Pagaya Technologies Ltd.

Greetings and welcome to Pagaya Technologies Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Josh Feagin, Head of Investor Relations. Thank you, Mr. Fagan. You may begin.

Thank you, and welcome to Pagaya's first quarter 2025 Earnings Conference Call. Joining me today to talk about our business and results are Gal Krubiner, Chief Executive Officer of Pagaya, Sanjeev Das, President, and Evangelos Peros, Chief Financial Officer. You can find the materials that accompany our prepared remarks and a replay of today's webcast on the investor relations section of our website at investor.pagaya.com. Our remarks today will include forward-looking statements that are based on our current expectations and forecasts with respect to, among other things, our operations and financial performance, including our financial outlook for the second quarter and full year of 2025. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially from our 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 to time with the SEC, including our 10-K 10Q, 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 FRLPC, FRLPC percentage of network volume, and core operating expenses will be discussed on the call. Reconciliation 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 on form 8K 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 Gal.

Thank you for joining us today for a discussion of our first quarter 2025 results. as well as an update on our business. I really think that the results speak for themselves and they demonstrate our execution against the commitment we have provided. In fact, we have exceeded expectations on key metrics and particularly on the gap net income profitability, which we have delivered one quarter earlier. This is and will remain a crucial metric for our management team moving forward. Perhaps more importantly is the fact that we deliver these results in the face of heightened macro uncertainty, sticking to our balanced and increasingly diversified growth focus combined with our efficient operations and structure. We grew revenue by 18% year over year, reaching an annualized run rate of nearly $1.2 billion. Free revenue, less production costs, or FRLPC, grew by 26% and reached an annualized run rate of over $460 million. And with our extremely efficient operating cost structure, These results drove 100% growth in our adjusted EBITDA to an annualized equivalent of approximately $320 million. Importantly, we achieved positive gap net income of $8 million this quarter, ahead of our second quarter guidance and the first time as a public company. I could not be prouder of the team and the work that has been done to get us to this point. We are truly delivering on our mission and value proposition, but now at scale. Because of Pagaya, more deserving Americans are getting more financial opportunities, and as we transform the financial ecosystem, our lending partners win, and we win with them. As important as the results is the diversified manner in which we have achieved those results, which underscores the durability of our business model. We have more lending partners contributing meaningfully to our volume. In fact, two times as many lenders represented at least $100 billion of volume this quarter versus just a year ago. Loan types and product selection are increasing as Sanjeev will discuss in further detail soon. And we found these volumes in the most efficient and diversified manner to date, including the recent announced forward flow agreement with Blue Owl Capital to purchase up to $2.4 billion in loans over 24 months, in addition to the previously announced forward flow agreement with Castle Lake. We have also built a capital structure with ample liquidity to self-fund our business, even with increasing uncertainty. Therefore, we do not need nor do we plan to raise equity capital in the foreseeable future. Combined with our prudent growth strategy and operating efficiencies, we have built a business model for all cycles. I would like to spend a moment on the macro and the geopolitical uncertainty. We understand this is an important topic to investors and this is an important topic to us as well. When we provided our guidance for 2025, we communicated that we were taking a prudent and balanced approach to growth. We understood there were unknowns and accordingly, while consumer credit behavior was and still steady, we took a cautious approach towards growth. We noted that our growth would be profitable and responsible, and indeed, this is what we reported today. We are clearly not complacent, nor we will be. We are building a business for the long term to navigate all cycles. We are best positioned to react to continued uncertainty and potential changes to consumer health and credit performance if they will arise. Our risk management is prudent and reflects lessons learned during the post-pandemic period. Our funding mechanism is the most diversified in our history. These factors enable us to stay nimble to navigate any environment that we can experience. Before passing the call to Sanjiv, I would like to talk about the commitments that we have made so far. We have now committed to our lending partners, our funding partners, and our shareholders. We are now at the point where we are delivering clearly against all of these. For our lending partners, we are now increasing the value of the Pagaya network to them even further with the introduction of our proactive pre-screen product. The acceptance of our solution is only getting stronger among lending partners as we have helped many of the industry's strongest brands to better serve customers with more access to credit and without straining their balance sheets. For our funding partners, we have committed to provide high volume of credit with stringent underwriting. Look no further than the $800 million raised in April alone for our personal loan and auto loan ABS programs as an evidence for the benefits of what we are delivering to our funding partners. For our shareholders, we are delivering consistent, durable growth with a keen focus on long-term profitability. In fact, we have raised our gap net income guidance for the full year, which IPI will discuss later in the call. With that, I would like to hand it off to our president, Sanjeev, for a review of our operational