Pagaya Technologies Ltd.

Thank you, and welcome to Pagaya's second quarter 2025 earnings conference call. Joining me today to talk about our business and results are Gal Krubeter, 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, www.investorrelations.com. 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 third quarter and full year of 2025. Our actual results may differ materially from those contemplated by those 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, 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 FRLPC. FRLPC percentage of network volume and core 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. And 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, Josh, and welcome everyone. This was our second consecutive quarter of positive GapNet income, at a record high of $17 million. Total revenues of $326 million was also a record, as well as our $126 million in revenues from fee, less production cost. And lastly, our $86 million of adjusted EBITDA. Our strong results underscore the tremendous work we have done to provide increasing value to our existing partners while building our new partner pipeline. This also reflects our improved funding and operating efficiency with strong unit economics, which the team will walk through in more details later. Given the sustainability of our growth, unique economic attribution, improving corporate structure, and increasing demand for our product, we are raising our full-year financial outlook. Our unique data advantage and AI underwriting advantage continues to compound and enabling more precise credit decision, fueling model improvements, and enhancing outcomes for our lending partners. These results are a strong reflection of our execution against several unique attributes delivered by extremely strong team. Before I discuss our results and our strategy moving forward, I do want to spend a few minutes Just to remind the audience what it is that makes our business model and the company so unique. First, it's the way which we source assets. We are not a direct-to-consumer or a balance sheet lender. We help over 31 different lenders to acquire and retain customers. The benefit of the network to Pagaya is clear. sizable loan flow at almost $250 billion per quarter without spending a single marketing dollar. This allows us to remain highly selective while still profitably growing volumes, underwriting just 1% of applications over the past three years. Second is the value proposition we provide to our lending partners. especially to the banks. With a heavy regulatory burden and stringent capital rules, banks cannot truly respond to opportunities presented to them, leaving good customers and depositors behind. GAIA ensures banks can serve such credit-worthy customers without taking any credit risk. The third attribute, is our ability to produce diversified assets at scale for large pools of capital raised by private capital funding partners such as Blue Owl and Castle Lake. Over 150 sophisticated investors look to us to provide this flow in a consistent fashion. Last is the unique economic profile as we monetize this flow. Ours is a fee-based model generating revenues from both sides of our network. That, coupled with a strong operational leverage, positions us to drive high levels of sustained long-term profitability. Turning back to our second quarter results, we have continued to diversify several key aspects of our platform. As such, 30% of originations come from point-of-sale and auto lending versus only 9% just a year ago. On the funding side, with our recent forward flow expansion with Castle Lake, we have added roughly $5 billion in forward flow capacity since the end of 2024. This represents 25% of our overall funding mix. The increasing diversification and capacity for our funding sources adds much more resiliency and stability through cycles and better supports our growth and earning power. We have continued to demonstrate strong operational leverage with a second quarter core operating expenses near record lows as a percentage of FRLPC thanks to the wide usage of technology and automation in our business, driving continued GapNet income growth. While the operating environment is showing some stabilization and credit performance remains solid, we remain deliberately conservative in managing volumes and credit such that we can respond effectively to any macro shift. Pagaya is targeting strong and sustainable growth through all cycles. While these results were delivered in our second quarter, we continued to execute as we entered the third quarter. We successfully raised $500 million through our first corporate bond issuance. This was a strong external validation of our business model. Our appeal to an increasing array of capital providers would not have been possible without our rentless focus on the stability and consistency of our business and our disciplined execution on driving towards GAAP profitability. This bond offering is designed to grow our earning power, provide us access to less expensive capital, and evolve our corporate capital structure to one that is more mature, diverse, and sustainable. When I look forward towards the next 18 months of Pagaya, I see a disciplined focus on growing our enterprise. The main objectives of our growth strategy are simple. To lend more partners and to offer additional value-added products to support our existing lenders' businesses. Our core technology advantages allow us to further support our partners' growth across the different markets in which we operate in. Today, our core program boosts our partners' ability to reach a large customer base. Recently, we have started to support our partners' ability to actually increase application flow into their funnels, as well as to reduce the friction to fund loans through expedited verification. Initiatives and products, such as the Pagaya Direct Marketing Engine, the Affiliate Optimizer, and the FastPass solutions, are a crucial part of our future growth. Sanjeev, my co-founder and president, will expand on the way in which product innovation boosts the appeal to our network of lending partners as a growth solution. We are coupling product expansion with our strong and consistent funding network and underwriting capabilities, and it is important to mention that all of these loans, even from the new initiatives, continue to be funded by the Pagaya Funding Network. We have made great strides in the past 18 months in stabilizing our funding, financing, and operating structure through a disciplined approach. We will now shift to focus and execute of our growth strategy, which we are excited to share more about in the coming quarters. In closing, we continue to demonstrate that our greatest strengths lies in our ability to combine advanced data, AI capabilities, and scale infrastructure, making us a partner of choice to many leading lenders to drive sustainable, profitable growth. The result is a highly efficient cost model, and as bank and lenders look for new ways to expand and grow, we're helping them get there, sharpening our solution scaling efficiently, and delivering impact where it matters the most. With that, I would like to hand it over to Sanjeev for a review of our operating business and more on our product-led growth.

Thank you, Gal. Our business continues to benefit from robust consumer demand, a healthy consumer, continued improvement of our credit modeling, as well as Pagaya's unique data advantage and network benefits. Existing lending partnerships remain the primary source of near-term volume growth. We see very significant expansion potential to our product solutions, given our now proven track record of success and the strong demand from existing partners for incremental growth opportunities. With the credit environment stabilizing, our lending partners are actively pushing growth opportunities. However, many initiatives are constrained at our lenders by their limited technology resources and competing internal priorities. Anticipating this challenge, Pagaya began investing nearly 18 months ago to build marketing capabilities designed to accelerate our partners' growth without them taking any incremental risk. In recent quarters, we successfully piloted pre-screen marketing initiatives as part of our direct marketing engine and have since initiated long-term commercial discussions to scale these programs. Additionally, we are working with leading affiliate platforms to develop plug-and-play solutions that require minimal integration effort, enabling lending partners to launch growth initiatives quickly. Our embeddedness in our partner's technology enables seamless expansion into new product solutions. Pagaya is expanding the way in which it works with its lending partners beyond decline monetization. We are growing our product suite to include marketing products to further accelerate their customer growth. Our direct marketing and affiliate optimizer engines help our lending partners expand their application funnel which in turn creates a significant growth platform for Pagaya. As we expand our product offerings, we consistently leverage Pagaya's core capabilities, underwriting advantage and funding efficiency. Demand also remains robust for new partner additions, a longer-term growth driver. We see continued interest from regional banks and leading fintechs. With several terms sheets signed, we expect a few announcements in the coming quarters. Importantly, all of these current and evolving business drivers remain within our B2B2C core competency and focus. We have no plans to go directly to consumers, and as Gal said, it is something that uniquely differentiates our model in the world of consumer lending. Now, let me provide some highlights for each of our product offerings. Within our personal loan segment, our value proposition continues to mature, and partners are keen to embrace expansion into newer product offerings, such as direct marketing and affiliate optimization. Pagaya is increasingly aligned with our lending partners as our products continue to evolve to best drive higher volumes, higher revenue, and expanded customer lifetime value. It is worth spending a bit of time on each of our evolving product solutions. Direct marketing engine for our lending partners, including our pre-screen solution, encapsulates Pagaya's continued efforts to help lending partners capture more application flow. It represents Pagaya's next generation of products designed to help partners not only monetize declines, but also grow their application flow. We are helping to pre-screen existing customers using our models and send them offers through email, direct mail, and other channels. We are on track to sign multiple new pre-screened term sheets with existing lending partners over the next few quarters, all of which completed successful pilots earlier this year. Next, our affiliate optimizer engine for lending partners, which leverages our unique data advantage to help lending partners grow volumes, through major affiliate programs such as Credit Karma, Experian, LendingTree, and others. This enables partners to attract new customers at scale via a major source of customer acquisition. We are also expanding the market opportunity for affiliates by introducing new lending partners to their platforms. Our goal is to further streamline the onboarding process for lending partners accelerating their growth with a plug-and-play solution on affiliate platforms. This eliminates the need for significant technology resources for onboarding, which is currently a challenge for our lending partners. This will in turn drive accelerated growth for Pagaya. Moving to our auto lending business, which is building on strong growth trends, optimizing and growing existing partnerships such as Ally and Westlake. First, We are growing our decline monetization programs and expanding our lending partners' access to high-quality application flow by assessing applications that would be approved by partners. Further, we are rolling out value-added features, including tailored income, employment, and other verification strategies via a new feature known as FastPass. These features under our partners' brands have already demonstrated promising results with potential to scale auto volumes. This improves the dealer and customer experience without incremental credit risk and drives cost savings for our lending partners. In terms of our pragmatic and balanced approach towards growth in auto lending, we have notably improved our underwriting model performance. The performance of our RPM ABS shelf and improved funding efficiency have led to lower cost of funds and capital requirements. We achieved our first AAA-rated auto ABS this quarter, a testament to our prudent underwriting. This has driven unit economics on par with the more mature personal loan segment. Our point of sale segment continues to demonstrate strong volume growth. Similar to the auto loan segment, we are enabling decline monetization for our lending partners and providing offers on application flow that could otherwise be approved by them. We have made notable progress on both sides of this business. Starting with the lending side, we have demonstrated profitable growth with Klarna, our anchor partner. We are helping Elevon grow their advanced product while making advancements with new partners. On the funding side, our innovative Posh ABS offering was AAA rated out of the gate and oversubscribed. We continue to explore additional long-term growth levels from multiple verticals, ticket sizes, and terms. In terms of our new partner pipeline, demand for our solutions remains robust. Among areas of focus, we see ongoing strong demand from U.S. regional banks. In this market, we are in several late-stage discussions planning personal and auto lending as well as point-of-sale financing opportunities. With several term sheets signed, we expect a few announcements in the coming quarters with some banks already in the process of onboarding. In particular, we are in the onboarding stage with a top 20 U.S. bank by assets to help in the relaunch of their personal loans business as well as some of the largest U.S. private banks to help expand their point-of-sale financing business. And now it's my pleasure to turn the call over to EP to cover the quarter's financial results and outlook. Thank you, Sanjeev.