertainty and trends.
While our debt does not indicate consumer the duration, we have the privilege of being able to people with our production to focus on prudent and disciplined.
Speaker #1: We fine-tuned the foundations of our business and approach towards risk management and underwriting. In turn, this drives further consistency for our investors as we continue to serve needs.
As such credit performance across asset classes remained in line with our expectations.
However, we pulled back our exposure to higher risk and be profitable credit deals, which have potential for higher relative losses in a downside scenario.
Speaker #1: All of that while building an enterprise focused on sustainable through-the-cycle drove us to proactively take action later in the fourth quarter in face of persistent growth.
As we mature as a company we are shifting more and more of our focus to achieve the best long term outcomes for our stakeholders and to avoid any downside that could arise from potential tail risks.
Speaker #1: consumer uncertainty and trends. While our data does not indicate consumer deterioration, we have the privilege of being able to pivot our production to focus on our lending partner prudent and disciplined.
We have been the business that is highly scalable with key inflection points in our operating and capital structure that results in Standalone operating efficiencies.
Speaker #1: As such, credit performance across asset classes remains in line with our expectations. However, we pulled back our exposure to higher-risk and B-profitable credit deals, which have potential for higher relative losses in a downside scenario.
We have a robust list of Onboarding partners and a healthy funding position.
As important with our data moat technological leadership and commercial momentum we are positioned to continue to take share in this vast market a market.
Speaker #1: As we mature as a company, we are shifting more and focusing on the best long-term outcomes for our stakeholders and to avoid any downside that could arise from potential tail risks.
<unk> creates and one <unk>.
And is increasingly profitable manner.
Let me now talk about the long term fundamentals of our business. It is clear that we have momentum and are executing on all aspects of our business.
Speaker #1: We have built a business that is highly scalable, with key inflection points in our operating and capital structure that result in standalone operating efficiencies.
As we have talked about throughout 2025 future growth will continue to come from a combination of recently on boarded partners and deepening our existing relationships.
Speaker #1: We have a robust list of onboarding partners and a healthy funding position. As important, with our data model, technological leadership, and commercial momentum, we are positioned to continue to take share in this vast market.
Our pipeline remained robust.
A testament to our product suite is becoming industry standard.
Speaker #1: A market that Pagaya creates, and one that Pagaya increasingly profitably leads. Let me now talk about the long-term fundamentals of our business. It is clear that we have momentum and are executing on all aspects of our future growth business, as we have talked about throughout 2025.
In the latest quarter and the months that followed we on boarded achieve jealous and a leading fast growing buy now pay later provider in North America.
Gal Krubiner: Attention into First Look and Second Look loans and optimizing our unit economics and balance sheet. Before discussing our result and outlook, it is important to recall that 2025 was a year of discipline for Pagaya. We fine-tuned the foundations of our business and approach towards risk management and underwriting. In turn, this drives further consistency for our investors as we continue to serve our lending partner needs. All of that while building an enterprise focused on sustainable through-the-cycle growth. This discipline drove us to proactively take action later in Q4 in face of persistent consumer uncertainty and trends. While our data does not indicate consumer deterioration, we have the privilege of being able to pivot our production to focus on prudence and discipline. As such, credit performance across asset classes remained in line with our expectations.
Gal Krubiner: Attention into First Look and Second Look loans and optimizing our unit economics and balance sheet. Before discussing our result and outlook, it is important to recall that 2025 was a year of discipline for Pagaya. We fine-tuned the foundations of our business and approach towards risk management and underwriting. In turn, this drives further consistency for our investors as we continue to serve our lending partner needs. All of that while building an enterprise focused on sustainable through-the-cycle growth. This discipline drove us to proactively take action later in Q4 in face of persistent consumer uncertainty and trends. While our data does not indicate consumer deterioration, we have the privilege of being able to pivot our production to focus on prudence and discipline. As such, credit performance across asset classes remained in line with our expectations.
And we expect to announce additional partner launches in the coming quarters.
Jia less global lending services is a leading auto finance providers that offer financial solutions to almost 20000 franchise and independent dealerships national wide.
Speaker #1: will continue to come from the combination of recently onboarded partners and deepening our existing As we have pipeline remains robust, attestment to our product suite relationships.
As I look ahead I'm excited about both consumer lenders joining the poor guy on network further highlighting the potential and value added of our enterprise platform.
Speaker #1: standard. In the latest quarter, and the Our months that followed, we pay later provider in North America. And we expect to announce additional GLS and a leading fast-growing buy now partner launches in the GLS, or Global Lending onboarded achieve financial solutions to almost independent dealerships Services, is a leading auto finance coming quarters. nationwide.
Speaker #1: standard. In the latest quarter, and the Our months that followed, we pay later provider in North America. And we expect to announce additional GLS and a leading fast-growing buy now partner launches in the GLS, or Global Lending onboarded achieve financial solutions to almost independent dealerships Services, is a leading auto finance coming quarters.
For our existing partners, we continue to innovate and meeting our partners, where they are to drive higher polymer usage certification and engagement for instance, lending club recently adopted our marketing affiliate offering and became a multi product partner for us.
We expect to end the first quarter with multiple large personal loan pulp mills fully on boarded into our belief in offering.
Our earning power and cash flow generation will become more robust as partners continue maturing into multi product relationships at.
Speaker #1: Excited about more consumer, 20,000 franchises, and lenders joining the Pagaya network, further highlighting the potential and value added of our enterprise partners—how well they are able to drive provider that offers, continue to innovate, meeting our higher partner usage, certification, and engagement.
Gal Krubiner: However, we pulled back our exposure to higher-risk, albeit profitable, credit deals which have potential for higher relative losses in a downside scenario. As we mature as a company, we are shifting more and more of our focus to achieve the best long-term outcomes for our stakeholders and to avoid any downside that could arise from potential tail risks. We have built a business that is highly scalable with key inflection points in our operating and capital structure that results in standalone operating efficiencies. We have a robust list of onboarding partners and a healthy funding position. As important with our data moat, technological leadership, and commercial momentum, we are positioned to continue to take share in this vast market, a market that Pagaya creates and one that Pagaya leads in an increasingly profitable manner. Let me now talk about the long-term fundamentals of our business.
Gal Krubiner: However, we pulled back our exposure to higher-risk, albeit profitable, credit deals which have potential for higher relative losses in a downside scenario. As we mature as a company, we are shifting more and more of our focus to achieve the best long-term outcomes for our stakeholders and to avoid any downside that could arise from potential tail risks. We have built a business that is highly scalable with key inflection points in our operating and capital structure that results in standalone operating efficiencies. We have a robust list of onboarding partners and a healthy funding position. As important with our data moat, technological leadership, and commercial momentum, we are positioned to continue to take share in this vast market, a market that Pagaya creates and one that Pagaya leads in an increasingly profitable manner. Let me now talk about the long-term fundamentals of our business.
At the same time, we continue to institutionalize and diversifying our business through long term agreements with fee and application flow commitments.
Speaker #1: For instance, lending club recently adopted our marketing platform. For our existing partners, we affiliate offering and became a multi-product partner for us. We expect to end the with partner alignment and business stabilization.
Creating additional partner alignment and business stabilization.
This quarter, we entered into long term.
Our largest partners in auto and personal loans.
Why do we want to continue growing our application volume from you and existing partners our decision to reduce our exposure is firmly grounded in portfolio.
Asian, rather than growing just for the sake of growth in fact, we are comfortable having a lower conversion rate when it is appropriate to reduce the likelihood of adverse outcome.
Is there a maturing business a core pillar of our culture is to deliberately balance long term growth and profitability against short term metrics.
Speaker #1: This quarter, we entered into long-term agreements with two of our largest personal partners in auto and loans. While we were to continue growing our application volume from new and existing partners, our decision to reduce our exposure is firmly grounded in portfolioization. We are comfortable having a lower conversion rate when it is appropriate to reduce the likelihood of adverse outcomes, rather than growing just for the sake of growth.
Our focus.
On top of funnel growth and expansion is designed for the future as we prioritize building an enterprise platform for the long term.
As the B to B to C enabler.
Gal Krubiner: It is clear that we have momentum and are executing on all aspects of our business. As we have talked about throughout 2025, future growth will continue to come from the combination of recently onboarded partners and deepening our existing relationships. Our pipeline remains robust, a testament to our product suite becoming industry standard. In the latest quarter and the months that followed, we onboarded Achieve, GLS, and a leading fast-growing buy-now-pay-later provider in North America. We expect to announce additional partner launches in the coming quarters. GLS, or Global Lending Services, is a leading auto finance provider that offers financial solutions to almost 20,000 franchises and independent dealerships nationwide. As I look ahead, I'm excited about more consumer lenders joining the Pagaya network, further highlighting the potential and value added of our enterprise platform.
Gal Krubiner: It is clear that we have momentum and are executing on all aspects of our business. As we have talked about throughout 2025, future growth will continue to come from the combination of recently onboarded partners and deepening our existing relationships. Our pipeline remains robust, a testament to our product suite becoming industry standard. In the latest quarter and the months that followed, we onboarded Achieve, GLS, and a leading fast-growing buy-now-pay-later provider in North America. We expect to announce additional partner launches in the coming quarters. GLS, or Global Lending Services, is a leading auto finance provider that offers financial solutions to almost 20,000 franchises and independent dealerships nationwide. As I look ahead, I'm excited about more consumer lenders joining the Pagaya network, further highlighting the potential and value added of our enterprise platform.
Bob will depend on <unk> to manage the business for long term strength and stability.
I appreciate our ability and willingness to make such proactive risk based decisions.
Turning to funding.
Speaker #1: As a maturing business, a core pillar of our growth and our culture is to, in fact, deliberately balance long-term growth and profitability against shorter metrics.
We continue to leverage favorable market dynamics to create longer term committed capital that enhance our capacity, while reducing exposure to funding volatility.
Speaker #1: Our focus on top designed for the future, as we prioritize building an enterprise platform for the long-of-funnel growth and expansion, is term.
This year and in the months that followed we.
Made strides in diversifying our funding sources with forward flow arrangements across all three core asset classes.
Speaker #1: As a B2B2C enabler, our partner depends on Pagaya to match the business for long-term strengths and stability. And they appreciate our ability and willingness to make such proactive, risk-based decisions.
Cell alone <unk> end point of safety.
Building on this momentum we further enhanced our funding stability with expansion into evolving a b s's across point of sale and personal alone create.
Speaker #1: Turning to funding, we continue to leverage favorable market dynamics to create longer-term committed capital that enhances our capacity while reducing exposure to funding volatility.
Creating almost $3 billion of.
Revolving capacity.
As we enter 2026, our guidance and business plan are driven first and foremost by this disciplined risk framework that we have developed over the years.
Speaker #1: This year, and in the months that followed, we made strides in diversifying our funding sources with forward-flow arrangements across all three core asset classes: personal loans, auto loans, and point of sale.
Gal Krubiner: For our existing partners, we continue to innovate, meeting our partners where they are to drive higher partner usage, sophistication, and engagement. For instance, LendingClub recently adopted our marketing affiliate offering and became a multi-product partner for us. We expect to end the year with partner alignment and business stabilization. This quarter, we entered into long-term agreements with two of our largest partners in auto and personal loans. While we work to continue growing our application volume from new and existing partners, our decision to reduce our exposure is firmly grounded in portfolio profitization rather than growing just for the sake of growth. In fact, we are comfortable having a lower conversion rate when it is appropriate to reduce the likelihood of adverse outcomes. As a maturing business, a core pillar of our culture is to deliberately balance long-term growth and profitability against shorter metrics.
Gal Krubiner: For our existing partners, we continue to innovate, meeting our partners where they are to drive higher partner usage, sophistication, and engagement. For instance, LendingClub recently adopted our marketing affiliate offering and became a multi-product partner for us. We expect to end the year with partner alignment and business stabilization. This quarter, we entered into long-term agreements with two of our largest partners in auto and personal loans. While we work to continue growing our application volume from new and existing partners, our decision to reduce our exposure is firmly grounded in portfolio profitization rather than growing just for the sake of growth. In fact, we are comfortable having a lower conversion rate when it is appropriate to reduce the likelihood of adverse outcomes. As a maturing business, a core pillar of our culture is to deliberately balance long-term growth and profitability against shorter metrics.
Our accomplishment in 2024 and 2025.
Set us up for efficient and durable growth.
We stabilize the business as we scaled we optimized our operating costs and balance sheet.
Speaker #1: Building on this momentum, we further enhanced our funding stability with the expansion into revolving ABSs across point of sale and personal loan capacity. As we enter 2026, creating almost $3, our guidance and business plan are driven first and foremost by this disciplined risk framework that we have developed over the years.
<unk>, our sources of revenues and funding.
Going forward, we are in the right place for balance efficient growth.
In 2026, Investor should expect more measured volume that revenue growth as we prioritize reducing credit exposure overall market share gains at the moment.
Speaker #1: Our accomplishment in 2024 and 2025 set us up for efficient and durable growth. We stabilized the business as we scaled with optimized our operating billion of revolving costs and balance sheet and diversified our sources of revenues and funding.
Our strategy reflects a business that is in control of its long term growth trajectory, while deploying measured risk.
With our 10 year anniversary approaching we believe this strategy reflects a company that is building an enduring platform that maximize value creation over time.
Speaker #1: In the right place for balanced, going forward, we are efficient growth. In 2026, investors should expect more measured volume, thus revenue growth, as we prioritize reducing credit exposure over market share gains at the moment.
We are building a b to b to C platform.
Will be cornerstone of the U S financial ecosystem that should be embedded with.
In every U S consumer lender.
Leveraging intelligent AI core Decisioning every quarter.
Speaker #1: Our strategy reflects a business that is in control of its long-term deploying measured anniversary approaching, we believe this strategy reflects a company that is building an enduring platform that maximize value creation over risk.
Our platform, we operate wherever our pulp mills.
Through the cycle, while powering products that meet the needs of our customers.
The first decade proved our model and secure our place in the market.
The next decade is about scaling that foundation with <unk> ambition durability and impact.
Speaker #1: time. We are building a With our 10 years will be cornerstone B2B2C platform that of the US financial growth trajectory while ecosystem that should be embedded lender.
Gal Krubiner: Our focus, on top of funnel growth and expansion, is designed for the future as we prioritize building an enterprise platform for the long term. As a B2B2C enabler, our partner depends on Pagaya to manage the business for long-term strengths and stability. They appreciate our ability and willingness to make such proactive, risk-based decisions. Turning to funding, we continue to leverage favorable market dynamics to create longer-term committed capital that enhance our capacity while reducing exposure to funding volatility. This year and in the months that followed, we made strides in diversifying our funding sources with forward-flow arrangements across all three core asset classes: personal loan, auto loans, and point of sale. Building on this momentum, we further enhanced our funding stability with the expansion into revolving ABSs across point of sale and personal loan, creating almost $3 billion of revolving capacity.
Gal Krubiner: Our focus, on top of funnel growth and expansion, is designed for the future as we prioritize building an enterprise platform for the long term. As a B2B2C enabler, our partner depends on Pagaya to manage the business for long-term strengths and stability. They appreciate our ability and willingness to make such proactive, risk-based decisions. Turning to funding, we continue to leverage favorable market dynamics to create longer-term committed capital that enhance our capacity while reducing exposure to funding volatility. This year and in the months that followed, we made strides in diversifying our funding sources with forward-flow arrangements across all three core asset classes: personal loan, auto loans, and point of sale. Building on this momentum, we further enhanced our funding stability with the expansion into revolving ABSs across point of sale and personal loan, creating almost $3 billion of revolving capacity.
Thank you Ralph.
As we wrap up the year with our fourth consecutive quarter of GAAP net income profitability and look ahead.
Speaker #1: Leveraging intelligent AI—quote decisioning as a core—our platform will operate within every U.S. consumer wherever our partners are through the cycle, while powering products that meet the needs of our customers.
<unk> strategy is clear.
Continue to build a sustainable and profitable business that is increasingly embedded in the U S financial ecosystem.
<unk> growth continues to be driven by institutional grid scaling of existing partner relationships as well as new partner additions.
Speaker #1: The first decade proved our model and secured our place in the market. The next decade is about durability and impact—about scaling that foundation.
In fact, we just added three new partners to our platform.
<unk> <unk>, our global lending services, and a leading fast growth buy now pay later provider in North America.
Speaker #2: God, as we wrap up the year with our fourth consecutive quarter,
Speaker #2: of Gapnet Income Profitability and look ahead, our growth Thank you, strategy is clear. Continue profitable business that is increasingly with greater ambition, embedded in the US financial to build a sustainable and ecosystem.
Our onboarding process is becoming industrial grid minimizing partner refills requirements.
All new partners have a prebuilt API integration for the entire product suite.
Prebuilt product Apis, along with an 18 month joint roadmap will enable accelerated scaling.
Speaker #2: Institutional-grade scaling of existing partner relationships as well as new partner additions. In fact, we just added three new partners to our platform: Achieve, GLS, or Global Lending Services, and a leading fast-growth buy now, pay later provider. Pagaya's growth continues to be driven by industrial grade.
We also established long term agreements with all of them that encompass volumes fees and all other protections.
Gal Krubiner: As we enter 2026, our guidance and business plan are driven first and foremost by this disciplined risk framework that we have developed over the years. Our accomplishments in 2024 and 2025 set us up for efficient and durable growth. We stabilized the business as we scaled, we optimized our operating costs and balance sheet, and diversified our sources of revenues and funding. Going forward, we are in the right place for balanced, efficient growth. In 2026, investors should expect more measured volume, thus revenue growth, as we prioritize reducing credit exposure over market share gains at the moment. Our strategy reflects a business that is in control of its long-term growth trajectory while deploying measured risk. With our 10-year anniversary approaching, we believe this strategy reflects a company that is building an enduring platform that maximizes value creation over time.
Gal Krubiner: As we enter 2026, our guidance and business plan are driven first and foremost by this disciplined risk framework that we have developed over the years. Our accomplishments in 2024 and 2025 set us up for efficient and durable growth. We stabilized the business as we scaled, we optimized our operating costs and balance sheet, and diversified our sources of revenues and funding. Going forward, we are in the right place for balanced, efficient growth. In 2026, investors should expect more measured volume, thus revenue growth, as we prioritize reducing credit exposure over market share gains at the moment. Our strategy reflects a business that is in control of its long-term growth trajectory while deploying measured risk. With our 10-year anniversary approaching, we believe this strategy reflects a company that is building an enduring platform that maximizes value creation over time.
Our onboarding pipeline remains the busiest and provides history.
With demand and traction from leading lenders in the country across banks Fintech and other lenders in fact, a lot of these leading lenders are proactively engaging with us on all products.
Speaker #2: Minimizing partner resource requirements, all new partners have a North pre-built API integration for the Americas. The entire Pagaya product onboarding process is becoming APIs, along with an 18-month joint roadmap, will enable accelerated scaling.
This is a testament to <unk> relevance and strong product driven value proposition.
We are planning to announce some new names in the coming quarters.
Speaker #2: We also established long-term agreements with all of them that encompass volumes, fees, and all other protections. Our onboarding pipeline remains the busiest in Pagaya's history.
With our existing partners, we've been consistently delivering and diversifying across products, including the direct marketing engine. The affiliate Optimizer engine and dual look.
Speaker #2: With demand and traction from leading lenders in the country, across banks, fintechs, and other lenders. In fact, a lot of these leading lenders are proactively engaging with us on all products.
This diversification provides <unk> with new volume beyond declined monetization.
Increased value and stickiness with existing lending partners and most importantly provides future growth for <unk> without expanding our own risk appetite.
Speaker #2: This is a testament to Pagaya's relevance and strong product-driven value proposition. We are planning to announce a new name in the coming quarters. With our existing partners, we've been consistently delivering and diversifying across products, including the direct marketing suite.
Partners continue to actively adopt our products in fact, our largest existing partners signed definitive term sheets and adopted the direct marketing engine. After a series of tests and are now scaling with us across direct mail and email pre screen campaigns.
Gal Krubiner: We are building a B2B2C platform that will be a cornerstone of the US financial ecosystem that should be embedded within every US consumer lender. Leveraging intelligent AI quant decisioning as its core, our platform will operate wherever our partners are through the cycle while powering products that meet the needs of our customers. The first decade proved our model and secured our place in the market. The next decade is about scaling that foundation with greater ambition, durability, and impact.
Gal Krubiner: We are building a B2B2C platform that will be a cornerstone of the US financial ecosystem that should be embedded within every US consumer lender. Leveraging intelligent AI quant decisioning as its core, our platform will operate wherever our partners are through the cycle while powering products that meet the needs of our customers. The first decade proved our model and secured our place in the market. The next decade is about scaling that foundation with greater ambition, durability, and impact.
Speaker #2: Engine, the affiliate optimizer engine, and Dual Look. This diversification provides Pagaya with pre-built product new volume beyond decline monetization; lending partners; and, most importantly, provides future growth for Pagaya without expanding our own risk appetite.
Within our affiliate Optimizer engine, we recently on boarded lending club onto credit Karma, where there will be presenting personal loan offers to consumers in partnership with <unk>.
Additionally, we are currently expanding our affiliate optimizer engine to include experience activate platform.
Speaker #2: Existing partners continue to actively adopt our products. In fact, our largest existing partners found definitive-term marketing engine after a series of mail and email pre-screen tests and are now scaling with us across direct campaigns.
With the launch of our first partner and several more in the Onboarding queue.
Speaker #2: Sheets and adopted the direct optimizer, we recently onboarded Lending Club onto Credit within our affiliate loan offers to consumers in Karma, where they will be presenting personal partnership with Pagaya.
Lastly, we signed several long term agreements with leading partners to establish commitments across application flow size quality and controls to provide further visibility through the cycle.
Sanjiv Das: Thank you, God. As we wrap up the year with our fourth consecutive quarter of GAAP net income profitability and look ahead, our growth strategy is clear: continue to build a sustainable and profitable business that is increasingly embedded in the U.S. financial ecosystem. Pagaya's growth continues to be driven by institutional-grade scaling of existing partner relationships as well as new partner additions. In fact, we just added 3 new partners to our platform: Achieve, GLS, or Global Lending Services, and a leading fast-growth buy-now-pay-later provider in North America. Our onboarding process is becoming industrial-grade, minimizing partner resource requirements. All new partners have a pre-built API integration for the entire Pagaya product suite. Pre-built product APIs, along with an 18-month joint roadmap, will enable accelerated scaling. We also established long-term agreements with all of them that encompass volumes, fees, and all other protections.
Sanjiv Das: Thank you, God. As we wrap up the year with our fourth consecutive quarter of GAAP net income profitability and look ahead, our growth strategy is clear: continue to build a sustainable and profitable business that is increasingly embedded in the U.S. financial ecosystem. Pagaya's growth continues to be driven by institutional-grade scaling of existing partner relationships as well as new partner additions. In fact, we just added 3 new partners to our platform: Achieve, GLS, or Global Lending Services, and a leading fast-growth buy-now-pay-later provider in North America. Our onboarding process is becoming industrial-grade, minimizing partner resource requirements. All new partners have a pre-built API integration for the entire Pagaya product suite. Pre-built product APIs, along with an 18-month joint roadmap, will enable accelerated scaling. We also established long-term agreements with all of them that encompass volumes, fees, and all other protections.
Turning to funding.
We continue to diversify from pre funded ABS funding structure.
Speaker #2: Additionally, we are currently expanding our affiliate optimizer engine to platform with the launch of our increased value and stickiness with existing more in the onboarding first partner and several queue.
<unk> more committed capital structures that reduces our exposure to funding volatility.
In the last few months, we have expanded our forward flow agreements into all three core asset classes, including inaugural agreements with <unk> and some point in auto and point of sale respectively.
Speaker #2: Lastly, we signed several long-term agreements with leading partners to establish commitments across application flow size, quality, and controls to provide further visibility through the cycle.
This broadens our Carson Lake agreement into both personal loans and auto.
Speaker #2: Turning to funding, we continued to diversify from, include experience, activate, include more committed capital structures that reduces our exposure to pre-funded ABS funding structure to funding volatility.
We continue to innovate across our various ABS shelves, we introduced revolving structures first in Pos.
And then in personal loans.
Inc and.
And Porsche ABS deal and our inaugural peered revolving ABS with 26, north, but it gives us a more diverse set of financing options and more visibility, hence greater consistency in our funding construct in the face of potential capital market cyclicality.
Speaker #2: In forward-flow agreements into all the last few months, we have expanded our classes, including inaugural agreements with Castlelake and Sunpoint in auto and point of sale, three core assets, respectively.
Speaker #2: This broadens our Castle Lake agreement into both personal loans and auto. We continue to innovate across our various ABS structures, first in shelves. We introduced revolving POS, and then in personal loans.
I'd like to reflect broadly on the capital markets environment, which remains very supportive for <unk>.
Sanjiv Das: Our onboarding pipeline remains the busiest in Pagaya's history, with demand and traction from leading lenders in the country across banks, fintechs, and other lenders. In fact, a lot of these leading lenders are proactively engaging with us on all products, which is a testament to Pagaya's relevance and strong product-driven value proposition. We are planning to announce some new names in the coming quarters. With our existing partners, we've been consistently delivering and diversifying across products, including the Direct Marketing Engine, the Affiliate Optimizer engine, and Dual Look. This diversification provides Pagaya with new volume beyond declined monetization, increased value and stickiness with existing lending partners, and most importantly, provides future growth for Pagaya without expanding our own risk appetite. Existing partners continue to actively adopt our products.
Sanjiv Das: Our onboarding pipeline remains the busiest in Pagaya's history, with demand and traction from leading lenders in the country across banks, fintechs, and other lenders. In fact, a lot of these leading lenders are proactively engaging with us on all products, which is a testament to Pagaya's relevance and strong product-driven value proposition. We are planning to announce some new names in the coming quarters. With our existing partners, we've been consistently delivering and diversifying across products, including the Direct Marketing Engine, the Affiliate Optimizer engine, and Dual Look. This diversification provides Pagaya with new volume beyond declined monetization, increased value and stickiness with existing lending partners, and most importantly, provides future growth for Pagaya without expanding our own risk appetite. Existing partners continue to actively adopt our products.
We see continued strong demand from across insurance funds, along with traditional asset managers, while we are witnessing a higher level of rationality that we saw in 2025 from private credit.
Speaker #2: We inked our second posh ABS deal and our inaugural paid revolving ABS with 26 North, which gives us a more diverse set of financing options and more visibility—hence, greater consistency in our funding.
Overall, we would view the current environment is more of a steady state with healthy demand and execution, particularly for quality assets.
Speaker #2: Potential capital market cyclicality. I'd like to reflect broadly on the capital markets environment, which remains very supportive for Pagaya. We see continued strong demand from across insurance funds, along with traditional asset managers, while we are witnessing a higher level of rationality than we saw in 2025 from private credit.
Turning to credit performance, we remain disciplined in our underwriting with our core focus is centered around gaining access to more high quality flow from existing and new partners.
We continue to leverage our unique ability to assess risk in real time.
Based on the data from over 30 lenders across three asset classes with agile decision, making.
Speaker #2: Overall, we would view the current environment as more of a steady state with healthy demand and assets. Turning to credit performance, we remain execution-focused, particularly for quality, disciplined in our underwriting, with our core focus centered around gaining access to more high-quality flow from existing and new sources to assess risk in real time.
We continue to prioritize prudent risk management.
While credit risk performance of our portfolio remains in line with expectations. We took proactive steps late in the year to reduce exposure to select higher volatility segments.
Sanjiv Das: In fact, our largest existing partners signed definitive term sheets and adopted the Direct Marketing Engine after a series of tests and are now scaling with us across direct mail and email pre-screen campaigns. Within our Affiliate Optimizer, we recently onboarded LendingClub onto Credit Karma, where they will be presenting personal loan offers to consumers in partnership with Pagaya. Additionally, we are currently expanding our Affiliate Optimizer engine to include Experian's Activate platform, with the launch of our first partner and several more in the onboarding queue. Lastly, we signed several long-term agreements with leading partners to establish commitments across application flow size, quality, and controls to provide further visibility through the cycle. Turning to funding, we continue to diversify from pre-funded ABS funding structure to include more committed capital structures that reduce our exposure to funding volatility.
Sanjiv Das: In fact, our largest existing partners signed definitive term sheets and adopted the Direct Marketing Engine after a series of tests and are now scaling with us across direct mail and email pre-screen campaigns. Within our Affiliate Optimizer, we recently onboarded LendingClub onto Credit Karma, where they will be presenting personal loan offers to consumers in partnership with Pagaya. Additionally, we are currently expanding our Affiliate Optimizer engine to include Experian's Activate platform, with the launch of our first partner and several more in the onboarding queue. Lastly, we signed several long-term agreements with leading partners to establish commitments across application flow size, quality, and controls to provide further visibility through the cycle. Turning to funding, we continue to diversify from pre-funded ABS funding structure to include more committed capital structures that reduce our exposure to funding volatility.
These actions had a direct impact on our network volumes revenues and profit in the fourth quarter.
Speaker #2: Based on the data from over with agile decision-making. We continue to 30 lenders across three asset classes prioritize prudent risk management. While credit risk performance of our portfolio remains in line with expectations, we took proactive steps late in the year to reduce exposure to select higher volatility segments.
Our decision was primarily driven by the changes in risk appetite that we observed across multiple lending partners of ours in light of market uncertainty.
As we discussed in our outlook the impact of these actions will restrain growth to a measured degree in the first quarter.
We expect a ramp in growth through the year due to several factors that we will discuss including the onboarding of new partners and continued penetration into existing relationships.
Speaker #2: These actions had a direct volumes, revenues, and profit in the impact on our network fourth quarter. Our decision was primarily driven by the changes in risk appetite that we observed across multiple lending partners of ours in light of market our outlook, the impact of these actions will restrain growth to a measured degree in the first in growth through the year due to several factors that we will uncertainty.
Before I hand, the call to EP for a detailed review of our financial performance and outlook I'd like to reflect on the successes we've had across the business this past year.
In summary, 2025 was a year of innovation optimization and profitability across all aspects of the business laying the groundwork for growth in 2026 and the years beyond.
Sanjiv Das: In the last few months, we have expanded our forward-flow agreements into all three core asset classes, including inaugural agreements with Castlelake and Sound Point in auto and point of sale, respectively. This broadens our Castlelake agreement into both personal loans and auto. We continue to innovate across our various ABS shelves. We introduced revolving structures, first in POS, and then in personal loans. We inked our second POS ABS deal and our inaugural POS revolving ABS with 26North, which gives us a more diverse set of financing options and more visibility, hence greater consistency in our funding concepts in the face of potential capital market cyclicality. I'd like to reflect broadly on the capital markets environment, which remains very supportive for Pagaya.
Sanjiv Das: In the last few months, we have expanded our forward-flow agreements into all three core asset classes, including inaugural agreements with Castlelake and Sound Point in auto and point of sale, respectively. This broadens our Castlelake agreement into both personal loans and auto. We continue to innovate across our various ABS shelves. We introduced revolving structures, first in POS, and then in personal loans. We inked our second POS ABS deal and our inaugural POS revolving ABS with 26North, which gives us a more diverse set of financing options and more visibility, hence greater consistency in our funding concepts in the face of potential capital market cyclicality. I'd like to reflect broadly on the capital markets environment, which remains very supportive for Pagaya.
Speaker #2: Including the onboarding of new partners and continued penetration into existing relationships. As we discussed, before I hand the call to performance and outlook, I'd like to reflect on the successes we've had across the business this past year.
Thanks Sanjay.
I will start with the Big picture in 2025, we achieved several important milestones that position <unk> for sustainable profitable growth.
Over the last few years, we have been deliberately reshaping this company strengthening the foundation tightening the operating model improving the capital structure and most importantly building a much more resilient and scalable and differentiated technology platform in consumer lending.
Speaker #2: In summary, 2025 was a year of innovation, optimization, and business, laying the groundwork for growth in 2026 and the years beyond.
Speaker #1: Thanks, Sanjiv. I will start with the big picture. In 2025, we achieved several important milestones that position profitable growth. Over the last few years, we have been deliberately reshaping this company.
And this past year, we made sustained investment in our data and risk infrastructure combined with intentional decisions around risk management balance sheet optimization and how we grow.
The cumulative result of all that work became evident in the financials as we are exiting 2025 with four consecutive quarters of GAAP profitability.
Speaker #1: Strengthening the
Speaker #1: Strengthening the Pagaya up for sustainable, foundation, tightening the operating model, quarter.
Speaker #1: improving the capital structure, and most importantly, building a much We expect a ramp more resilient, scalable, and differentiated technology platform in consumer lending. In investment in our data and risk infrastructure, combined with intentional decisions around risk management, balanced optimization, and how we that work became evident in the 2025 with four this past year, we made sustained financials as we are exiting grow.
Sanjiv Das: We see continued strong demand from across insurance funds along with traditional asset managers, while we are witnessing a higher level of rationality than we saw in 2025 from private credit. Overall, we would view the current environment as more of a steady state with healthy demand and execution, particularly for quality assets. Turning to credit performance, we remain disciplined in our underwriting with our core focus centered around gaining access to more high-quality flow from existing and new partners. We continue to leverage our unique ability to assess risk in real time based on the data from over 30 lenders across three asset classes with agile decision-making. We continue to prioritize prudent risk management. While credit risk performance of our portfolio remains in line with expectations, we took proactive steps late in the year to reduce exposure to select higher volatility segments.
Sanjiv Das: We see continued strong demand from across insurance funds along with traditional asset managers, while we are witnessing a higher level of rationality than we saw in 2025 from private credit. Overall, we would view the current environment as more of a steady state with healthy demand and execution, particularly for quality assets. Turning to credit performance, we remain disciplined in our underwriting with our core focus centered around gaining access to more high-quality flow from existing and new partners. We continue to leverage our unique ability to assess risk in real time based on the data from over 30 lenders across three asset classes with agile decision-making. We continue to prioritize prudent risk management. While credit risk performance of our portfolio remains in line with expectations, we took proactive steps late in the year to reduce exposure to select higher volatility segments.
As it relates to our 2026, our growth outlook. It reflect our long term objective to grow the platform, while remaining disciplined and adaptive in how we manage risk and even more so in an uncertain environment.
We actively manage the business as a portfolio of products partners and risk brands adjusting exposure as conditions evolve.
When uncertainty increases the appropriate response is to reduce exposure to higher risk segments when conditions improve we will reassess and reallocate accordingly.
Speaker #1: consecutive quarters of gap profitability. As it relates to our 2026 growth outlook, it reflects our long-term objective to grow the platform while The cumulative result of all remaining disciplined and adaptive in how we manage risk, and even more so in uncertain environment.
We remain focused on growth from increased product usage penetration and new partners.
Speaker #1: We actively manage the business and risk bands, adjusting exposure as conditions and our portfolio of products and partners evolve. When uncertainty increases, the appropriate response is to reduce exposure to higher risk segments.
Let me walk through the numbers.
For the full year 2025, we delivered $1 3 billion of revenue up 26% year over year.
$512 million of FRE LPC also up 26%.
Speaker #1: When accordingly. We remain focused on reassessing and reallocating growth from increased product partners. Let me walk through usage, penetration, and new numbers. For the full year 2025, we delivered $1.3 billion of revenue, up 26% year-over-year, $512 million of FRLPC, also up 26%, $371 million of adjusted EBITDA, and $81 million of GAAP net income, representing a $483 million improvement versus last year.
$371 million of adjusted EBITDA up, 76% and $81 million of GAAP net income representing $483 million improvement versus last year.
Sanjiv Das: These actions had a direct impact on our network volumes, revenues, and profit in the fourth quarter. Our decision was primarily driven by the changes in risk appetite that we observed across multiple lending partners of ours in light of market uncertainty. As we discussed in our outlook, the impact of these actions will restrain growth to a measured degree in the first quarter. We expect a ramp in growth through the year due to several factors that we will discuss, including the onboarding of new partners and continued penetration into existing relationships. Before I hand the call to EP for a detailed review of our financial performance and outlook, I'd like to reflect on the successes we've had across the business this past year.
Sanjiv Das: These actions had a direct impact on our network volumes, revenues, and profit in the fourth quarter. Our decision was primarily driven by the changes in risk appetite that we observed across multiple lending partners of ours in light of market uncertainty. As we discussed in our outlook, the impact of these actions will restrain growth to a measured degree in the first quarter. We expect a ramp in growth through the year due to several factors that we will discuss, including the onboarding of new partners and continued penetration into existing relationships. Before I hand the call to EP for a detailed review of our financial performance and outlook, I'd like to reflect on the successes we've had across the business this past year.
This reflects meaningful progress and profitability and operating leverage showing up at scale.
For the fourth quarter, specifically revenue was $335 million foreign.
<unk> was $131 million and adjusted EBITDA was 98 million, representing a 29% margin.
We reported GAAP net income of 34 million compared to a loss of $238 million a year ago.
Speaker #1: This reflects meaningful progress in stability and operating leverage showing up at scale. For the fourth quarter specifically, revenue was $335 million, FRLPC was $131 million, and adjusted EBITDA was $98 million, representing up 76%, a 29% margin.
Foreign policy as a percentage of network volume was four 9% demonstrating strong monetization while remaining disciplined on risk.
Sanjiv Das: In summary, 2025 was a year of innovation, optimization, and profitability across all aspects of the business, laying the groundwork for growth in 2026 and the years beyond.
Sanjiv Das: In summary, 2025 was a year of innovation, optimization, and profitability across all aspects of the business, laying the groundwork for growth in 2026 and the years beyond.
Turning to network volume, we reported $2 7 billion for the fourth quarter up 3% year over year.
Speaker #1: We reported GAAP net income of $34 million, compared to a loss of $238 million a year ago. FRLPC was 4.9% as a percentage of network volume, demonstrating strong monetization while remaining disciplined on risk.
Personal loan auto and Prs volume combined grew at a double digit rate and was partially offset by zero FSFR volume in the quarter.
Evangelos Perros: Thanks, Sanjiv. I will start with the big picture. In 2025, we achieved several important milestones that positioned Pagaya up for sustainable, profitable growth. Over the last few years, we have been deliberately reshaping this company, strengthening the foundation, tightening the operating model, improving the capital structure, and most importantly, building a much more resilient, scalable, and differentiated technology platform in consumer lending. In this past year, we made sustained investment in our data and risk infrastructure, combined with intentional decisions around risk management, balanced optimization, and how we grow. The cumulative result of all that work became evident in the financials as we're exiting 2025 with four consecutive quarters of GAAP profitability. As it relates to our 2026 growth outlook, it reflects our long-term objective to grow the platform while remaining disciplined and adaptive in how we manage risk, and even more so in an uncertain environment.
Evangelos Perros: Thanks, Sanjiv. I will start with the big picture. In 2025, we achieved several important milestones that positioned Pagaya up for sustainable, profitable growth. Over the last few years, we have been deliberately reshaping this company, strengthening the foundation, tightening the operating model, improving the capital structure, and most importantly, building a much more resilient, scalable, and differentiated technology platform in consumer lending. In this past year, we made sustained investment in our data and risk infrastructure, combined with intentional decisions around risk management, balanced optimization, and how we grow. The cumulative result of all that work became evident in the financials as we're exiting 2025 with four consecutive quarters of GAAP profitability. As it relates to our 2026 growth outlook, it reflects our long-term objective to grow the platform while remaining disciplined and adaptive in how we manage risk, and even more so in an uncertain environment.
Personal loans remain our largest vertical at approximately 65% of total volume and grew 10% year over year.
Speaker #1: Turning to network volume, we reported $2.7 billion for the fourth quarter, up 3% year over year. Personal loan, auto, and POS volume combined grew at a double-digit rate. There was zero SFR volume in the quarter.
Also in Pos and represented 19% and 16% of quarterly network volume respectively.
For the full year network volume was $10 5 billion up 9%.
Excluding <unk> volume growth was substantially higher.
Speaker #1: Personal loans remain our rate and was partially offset by largest vertical at approximately 65% of total volume, and grew 10% year over year. Auto and POS represented 19% and 16% volume, respectively.
Late in the quarter, we proactively tightened production in certain areas that remain profitable, but could exhibit higher variability of credit outcomes and may be the first to show deterioration in a downside scenario.
Speaker #1: For of quarterly network up 9%. the full year, network volume was substantially was 10.5 billion, we proactively tightened production in certain areas that remain profitable but could exhibit higher variability of higher.
This was a dynamic reallocation within the portfolio away from higher risk segments with Atlantic we redeployed in volume from new application flow and new products and therefore more balanced risk.
Given our visibility into new partner, Onboarding, new partner and product monetization and the operating leverage in the business. We are well positioned to make these adjustments the decision reduced fourth quarter volume by approximately 100 to 150 million without impacting the quarter.
Speaker #1: First to show deterioration in credit outcomes and may be the downside scenario. This was a dynamic reallocation within the portfolio away from late in the quarter, to be redeployed in volume from new application flow and new risk.
Evangelos Perros: We actively manage the business as a portfolio of products, partners, and risk bands, adjusting exposure as conditions evolve. When uncertainty increases, the appropriate response is to reduce exposure to higher-risk segments. When conditions improve, we will reassess and reallocate accordingly. We remain focused on growth from increased product usage, penetration, and new partners. Let me walk through the numbers. For the full year 2025, we delivered $1.3 billion of revenue, up 26% year-over-year, $512 million of FRLPC, also up 26%, $371 million of adjusted EBITDA, up 76%, and $81 million of GAAP net income, representing a $483 million improvement versus last year. This reflects meaningful progress in profitability and operating leverage showing up at scale. For the fourth quarter specifically, revenue was $335 million, FRLPC was $131 million, and adjusted EBITDA was $98 million, representing a 29% margin.
Evangelos Perros: We actively manage the business as a portfolio of products, partners, and risk bands, adjusting exposure as conditions evolve. When uncertainty increases, the appropriate response is to reduce exposure to higher-risk segments. When conditions improve, we will reassess and reallocate accordingly. We remain focused on growth from increased product usage, penetration, and new partners. Let me walk through the numbers. For the full year 2025, we delivered $1.3 billion of revenue, up 26% year-over-year, $512 million of FRLPC, also up 26%, $371 million of adjusted EBITDA, up 76%, and $81 million of GAAP net income, representing a $483 million improvement versus last year. This reflects meaningful progress in profitability and operating leverage showing up at scale. For the fourth quarter specifically, revenue was $335 million, FRLPC was $131 million, and adjusted EBITDA was $98 million, representing a 29% margin.
Profitability targets.
When risk moves and persist we will adjust we will not stretch where dynamic we recalibrate and continue compounding returns.
Speaker #1: Given our visibility into new partner onboarding, new partner and product monetization, and the operating leverage in the business, we are making adjustments. The decision reduced fourth quarter volume by higher risk segments with a plan for products, and therefore more balanced approximately $100 to $150 million, without impacting the quarter's profitability targets. We are well positioned to make these.
Fourth quarter total revenue and other income was 335 million up 20% year over year.
Revenue grew 16% to 321 million and made up 96% of total revenue.
Speaker #1: When risk moves and persists, we will dynamic. We recalibrate and adjust. We will not stretch. We are returns. Fourth quarter total revenue and other income was 335 million, up 20% year over continue compounding year.
Interest and investment income grew to 14 million.
Importantly revenue growth continued to outpace volume growth underscoring two key trends improves monetization and higher revenue and profit per unit of volume and risk.
Speaker #1: 16% to $321 million, 96% of total revenue. Interest and investment income, fee revenue grew to $14 million. Importantly, revenue growth continued to outpace volume growth, underscoring two key trends.
Full year revenue grew 26% and interest and investment income reached approximately $40 million.
And finally PC in the fourth quarter was 131 million up 12% year over year again meaningfully outpacing volume growth.
Speaker #1: Improved monetization and higher revenue and profit per unit of volume and million, and made up. Full year revenue grew 26%, and interest and investment income reached million.
If our MPC margin expanded to four 9% driven primarily by partner and funding mix.
Evangelos Perros: We reported GAAP net income of $34 million compared to a loss of $238 million a year ago. FRLPC, as a percentage of network volume, was 4.9%, demonstrating strong monetization while remaining disciplined on risk. Turning to network volume, we reported $2.7 billion for the fourth quarter, up 3% year-over-year. Personal loan, auto, and POS volume combined grew at a double-digit rate and was partially offset by zero SFR volume in the quarter. Personal loans remain our largest vertical at approximately 65% of total volume and grew 10% year-over-year. Auto and POS represented 19% and 16% of quarterly network volume, respectively. For the full year, network volume was $10.5 billion, up 9%. Excluding SFR, volume growth was substantially higher.
Evangelos Perros: We reported GAAP net income of $34 million compared to a loss of $238 million a year ago. FRLPC, as a percentage of network volume, was 4.9%, demonstrating strong monetization while remaining disciplined on risk. Turning to network volume, we reported $2.7 billion for the fourth quarter, up 3% year-over-year. Personal loan, auto, and POS volume combined grew at a double-digit rate and was partially offset by zero SFR volume in the quarter. Personal loans remain our largest vertical at approximately 65% of total volume and grew 10% year-over-year. Auto and POS represented 19% and 16% of quarterly network volume, respectively. For the full year, network volume was $10.5 billion, up 9%. Excluding SFR, volume growth was substantially higher.
For the full year FRE APC totaled $512 million also for 9% of network volume up 70 basis points from 2024.
Speaker #1: FRLPC in the fourth quarter was $131 million, up 12% year over year. Thankfully, outpacing volume growth. Approximately 40 FRLPC margin expanded to 4.9%, driven primarily by partner and funding. FRLPC totaled $512 million, also 4.9% of network volume, up 70 basis points from 2024.
I want to spend a moment on a subset of fee revenue fees from capital markets execution. This is an area, where we have progressed in a very intentional way.
These fees were at a negative $6 million for the quarter and a negative $21 million for the year, reflecting the pricing agreements with our former flow partners and their risk adjusted pricing of our ABS transactions.
Speaker #1: I want to spend a moment on a subset of markets execution. This is a very intentional mix. These fees were a part of fee revenue, fees from capital. For the full year, negative $6 million for the quarter and a negative $21 million for the year, reflecting the pricing agreements with our four close partners and the transactions.
Specifically on ABS negative fees reflect additional cash contribution we put in our securitization structures. In addition to our purchase of securities reflected in our investments in loans and securities.
These cash contribution is accounted for as an upfront the reduction in fee revenues and provide additional support against potential future credit losses.
Speaker #1: Specifically on ABS, negative fees an area where we have progressed in a reflect additional cash contribution we put in our securitization structures in addition to our purchase of securities reflected in our investments in loans and securities.
Evangelos Perros: Late in the quarter, we proactively tightened production in certain areas that remain profitable but could exhibit higher variability of credit outcomes and may be the first to show deterioration in a downside scenario. This was a dynamic reallocation within the portfolio, away from higher-risk segments, with a plan to be redeployed in volume from new application flow and new products, and therefore more balanced risk. Given our visibility into new partner onboarding, new partner and product monetization, and the operating leverage in the business, we are well-positioned to make these adjustments. The decision reduced fourth-quarter volume by approximately $100 to $150 million without impacting the quarter's profitability targets. When risk moves and persists, we will adjust. We will not stretch. We are dynamic. We recalibrate and continue compounding returns. Fourth-quarter total revenue and other income was $335 million, up 20% year-over-year.
Evangelos Perros: Late in the quarter, we proactively tightened production in certain areas that remain profitable but could exhibit higher variability of credit outcomes and may be the first to show deterioration in a downside scenario. This was a dynamic reallocation within the portfolio, away from higher-risk segments, with a plan to be redeployed in volume from new application flow and new products, and therefore more balanced risk. Given our visibility into new partner onboarding, new partner and product monetization, and the operating leverage in the business, we are well-positioned to make these adjustments. The decision reduced fourth-quarter volume by approximately $100 to $150 million without impacting the quarter's profitability targets. When risk moves and persists, we will adjust. We will not stretch. We are dynamic. We recalibrate and continue compounding returns. Fourth-quarter total revenue and other income was $335 million, up 20% year-over-year.
While this does not change the underlying credit performance of the asset.
It reduces downside exposure and earnings volatility associated with a certificate investments with hold on our balance sheet.
Speaker #1: These cash contributions, risk-adjusted pricing of our ABS, are accounted for as an upfront reduction in fee revenues and provide additional credit losses. While this does not change the underlying credit performance of the asset, it reduces downside exposure and earnings volatility associated with a support against potential future certificate investment we hold on our balance sheet.
Most importantly, though it also creates a clear and a tighter risk boundaries for our investors.
To put this into context for every $1 billion of ABS funding, we are required to contribute a minimum of approximately $50 million of capital I E. 5% in line with risk retention rules.
Speaker #1: Most importantly, though, it also creates a boundary for our investors. To put this into context, for every $1 billion, a clear and tighter risk is approximately $50 million of capital, i.e., 5%, in line with risk retention rules.
Illustrative Lee at <unk>.
<unk> hundred basis points. These counting ABS pricing translates into roughly $10 million of lower upfront fees, but also implies 10 million less in future impairments or up to $10 million more income all else being equal.
Now, let's talk about what we view as another differentiated feature of the business our operating leverage.
Speaker #1: ABS pricing translates into roughly $10 million of lower, illustratively, upfront fees, but also implies $10 million less in future impairments or up to $10 million more equal.
Adjusted EBITDA in the fourth quarter was $98 million up 53% year over year with a 29% margin.
Evangelos Perros: Fee revenue grew 16% to $321 million and made up 96% of total revenue. Interest and investment income grew to $14 million. Importantly, revenue growth continued to outpace volume growth, underscoring two key trends: improved monetization and higher revenue and profit per unit of volume and risk. Full-year revenue grew 26%, and interest and investment income reached approximately $40 million. FRLPC in Q4 was $131 million, up 12% year-over-year, and meaningfully outpacing volume growth. FRLPC margin expanded to 4.9%, driven primarily by partner and funding mix. For the full year, FRLPC totaled $512 million, also 4.9% of network volume, up 70 basis points from 2024. I want to spend a moment on a subset of fee revenue: fees from capital market execution. This is an area where we have progressed in a very intentional way.
Evangelos Perros: Fee revenue grew 16% to $321 million and made up 96% of total revenue. Interest and investment income grew to $14 million. Importantly, revenue growth continued to outpace volume growth, underscoring two key trends: improved monetization and higher revenue and profit per unit of volume and risk. Full-year revenue grew 26%, and interest and investment income reached approximately $40 million. FRLPC in Q4 was $131 million, up 12% year-over-year, and meaningfully outpacing volume growth. FRLPC margin expanded to 4.9%, driven primarily by partner and funding mix. For the full year, FRLPC totaled $512 million, also 4.9% of network volume, up 70 basis points from 2024. I want to spend a moment on a subset of fee revenue: fees from capital market execution. This is an area where we have progressed in a very intentional way.
Core operating expenses declined to 36% of our foreign APC, a 13 point improvement year over year.
Speaker #1: Now, let's talk about what income, all being, we view as another differentiated feature of ABS funding. We are required, the business, our operating leverage.
Incremental EBITDA margin exceeded 100%, meaning nearly every incremental dollar of fr LPC flowed through to EBITDA.
Speaker #1: Adjusted EBITDA in the fourth quarter was $98 million, up 53% year over year, with a 29% margin. Core operating expenses declined to 36% of—to contribute a minimum of FRLPC, a 13-point improvement year over year.
The modest means versus guidance was driven by the late quarter production adjustment.
For the full year, adjusted EBITDA was $371 million up 76% and margin expanded to 28, 5% up 800 basis points.
Speaker #1: Incremental EBITDA margin exceeded 100%, meaning nearly every incremental dollar of FRLPC flowed through to EBITDA. The modest means versus guidance was driven by the late-quarter production adjustment.
Turning to GAAP net income we reported a record 34 million, our fourth consecutive quarter of profitability compared to a net loss of $238 million a year ago.
Speaker #1: For the full year, adjusted EBITDA was $371 million, up 76%, and margin expanded to 28.5%, up 800 basis points. Turning to GAAP net income, we reported a record $34 million, our fourth consecutive quarter of profitability, compared to a net loss a year ago.
Fourth quarter GAAP net income included the positive impact of approximately $9 million from the extinguishment of corporate notes and a nonrecurring tax related benefits.
For the full year GAAP net income was 81 million compared to a 401 million loss in 2024.
Speaker #1: Fourth quarter GAAP net income included the positive impact of approximately 9 238 million a year million, from the extinguishment of benefit. For the full year, GAAP net income non-recurring tax-related loss in 2024.
Evangelos Perros: These fees were a negative $6 million for the quarter and a negative $21 million for the year, reflecting the pricing agreements with our forward-flow partners and the risk-adjusted pricing of our ABS transactions. Specifically on ABS, negative fees reflect additional cash contribution we put in our securitization structures, in addition to our purchase of securities reflected in our investments in loans and securities. This cash contribution is accounted for as an upfront reduction in fee revenues and provides additional support against potential future credit losses. While this does not change the underlying credit performance of the asset, it reduces downside exposure and earnings volatility associated with the certificate investments we hold on our balance sheet. Most importantly, though, it also creates a clear and a tighter risk boundary for our investors.
Evangelos Perros: These fees were a negative $6 million for the quarter and a negative $21 million for the year, reflecting the pricing agreements with our forward-flow partners and the risk-adjusted pricing of our ABS transactions. Specifically on ABS, negative fees reflect additional cash contribution we put in our securitization structures, in addition to our purchase of securities reflected in our investments in loans and securities. This cash contribution is accounted for as an upfront reduction in fee revenues and provides additional support against potential future credit losses. While this does not change the underlying credit performance of the asset, it reduces downside exposure and earnings volatility associated with the certificate investments we hold on our balance sheet. Most importantly, though, it also creates a clear and a tighter risk boundary for our investors.
This largely reflects higher fee revenue alongside lower operating expenses interest expense and impairment, resulting in a 10% margin in the fourth quarter compared to a 6% last quarter and a negative 85% a year ago.
Credit related fair value adjustments were $107 million for the year adjust.
Speaker #1: This largely reflects higher fee revenue, alongside lower operating expenses, interest on corporate notes and expense, and impairments, resulting in a 10% margin in the fourth quarter, compared to 6% last quarter and negative 85% a year ago.
Adjusted net income was $275 million.
Diving into credit performance and results across personal loan auto and point of sale remain in line with expectations and within our risk tolerance demand for our assets remains strong as evidenced by a new forward flow agreements, our first ore to certificate sales since 2021 and the demand that we are.
Speaker #1: Credit-related fair value adjustments were $107 million for the year. Adjusted net income was $81 million, compared to $401 million. Diving into credit performance, results across personal loan, auto, and point-of-sale remain in line with expectations and within our risk tolerance. There was a 275 to 100 basis points discount in performance.
Seeing the first few weeks of the year.
2025 vintage as it represents a more normalized production compared to 2024, particularly given the lower cost of funding from investors relative to prior years.
Speaker #1: Demand for our assets remains strong, as evidenced by new forward flow agreements, our first auto certificate sale since 2021, and the demand weeks of the year.
It relates to new production rating agencies also validated the cumulative net losses are expected to be lower relative to prior production after reflecting our recent risk actions.
Evangelos Perros: To put this into context, for every $1 billion of ABS funding, we are required to contribute a minimum of approximately $50 million of capital, i.e., 5%, in line with risk retention rules. Illustratively, a 100 basis points discount in ABS pricing translates into roughly $10 million of lower upfront fees, but also implies $10 million less in future impairments or up to $10 million more income, all else being equal. Now, let's talk about what we view as another differentiated feature of the business: our operating leverage. Adjusted EBITDA in Q4 was $98 million, up 53% year-over-year, with a 29% margin. Core operating expenses declined to 36% of FRLPC, a 13-point improvement year-over-year. Incremental EBITDA margin exceeded 100%, meaning nearly every incremental dollar of FRLPC flowed through to EBITDA. The modest miss versus guidance was driven by delayed quarter production adjustment.
Evangelos Perros: To put this into context, for every $1 billion of ABS funding, we are required to contribute a minimum of approximately $50 million of capital, i.e., 5%, in line with risk retention rules. Illustratively, a 100 basis points discount in ABS pricing translates into roughly $10 million of lower upfront fees, but also implies $10 million less in future impairments or up to $10 million more income, all else being equal. Now, let's talk about what we view as another differentiated feature of the business: our operating leverage. Adjusted EBITDA in Q4 was $98 million, up 53% year-over-year, with a 29% margin. Core operating expenses declined to 36% of FRLPC, a 13-point improvement year-over-year. Incremental EBITDA margin exceeded 100%, meaning nearly every incremental dollar of FRLPC flowed through to EBITDA. The modest miss versus guidance was driven by delayed quarter production adjustment.
Speaker #1: 2025 vintages represent a trend that we're seeing in the first few months, with more normalized production compared to 2024, particularly given the lower cost of funding from investors relative to prior years.
Let's go to the specifics personal loan CNS for the second half of 2024 through the first half of 2025 vintages are running 30% to 40% better than 2021 peak levels.
Speaker #1: As it relates to new production, rating agencies also validated that cumulative net losses are expected to be lower relative to prior recent risk actions.
<unk> are running 50% to 70% better than 2022 vintages.
Speaker #1: specifics. Personal loan CNLs for the second half of 2024 through the first half of production after reflecting our 2025 vintages are running 30 to Let's go to the 2021 peak levels.
While auto 60, plus delinquencies are higher than 24, following the year's pullback and broadly in line with 2023 levels recoveries enroll rates are better than both 2023, and 2024 pointing to a normalized level of expected losses.
Speaker #1: Auto CNLs are running 50% to 70% better than 2022 vintages. While auto 60-plus delinquencies are higher, they are broadly in line with 2023 levels. Recoveries and roll rates are better than both 2023 and 2024, pointing to 2024, following the year's pullback and to a normalized level of point-of-sale credit rents expectations.
For point of sale credit trends remained stable and in line with expectations.
As I mentioned earlier realized credit performance remains in line with expectations and our late quarter actions reflect increased uncertainty rather than observed deterioration when uncertainty increases even if losses have not materialized. The platform is designed to reduce exposure to.
Evangelos Perros: For the full year, adjusted EBITDA was $371 million, up 76%, and margin expanded to 28.5%, up 800 basis points. Turning to GAAP net income, we reported a record $34 million, our fourth consecutive quarter of profitability, compared to a net loss of $238 million a year ago. Fourth-quarter GAAP net income included the positive impact of approximately $9 million from the extinguishment of corporate notes and a non-recurring tax-related benefit. For the full year, GAAP net income was $81 million, compared to a $401 million loss in 2024. This largely reflects higher fee revenue alongside lower operating expenses, interest expense, and impairments, resulting in a 10% margin in the fourth quarter, compared to a 6% last quarter and a negative 85% a year ago. Credit-related fair value adjustments were $107 million for the year. Adjusted net income was $275 million.
Evangelos Perros: For the full year, adjusted EBITDA was $371 million, up 76%, and margin expanded to 28.5%, up 800 basis points. Turning to GAAP net income, we reported a record $34 million, our fourth consecutive quarter of profitability, compared to a net loss of $238 million a year ago. Fourth-quarter GAAP net income included the positive impact of approximately $9 million from the extinguishment of corporate notes and a non-recurring tax-related benefit. For the full year, GAAP net income was $81 million, compared to a $401 million loss in 2024. This largely reflects higher fee revenue alongside lower operating expenses, interest expense, and impairments, resulting in a 10% margin in the fourth quarter, compared to a 6% last quarter and a negative 85% a year ago. Credit-related fair value adjustments were $107 million for the year. Adjusted net income was $275 million.
Speaker #1: As I mentioned earlier, realized credit expectations, and our late quarter actions reflect increased uncertainty rather remain stable and in line with than observed deterioration.
Speaker #1: performance remains in line with When uncertainty increases, even if losses have not materialized, the platform is designed to reduce exposure to the details of the distribution.
The tails of the distribution.
When conditions improve we will adjust again.
Funding remains robust in the fourth quarter, we issued $2 9 billion in our ABS program across seven transactions last week, we closed an $800 million ABS deal that was oversubscribed, even after upsizing from an initial size of $600 million.
Speaker #1: When conditions improve, we will adjust again. Funding remains robust. In the fourth quarter, we issue 2.9 billion in our ABS program across seven transactions.
With the recent announcement of our inaugural Tos for workflow with sound point capital. We now have forward flow agreements across all three asset classes.
Speaker #1: Last week, we closed an 800 million ABS deal that was oversubscribed even after upsizing from announcement of our inaugural POS forward flow with SoundPoint Capital, we all three asset million.
We also closed our first $350 million revolving personal loan ABS was 26, north and combined with our two point of sale ABS revolvers, we now have about $3 billion of revolving capacity from those three transactions.
Speaker #1: classes. We also closed our first 350 million revolving personal loan ABS with 26 North and combined with our two With a recent an initial size of 600 point-of-sale ABS revolvers, we now have about 3 billion of revolving capacity from those three liquidity and flexibility.
Turning to the balance sheet asset quality and mix have improved materially over the past 24 months, providing increased liquidity and flexibility. We ended the quarter with approximately 288 million in cash and cash equivalents up $62 million from a year ago and $945 million.
Investment is loan and securities.
Evangelos Perros: Diving into credit performance, results across personal loan, auto, and point of sale remain in line with expectations and within our risk tolerance. Demand for our assets remains strong, as evidenced by new forward-flow agreements, our first auto certificate sale since 2021, and the demand that we're seeing in the first few weeks of the year. 2025 vintages represent a more normalized production compared to 2024, particularly given the lower cost of funding from investors relative to prior years. As it relates to new production, rating agencies also validated that cumulative net losses are expected to be lower relative to prior production after reflecting our recent risk actions. Let's go to the specifics. Personal loan CNLs for the second half of 2024 through the first half of 2025 vintages are running 30% to 40% better than 2021 peak levels. Auto CNLs are running 50% to 70% better than 2022 vintages.
Evangelos Perros: Diving into credit performance, results across personal loan, auto, and point of sale remain in line with expectations and within our risk tolerance. Demand for our assets remains strong, as evidenced by new forward-flow agreements, our first auto certificate sale since 2021, and the demand that we're seeing in the first few weeks of the year. 2025 vintages represent a more normalized production compared to 2024, particularly given the lower cost of funding from investors relative to prior years. As it relates to new production, rating agencies also validated that cumulative net losses are expected to be lower relative to prior production after reflecting our recent risk actions. Let's go to the specifics. Personal loan CNLs for the second half of 2024 through the first half of 2025 vintages are running 30% to 40% better than 2021 peak levels. Auto CNLs are running 50% to 70% better than 2022 vintages.
As we have stated over the past year, we're leveraging our improved liquidity to make opportunistic investments to lower our cost of funding and increase profitability.
Speaker #1: ended the quarter with approximately We 288 million in cash and 24 months, providing increased cash equivalents, up 62 million from a year ago, and 945 million in investments loan and securities.
In the fourth quarter, new investments in loan and Securities were about 271 million of which $47 million was opportunistic in the form of ABS bonds, and we received $170 million in return of capital from prior deals.
Speaker #1: As we have stated over the past year, we're leveraging our improved liquidity to make opportunistic investments, turning to the balance transactions to lower profitability.
Speaker #1: In the our cost of funding, and increase loan and securities were about improved materially over the past 271 million, of which 47 million was opportunistic in the form of ABS bonds, and we received 170 million in return of capital from prior deals.
In December we also repurchased $7 million of our corporate notes at an approximate 12, 5% discount to par consistent with our stated objective of opportunistic capital deployment.
Last week, we repurchased an additional 17 of our corporate note.
Speaker #1: In December, we also repurchased 7 million of our corporate notes at an approximate 12.5% discount to par, consistent with our stated objective of opportunistic capital deployment.
Okay.
Throughout 2025 discretionary investments in ABS structures, all in the form of rated loans total approximately $171 million, representing about 27% of the total investments in loan and securities.
Speaker #1: Last week, we repurchased an additional $7 million of our corporate notes. Throughout 2025, discretionary investments in ABS structures, all in the form of rated sheet, asset quality and mix have notes, totaled approximately $171 million, representing about 27% of the total investments in loans and securities.
Combined with cash we now hold a healthy liquidity position and in a wide range of scenarios. Our objective is no longer just liquidity, we are maturing and increasingly pursuing optionality optionality allows us to be conservative on credit opportunistic on capital deployment and patient on growth.
Evangelos Perros: While auto 60+ delinquencies are higher than 2024 following the year's pullback and broadly in line with 2023 levels, recoveries and roll rates are better than both 2023 and 2024, pointing to a normalized level of expected losses. For point-of-sale, credit trends remain stable and in line with expectations. As I mentioned earlier, realized credit performance remains in line with expectations, and our late-quarter actions reflect increased uncertainty rather than observed deterioration. When uncertainty increases, even if losses have not materialized, the platform is designed to reduce exposure to the tails of the distribution. When conditions improve, we will adjust again. Funding remains robust. In Q4, we issued $2.9 billion in our ABS program across seven transactions. Last week, we closed an $800 million ABS deal that was oversubscribed even after upsizing from an initial size of $600 million.
Evangelos Perros: While auto 60+ delinquencies are higher than 2024 following the year's pullback and broadly in line with 2023 levels, recoveries and roll rates are better than both 2023 and 2024, pointing to a normalized level of expected losses. For point-of-sale, credit trends remain stable and in line with expectations. As I mentioned earlier, realized credit performance remains in line with expectations, and our late-quarter actions reflect increased uncertainty rather than observed deterioration. When uncertainty increases, even if losses have not materialized, the platform is designed to reduce exposure to the tails of the distribution. When conditions improve, we will adjust again. Funding remains robust. In Q4, we issued $2.9 billion in our ABS program across seven transactions. Last week, we closed an $800 million ABS deal that was oversubscribed even after upsizing from an initial size of $600 million.
Speaker #1: Combined with cash, we now hold a healthy liquidity position under a wide range of maturing and increasingly pursuing just liquidity. We are optionality. Optionality allows us to be conservative on credit, opportunistic on capital deployment, and patient on growth.
In the fourth quarter, the fair value of the investment portfolio was adjusted down by approximately $50 million and we added $97 million of new investments and net of Paydowns. Our guidance continues to reflect $100 million to $150 million of rolling 12 months forward credit related.
Speaker #1: In the fourth quarter, the fair value of the investment portfolio was adjusted down by approximately $50 million, and we added $97 million of new investments net of paydowns.
<unk>.
I want to remind everyone that this is not a forecast of losses, it's a governance risk embedded in our guidance. It reflects uncertainty and remains consistent with prior guidance.
Speaker #1: Our guidance continues to reflect 100 to 150 million of rolling 12-month forward credit-related impairments. I want to remind everyone that this is not a forecast of losses.
Let me close with our 2026 outlook, we remain cautious in the near term given persistent macro and credit uncertainty, we expect volume growth throughout the year, driven by new application flow new partners and increased penetration of our products.
Speaker #1: It's a governance on risk embedded in our guidance, consistent with prior guidance. It reflects uncertainty and remains guidance. Let me close with our 2026 outlook.
Evangelos Perros: With a recent announcement of our inaugural POS forward flow with Sound Point Capital, we now have forward flow agreements across all three asset classes. We also closed our first $350 million revolving personal loan ABS with 26North, and combined with our two point-of-sale ABS revolvers, we now have about $3 billion of revolving capacity from those three transactions. Turning to the balance sheet, asset quality and mix have improved materially over the past 24 months, providing increased liquidity and flexibility. We ended the quarter with approximately $288 million in cash and cash equivalents, up $62 million from a year ago, and $945 million in investments, loans, and securities. As we have stated over the past year, we're leveraging our improved liquidity to make opportunistic investments to lower our cost of funding and increase profitability.
Evangelos Perros: With a recent announcement of our inaugural POS forward flow with Sound Point Capital, we now have forward flow agreements across all three asset classes. We also closed our first $350 million revolving personal loan ABS with 26North, and combined with our two point-of-sale ABS revolvers, we now have about $3 billion of revolving capacity from those three transactions. Turning to the balance sheet, asset quality and mix have improved materially over the past 24 months, providing increased liquidity and flexibility. We ended the quarter with approximately $288 million in cash and cash equivalents, up $62 million from a year ago, and $945 million in investments, loans, and securities. As we have stated over the past year, we're leveraging our improved liquidity to make opportunistic investments to lower our cost of funding and increase profitability.
Speaker #1: We remain cautious in the near term given persistent macro and credit uncertainty. We expect volume growth throughout the year, driven by new application flow, new partners, and products.
And finally pursue margin is expected to be between four and 5% for the year and to revert lower we've seen that range from current levels. As a result of continued expansion in Pos contribution from new partners and our funding mix as Jeff mentioned guidance reflect the credit related impairments if any.
Speaker #1: FRLPC margin and 5 percent for the year, and of continued expansion in POS, contribution from new mix. As just mentioned, guidance increased penetration of our partners, and our funding reflects the credit-related impairment, if any, of $100 to $150 million.
100 $150 million.
Both first quarter and full year guidance to reflect the full impact of last quarter's exit rates volume reduction of approximately $100 million to $150 million per months.
Most notably the midpoint of that range represents approximately $375 million of first quarter impact and $1 5 billion on a full year baseline essentially assuming current uncertainty persists and leading to consumer and performance deterioration.
Speaker #1: Quarter and full year guidance reflect a full impact of last quarter's exit rate volume reduction of approximately 100 to 150 million per month. Illustratively, the midpoint of that range represents approximately 375 million of first quarter impact, and 1.5 billion on a full year baseline, essentially assuming current uncertainty persists and leading to consumer and performance deterioration.
If uncertainty receipts, we will adjust accordingly and swiftly.
Evangelos Perros: In Q4, new investments in loans and securities were about $271 million, of which $47 million was opportunistic in the form of ABS bonds, and we received $170 million in return of capital from prior deals. In December, we also repurchased $7 million of our corporate notes at an approximate 12.5% discount to par, consistent with our stated objective of opportunistic capital deployment. Last week, we repurchased an additional $7 million of our corporate notes. Throughout 2025, discretionary investments in ABS structures, all in the form of rated loans, totaled approximately $171 million, representing about 27% of the total investments in loans and securities. Combined with cash, we now hold a healthy liquidity position under a wide range of scenarios. Our objective is no longer just liquidity. We are maturing and increasingly pursuing optionality.
Evangelos Perros: In Q4, new investments in loans and securities were about $271 million, of which $47 million was opportunistic in the form of ABS bonds, and we received $170 million in return of capital from prior deals. In December, we also repurchased $7 million of our corporate notes at an approximate 12.5% discount to par, consistent with our stated objective of opportunistic capital deployment. Last week, we repurchased an additional $7 million of our corporate notes. Throughout 2025, discretionary investments in ABS structures, all in the form of rated loans, totaled approximately $171 million, representing about 27% of the total investments in loans and securities. Combined with cash, we now hold a healthy liquidity position under a wide range of scenarios. Our objective is no longer just liquidity. We are maturing and increasingly pursuing optionality.
This is an important point so let me explain.
We are exiting the year with $10 8 billion of fourth quarter annualized volume deliberately shrinking higher risk volume by $1 5 billion on an annualized basis, while still delivering year over year volume growth.
Speaker #1: If uncertainty recedes, we will adjust accordingly and revert lower within that range swiftly. This is an important point, so let me explain. We are from current levels as a result, exiting the year with 10.8 volume.
The reduction in certain credit peers, and new volume growth are not contradictory. There are two sides of the same optimization process.
Speaker #1: Deliberately shrinking 1.5 billion on an annualized basis, while still delivering year-over-year volume growth. Reduction in certain credit tiers and new volume growth are not contradictory.
For the first quarter of 2026, we expect network volume in the range of two five to $2 7 billion total.
Total revenue and other income in the range of $315 million to $335 million.
Speaker #1: There are two sides of the same optimization process. For the first quarter of 2026, we expect network volume in the range of $2.5 to $2.7 billion.
And adjusted EBITDA in the range of $80 million to $95 million.
Speaker #1: Total revenue and other income in the range of $315 million to $335 million. An adjusted EBITDA in the range of $80 million to $95 million.
We expect GAAP net income for the quarter of $15 million to $35 million.
For the full year 2026, we are expecting network volume in the range of 11 to $5 billion to $13 billion total revenue and other income in the range of $1 4 billion to $1 $5 75 billion and adjusted EBITDA in the range of 410 to 400.
Speaker #1: We expect net income for the quarter of 15 to 35 million. 2026, we are expecting network For the full year volume in the range of 11.25 to 13 billion.
Evangelos Perros: Optionality allows us to be conservative on credit, opportunistic on capital deployment, and patient on growth. In Q4, the fair value of the investment portfolio was adjusted down by approximately $50 million, and we added $97 million of new investments net of paydowns. Our guidance continues to reflect $100 to $150 million of rolling 12-month forward credit-related impairments. I want to remind everyone that this is not a forecast of losses. It's a governance on risk embedded in our guidance. It reflects uncertainty and remains consistent with prior guidance. Let me close with our 2026 outlook. We remain cautious in the near term given persistent macro and credit uncertainty. We expect volume growth throughout the year, driven by new application flow, new partners, and increased penetration of our products.
Evangelos Perros: Optionality allows us to be conservative on credit, opportunistic on capital deployment, and patient on growth. In Q4, the fair value of the investment portfolio was adjusted down by approximately $50 million, and we added $97 million of new investments net of paydowns. Our guidance continues to reflect $100 to $150 million of rolling 12-month forward credit-related impairments. I want to remind everyone that this is not a forecast of losses. It's a governance on risk embedded in our guidance. It reflects uncertainty and remains consistent with prior guidance. Let me close with our 2026 outlook. We remain cautious in the near term given persistent macro and credit uncertainty. We expect volume growth throughout the year, driven by new application flow, new partners, and increased penetration of our products.
Speaker #1: Total revenue and other income in the range of $1.4 billion to $1.575 billion. An adjusted EBITDA in the range of $410 million to $460 million.
$60 million.
We expect GAAP net income for the year to range from $100 million to $150 million.
With that let me turn it back to the operator for questions.
Speaker #1: We expect gap net income for the to 150 year to range from 100 million. With that, let me questions.
Thank you we will now be conducting a question and answer session.
I would like to ask a question. Please press star one on your telephone keypad.
Affirmation tone will indicate your line is in the question queue. You May press star two if he would like treatment of your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star teams.
Speaker #2: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad.
Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue, and for participants choosing speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Our first question is from John Hecht with Jefferies. Please proceed.
Morning, guys and thanks for taking my questions maybe.
Maybe just.
Speaker #2: Our first question is
They go a layer deeper.
Evangelos Perros: FRLPC margin is expected to be between 4% and 5% for the year and to revert lower within that range from current levels as a result of continued expansion in POS, contribution from new partners, and our funding mix. As just mentioned, guidance reflects the credit-related impairments, if any, of $100 to $150 million. Q1 and full-year guidance reflect the full impact of last quarter's exit rate volume reduction of approximately $100 to $150 million per month. Illustratively, the midpoint of that range represents approximately $375 million of Q1 impact and $1.5 billion on a full-year baseline, essentially assuming current uncertainty persists and leading to consumer and performance deterioration. If uncertainty recedes, we will adjust accordingly and swiftly. This is an important point, so let me explain.
Evangelos Perros: FRLPC margin is expected to be between 4% and 5% for the year and to revert lower within that range from current levels as a result of continued expansion in POS, contribution from new partners, and our funding mix. As just mentioned, guidance reflects the credit-related impairments, if any, of $100 to $150 million. Q1 and full-year guidance reflect the full impact of last quarter's exit rate volume reduction of approximately $100 to $150 million per month. Illustratively, the midpoint of that range represents approximately $375 million of Q1 impact and $1.5 billion on a full-year baseline, essentially assuming current uncertainty persists and leading to consumer and performance deterioration. If uncertainty recedes, we will adjust accordingly and swiftly. This is an important point, so let me explain.
And the concept of moving away from variable to outcomes.
Speaker #3: Morgan, guys, thanks for taking my questions. Gal, maybe just go a little deeper—in this concept of moving outcomes, is it pricing in with respect to payment trends?
Pricing in the market are you seeing something change with respect to payment trends.
Or is it.
Speaker #3: away from variable
Is it related to certain channel partners or certain types of products, maybe just another layer of details on this.
Definitely John appreciate the question.
Speaker #3: Or is it related to certain channel partners or certain types of products? Maybe just
So before going into the market dynamics I want just to start off with reiterating that that message that we gave from a guide perspective has been the same for that deal.
Speaker #3: another layer of details on
Speaker #4: Definitely,
Speaker #4: John. Appreciate the proceed. question. So before I'm going into the market this. dynamics, I want just to start with
But we will always prioritize within risk management.
Speaker #4: reiterating that that message that we gave from Pagaya perspective has been the same for
The short term growth and that principle that we have.
Call it either youre going to.
Speaker #4: always prioritize prudent risk management over short-term market?
<unk> is now fully embedded in the way we run the company.
Speaker #4: growth. And that principle that we the last year. emphasized—call That we will Are you seeing something change with the company. Now, the main reason fully embedded in the way we run for that is that we are a different type of animal.
The main reason for that is that we are a different type of animal.
We are not like many consumer finance platform.
That rely on marketing spend to generate volume.
Evangelos Perros: We are exiting the year with $10.8 billion of fourth-quarter annualized volume, deliberately shrinking high-risk volume by $1.5 billion on an annualized basis while still delivering year-over-year volume growth. Reduction in certain credit years and new volume growth are not contradictory. They are two sides of the same optimization process. For Q1 2026, we expect network volume in the range of $2.5 to 2.7 billion, total revenue and other income in the range of $315 to 335 million, and adjusted EBITDA in the range of $80 to 95 million. We expect GAAP net income for the quarter of $15 to 35 million. For the full year 2026, we are expecting network volume in the range of $11.25 to 13 billion, total revenue and other income in the range of $1.4 to 1.575 billion, and adjusted EBITDA in the range of $410 to 460 million.
Evangelos Perros: We are exiting the year with $10.8 billion of fourth-quarter annualized volume, deliberately shrinking high-risk volume by $1.5 billion on an annualized basis while still delivering year-over-year volume growth. Reduction in certain credit years and new volume growth are not contradictory. They are two sides of the same optimization process. For Q1 2026, we expect network volume in the range of $2.5 to 2.7 billion, total revenue and other income in the range of $315 to 335 million, and adjusted EBITDA in the range of $80 to 95 million. We expect GAAP net income for the quarter of $15 to 35 million. For the full year 2026, we are expecting network volume in the range of $11.25 to 13 billion, total revenue and other income in the range of $1.4 to 1.575 billion, and adjusted EBITDA in the range of $410 to 460 million.
We don't need to grow at any cost to justify our expense base.
Speaker #4: And we are not like platforms that rely on marketing spend—don't need to grow at any cost to generate volume. We justify our expense. Many consumer finance is obviously giving us more flexibility to be disciplined, especially when we see early signs of different market softness.
And these structural advantage is obviously, giving us more flexibility to be disciplined, especially when we see early signs of different market soft demands.
Now when you think about that in the data we collect it's really come to the core strengths of our platform, which is the ability to remove what we describe as dailies called the viability outcomes as you pointed out in real time through the fact that we see signals across.
Speaker #4: Now, when you think about that and the data we collect, it really comes to the core strengths of our platform, which is to describe as tail risk or the variability of outcomes, as you pointed out, in real time.
30, plus different lenders three asset classes that are a lot of data that allows us to be proactive rather than to be reactive.
Speaker #4: Through the fact that we see signals across 30-plus different classes—that's a lot of data that allows us to be proactive rather than reactive.
Now the first point I would point out to your question is the market dynamics, so from a market perspective.
A lot of volatility.
Speaker #4: Now, the first point I will point out to your question is the market dynamics. So, from a market perspective, there is just a lot of volatility.
You don't need to look very hard to see that in the last period.
Mainly since Q4.
The amount of volatility and declining rationality that we are seeing is just reached an 11.
Speaker #4: You don't need to base. And this structural advantage—look, it's very hard to see that in the last period, mainly since lenders—three asset declining rationality that we are seeing has just reached a new level.
Financial markets are demonstrating much volatility driven by geopolitical private credit you see notable shifts in sentiment.
Evangelos Perros: We expect GAAP net income for the year to range from $100 to $150 million. With that, let me turn it back to the operator for questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from John Hecht with Jefferies. Please proceed. Morning, guys, and thanks for taking my questions. Gal, maybe just go a layer deeper in this concept of moving away from variable outcomes. Is it pricing in the market?
Evangelos Perros: We expect GAAP net income for the year to range from $100 to $150 million. With that, let me turn it back to the operator for questions.
Speaker #4: Financial markets in Q4—the amount of volatility and the volatility driven by geopolitical factors and private credit—you see notable shifts, despite the fact that the consumer performance in our product remains strong. The ABS market is functioning well, but it's definitely giving you a pause as a risk manager to ask the question: 'What's your risk appetite, and where do you want to be?' Now, as I mentioned, we don't see a specific deterioration.
And despite the fact that the consumer performance in our production remains strong and the ABS market are functioning well, it's definitely giving you a pause is our risk manager to ask the question of like what's your risk appetite and where do you want to be.
Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from John Hecht with Jefferies. Please proceed.
Now as I mentioned, the consumer behavioral data front, we don't see a specific deterioration so nothing on the <unk> or the CPR and therefore, our 2026 outlook of the impact of credits related impediments. If any is in line with our 2025 guide which is the 100 to 115.
Speaker #4: So nothing on the CNL or the CPR. And therefore, on our consumer behavior data front, we don't—2026 outlook of the impact of credit-related impairments, if any, is in line with our 2025 guide, which is the $100 to $150 million partner behavior.
John Hecht: Morning, guys, and thanks for taking my questions. Gal, maybe just go a layer deeper in this concept of moving away from variable outcomes. Is it pricing in the market?
Al.
We did see a clear shift in our partner behavior.
Several Bob Mills have moving away from.
Expansion too cautious as they have progressed.
Speaker #4: Several partners have moved away—see a clear shift in our tone to cautious, as their early signal is exactly what we capture. If you will talk with our lenders, call it Q1, Q2 last year, everyone will tell you that, 'Yeah, this is a year of going very strongly from expansion, aggressively growing.' 40, 50 percent.
In the early signal is exactly what our operating model is designed to capture if you will talk with our lenders call. It.
Evangelos Perros: Are you seeing something change with respect to payment trends, or is it related to certain channel partners or certain types of products? Maybe just another layer of details on this. Definitely, John. Appreciate the question. So before I'm going into the market dynamics, I want just to start with reiterating that that message that we gave from Pagaya perspective has been the same for the last year, that we will always prioritize prudent risk management over short-term growth. And that principle that we have addressed, call it a year, a year and a half back, is now fully embedded in the way we run the company. Now, the main reason for that is that we are a different type of animal, and we are not like many consumer finance platforms that rely on marketing spend to generate volume.
John Hecht: Are you seeing something change with respect to payment trends, or is it related to certain channel partners or certain types of products? Maybe just another layer of details on this.
Q1, Q2 last year Avalon will tell you that yes. This is a year of going very strongly aggressively growing 40% 50%.
Gal Krubiner: Definitely, John. Appreciate the question. So before I'm going into the market dynamics, I want just to start with reiterating that that message that we gave from Pagaya perspective has been the same for the last year, that we will always prioritize prudent risk management over short-term growth. And that principle that we have addressed, call it a year, a year and a half back, is now fully embedded in the way we run the company. Now, the main reason for that is that we are a different type of animal, and we are not like many consumer finance platforms that rely on marketing spend to generate volume.
When you spoke with the same folks by the end of the yield.
The posture and understanding of the situation was much more balanced.
Speaker #4: When you spoke with the year, the posture and the understanding of the situation was much more balanced. And as we—our operating model is designed to saw that, we decided to take even one step further and to be what we call ahead of the curve.
And as we saw with that we decide and take even one step further and to be what we call ahead of the tariffs.
Now the way, we operate and what we were doing we do it very quickly and swiftly because of the technology agile advantage that we have and the fact that we can do these things real time, so literally a decision in the middle to late Q4 can be related to all of that and that's becoming our basis.
Speaker #4: Now, the way we operate and the way we do it, we do it very quickly and swiftly because of the technology advantage that we have. And the fact that we can do these things in real time—so literally a decision in the middle of Q4 can be on our basis as we think about to late 2026.
Evangelos Perros: We don't need to grow at any cost to justify our expense base. This structural advantage is obviously giving us more flexibility to be disciplined, especially when we see early signs of different market softness. Now, when you think about that and the data we collect, it's really come to the core strengths of our platform, which is the ability to remove what we describe as tail risk or the variability outcomes, as you pointed out, in real time through the fact that we see signals across 30+ different lenders, 3 asset classes, that are a lot of data that allows us to be proactive rather than to be reactive. Now, the first point I will point out to your question is the market dynamics. From a market perspective, there is just a lot of volatility.
Gal Krubiner: We don't need to grow at any cost to justify our expense base. This structural advantage is obviously giving us more flexibility to be disciplined, especially when we see early signs of different market softness. Now, when you think about that and the data we collect, it's really come to the core strengths of our platform, which is the ability to remove what we describe as tail risk or the variability outcomes, as you pointed out, in real time through the fact that we see signals across 30+ different lenders, 3 asset classes, that are a lot of data that allows us to be proactive rather than to be reactive. Now, the first point I will point out to your question is the market dynamics. From a market perspective, there is just a lot of volatility.
As we think about 2026.
<unk> will talk a little bit more about how we think about the guidance in that in that in that respect.
Speaker #4: And if you will talk a little bit more about how we think about the close the question, I just want to emphasize that from an enterprise progression, an execution guidance in that perspective, what the team has done and is respect.
I think before we close the question I just wanted to emphasize that from an enterprise progression and execution perspective, while the team has done and is planning for 2026 is really exceptional.
And we are becoming a better per guy and not just the bigger ones. So think about it that opened in Q4, we added forward flow into new asset classes.
Speaker #4: Planning for 2026 is really exceptional. And we are becoming a better Pagaya, not just—I think before we Q4, we added forward flow in two new asset classes.
Included the revolver capacity in Brazil alone and.
And on boarded two more partners.
Speaker #4: We included a revolver capacity in personal loan and a bigger one. So think about it, that only in onboarded two more same folks, by the end of partners.
So when I think about it.
From an Seo perspective, and frankly, I think you should think about it too is that I'm very pleased with the team outcome. Despite the short term reduction in risk decision that is trying very hard to avoid with any potential of downside because of the dailies.
Speaker #4: So when I think about it, from a CEO perspective and frankly, I think you should think about it too, is that I'm very pleased with the team outcome despite the short-term reduction in risk decision that is trying very hard to avoid with any potential of downside because of a tail risk.
Evangelos Perros: You don't need to look very hard to see that in the last period, mainly since Q4, the amount of volatility and declining rationality that we are seeing has just reached a new level. Financial markets are demonstrating much volatility driven by geopolitical private credit. You see notable shifts in sentiment. And despite the fact that the consumer performance in our production remains strong and the ABS markets are functioning well, it's definitely giving you a pause as a risk manager to ask the question of, "What's your risk appetite and where do you want to be?" Now, as I mentioned, on the consumer behavior data front, we don't see a specific deterioration, so nothing on the CNL or the CPR. And therefore, our 2026 outlook of the impact of credit-related impairments, if any, is in line with our 2025 guide, which is the $100 to $150 million.
Gal Krubiner: You don't need to look very hard to see that in the last period, mainly since Q4, the amount of volatility and declining rationality that we are seeing has just reached a new level. Financial markets are demonstrating much volatility driven by geopolitical private credit. You see notable shifts in sentiment. And despite the fact that the consumer performance in our production remains strong and the ABS markets are functioning well, it's definitely giving you a pause as a risk manager to ask the question of, "What's your risk appetite and where do you want to be?" Now, as I mentioned, on the consumer behavior data front, we don't see a specific deterioration, so nothing on the CNL or the CPR. And therefore, our 2026 outlook of the impact of credit-related impairments, if any, is in line with our 2025 guide, which is the $100 to $150 million.
And when I'm looking ahead in 2026, we remained very focused about executing on the things we can influence and our long term strategy.
Speaker #4: And when I'm looking ahead to 2026, we remain very focused on executing on the things we can influence and our long-term strategy, which is extending our partner network, deepening our existing relationships, and proactively cutting off tail risk rather than chasing short-term volume.
She is expanding our partner network deepening our existing relationships and proactively cutting off the tail risks rather than chasing short term volume.
So to add to and that part I just want to leave you with two smaller names.
That's the first one the fact that we have been more Conservatives is obviously.
Speaker #4: So to end that small myths that the first one that the ability to scale quickly. Which is why our guide range is intentionally wide.
Our ability to quickly.
Which is why our guide range is intentionally wide and the second is that even in what we described the volatile environment that we don't want to be over risk on we expect to deliver a meaningful GAAP net income profitability of over $100 million in 2026.
Speaker #4: In a volatile environment that we don't want to be over-risked on, we expect to deliver meaningful yet net income profitability of over $100 million in 2026.
So in other words, our entitled 2026 guidance range, especially assume call it uncertainty persists and lead to consumer and performance deterioration.
Speaker #4: So, in other words, our entire 2026 guidance range especially assumes common uncertainty persists, and leads to consumer and performance deterioration that we are kind of taking as part of our part. I just want to leave you with two plans.
Evangelos Perros: We did see a clear shift in our partner behavior. Several partners have moved away from expansion to cautious as the year progressed. The early signal is exactly what our operating model is designed to capture. If you will talk with our lenders, call it Q1, Q2 last year, everyone will tell you that, "Yeah, this is a year of going very strongly, aggressively growing, 40%, 50%." When you spoke with the same folks by the end of the year, the posture and the understanding of the situation was much more balanced. As we saw with that, we decided to take even one step further and to be what we call ahead of the curve.
Gal Krubiner: We did see a clear shift in our partner behavior. Several partners have moved away from expansion to cautious as the year progressed. The early signal is exactly what our operating model is designed to capture. If you will talk with our lenders, call it Q1, Q2 last year, everyone will tell you that, "Yeah, this is a year of going very strongly, aggressively growing, 40%, 50%." When you spoke with the same folks by the end of the year, the posture and the understanding of the situation was much more balanced. As we saw with that, we decided to take even one step further and to be what we call ahead of the curve.
We are kind of like taking as part of our plan so and certainly the themes, we will definitely adjust accordingly and swiftly.
Speaker #4: So if uncertainty resists, we will definitely adjust accordingly and
Yes, maybe I'll jump in.
So as we know to drive this action translates to somewhere between 101 hundred $50 million dollar volume cut in the fourth quarter.
Speaker #2: Yeah.
Speaker #2: And maybe I'll jump swiftly in. So, as we noted, right, this action translates to somewhere between $100 and $150 million volume cut in the fourth quarter.
So effectively that's a $1 5 billion dollar volume into 2026.
Speaker #2: So effectively, that's a one and a half billion dollar of volume into 2026. And remember, we're more than offsetting that with volume from new partners and new products.
Remember, we're more than offsetting that with new volume from new partners and new products.
Secondly, what we're doing is we're replacing higher credit risk volume with volume from new products and new partners that come in and Thats, a much more balanced risk.
Speaker #2: So effectively, what we're doing is we're replacing higher credit risk volume with volume from new products and new partners that wondering like, "Okay, to come in as a much more balanced jump ahead, what's next for 2026?
Evangelos Perros: Now, the way we operate and the way we do it, we do it very quickly and swiftly because of the technology agile advantage that we have and the fact that we can do these things real time. So literally, a decision in the middle to late of Q4 can be related to all of that. And that's becoming our basis as we think about 2026. And Ipy will talk a little bit more about how we think about the guidance in that respect. I think before we close the question, I just want to emphasize that from an enterprise progression and execution perspective, what the team has done and is planning for 2026 is really exceptional. And we are becoming a better Pagaya, not just a bigger one. So think about it, that only in Q4, we added forward flow in two new asset classes.
Gal Krubiner: Now, the way we operate and the way we do it, we do it very quickly and swiftly because of the technology agile advantage that we have and the fact that we can do these things real time. So literally, a decision in the middle to late of Q4 can be related to all of that. And that's becoming our basis as we think about 2026. And Ipy will talk a little bit more about how we think about the guidance in that respect. I think before we close the question, I just want to emphasize that from an enterprise progression and execution perspective, what the team has done and is planning for 2026 is really exceptional. And we are becoming a better Pagaya, not just a bigger one. So think about it, that only in Q4, we added forward flow in two new asset classes.
And if you think about I'm sure you're wondering okay to jumbo head Whats next for 2026, what does that mean for the guidance what needs to happen for that to change I would say is.
Speaker #2: risk. What does that mean for the guidance? What And if you think about, I'm sure you're needs to happen for that to change?" I would say is this reflects we're assuming this decision does not reverse for purpose of our guidance in 2026.
These reflect we are assuming this decision does not reverse for purpose of our guidance in 2026.
If we're right we would not be chasing our tail for the year and if we're wrong, we will reverse and in that case, we would have left some money on the table for a few quarters.
Speaker #2: re right, we will not be chasing our tail for the year. And if we're wrong, we will reverse. And in that case, we would quarters.
So something has to really dramatically change really in 2026 to go below.
Speaker #2: So something has below the guidance that we to really dramatically change really in 2026 to go have provided. The other thing I want to is just think about in the long term, there is no real impact in the long-term part of the business.
The guidance that we have provided the other thing I want to point out, though and to close the question is.
Just think about in the long term there is no real impact in the long term part of the business. We're still looking at the 15% to 20% growth of this business, especially if youre something about the annualized <unk> of the new volume that comps in 2027 into 2028.
Evangelos Perros: We included a revolver capacity in personal loan and onboarded 2 more partners. So when I think about it from a CEO perspective, and frankly, I think you should think about it too, is that I'm very pleased with the team outcome despite the short-term reduction in risk decision that is trying very hard to avoid with any potential of downside because of a tail risk. And when I'm looking ahead on 2026, we remain very focused about executing on the thing we can influence in our long-term strategy, which is extending our partner network, deepening our existing relationships, and proactively cutting off tail risk rather than chasing short-term volume. So to end that part, I just want to leave you with 2 small nits.
Gal Krubiner: We included a revolver capacity in personal loan and onboarded 2 more partners. So when I think about it from a CEO perspective, and frankly, I think you should think about it too, is that I'm very pleased with the team outcome despite the short-term reduction in risk decision that is trying very hard to avoid with any potential of downside because of a tail risk. And when I'm looking ahead on 2026, we remain very focused about executing on the thing we can influence in our long-term strategy, which is extending our partner network, deepening our existing relationships, and proactively cutting off tail risk rather than chasing short-term volume. So to end that part, I just want to leave you with 2 small nits.
Speaker #2: We're still looking have left some money on the table for a few point out, though, and to close the question business, especially if you start thinking about the at the 15, 20 percent growth of this annualization of the new volume 2028.
And the last thing obviously to keep in mind and let that thing came as this is still a business generating $100 million plus net income even in that scenario.
Speaker #2: thing is obviously to keep in mind, and let And the last grab net income even in that generating $100 million plus of
Okay, and then a follow up question, which I think is somewhat.
Speaker #2: scenario.
Similar to <unk>.
Speaker #1: Okay. And
Speaker #1: Then your follow-up question, which I think is a question in terms of where your monetization—maybe talk might have increased.
Last question in terms of where your focus is it seems like theres more commentary about being focused on volume outside of decline monetization maybe talk about.
What products might have increased.
Increased momentum there.
The economics of those transactions differ from.
Speaker #1: momentum there, and do the economics of those transactions differ? And if we're from the decline
The decline modernization.
Evangelos Perros: The first one is that the fact that we have been more conservative is obviously retain our ability to scale quickly, which is why our guide range is intentionally wide. The second is that even in what we describe, a volatile environment that we don't want to be over-risk on, we expect to deliver a meaningful GAAP net income profitability of over $100 million in 2026. So in other words, our entire 2026 guidance range, especially assume current uncertainty persists, and lead to consumer and performance deterioration that we are kind of taking as part of our plan. So if uncertainty recedes, we will definitely adjust accordingly and swiftly. Yeah, and maybe I'll jump in. So as we noted, this action translates to somewhere between $100 and $150 million volume cut in the fourth quarter. So effectively, that's a $1.5 billion of volume into 2026.
Gal Krubiner: The first one is that the fact that we have been more conservative is obviously retain our ability to scale quickly, which is why our guide range is intentionally wide. The second is that even in what we describe, a volatile environment that we don't want to be over-risk on, we expect to deliver a meaningful GAAP net income profitability of over $100 million in 2026. So in other words, our entire 2026 guidance range, especially assume current uncertainty persists, and lead to consumer and performance deterioration that we are kind of taking as part of our plan. So if uncertainty recedes, we will definitely adjust accordingly and swiftly.
Sure John I'll take it doesn't sanjiv.
Absolutely I think you got it you hit the nail on its head with your question so essentially whats.
Speaker #2: Sure, John. I'll take it. This is Sanjiv. Absolutely. I think you got it. You hit the nail on its head with your question. So essentially, what's diversifying our products into the direct marketing engine that we've talked about, about the affiliate optimizer engine before.
We are diversifying.
Sure.
Our products into.
The direct marketing engine that we've talked about before.
About.
The affiliate Optimizer engine before and of course <unk>.
Current look in auto where we look at loans at the same time that our partners to essentially first look.
Speaker #2: And of course, dual or concurrent look in auto, where we look at loans at the same time that our partners do—essentially, first look.
The dynamics of the direct marketing engine, where we essentially help our partners grow their originations.
Speaker #2: The dynamics of the direct marketing engine, where we essentially help our partners grow their originations, is very, very strong and very positive. And the performance is also substantially better.
He is very very strong and very positive and the performance is also substantially better.
Evangelos Perros: Yeah, and maybe I'll jump in. So as we noted, this action translates to somewhere between $100 and $150 million volume cut in the fourth quarter. So effectively, that's a $1.5 billion of volume into 2026.
Same with the affiliate Optimizer engine is essentially a business that has about a third of its dependency on credit Karma and experience continues to grow very very strongly and similar to what credit card business is still we are doing the same thing in personal loans and we are substantially improving.
Speaker #2: Same with the affiliate optimizer engine. We've essentially a business that has about a third of its dependency on Credit Karma, and experience continues to grow very, very strongly, similar to what credit card loans.
Evangelos Perros: Remember, we're more than offsetting that with volume from new partners and new products. So effectively, what we're doing is we're replacing higher credit risk volume with volume from new products and new partners that come in as a much more balanced risk. And if you think about, I'm sure you're wondering, "Okay, to jump ahead, what's next for 2026? What does that mean for the guidance? What needs to happen for that to change?" I would say is we are assuming this decision does not reverse for purpose of our guidance in 2026. And if we are right, we will not be chasing our tail for the year. And if we're wrong, we will reverse. And in that case, we would have left some money on the table for a few quarters.
Evangelos Perros: Remember, we're more than offsetting that with volume from new partners and new products. So effectively, what we're doing is we're replacing higher credit risk volume with volume from new products and new partners that come in as a much more balanced risk. And if you think about, I'm sure you're wondering, "Okay, to jump ahead, what's next for 2026? What does that mean for the guidance? What needs to happen for that to change?" I would say is we are assuming this decision does not reverse for purpose of our guidance in 2026. And if we are right, we will not be chasing our tail for the year. And if we're wrong, we will reverse. And in that case, we would have left some money on the table for a few quarters.
Our partner presence with our existing partners in both of those.
Speaker #2: And we are partner presence with our businesses do. We are doing the same thing in personal existing partners in both of substantially improving our done extremely well for us.
Are those platforms and so that is something that has done extremely well for us. This is where the shift in the business is happening and this is exactly where we are.
Speaker #2: This is where the shift in the business is happening. And this is exactly where we are emphasizing. The performance of these products and the economics in these are substantially better than what we have on those platforms.
We are emphasizing.
Because because of the performance of these products are the economics in these are substantially better than what we have traditionally.
Provided because of better risk performance and better ability to charge.
Better economics so.
Speaker #2: Of better risk performance and better ability to charge better economics—definitely want to talk about. We have, as you know, 31 existing partners. Our top five partners are already on these new products.
That's something that we definitely want to talk about.
We have as you know 31 existing partners our top five partners are already on these new products, we have signed agreements on our pre screen product, which is our direct marketing product as well as agreements on credit Karma and the affiliate channels and having.
Evangelos Perros: So something has to really dramatically change, really, in 2026 to go below the guidance that we have provided. The other thing I want to point out, though, and, to close the question, is just think about in the long term, there is no real impact in the long-term part of the business. We're still looking at 15%, 20% growth of this business, especially if you start thinking about the annualization of the new volume that comes in 2027 into 2028. The last thing, obviously, to keep in mind and let that sink in is this is still a business that's generating $100 million plus of GAAP net income even in that scenario. Okay.
Evangelos Perros: So something has to really dramatically change, really, in 2026 to go below the guidance that we have provided. The other thing I want to point out, though, and, to close the question, is just think about in the long term, there is no real impact in the long-term part of the business. We're still looking at 15%, 20% growth of this business, especially if you start thinking about the annualization of the new volume that comes in 2027 into 2028. The last thing, obviously, to keep in mind and let that sink in is this is still a business that's generating $100 million plus of GAAP net income even in that scenario.
Speaker #2: We have signed agreements on our pre-screen product, which is our direct marketing product, as well as affiliate channels. And we are starting to increase our dual look performance very substantially.
The increase or do a look performance very substantially I do.
I want to emphasize one other thing that is extremely important which is that we have also.
Speaker #2: I do want to emphasize one other thing that is extremely important, which is that we have also onboarded a record number of new partners. Karl talked about two that are onboarding right now.
On boarded.
A record number of new partners call talked about to the on boarding right now there is a third thats in process.
I fully expect that by the end of the second quarter, we will have on boarded maybe seven potentially eight new partners, which will be like a record for us.
Speaker #2: There's a third that's in process. And I fully expect that by the end of onboarding, maybe seven in the second quarter, we will have potentially eight new partners, which will be like a record for us.
John Hecht: Okay. And then your follow-up question, which I think is somewhat similar to the last question in terms of where your focus is, it seems like there is more commentary about being focused on volume outside of decline monetization. Maybe talk about what products might have increased the momentum there. And do the economics of those transactions differ from the decline monetization?
What <unk> got and I are trying to.
Evangelos Perros: And then your follow-up question, which I think is somewhat similar to the last question in terms of where your focus is, it seems like there is more commentary about being focused on volume outside of decline monetization. Maybe talk about what products might have increased the momentum there. And do the economics of those transactions differ from the decline monetization? Sure, John. I'll take it. This is Sanjiv. Absolutely. I think you hit the nail on its head with your question. So essentially, what's happening is we are diversifying our products into the Direct Marketing Engine that we've talked about before. We talked about the Affiliate Optimizer engine before. And of course, dual or concurrent look in Auto where we look at loans at the same time that our partners do essentially First Look.
Emphasize is that we are focusing more on the shift in the business with our existing 31 lenders to more profitable partners. We're also focusing substantially more on getting new partners essentially demonstrating that we are becoming part of the financial ecosystem and U S consumer lending and we are managing.
Speaker #3: So what EPGAL and I are trying to emphasize is that we are focusing more on the shift in the business with our existing 31 lenders to more profitable partners.
Speaker #3: We're also focusing substantially more on getting new partners, essentially demonstrating that we are becoming part of consumer lending. And we are a financial ecosystem in the U.S., managing risk in a very thoughtful, responsible way.
The risk and the VA.
Very thoughtful responsible way.
In the long term.
Sanjiv Das: Sure, John. I'll take it. This is Sanjiv. Absolutely. I think you hit the nail on its head with your question. So essentially, what's happening is we are diversifying our products into the Direct Marketing Engine that we've talked about before. We talked about the Affiliate Optimizer engine before. And of course, dual or concurrent look in Auto where we look at loans at the same time that our partners do essentially First Look.
Okay.
Great. Thank you very much.
Speaker #3: long term. As a growth franchise in the
Our next question is from Kyle Joseph with Stephens. Please proceed.
Speaker #1: much. Great. Thank you very
Hey, good morning, guys. Thanks for taking my questions.
Speaker #4: This is from Kyle Joseph with Proceed.
Speaker #4: Please recently.
Been a lot of headlines on on private credit and the Arps recently just wanted to get you guys gave an update on the funding side.
Speaker #5: Thank you for taking my questions. There have been a lot of headlines. Hey, good morning, guys. Thanks.
Speaker #5: the alts recently.
But you know how youre thinking about funding into your 26 outlook given given all the headlines we've seen in that world recently.
Speaker #5: Can you guys give an update on private credit and our next question on the funding side of the business? Stevens.
Speaker #5: About funding into your '26 outlook, given...
Evangelos Perros: The dynamics of the Direct Marketing Engine where we essentially help our partners grow their originations is very, very strong and very positive. And the performance is also substantially better. Same with the Affiliate Optimizer Engine. We have essentially a business that has about a third of its dependency on Credit Karma and Experian continues to grow very, very strongly, similar to what credit card businesses do. We are doing the same thing in personal loans. And we are substantially improving our partner presence with our existing partners in both of those platforms. And so that is something that has done extremely well for us. This is where the shift in the business is happening.
Sanjiv Das: The dynamics of the Direct Marketing Engine where we essentially help our partners grow their originations is very, very strong and very positive. And the performance is also substantially better. Same with the Affiliate Optimizer Engine. We have essentially a business that has about a third of its dependency on Credit Karma and Experian continues to grow very, very strongly, similar to what credit card businesses do. We are doing the same thing in personal loans. And we are substantially improving our partner presence with our existing partners in both of those platforms. And so that is something that has done extremely well for us. This is where the shift in the business is happening.
Yeah. Thanks, Scott So the question I'll take it.
Speaker #5: All the headlines we've seen in that world—thanks, guys.
Look the demand for our product and production is very robust.
Speaker #5: Thanks.
Speaker #2: Yeah,
Speaker #2: I mean, look, the demand for our product and production is, things that we announced, new deal with 26, robust. Thanks for the question. I'll take it.
Look at Q4, a couple of the things that we announced a new deal with 2006 north.
Which combined with our past deals generates more than $3 billion of capacity across these two products from some of the revolver structure of these the sale of the certificate in onto new forward closing altering.
Speaker #2: $3 billion of capacity across these post-deals generates more than two products from the look at Q4, a couple of the certificates in auto, new forward revolver structure of these.
<unk>.
The sale of this certificate ever said on OWS, So generally very strong demand and validated by the execution that we're delivering for our investors.
Speaker #2: POS, the sale of the certificate that we said on OWS. So, generally, flows in auto, and very strong demand—and validated by the execution that we're delivering. For the sale of the, I would say is, if you step back, had a very frothy sort of private credit market deploying capital.
What I would say is if you step back by the 25 was a year, where you had a very frothy sort of private credit market deploying capital.
Evangelos Perros: This is exactly where we are emphasizing that because of the performance of these products, the economics in these are substantially better than what we have traditionally provided because of better risk performance and better ability to charge better economics. So that's something that we definitely want to talk about. We have, as you know, 31 existing partners. Our top 5 partners are already on these new products. We have signed agreements on our pre-screen product, which is our direct marketing product, as well as agreements on Credit Karma and the affiliate channels. We are starting to increase our Dual Look performance very substantially. I do want to emphasize one other thing that is extremely important, which is that we have also onboarded a record number of new partners. Gal talked about 2 that are onboarding right now. There's a third that's in process.
Sanjiv Das: This is exactly where we are emphasizing that because of the performance of these products, the economics in these are substantially better than what we have traditionally provided because of better risk performance and better ability to charge better economics. So that's something that we definitely want to talk about. We have, as you know, 31 existing partners. Our top 5 partners are already on these new products. We have signed agreements on our pre-screen product, which is our direct marketing product, as well as agreements on Credit Karma and the affiliate channels. We are starting to increase our Dual Look performance very substantially. I do want to emphasize one other thing that is extremely important, which is that we have also onboarded a record number of new partners. Gal talked about 2 that are onboarding right now. There's a third that's in process.
And now, it's becoming a little bit more normal and much more disciplined and we're actually benefiting from that.
Speaker #2: And now it's becoming a little bit more normal, and much more. 2025 was a year where you disciplined, and we're actually benefiting from that.
I would take it I'll take it a step further and say that some of the actions that we took is actually fueling more demand for our product in production.
Speaker #2: I would actually be fueling more demand for our product and production. You look at the last ABS deal that we did a few days ago, we went to market with a $600 million size.
You look at the last ABS deal that we did a few days ago went to market with $600 million of XI.
<unk>.
And it got Upsized.
By 30% and still oversubscribed, So I think what Youll see is the platforms that have a very robust and very diversified set of investors.
Speaker #2: Upsized by some of the actions that we took is— and it got 30%, and still oversubscribed. So I think what you see is, the platforms that have a very robust and very diversified set of investors that they work with, like Pagaya, we're benefiting from all of these.
That they work with like Bulgaria.
We're benefiting from all of these will continue to obviously.
We continue to try and diversify our funding further.
Speaker #2: Obviously, we continue to try and diversify. We'll continue to pursue our funding further, and I know that is on our pipeline. So, I think we feel very good about our positioning in the funding environment relative to others.
Oh that is unparallel in our pipeline. So I think we feel very good about the funding environment relative to our positioning in the marketplace and maybe one thing to add is that a lot of the colleague that's been going around.
Evangelos Perros: I fully expect that by the end of Q2, we will have onboarded maybe 7, potentially 8 new partners, which will be a record for Pagaya. So what Ipy, Gal, and I are trying to do is emphasize is that we are focusing more on the shift in the business with our existing 31 lenders to more profitable partners. We're also focusing substantially more on getting new partners, essentially demonstrating that we are becoming part of the financial ecosystem in US consumer lending. And we are managing the risk in a very thoughtful, responsible way as we grow the franchise in the long term. Great. Thank you very much. Our next question is from Kyle Joseph with Stephens. Please proceed. Hey, good morning, guys. Thanks for taking my questions. Been a lot of headlines on private credit and the alts recently.
Sanjiv Das: I fully expect that by the end of Q2, we will have onboarded maybe 7, potentially 8 new partners, which will be a record for Pagaya. So what Ipy, Gal, and I are trying to do is emphasize is that we are focusing more on the shift in the business with our existing 31 lenders to more profitable partners. We're also focusing substantially more on getting new partners, essentially demonstrating that we are becoming part of the financial ecosystem in US consumer lending. And we are managing the risk in a very thoughtful, responsible way as we grow the franchise in the long term.
Speaker #2: marketplace.
Around which obviously impacting the full funding.
Speaker #3: Knowing around, which—and maybe one thing to add is that a lot of the colleagues have been obviously impacting the full funding world, but it's much more world.
But like it's much more around the corporate side of the world and.
Specifically around the house et.
They try and company.
That has been in the sphere of trying to grab market share there.
Speaker #3: And specifically, around the corporate side of the U.S., etc., and companies that have been in the sphere of trying to grab market there.
I think on the consumer side, which is a byproduct of that but like you don't see that level off.
Speaker #3: I think on the consumer side, which is a byproduct of that, but you don't see that level of volatility or kind of exchanges in—
Volatility or <unk>.
Changes in the law.
But it is calling for.
Great. Thank you and then just just a quick follow up on a modeling question for you on the impairment side of things given the underwriting changes you guys have made.
Speaker #3: calling for everything to be much more
Speaker #3: Volatile the last quarter. But it is
John Hecht: Great. Thank you very much.
Speaker #5: Quick follow-up, a modeling question. Great, thank you. And then just a for you—on the impairment side,
Operator: Our next question is from Kyle Joseph with Stephens. Please proceed.
What sort of level should we expect to.
Speaker #5: Changes you guys have made, what sort of level should we view your GAAP EPS guidance for?
To get to your GAAP EPS guidance for 2006.
Kyle Joseph: Hey, good morning, guys. Thanks for taking my questions. Been a lot of headlines on private credit and the alts recently.
Yes, no no changes on that.
We're still guiding to call it under scenario in our guidance of $100 million to $150 million range.
Speaker #2: Yeah, thanks. No, no change on that. We're still guiding to the,
Evangelos Perros: Just wanted to get an update on the funding side of business, but how you're thinking about funding into your 2026 outlook given all the headlines we've seen in that world recently. Thanks. Yeah, thanks, Kyle. Thanks for the question. I'll take it. I mean, look, the demand for our product and production is very robust. Look at Q4, a couple of the things that we announced: new deal with 26North, which combined with the POS deals generates more than $3 billion of capacity across these two products from the revolver structure of these, the sale of the certificate in auto, new forward flows in auto and POS, the sale of the certificate that we sold to OWS. So generally, very strong demand and validated by the execution that we're delivering for our investors.
Kyle Joseph: Just wanted to get an update on the funding side of business, but how you're thinking about funding into your 2026 outlook given all the headlines we've seen in that world recently. Thanks.
Our range for the year.
The same as it was in 2025.
Speaker #2: Million range for the 100 to 150, expect to get to—call it—under Scenario A in our guidance for 2025. So no changes there, given the ongoing performance.
<unk>.
So no changes there given the ongoing credit performance.
Evangelos Perros: Yeah, thanks, Kyle. Thanks for the question. I'll take it. I mean, look, the demand for our product and production is very robust. Look at Q4, a couple of the things that we announced: new deal with 26North, which combined with the POS deals generates more than $3 billion of capacity across these two products from the revolver structure of these, the sale of the certificate in auto, new forward flows in auto and POS, the sale of the certificate that we sold to OWS. So generally, very strong demand and validated by the execution that we're delivering for our investors.
Okay.
Great. Thanks for taking my questions.
Speaker #2: Credit, same as it was in Q4.
Our next question is from Al <unk> with B Riley Securities. Please proceed.
Speaker #5: Great. Thanks for taking my
Speaker #4: Our
Speaker #4: Our
Speaker #4: next question is year.
Hey, Thank you guys.
Got a question.
Speaker #4: please
Speaker #4: please
Yes.
Speaker #3: Hey, thank you, guys. Good, given the macro trends we've seen over the year with—
Intuitive given the macro trends, we've seen over the year with falling inflation rates coming down job market generally good and I think <unk> mentioned.
Speaker #3: Got a down job market, generally. Falling inflation, rates coming on increased. It's a quarter that was based on losses. So just wanted to give us any more qualitative uncertainty.
We're actually in the last quarter was.
Based on increased uncertainty not an increase in credit losses. So I just wanted to.
Could you give us any more qualitative.
Evangelos Perros: What I would say is if you step back, 2025 was a year where you had a very frothy sort of private credit market deploying capital. And now it's becoming a little bit more normal and much more disciplined. And we're actually benefiting from that. I would take it a step further and say that some of the actions that we took is actually fueling more demand for our product and production. You look at the last ABS deal that we did a few days ago. We went to market with $600 million of size. And it got upsized by 30% and still oversubscribed. So I think what you see is the platforms that have a very robust and very diversified set of investors that they work with, like Pagaya, we're benefiting from all of these.
Evangelos Perros: What I would say is if you step back, 2025 was a year where you had a very frothy sort of private credit market deploying capital. And now it's becoming a little bit more normal and much more disciplined. And we're actually benefiting from that. I would take it a step further and say that some of the actions that we took is actually fueling more demand for our product and production. You look at the last ABS deal that we did a few days ago. We went to market with $600 million of size. And it got upsized by 30% and still oversubscribed. So I think what you see is the platforms that have a very robust and very diversified set of investors that they work with, like Pagaya, we're benefiting from all of these.
Or quantitative color.
What you saw your partners doing.
In your response, it just seems a little counterintuitive it seems like things are.
Speaker #3: Doing in your response, it just seemed a little counterintuitive. It seems like not an increase in credit—hey, your action in the last consumer's direction to be better credits and.
Going into consumer's direction too.
Be better credits.
Speaker #3: Things are going in the business.
Just a little bit.
It's a little bit more flushing out thanks.
Speaker #3: This is just a little bit of—it's a little bit—needs a little more flushing out. Thanks.
I.
I think it's a great observation in fact those are some of the countervailing forces that we had in our mind as well at the end of Q4 on one hand, the macro was.
Speaker #2: Hello, hi. I think it's a great observation. In fact, those were some of the countervailing forces that we had in our mind as well at the end of Q4.
What it was in terms of inflation than rates coming down.
As you pointed out on the other hand.
Speaker #2: Inflation and rates coming down—as you pointed out. On one hand, the macro was what it was, specifically from our end. On the other hand, the 31 lending partner platform was expanding. We were observing very strong expansion in the middle of the year from some of the partners that had been talking about credit expansion by the third, fourth year.
You are observing very specifically from our 31 lending partner platform with some of the partners that had been talking about credit expansion in the middle of the year.
Evangelos Perros: We'll continue to obviously continue to try and diversify our funding further. And all of that is on our pipeline. So I think we feel very good about the funding environment relative to our positioning in the marketplace. And maybe one thing to add is that a lot of the, call it, the sinning around, which obviously impacting the full funding world, but it's much more around the corporate side of the world and specifically around the US, etc., and companies that have been in the sphere of trying to grab market share there. I think on the consumer side, which is a byproduct of that, but you don't see that level of volatility or kind of changes in the last quarter. But it is calling for everything to be much more realistic. Great. Thank you. And then just a quick follow-up, a modeling question for you.
Evangelos Perros: We'll continue to obviously continue to try and diversify our funding further. And all of that is on our pipeline. So I think we feel very good about the funding environment relative to our positioning in the marketplace.
We're feeling less certain about credit extension by the third fourth quarter.
The sheer uncertainty in the market and by that at all outlined in his.
Speaker #2: Quarter for the sheer uncertainty in the is.
Gal Krubiner: And maybe one thing to add is that a lot of the, call it, the sinning around, which obviously impacting the full funding world, but it's much more around the corporate side of the world and specifically around the US, etc., and companies that have been in the sphere of trying to grab market share there. I think on the consumer side, which is a byproduct of that, but you don't see that level of volatility or kind of changes in the last quarter. But it is calling for everything to be much more realistic.
Opening comments those clearly.
Speaker #2: Gal outlined in his opening: we're feeling less certain about credit at the tail end of certain, so we felt that—and that's the beauty of being a—comments, there was clearly—ways we are shielded from the markets.
Geopolitical uncertainty, which was causing some uncertainty in the financial markets. There were there was some stuff going on.
At the tail end of some certain businesses in certain markets and so.
We felt that the most responsible thing for us to do and that's the beauty of being.
Speaker #2: most responsible thing for us to do, on which we were able to take actions at what we thought would be the most
To be to see market is that in some ways. We are shielded from the scene.
Because the b.
Between the CNS response or gives us signals that based on which we were able to take actions at what we thought would be the most marginal risk here in the business and this is this theme of uncertainty in the.
Speaker #2: sea. Because the on what you saw your partners B, that's between the B2B2C market, is that in some And C and us, responds or gives us signals.
Kyle Joseph: Great. Thank you. And then just a quick follow-up, a modeling question for you.
Evangelos Perros: On the impairment side of things, given the underwriting changes you guys have made, what sort of level should we expect to get to your GAAP EPS guidance for 2026? Thanks. Yeah, thanks. No change on that. We're still guiding to the, call it, under scenario A in our guidance of $100 to 150 million range for the year, same as it was in 2025. So no changes there given the ongoing credit performance. Great. Thanks for taking my questions. Our next question is from Hal Goetsch of B. Riley Securities. Please proceed. Hey, thank you, guys. Kind of question. It's counterintuitive given the macro trends we've seen over the year with falling inflation, rates coming down, job market generally good.
Kyle Joseph: On the impairment side of things, given the underwriting changes you guys have made, what sort of level should we expect to get to your GAAP EPS guidance for 2026? Thanks.
Speaker #2: And it is this theme of the potential uncertainty in the credit businesses. There are certain market uncertainties. And by that, as aggressive, and, but having said that, our ability—then, which could change, I mean, rates could change, the market that drives us to think that market could change, by the second half of the year, well, all we need to do is basically prudently turn that back on.
<unk> potential uncertainty in the credit market that drives us to think that we should be responsible and prudent rather than aggressive.
Evangelos Perros: Yeah, thanks. No change on that. We're still guiding to the, call it, under scenario A in our guidance of $100 to 150 million range for the year, same as it was in 2025. So no changes there given the ongoing credit performance.
And.
But having said that our ability to scale and be nimble is extremely high so if things change in the market, which could change I mean rates could change the market could change by the second half of the year.
All we need to do is basically prudently turn that back on and Thats.
The reason why our guidance range is wide, but having said that we as a management team have very very high conviction that we will deliver profitable volumes, which is why our GAAP net income number at work that's causing that.
Speaker #2: And that's the reason why our guidance range is—we should be responsible and prudent rather than scale and be nimble. We will deliver profitable volumes, which is why we have very, very high conviction that—
Kyle Joseph: Great. Thanks for taking my questions.
Speaker #2: wide. But having said
Operator: Our next question is from Hal Goetsch of B. Riley Securities. Please proceed.
Hal Goetsch: Hey, thank you, guys. Kind of question. It's counterintuitive given the macro trends we've seen over the year with falling inflation, rates coming down, job market generally good.
I think maybe one of them.
Got it.
Speaker #2: Anything is never too late. It's a way to be disciplined.
Thank you Mike when you see losses, it's a little bit too late and when you are taking a proactive before that the way to be disciplined. So like you don't need always to look on the duration of your outcomes on the CNS to say now I need to take action and I think again, it's given where we stand and what we see.
Speaker #3: No, I
Speaker #3: think one point to think in
Speaker #3: think one point to think in
Speaker #3: When you see losses, it's a little bit, again, as given where we stand and what our GAAP net income number is, what it takes to take action. And I think, add?
Speaker #3: When you see losses, it's a little bit—again, as given where we stand and what our GAAP net income number is, what it—take action. And I think, add?
Speaker #3: So, and when you are talking, you don't always need to look at deterioration of your mind.
Evangelos Perros: I think EP mentioned, "Hey, your action in the last quarter was based on increased uncertainty, not an increase in credit losses." So I just wanted to if you could give us any more qualitative color on what you saw your partners doing in your response. It just seems a little counterintuitive. It seems like things are going in the consumer's direction to be better credits. And this is just a little bit of it's a little bit needs a little more fleshing out. Thanks. Hal, hi. I think it's a great observation. In fact, those were some of the countervailing forces that we had in our mind as well at the end of Q4. On one hand, the macro was what it was in terms of inflation and rates coming down, as you pointed out.
Hal Goetsch: I think EP mentioned, "Hey, your action in the last quarter was based on increased uncertainty, not an increase in credit losses." So I just wanted to if you could give us any more qualitative color on what you saw your partners doing in your response. It just seems a little counterintuitive. It seems like things are going in the consumer's direction to be better credits. And this is just a little bit of it's a little bit needs a little more fleshing out.
Shall we say.
I'm going to be more conservative on that part of the spectrum and that's it.
Speaker #3: See, it's enough to actually say, 'You know what? I'm going to be proactive before that's the— that we, as a management team, are more conservative on that part of your pullback spectrum.' And that's outcomes on the CNLs to say, 'Now I need to that as well.'
Sure.
Okay.
Unlike maybe 2023, then you are still building the platform relationships with our lending partners.
Your pullback.
And some of those riskier tiers.
Speaker #3: with the lending partners,
Your lending partners, we're okay with that as well that wasn't all relationship issue because I think it was key in 'twenty two 'twenty three 'twenty four to build the platform build those relationships and in this case. It was this kind of pullback is.
Sanjiv Das: Thanks. Hal, hi. I think it's a great observation. In fact, those were some of the countervailing forces that we had in our mind as well at the end of Q4. On one hand, the macro was what it was in terms of inflation and rates coming down, as you pointed out.
Speaker #3: There wasn't a relationship issue. In some of those riskier—because your lending partners were okay with 2024 to build the platform, build those relationships, and in this case, this kind of pullback is okay with the partner.
Okay with the partner.
So a good question B. It is exactly what we told you that in 2022, its a different situation.
Evangelos Perros: On the other hand, what we were observing very specifically from our 31 lending partner platform was some of the partners that had been talking about credit expansion in the middle of the year were feeling less certain about credit expansion by the Q3, Q4 because of the sheer uncertainty in the market. And by that, as Gal outlined in his opening comments, there was clearly geopolitical uncertainty, which was causing some uncertainty in the financial markets. There was some stuff going on at the tail end of certain businesses, certain markets.
Sanjiv Das: On the other hand, what we were observing very specifically from our 31 lending partner platform was some of the partners that had been talking about credit expansion in the middle of the year were feeling less certain about credit expansion by the Q3, Q4 because of the sheer uncertainty in the market. And by that, as Gal outlined in his opening comments, there was clearly geopolitical uncertainty, which was causing some uncertainty in the financial markets. There was some stuff going on at the tail end of certain businesses, certain markets.
And see the answer is no. They appreciate that from them, 15% growth seen the midpoint and <unk> is much better than 2025% growth, but then in three months six months nine months, we take you down on debt. So stability is key.
Speaker #2: situation. But then in Q3 and Q4, the answer midpoint and a stronger Pagaya is much key. More than that.
Speaker #2: No, they appreciate question B. It's exactly what we—different. So A, it's a good 15% growth in the—better than I told you that in 2022, it's a 20-25% growth.
Speaker #2: From them, it down on them. So stability is
And that's why of course.
Yes that makes sense. Thank you.
Our next question is from Reena Kumar with Oppenheimer <unk> Company. Please proceed.
Speaker #3: Yeah, that makes
Speaker #4: Our next
Good morning. Thanks for taking my question can you just talk about like where you actually trying to pull back like it wasn't a particular asset class or was the action taken across the board.
Speaker #6: Good morning, and thank you for taking my question. This is Raina Kumar. Was it a particular focus across the board or more focus on the personal end?
Evangelos Perros: And so we felt that the most responsible thing for us to do, and that's the beauty of being a B2B2C market, is that in some ways, we are shielded from the C because the B that's between the C and us responds or gives us signals based on which we were able to take actions at what we thought would be the most marginal risk tier in the business. And it is this theme of uncertainty in the potential uncertainty in the credit market that drives us to think that we should be responsible and prudent rather than aggressive. But having said that, our ability to scale and be nimble is extremely high. So if things change in the market, which could change, I mean, rates could change. The market could change by the second half of the year.
Sanjiv Das: And so we felt that the most responsible thing for us to do, and that's the beauty of being a B2B2C market, is that in some ways, we are shielded from the C because the B that's between the C and us responds or gives us signals based on which we were able to take actions at what we thought would be the most marginal risk tier in the business. And it is this theme of uncertainty in the potential uncertainty in the credit market that drives us to think that we should be responsible and prudent rather than aggressive. But having said that, our ability to scale and be nimble is extremely high. So if things change in the market, which could change, I mean, rates could change. The market could change by the second half of the year.
Speaker #6: question.
Speaker #6: Asset class, or was the action taken proceeded by the board?
Hi, Dana.
It's primarily across the entire portfolio.
Speaker #2: Raina, it's high—actual gross number.
With a little bit more focus on the personal loan and auto side, just because of the secular growth that we've seen Pos.
Speaker #2: auto side, just because of the
Speaker #2: Auto side, just because of the secular growth that we see in the back?
And that was obviously or the later part of the quarter and effectively that's why you see that sort of as an exit rate change into 2026.
Understood that's helpful and then.
Speaker #2: exit rate change into Understood.
Just on your target for the 5% F. R. L. P C margin from 26 I'm obviously.
Speaker #6: On your target of four to five percent, that's helpful. And then just POS.
Barry a wide range, but you highlighted earlier can you just talk about like how much conservatism is baked in at the low end and like what are the puts and takes to get from the bottom to the top and then if I can sneak in one modeling question, if he's going to tell.
Speaker #6: '26, obviously, that's—and that was the range that you highlighted.
Speaker #6: Much conservatism is baked in at the low Oppenheimer and Company.
Speaker #6: End, and what are the puts and takes to get, please, earlier? Then, if I can just sneak in one modeling—and effectively, that's why you see that sort of as an—could you just talk about how—question, if you can just tell us, you.
Evangelos Perros: All we need to do is basically prudently turn that back on. And that's the reason why our guidance range is wide. But having said that, we as a management team have very, very high conviction that we will deliver profitable volumes, which is why our GAAP net income number is what it is. Gal, do you want to add anything to it? No, I think one point to take in mind. When you see losses, it's a little bit too late. And when you are taking it proactive before, that's the way to be disciplined. So you don't need always to look on the iteration of your outcomes on the CNLs to say, "Now, I need to take action." And I think, again, given where we stand and what we see, it's enough to actually say, "You know what?
Evangelos Perros: All we need to do is basically prudently turn that back on. And that's the reason why our guidance range is wide. But having said that, we as a management team have very, very high conviction that we will deliver profitable volumes, which is why our GAAP net income number is what it is. Gal, do you want to add anything to it? No, I think one point to take in mind. When you see losses, it's a little bit too late. And when you are taking it proactive before, that's the way to be disciplined. So you don't need always to look on the iteration of your outcomes on the CNLs to say, "Now, I need to take action." And I think, again, given where we stand and what we see, it's enough to actually say, "You know what?
Our assumption for 2006, our GAAP tax rate. Thank you.
Speaker #6: your assumption for '26 GAAP tax
So as we have said before as it relates to the apparently PC rate I. Appreciate obviously that has a wide range.
Speaker #6: rate. Thank
Speaker #2: So, as we have a wide range and we look at rate, you may see a sort still coming in at higher.
Speaker #2: Said before, as it relates to the FRLPC rate, I appreciate, obviously, that it's—but ultimately, the way to think about it, your products that come in at a low... yeah.
We'll look to narrow that down going forward at some point, but ultimately the way to think about it think it focus on apparently seen dollar terms. So the more volume you get from your partners and newer products that come in at the low rate you may see a sort of dilutive impact on the actual rate, but still coming in at higher volumes.
Speaker #2: The more volume you get from your partners and portfolio, if you see a slowdown for the new, a very wide—call it a low range of product, new partners—you may end up, but obviously achieving a relatively, vice versa. If there is potentially, let's call it, higher FRLPC.
Therefore higher dollars.
Top line and then <unk> there is potentially let's call. It a slow around when you think about the mix of the portfolio did you see a slower ramp of the new product New partners you may end up with call. It the lower end of the of the.
The ray of the guidance on volume, but obviously, achieving and analytically higher RPC.
Evangelos Perros: I'm going to be more conservative on that part of the spectrum." And that's it. Okay. Unlike maybe 2023, when you were still building the platform relationship with the lending partners, your pullback in some of those riskier tiers that your lending partners were okay with that as well. There wasn't a relationship issue because I think it was key in 2023, 2024 to build the platform, build those relationships. And in this case, this kind of pullback is okay with the partner. So A, it's a good question. B, it's exactly what we told you, that in 2022, it's a different situation. And C, the answer is no. They appreciate that. From them, 15% growth in the midpoint and a stronger Pagaya is much better than a 20, 25% growth. But then in three months, six months, nine months, we take it down on them.
Evangelos Perros: I'm going to be more conservative on that part of the spectrum." And that's it.
That's how it will be how to think about that across the board. So it shouldn't materially change sort of the key dollar amounts or.
Hal Goetsch: Okay. Unlike maybe 2023, when you were still building the platform relationship with the lending partners, your pullback in some of those riskier tiers that your lending partners were okay with that as well. There wasn't a relationship issue because I think it was key in 2023, 2024 to build the platform, build those relationships. And in this case, this kind of pullback is okay with the partner.
Speaker #2: That's how a little bit how to think about the guidance on volume, dollar amounts. All dollars at the top line. And then of dilutive impact on the actual rate, but rate but obviously there's a lot of materially change sort of the key moving parts there because obviously the business is coming out from a period where it question, generally speaking, I would point to, call it a 20% type of tax forward.
The.
On the.
Tax rate question generally speaking I would point to call it 20% type of tax rate.
There is a lot of moving parts there because obviously the business is coming out from a period, where it was two years ago, losing money now into getting to cosmetic and profitability, but that's what I would assume for going forward.
Speaker #2: Getting into government, taking a was two years ago, losing money now.
Thanks for the color.
Speaker #2: But that's what I would assume for going questions.
Evangelos Perros: So A, it's a good question. B, it's exactly what we told you, that in 2022, it's a different situation. And C, the answer is no. They appreciate that. From them, 15% growth in the midpoint and a stronger Pagaya is much better than a 20, 25% growth. But then in three months, six months, nine months, we take it down on them.
Speaker #6: Thanks for the
Our next question is from David Scharf with citizens capital markets. Please proceed.
Speaker #4: Our next question is color.
Speaker #4: Our next question is color.
Hi, good morning, Thanks for taking my questions.
Speaker #4: Capital Markets. Please profitability.
Maybe just two.
Speaker #5: Hi, good morning.
Sort of dive in a little more.
To <unk> question on perhaps what Youre.
Speaker #5: more to Hal's
Kind of behavior, you're seeing from lending partners.
Evangelos Perros: So stability is key more than the actual growth number. Yes, that makes sense. Thank you. Our next question is from Rayna Kumar with Oppenheimer & Co. Please proceed. Good morning. Thanks for taking my question. Could you just talk about where you actually started to pull back? Was it a particular asset class, or was the action taken across the board? Hi, Raina. It's primarily across the entire portfolio with a little bit more focus on the personal and auto side just because of the secular growth that we see in POS. And that was obviously on the later part of the quarter. And effectively, that's why you see that sort of as an exit rate change into 2026. Understood. That's helpful. And then just on your target 4% to 5% FRLPC margin for 2026, obviously, that's a very wide range that you highlighted earlier.
Evangelos Perros: So stability is key more than the actual growth number.
This was.
So far in earnings season, where a lot of lenders pretty much said.
Speaker #5: Partners, the tax rate... maybe just a little.
Speaker #5: Maybe just the tax rate, little partners.
Hal Goetsch: Yes, that makes sense. Thank you.
Operator: Our next question is from Rayna Kumar with Oppenheimer & Co. Please proceed.
Things are stable there are no certainly no rush to widen their credit boxes, but there is certainly werent indications that things were tightening either.
Rayna Kumar: Good morning. Thanks for taking my question. Could you just talk about where you actually started to pull back? Was it a particular asset class, or was the action taken across the board?
Just just so we understand.
Did you start to see by the end of the quarter.
More evidence of.
Evangelos Perros: Hi, Raina. It's primarily across the entire portfolio with a little bit more focus on the personal and auto side just because of the secular growth that we see in POS. And that was obviously on the later part of the quarter. And effectively, that's why you see that sort of as an exit rate change into 2026.
Speaker #5: by the end of the quarter question and perhaps what you're kind partners six months earlier? Is that how we more evidence behavioral said things are stable, there are changes?
Of turn downs of loan application rejections by your partners that may have been approved.
Speaker #5: of loan application rejections by your partners that may have been
But by your partners six months earlier or is that how we should.
Sort of interpret the behavioral changes you're seeing.
I think the best way to locally.
Many more expansion that working late Boeing plane.
Speaker #3: I think the best way to look on more expansions that were in too low and therefore we're going to place, or in plan, approve more type of to grow." But it has been reporting companies we talked about that the growth going
Rayna Kumar: Understood. That's helpful. And then just on your target 4% to 5% FRLPC margin for 2026, obviously, that's a very wide range that you highlighted earlier.
Not in play.
So it's not to say that people are not saying, hey, we're going to continue to grow but it has been shifted much more towards.
Speaker #3: play. So it's not to say that people are not the personal loan side of
How do we do more asset classes, how do we get more to our customers rather than.
Evangelos Perros: Can you just talk about how much conservatism is baked in at the low end, and what are the puts and takes to get from the bottom to the top? And then if I can just sneak in one modeling question, if you can just tell us your assumption for 2026 GAAP tax rate. Thank you. Yeah. So as we have said before, as it relates to the FRLPC rate, I appreciate, obviously, that it's a wide range. And we look to narrow that down going forward at some point. But ultimately, the way to think about it, focus on FRLPC in dollar terms. So the more volume you get from your partners and your product that come in at a low rate, you may see a sort of dilutive impact on the actual rate but still coming in at higher volumes and therefore higher dollars at the top line.
Rayna Kumar: Can you just talk about how much conservatism is baked in at the low end, and what are the puts and takes to get from the bottom to the top? And then if I can just sneak in one modeling question, if you can just tell us your assumption for 2026 GAAP tax rate. Thank you.
Oh.
The pricing are high and we just going to make it more aggressive or the losses are too low and therefore, we cannot prove more type of population.
So you definitely see a difference and by the way I think you will see on the gross numbers all of daily call team.
Evangelos Perros: Yeah. So as we have said before, as it relates to the FRLPC rate, I appreciate, obviously, that it's a wide range. And we look to narrow that down going forward at some point. But ultimately, the way to think about it, focus on FRLPC in dollar terms. So the more volume you get from your partners and your product that come in at a low rate, you may see a sort of dilutive impact on the actual rate but still coming in at higher volumes and therefore higher dollars at the top line.
Companies, you talked about the growth going forward.
Top line growth is not what it used to be less deal, especially on the personal loan business.
Speaker #3: forward from the top line growth is not what "Oh, the pricing is high and we're just business.
Got it no. That's helpful. I mean, obviously as you noted your business is in a unique position to kind of see the activities of multiple lenders as opposed to just.
Observe in your own portfolio. So that's helpful. And then just as a follow up.
Evangelos Perros: And then vice versa, if there is potentially, let's call it, a slow ramp when you think about the mix of the portfolio. If you see a slow ramp for the new product, new partners, you may end up with, call it, a low range of the rate of the guidance on volume but obviously achieving a relatively higher FRLPC. That's a little bit how to think about that across the board. So it shouldn't materially change sort of the key dollar amounts. On the tax rate question, generally speaking, I would point to, call it, a 20% type of tax rate. But obviously, there's a lot of moving parts there because obviously, the business is coming out from a period where it was two years ago losing money, now into getting to a profitability. But that's what I would assume for going forward. Thanks for the color.
Evangelos Perros: And then vice versa, if there is potentially, let's call it, a slow ramp when you think about the mix of the portfolio. If you see a slow ramp for the new product, new partners, you may end up with, call it, a low range of the rate of the guidance on volume but obviously achieving a relatively higher FRLPC. That's a little bit how to think about that across the board. So it shouldn't materially change sort of the key dollar amounts. On the tax rate question, generally speaking, I would point to, call it, a 20% type of tax rate. But obviously, there's a lot of moving parts there because obviously, the business is coming out from a period where it was two years ago losing money, now into getting to a profitability. But that's what I would assume for going forward.
Speaker #5: multiple lenders as opposed to
Speaker #5: multiple lenders as opposed to
Should we think about maybe the recalibration on credit.
Extending.
And reducing tail risk does that extend to how you approach your.
Speaker #5: credit No, that's helpful. I mean, obviously, as you extend to how you extending to and reducing approvals? tail risk?
Speaker #5: Does that it.
Your discretionary investing in Securities in addition to.
Originations or loan approvals.
Speaker #5: to
Hi, Dave.
I think there are two <unk>.
Different aspects ride to two sides of the network one doesn't necessarily tied to the other.
Speaker #2: Aspects, right? You have to approach your discipline underwriting from two sides of the equation.
Got it understood. Thank you.
Okay.
Rayna Kumar: Thanks for the color.
We have reached the end of our question and answer session I would like to turn the conference back over to Karl for closing remarks.
Evangelos Perros: Our next question is from David Scharf with Citizens Capital Markets. Please proceed. Hi, good morning. Thanks for taking my questions. Maybe just to sort of dive in a little more to Hal's question and perhaps what kind of behavior you're seeing from lending partners. This was so far an earnings season where a lot of lenders pretty much said things are stable. There are certainly no rush to widen their credit boxes. But there certainly weren't indications that things were tightening either. Just so we understand, did you start to see by the end of the quarter more evidence of turndowns, of loan application rejections by your partners that may have been approved by your partners six months earlier? Is that how we should sort of interpret the behavioral changes you're seeing?
Operator: Our next question is from David Scharf with Citizens Capital Markets. Please proceed.
So I want to thank everyone for joining us today as you can said our results demonstrate the power of the B to B to C model. We have worked so hard to build it for guidance.
Speaker #4: Gal for closing
David Scharf: Hi, good morning. Thanks for taking my questions. Maybe just to sort of dive in a little more to Hal's question and perhaps what kind of behavior you're seeing from lending partners. This was so far an earnings season where a lot of lenders pretty much said things are stable. There are certainly no rush to widen their credit boxes. But there certainly weren't indications that things were tightening either. Just so we understand, did you start to see by the end of the quarter more evidence of turndowns, of loan application rejections by your partners that may have been approved by your partners six months earlier? Is that how we should sort of interpret the behavioral changes you're seeing?
Increasingly diversified growth with an unrelenting focus on disciplined underwriting along with a growing list of partners and funding mechanism that keeps evolving and improving.
Speaker #2: have worked so hard to build at One doesn't necessarily tie to the everyone for joining us today. As demonstrates the power of the B2B2C model we all US consumer lending remarks.
Speaker #2: …have worked so hard to build at One doesn't necessarily tie to the everyone for joining us today. As demonstrates the power of the B2B2C model we all US consumer lending today.
Speaker #2: Pagaya. Increasingly diversified it is, many to 2026, and to share our journey with you as we have. So I want to thank you.
Speaker #2: Growth with an underwriting focus, along with a growing list of partners and funding, JP. No, I think these are—got it—improving. I look forward to maybe the recalibration on position, to kind of see the activities of other partners.
Speaker #2: Growth with an underlying focus, along with a growing list of partners and funding, JP. No, I think these are—got it—are improving. I look forward to maybe the recalibration on position, to kind of see the activities of others.
I look forward for 2026, and two shale for jewelry with you as we grow <unk> into a key partners for all U S consumers.
Continuing optimizing our product suite and value proposition to maximize the value we provide to our partners.
Speaker #2: institutions you can tell, our result market opportunity and market that continuing optimizing our product suite and lead. Thank you very much for your time value proposition to maximize the value we provide to our we created and that we
We remain laser focused on the long term potential for Guyana as we penetrate these enormous market opportunity and market that we created and definitely thank you very much for your time today.
Okay.
This will conclude today's conference you may disconnect your lines at this time and thank you for your participation.
Evangelos Perros: I think the best way to look on it is many more expansions that were in play or in, then became not in play. So it's not to say that people are not saying, "Hey, we are going to continue to grow." But it has been shifted much more towards, "How do we do more asset classes? How do we get more to our customers?" rather than, "Oh, the pricing are high, and we're just going to make it more aggressive." Or, "The losses are too low, and therefore, we're going to approve more type of population." So you definitely see a difference.
Gal Krubiner: I think the best way to look on it is many more expansions that were in play or in, then became not in play. So it's not to say that people are not saying, "Hey, we are going to continue to grow." But it has been shifted much more towards, "How do we do more asset classes? How do we get more to our customers?" rather than, "Oh, the pricing are high, and we're just going to make it more aggressive." Or, "The losses are too low, and therefore, we're going to approve more type of population." So you definitely see a difference.
Evangelos Perros: And by the way, I think you will see on the gross numbers of all of the reporting companies we talked about that the growth going forward from the top line growth is not what it used to be last year, especially on the personal loan and other type of business. Got it. No, that's helpful. I mean, obviously, as you noted, your business is in a unique position to kind of see the activities of multiple lenders as opposed to just observing your own portfolio. So that's helpful. And then just as a follow-up, should we think about maybe the recalibration on credit in reducing tail risk? Does that extend to how you approach your discretionary investing in securities in addition to originations, or loan approvals? Hi, Dave. Hi, EP. No, I think these are two different aspects, right, two sides of the network.
Gal Krubiner: And by the way, I think you will see on the gross numbers of all of the reporting companies we talked about that the growth going forward from the top line growth is not what it used to be last year, especially on the personal loan and other type of business.
David Scharf: Got it. No, that's helpful. I mean, obviously, as you noted, your business is in a unique position to kind of see the activities of multiple lenders as opposed to just observing your own portfolio. So that's helpful. And then just as a follow-up, should we think about maybe the recalibration on credit in reducing tail risk?
Gal Krubiner: Does that extend to how you approach your discretionary investing in securities in addition to originations, or loan approvals? Hi, Dave. Hi, EP. No, I think these are two different aspects, right, two sides of the network.
Evangelos Perros: One doesn't necessarily tie to the other. Got it. Understood. Thank you. We have reached the end of our question-and-answer session. I would like to turn the conference back over to Gal for closing remarks. So I want to thank everyone for joining us today. As you can tell, our results demonstrate the power of the B2B2C model we have worked so hard to build at Pagaya, increasingly diversified growth with an unrelenting focus on disciplined underwriting, along with a growing list of partners and funding mechanisms that keeps evolving and improving. I look forward for 2026 and to share our journey with you as we grow Pagaya into key partners for all US consumer lending institutions, continually optimizing our product suite and value proposition to maximize the value we provide to our partners.
Gal Krubiner: One doesn't necessarily tie to the other.
David Scharf: Got it. Understood. Thank you.
Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to Gal for closing remarks.
Gal Krubiner: So I want to thank everyone for joining us today. As you can tell, our results demonstrate the power of the B2B2C model we have worked so hard to build at Pagaya, increasingly diversified growth with an unrelenting focus on disciplined underwriting, along with a growing list of partners and funding mechanisms that keeps evolving and improving. I look forward for 2026 and to share our journey with you as we grow Pagaya into key partners for all US consumer lending institutions, continually optimizing our product suite and value proposition to maximize the value we provide to our partners.
Evangelos Perros: We remain laser-focused on the long-term potential of Pagaya as we penetrate this enormous market opportunity, a market that we created and that we lead. Thank you very much for your time today. Thank you. This will conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.
Gal Krubiner: We remain laser-focused on the long-term potential of Pagaya as we penetrate this enormous market opportunity, a market that we created and that we lead. Thank you very much for your time today.
Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.
