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Pagaya Technologies Ltd. (PGY)

CIK: 0001883085. SIC: 6199 Finance Services. Latest 10-K as of: 2026-03-02.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 61 > SIC 6199 Finance Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1883085. Latest filing source: 0001883085-26-000018.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue1,301,360,000USD20252026-06-01
Net income81,389,000USD20252026-06-01
Assets1,545,914,000USD20252026-06-01

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001883085.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric20212022202320242025
Revenue474,588,000748,928,000812,051,0001,032,248,0001,301,360,000
Net income-91,151,000-302,321,000-128,438,000-401,406,00081,389,000
Operating income-5,809,000-251,505,000-24,400,00066,840,000263,827,000
Diluted EPS-8.25-8.22-2.14-5.660.93
Operating cash flow49,811,000-40,000,000-21,659,00047,751,000238,620,000
Capital expenditures6,624,00022,406,00020,189,00017,737,00013,902,000
Assets1,045,079,0001,208,376,0001,291,072,0001,545,914,000
Liabilities279,656,000468,377,000775,276,000960,460,000
Stockholders' equity553,520,000559,721,000326,491,000480,017,000
Cash and cash equivalents190,778,000309,793,000186,478,000187,921,000235,329,000
Free cash flow43,187,000-62,406,000-41,848,00030,014,000224,718,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric20212022202320242025
Net margin-19.21%-40.37%-15.82%-38.89%6.25%
Operating margin-1.22%-33.58%-3.00%6.48%20.27%
Return on equity-54.62%-22.95%-122.95%16.96%
Return on assets-28.93%-10.63%-31.09%5.26%
Liabilities / equity0.510.842.372.00
Current ratio3.284.051.80

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001883085.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2024-Q12024-03-31245,276,000-21,223,000-0.33reported discrete quarter
2024-Q22024-06-30250,344,000-74,785,000-1.04reported discrete quarter
2024-Q32024-09-30257,234,000-67,476,000-0.93reported discrete quarter
2024-Q42024-12-31279,394,000-237,922,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-31289,989,0007,893,0000.10reported discrete quarter
2025-Q22025-06-30326,398,00016,655,0000.20reported discrete quarter
2025-Q32025-09-30350,165,00022,545,0000.23reported discrete quarter
2025-Q42025-12-31334,808,00034,296,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-31317,944,00024,694,0000.28reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001883085-26-000031.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and our audited annual consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and the related notes included in our Annual Report on Form 10-K filed with the SEC on March 2, 2026 (“our Annual Report on Form 10-K”). Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. In this section “we,” “us,” “our” and “Pagaya” refer to Pagaya Technologies Ltd.

Company Overview

Pagaya’s mission is to deliver more financial opportunity to more people, more often. We believe our mission will be accomplished by becoming the trusted lending technology partner for the consumer finance ecosystem, with an expansive product suite (the fee-generating side of our business) fueled by effective and efficient capital and risk management (the capital efficiency side of our business). Both sides of our business working harmoniously to meet the complex needs of the leading financial institutions.

We are a product-focused technology company that deploys sophisticated data science and proprietary, AI-powered technology to enable better outcomes for financial institutions, their existing and potential customers, and institutional or sophisticated investors.

We have built, and we are continuing to scale, a leading AI and data network for the benefit of financial services and other service providers, their customers, and investors. Services providers integrated in our network, which we refer to as our ‘‘Partners,’’ range from high-growth financial technology companies to incumbent banks and financial institutions. We believe Partners benefit from our network to extend financial products to their customers, in turn helping those customers fulfill their financial needs. These assets originated by Partners with the assistance of Pagaya’s AI technology are eligible to be acquired by Financing Vehicles: (i) funds managed or advised by Pagaya or one of its affiliates, (iii) special purpose vehicles established by third-party investors to facilitate the purchase of assets under forward flow agreements and (iv) other similar vehicles (“Financing Vehicles”).

In recent years, investments in digitization have improved the front-end delivery of financial products, upgrading customer experience and convenience. Notwithstanding these advances, we believe underlying approaches to the determination of creditworthiness for financial products are often outdated and overly manual. In our experience, providers of financial services tend to utilize a limited number of factors to make decisions, operate with siloed technology infrastructure and have data limited to their own experience. As a result, we believe financial services providers approve a smaller proportion of their application volume than is possible with the benefit of modern technology, such as our AI technology and data network.

At our core, we are a technology company that deploys data science and technology to drive better results across the financial ecosystem. We believe our solution drives a “win-win-win” for Partners, their customers and potential customers, and investors. First, by utilizing our network, Partners are able to approve more customer applications, which we believe drives superior revenue growth, enhanced brand affinity, opportunities to promote other financial products and decreased unit-level customer acquisition costs. Partners realize these benefits with limited incremental risk or funding requirements. Second, Partners’ customers benefit from enhanced and more convenient access to financial products. Third, investors benefit through gaining exposure to these assets originated by Partners with the assistance of our AI technology and acquired by the Financing Vehicles through our network.

Our Economic Model

Pagaya’s revenues are primarily derived from Network Volume. We define Network Volume as the gross dollar value of assets originated by our Partners with the assistance of our artificial intelligence (“AI”) technology1. We generate revenue from network

1 Our proprietary technology uses machine learning models as a subset of artificial intelligence that go through extensive testing, validation, and governance processes before they can be used or modified. The machine learning models are static and do not have the ability to self-correct, self-improve, and/or learn over time. Any change to the models requires human intervention, testing, validation, and governance approvals before a change can be made.

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AI fees, contract fees, interest income and investment income. Revenue from fees is comprised of network AI fees and contract fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees.

We primarily earn AI integration fees for the creation and delivery of the assets that comprise our Network Volume.

Capital markets execution and contract fees are primarily earned from investors. Multiple funding channels are utilized to enable the purchase of network assets from our Partners, such as asset backed securitizations and forward flow arrangements. Capital markets execution fees are primarily earned from the market pricing of ABS transactions, as well as upon the execution of forward flow transactions, while contract fees are management, performance and similar fees.

Additionally, we earn interest income from our risk retention holdings and our corporate cash balances and investment income associated with our ownership interests in certain Financing Vehicles and other proprietary investments.

We incur costs when Network Volume is acquired by the Financing Vehicles. These costs, which we refer to as ‘‘Production Costs,’’ compensate our Partners for acquiring and originating assets. Accordingly, the amount and growth of our Production Costs are highly correlated to Network Volume. An important operating metric to evaluate the success of our economic model, therefore, is FRLPC, or fee revenue less Production Costs. FRLPC is a not calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP") See the section below entitled "Reconciliation of Non-GAAP Financial Measures" for a description and reconciliation of this measure to the most directly comparable GAAP measure.

Additionally, we have built what we believe to be a leading data science and AI organization that has enabled us to assist our Partners as they make decisions to extend credit to consumers. Excluding Production Costs, headcount, technology overhead and research and development expenses represent the significant portion of our expenses.

Key Factors Affecting Our Performance

Expanded Usage of Our Network by Our Existing Partners

Our AI technology typically enables Partners to convert a larger proportion of their application volume into originated loans, enabling them to expand their ecosystem and generate incremental revenues. Our Partners have historically seen rapid scaling of origination volume on our network shortly after onboarding and the contribution of Pagaya’s network to Partners’ total origination volume tends to increase over time. Additionally, we continue to introduce and develop new asset types, products and services, enabling Partners to expand their relationship with Pagaya and further increase origination volumes.

Adoption of Our Network by New Partners

We devote significant time to, and have a team that focuses on, onboarding and managing Partners to our network. We believe that our success in adding new Partners to our network is driven by our distinctive value proposition: driving significant revenue uplift to our Partners at limited incremental cost or credit risk to the Partner. Our success adding new Partners has contributed to our overall Network Volume growth and driven our ability to rapidly scale new asset classes.

Continued Improvements to Our AI Technology

We believe our historical growth has been significantly influenced by improvements to our AI technology, which are in turn driven both by the deepening of our proprietary data network and the strengthening of our AI technology. As our existing Partners grow their usage of our network, new Partners join our network, and as we expand our network into new asset classes, the value of our data asset increases. Our technology improvements thus benefit from a flywheel effect that is characteristic of AI technology, in that improvements are derived from a continually increasing base of training data for our technology. We have found, and we expect to continue to experience, that more data leads to more efficient pricing and greater Network Volume. Since inception, we have evaluated more than $3.9 trillion in application volume.

In addition to the accumulation of data, we make improvements to our technology by leveraging the experience of our research and development specialists. Our research team is central to accelerating the sophistication of our AI technology and expanding into new markets and use cases. We are reliant on these experts’ success in making these improvements to our technology over time.

Availability and Pricing of Funding from Investors

Regardless of market conditions, the availability and pricing of funding from investors is critical to our growth. We have diversified our investor network and will continue to seek to further diversify our investor base. For the three months ended

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March 31, 2026 and 2025, our top 5 investors collectively accounted for approximately 59% and 39%, respectively, of our total funding.

Performance of Assets Originated with the Assistance of Our Proprietary Technology

The availability of funding from investors is a function of demand for consumer credit, as well as the performance of such assets originated with the assistance of our AI technology and purchased by Financing Vehicles. Our AI technology and data-driven insights are designed to enable relative outperformance versus the broader market. We believe that investors in Financing Vehicles view our AI technology as an important component in delivering assets that meet their investment criteria.

Impact of Macroeconomic Cycles and Global and Regional Conditions

We expect economic cycles to affect our financial performance and related metrics. Macroeconomic conditions, including persistent inflation, elevated interest rates, supply chain constraints, geopolitical tensions, climate-related disruptions, and evolving global conflicts, may affect consumer demand for financial products, our Partners’ ability to generate and convert customer application volume, and the availability and cost of funding from investors through our Financing Vehicles.

Geopolitical instability persists in the Middle East and Eastern Europe. The ongoing conflict between Israel, the U.S., and Iran that erupted in February 2026 has resulted in volatility and disruption of global energy and financial markets, which has increased our cost of capital and may diminish investor appetite for risk assets. Management is actively monitoring the situation for systemic risks and has implemented remote-work protocols for our Tel Aviv-

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-02. Report date: 2025-12-31.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with this Annual Report and our consolidated financial statements and the related notes contained elsewhere in this Annual Report. This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in “Item 1A.—Risk Factors” of this Annual Report.

Pursuant to the FAST Act Modernization and Simplification of Regulation S-K, discussions related to the results of operations for the year ended December 31, 2024 in comparison to the year ended December 31, 2023 have been omitted. For such omitted discussions, refer to Pagaya’s Operating Results included in the Annual Report on Form 10-K filed with the SEC on March 12, 2025.

Company Overview

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Pagaya’s mission is to deliver more financial opportunity to more people, more often. We believe our mission will be accomplished by becoming the trusted lending technology partner for the consumer finance ecosystem, with an expansive product suite (the fee-generating side of our business) fueled by effective and efficient capital and risk management (the capital efficiency side of our business). Both sides of our business working harmoniously to meet the complex needs of the leading financial institutions.

We are a product-focused technology company that deploys sophisticated data science and proprietary, AI-powered technology to enable better outcomes for financial institutions, their existing and potential customers, and institutional or sophisticated investors.

We have built, and we are continuing to scale, a leading AI and data network for the benefit of financial services and other service providers, their customers, and investors. Services providers integrated in our network, which we refer to as our ‘‘Partners,’’ range from high-growth financial technology companies to incumbent banks and financial institutions. We believe Partners benefit from our network to extend financial products to their customers, in turn helping those customers fulfill their financial needs. These assets originated by Partners with the assistance of Pagaya’s AI technology are eligible to be acquired by Financing Vehicles: (i) funds managed or advised by Pagaya or one of its affiliates, (ii) securitization vehicles sponsored or administered by Pagaya or one of its affiliates and (iii) other similar vehicles (“Financing Vehicles”).

In recent years, investments in digitization have improved the front-end delivery of financial products, upgrading customer experience and convenience. Notwithstanding these advances, we believe underlying approaches to the determination of creditworthiness for financial products are often outdated and overly manual. In our experience, providers of financial services tend to utilize a limited number of factors to make decisions, operate with siloed technology infrastructure and have data limited to their own experience. As a result, we believe financial services providers approve a smaller proportion of their application volume than is possible with the benefit of modern technology, such as our AI technology and data network.

At our core, we are a technology company that deploys data science and technology to drive better results across the financial ecosystem. We believe our solution drives a “win-win-win” for Partners, their customers and potential customers, and investors. First, by utilizing our network, Partners are able to approve more customer applications, which we believe drives superior revenue growth, enhanced brand affinity, opportunities to promote other financial products and decreased unit-level customer acquisition costs. Partners realize these benefits with limited incremental risk or funding requirements. Second, Partners’ customers benefit from enhanced and more convenient access to financial products. Third, investors benefit through gaining exposure to these assets originated by Partners with the assistance of our AI technology and acquired by the Financing Vehicles through our network.

Emerging Growth Company Status

On the last business day of the second quarter in 2025, the aggregate market value of the Company’s ordinary Class A shares held by non-affiliate shareholders exceeded $700 million. As a result, we are considered a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act and ceased to be an “emerging growth company” as of December 31, 2025. Due to the loss of emerging growth company status, the Company is no longer exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and our independent registered public accounting firm evaluated and reported on the effectiveness of our internal controls over financial reporting in this Annual Report. The transition to large accelerated filer status subjects the Company to accelerated filing deadlines and additional disclosure requirements, which further aligns our reporting with other large US companies for even greater transparency.

Foreign Private Issuer Status

The Company was previously classified as a “foreign private issuer” (“FPI”) under SEC rules; however, as of June 30, 2025, the Company determined that it no longer satisfied the criteria to be an FPI. Consequently, we will be required to comply with all of the provisions applicable to a U.S. domestic issuer under the Exchange Act. There are no material adjustments required as a result of this adjustment since we have decided to voluntarily file on U.S. domestic issuer forms with the SEC beginning in 2024. Since then, the Company has been filing its quarterly reports on Form 10-Q, current reports on Form 8-K, and its annual reports on Form 10-K. In addition, the Company has been complying with Regulation FD and the SEC’s proxy rules, with the exception of the “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Beginning on January 1, 2026, our officers, directors, and principal shareholders are subject to the “short-swing” profit recovery provisions of Section 16 of the Exchange Act with respect to their purchases and sales of the Ordinary Shares.

Our Economic Model

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Pagaya’s revenues are primarily derived from Network Volume. We define Network Volume as the gross dollar value of assets originated by our Partners with the assistance of our artificial intelligence (“AI”) technology1 and, with respect to single-family rental operations, the gross dollar value of services, which may include the value of newly onboarded properties onto our Darwin platform. We generate revenue from network AI fees, contract fees, interest income and investment income. Revenue from fees is comprised of network AI fees and contract fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees.

We primarily earn AI integration fees for the creation and delivery of the assets that comprise our Network Volume.

Capital markets execution and contract fees are primarily earned from investors. Multiple funding channels are utilized to enable the purchase of network assets from our Partners, such as asset backed securitizations and forward flow arrangements. Capital markets execution fees are primarily earned from the market pricing of ABS transactions, as well as upon the execution of forward flow transactions, while contract fees are management, performance and similar fees.

Additionally, we earn interest income from our risk retention holdings and our corporate cash balances and investment income associated with our ownership interests in certain Financing Vehicles and other proprietary investments.

We incur costs when Network Volume is acquired by the Financing Vehicles. These costs, which we refer to as ‘‘Production Costs,’’ compensate our Partners for acquiring and originating assets. Accordingly, the amount and growth of our Production Costs are highly correlated to Network Volume. An important operating metric to evaluate the success of our economic model, therefore, is FRLPC, or fee revenue less Production Costs.

Additionally, we have built what we believe to be a leading data science and AI organization that has enabled us to assist our Partners as they make decisions to extend credit to consumers or for the identification and purchase, or property management, of single-family rental properties. Excluding Production Costs, headcount, technology overhead and research and development expenses represent the significant portion of our expenses.

Key Factors Affecting Our Performance

Expanded Usage of Our Network by Our Existing Partners

Our AI technology typically enables Partners to convert a larger proportion of their application volume into originated loans, enabling them to expand their ecosystem and generate incremental revenues. Our Partners have historically seen rapid scaling of origination volume on our network shortly after onboarding and the contribution of Pagaya’s network to Partners’ total origination volume tends to increase over time. Additionally, we continue to introduce and develop new asset types, products and services, enabling Partners to expand their relationship with Pagaya and further increase origination volumes.

Adoption of Our Network by New Partners

We devote significant time to, and have a team that focuses on, onboarding and managing Partners to our network. We believe that our success in adding new Partners to our network is driven by our distinctive value proposition: driving significant revenue uplift to our Partners at limited incremental cost or credit risk to the Partner. Our success adding new Partners has contributed to our overall Network Volume growth and driven our ability to rapidly scale new asset classes.

Continued Improvements to Our AI Technology

We believe our historical growth has been significantly influenced by improvements to our AI technology, which are in turn driven both by the deepening of our proprietary data network and the strengthening of our AI technology. As our existing Partners grow their usage of our network, new Partners join our network, and as we expand our network into new asset classes, the value of our data asset increases. Our technology improvements thus benefit from a flywheel effect that is characteristic of AI technology, in that improvements are derived from a continually increasing base of training data for our technology. We have found, and we expect to continue to experience, that more data leads to more efficient pricing and greater Network Volume. Since inception, we have evaluated more than $3.6 trillion in application volume.

1 Our proprietary technology uses machine learning models as a subset of artificial intelligence that go through extensive testing, validation, and governance processes before they can be used or modified. The machine learning models are static and do not have the ability to self-correct, self-improve, and/or learn over time. Any change to the models requires human intervention, testing, validation, and governance approvals before a change can be made.

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In addition to the accumulation of data, we make improvements to our technology by leveraging the experience of our research and development specialists. Our research team is central to accelerating the sophistication of our AI technology and expanding into new markets and use cases. We are reliant on these experts’ success in making these improvements to our technology over time.

Availability and Pricing of Funding from Investors

Regardless of market conditions, the availability and pricing of funding from investors is critical to our growth. We have diversified our investor network and will continue to seek to further diversify our investor base. In the year ended December 31, 2025, our top 5 ABS investors contributed approximately 46% of our total ABS funding, compared to 54% in the year ended December 31, 2024.

Performance of Assets Originated with the Assistance of Our Proprietary Technology

The availability of funding from investors is a function of demand for consumer credit and residential real estate assets, as well as the performance of such assets originated with the assistance of our AI technology and purchased by Financing Vehicles. Our AI technology and data-driven insights are designed to enable relative outperformance versus the broader market. We believe that investors in Financing Vehicles view our AI technology as an important component in delivering assets that meet their investment criteria. See “Item 1A.—Risk Factors—Risks Related to the Operations of Our Business” in this Annual Report.

Impact of Macroeconomic Cycles and Global and Regional Conditions

We expect economic cycles to affect our financial performance and related metrics. Macroeconomic conditions, including persistent inflation, elevated interest rates, supply chain constraints, geopolitical tensions, climate-related disruptions, and evolving global conflicts, may affect consumer demand for financial products, our Partners’ ability to generate and convert customer application volume, and the availability and cost of funding from investors through our Financing Vehicles. While geopolitical instability persists in the Middle East and Eastern Europe, these conditions have transitioned into a period of fragile stabilization and market normalization as of early 2026. Following the implementation of a ceasefire framework in the Middle East in late 2025 and the long-term reorientation of global trade routes, the immediate systemic risk to energy prices and supply chains has moderated. However, the ongoing conflict between Israel, the U.S., and Iran that erupted on February 28, 2026, creates significant uncertainty. This escalation could trigger volatility in global energy prices and financial markets, which may increase our cost of capital or diminish investor appetite for risk assets. Management is actively monitoring the situation for systemic risks and has implemented immediate remote-work protocols for our Tel Aviv-based team to maintain business continuity while prioritizing employee safety. We will continue to evaluate our operational protocols as the security landscape evolves. Although these regional dynamics remain a source of uncertainty, we have not experienced material impacts on our business from this conflict, prolonged hostilities or further escalation, such as expanded sanctions, disruptions to energy markets, or broader economic fallout, could exacerbate global inflationary pressures and supply chain challenges. These factors may indirectly influence consumer credit demand, investor appetite for risk assets, and our Network Volume. We assess this risk as manageable but remain vigilant given its potential to contribute to wider economic disruptions. Macroeconomic pressures, including sustained high interest rates and inflation, continue to shape our operating environment. Central banks, including the Federal Reserve, have maintained elevated rates into early 2026 to combat inflationary trends, increasing borrowing costs and potentially straining borrowers’ ability to service debt. This could lead to higher delinquencies, defaults, and charge-offs,

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reducing investor returns and dampening demand for assets generated on our platform. Inflation, though moderating from its 2022-2023 peak, remains above historical norms, driving up operating costs such as employee compensation, financing expenses, and technology investments. These pressures have been partially offset by operational efficiencies and growth in application volume from our Partners, supporting net growth in Network Volume despite a higher cost of capital. Global supply chain disruptions, exacerbated by geopolitical tensions and extreme weather events linked to climate change, continue to challenge economic stability. These disruptions may indirectly affect our Partners’ ability to serve customers and could increase costs across our network. Meanwhile, the elevated risk-free rate environment has shifted investor preferences, with some favoring safer assets over consumer credit. While our ability to raise funding remains intact, the cost of capital has risen, necessitating adjustments in conversion ratios to meet investor return expectations. Strong Partner application volume has mitigated this impact, sustaining Network Volume growth through 2024 and 2025. Adverse developments in the financial sector, such as regional bank stresses, liquidity concerns, or prolonged U.S. federal debt ceiling debates, could further complicate our operating landscape. In 2024, isolated bank failures and downgrades sparked temporary market volatility, though our direct exposure remains limited. Should these events escalate into systemic liquidity issues, they could impair our Partners’ and counterparties’ ability to meet obligations, disrupt funding flows, or destabilize financial markets, adversely affecting our performance. Similarly, ongoing trade tensions, particularly between the U.S. and China, and potential tariff escalations could introduce additional uncertainty, though we have not yet seen significant effects on our operations. Economic downturns or prolonged uncertainty may pressure the performance of assets acquired by Financing Vehicles from our network. However, these conditions also provide valuable data to refine our AI technology, enhancing our ability to adapt to shifting market dynamics and deliver value to Partners and investors. Historical events like the COVID-19 pandemic and the current inflationary period have underscored the resilience of our platform, validating its outcomes even amid volatility. For a detailed discussion of uncertainties and other factors that could impact our operating results, see the “Item 1A.—Risk Factors” section in this Annual Report.

Key Operating Metric

We collect and analyze operating and financial data of our business to assess our performance, formulate financial projections and make strategic decisions. In addition to total revenues, net operating income (loss), other measures under U.S. GAAP, and certain non-GAAP financial measures (see discussion and reconciliation herein titled “Reconciliation of Non-GAAP Financial Measures”), we consider Network Volume to be a key operating metric we use to evaluate our business. The following table sets forth our Network Volume for the years ended December 31, 2025, 2024 and 2023.

Year Ended December 31,

2025

2024

2023

($ in millions)

Network Volume

$

10,534 

$

9,705 

$

8,299 

Network Volume

We believe the Network Volume metric to be a helpful indicator for our overall scale and reach, as we generate revenue primarily on the basis of Network Volume. In addition, Network Volume directly influences Fee Revenue Less Production Cost (FRLPC), a key non-GAAP measure we use to assess operational efficiency. While maintaining a focus on profitable growth, which may result in a different targeted volume mix, we believe the growth in Network Volume highlights the scalability of our business, which, in turn, affects our operational leverage and profitability. Network Volume is primarily driven by our relationships with our Partners and SFR Partners. We believe that Network Volume has benefited from continuous improvements to our proprietary technology, enabling our network to more effectively identify assets for acquisition by the Financing Vehicles, thereby providing additional investment opportunities to investors. As a result, when viewed in combination with financial profitability metrics, the expansion of Network Volume provides insights into the effectiveness of our business strategies and the ability to leverage operational efficiencies across different asset classes. Network Volume is comprised of assets across several asset classes, including personal loans, auto loans, residential real estate, and point-of-sale receivables.

Components of Results of Operations

Revenue

We generate revenue from network AI fees, contract fees, interest income and investment income. Network AI fees and contract fees are presented together as Revenue from fees in the consolidated financial statements. Revenue from fees is recognized after applying the five-step model consistent with Financial Accounting Standards Board Accounting Standards Codification (“ASC”)

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606, “Revenue from Contracts with Consumers” (“ASC 606”). Revenue from fees is inclusive of network AI fees and contract fees.

Network AI fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees. We earn AI integration fees for the creation and delivery of the assets that comprise our Network Volume. Multiple funding channels are used to enable the purchase of network assets from our Partners, such as ABS and forward flow arrangements. Capital markets execution fees are earned when a pre-funded, Pagaya-sponsored ABS vehicle is sold by underwriters, as well as upon the execution of forward flow transactions.

Contract fees. Contract fees primarily include administration and management fees, and performance fees. Administration and management fees are contracted upon the establishment of Financing Vehicles and these fees are earned as the Financing Vehicles purchase loans and as the Company provides services over their remaining lives, except for the portion of management fees that are recognized at the point in time based on contract terms.

We also earn interest income from our risk retention holdings and cash balances and investment income associated with our ownership interests in certain Financing Vehicles and other proprietary investments.

Costs and Operating Expenses

Costs and operating expenses consist of Production Costs, technology, data and product development expenses, sales and marketing expenses, and general and administrative expenses. Salaries and personnel-related costs, including benefits, bonuses, share-based compensation, and outsourcing comprise a significant component of several of these expense categories. A portion of our non-share-based compensation expense and, to a lesser extent, certain operating expenses (excluding Production Costs) are denominated in the new Israeli shekel (“NIS”), which could result in variability in our operating expenses which are presented in U.S. Dollars.

Production Costs

Production Costs are primarily comprised of expenses incurred when Network Volume is transferred from Partners into Financing Vehicles, as our Partners are responsible for marketing and customer interaction and facilitating the flow of additional application flow. Accordingly, the amount and growth of our Production Costs are highly correlated to Network Volume. Additionally, but to a lesser extent, Production Costs also include expenses incurred to renovate single-family rental properties.

Technology, Data and Product Development

Technology, data and product development expenses primarily comprise costs associated with the maintenance and ongoing development of our network and AI technology, including personnel, allocated costs, and other development-related expenses. Technology, data and product development costs, net of amounts capitalized in accordance with U.S. GAAP, are expensed as incurred. The capitalized internal-use software is amortized on a straight-line method over the estimated useful life in technology, data and product development costs. We have invested and believe continued investments in technology, data and product development are important to achieving our strategic objectives.

Sales and Marketing

Sales and marketing expenses, related to Partner onboarding, development, and relationship management, as well as capital markets investor engagement and marketing, are comprised primarily of salaries and personnel-related costs, as well as the costs of certain professional services, and allocated overhead. Sales and marketing expenses are expensed as incurred. Sales and marketing expenses in absolute dollars may fluctuate from period to period based on the timing of our investments in our sales and marketing functions. These investments may vary in scope and scale over future periods depending on our pipeline of new Partners and strategic investors.

General and Administrative

General and administrative expenses primarily comprise personnel-related costs for our executives, finance, legal and other administrative functions, insurance costs, professional fees for external legal, accounting and other professional services and allocated overhead costs. General and administrative expenses are expensed as incurred.

Gains and (losses) on investments in loans and securities

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Gains and (losses) on investments in loans and securities primarily reflects changes in fair value that management identifies as credit losses or reversals of previously recognized credit losses, including remeasurements of instruments accounted for under the fair value option and any gain or loss realized upon sale or termination of such instruments. As of the end of each reporting period, management reviews each security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any decline (or recovery) in fair value which management identifies as a credit loss (or a reversal of previously recognized credit loss) is recognized as loss (or gain) on investments in loans and securities.

Other Expenses, Net

Other expenses, net primarily consists of interest expenses from borrowings, change in the fair value of warrant liabilities and other non-recurring items.

Gains and (losses) from extinguishment of debt

Gains and (losses) from extinguishment of debt represents the difference between the reacquisition price and the net carrying amount of the retired debt. These amounts include gains from debt repurchases at a discount and losses related to early payment penalties and the write-off of unamortized deferred issuance costs and original issue discounts. Such amounts are recognized in the consolidated statements of operations upon the settlement of the underlying obligations.

Income Tax Expense

We account for taxes on income in accordance with ASC 740, “Income Taxes” (“ASC 740”). We are eligible for certain tax benefits in Israel under the Law for the Encouragement of Capital Investments or the Investment Law at a reduced tax rate of 12%. Accordingly, as we generate taxable income in Israel, our effective tax rate is expected to be lower than the standard corporate tax rate for Israeli companies, which is 23%. Our taxable income generated in the United States or derived from other sources in Israel which is not eligible for tax benefits will be subject to the regular corporate tax rate in their respective tax jurisdictions.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests in our consolidated statements of operations is a result of our investments in certain of our consolidated variable interest entities (‘‘VIEs’’) and consists of the portion of the net income of these consolidated entities that is not attributable to us.

Results of Operations

The following table sets forth operating results for the periods indicated (in thousands, except share and per share data):

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Year Ended December 31,

2025

2024

2023

Revenue

Revenue from fees

$

1,261,341 

$

1,004,550 

$

772,814 

Other Income

Interest income

48,434 

32,291 

38,748 

Investment (loss) income

(8,415)

(4,593)

489 

Total Revenue and Other Income

1,301,360 

1,032,248 

812,051 

Production costs

749,169 

597,652 

508,944 

Technology, data and product development (2)

75,213 

76,571 

74,383 

Sales and marketing (2)

53,591 

50,404 

49,773 

General and administrative (2)

159,560 

240,781 

203,351 

Total Costs and Operating Expenses

1,037,533 

965,408 

836,451 

Operating Income (Loss)

263,827 

66,840 

(24,400)

Gains and (losses) on investments in loans and securities (1)

(107,030)

(404,150)

(131,315)

Other expense, net (1)

(80,417)

(83,612)

(25,453)

Gains and (losses) from extinguishment of debt (1)

(24,755)

(200)

— 

Income (Loss) Before Income Taxes

51,625 

(421,122)

(181,168)

Income tax (benefit) expense

(19,745)

24,576 

15,571 

Net Income (Loss) Including Noncontrolling Interests

71,370 

(445,698)

(196,739)

Less: Net (loss) income attributable to noncontrolling interests

(10,019)

(44,292)

(68,301)

Net Income (Loss) Attributable to Pagaya Technologies Ltd.

$

81,389 

$

(401,406)

$

(128,438)

Earnings (loss) per share attributable to Pagaya Technologies Ltd. ordinary shareholders:

Basic

$

0.99 

$

(5.66)

$

(2.14)

Diluted

$

0.93 

$

(5.66)

$

(2.14)

Weighted average shares outstanding:

Basic

78,336,095 

70,879,807 

60,038,893 

Diluted

83,097,227 

70,879,807 

60,038,893 

(1) Prior period amounts have been reclassified to conform to the current period’s presentation.

(2) The following table sets forth share-based compensation for the periods indicated below (in thousands):

Year Ended December 31,

2025

2024

2023

Technology, data and product development

$

4,965 

$

8,695 

$

12,375 

Sales and marketing

21,142 

14,666 

13,216 

General and administrative

28,011 

38,136 

45,464 

Total share-based compensation in operating expenses

$

54,118 

$

61,497 

$

71,055 

Comparison of Year Ended December 31, 2025 and 2024

Total Revenue and Other Income

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Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Revenue from fees

$

1,261,341 

$

1,004,550 

$

256,791 

26 

%

Interest income

48,434 

32,291 

16,143 

50 

%

Investment (loss) income

(8,415)

(4,593)

(3,822)

(83)

%

Total Revenue and Other Income

$

1,301,360 

$

1,032,248 

$

269,112 

26 

%

Total revenue and other income, increased by $269.1 million, or 26%, to $1,301.4 million for the year ended December 31, 2025 from $1,032.2 million for the year ended December 31, 2024. The increase was primarily driven by an increase in revenue from fees and interest income, partially offset by an increase in investment loss, net.

Revenue from fees increased by $256.8 million, or 26%, to $1,261.3 million for the year ended December 31, 2025 from $1,004.6 million for the year ended December 31, 2024. The increase was primarily due to a $215.2 million increase in Network AI fees, comprised of AI integration fees and capital markets execution fees, from $916.1 million for the year ended December 31, 2024 to $1,131.3 million for the year ended December 31, 2025. The increase in Network AI fees was primarily driven by improved economics in AI integration fees earned from certain Partners, as well as the growth in Network Volume, which increased by 9% from $9.7 billion for the year ended December 31, 2024 to $10.5 billion for the year ended December 31, 2025. These increases were partially offset by a decrease in capital markets execution fees earned from our ABS and forward flow transactions during the year ended December 31, 2025. Contract fees, comprised of administration and management fees, performances fees, and servicing fees, increased by $41.6 million from $88.5 million for the year ended December 31, 2024 to $130.0 million for the year ended December 31, 2025. This increase was due to higher net asset values of assets held by ABS Financing Vehicles driven by continued business growth, and an increase in performance fees, as the prior period included a reversal of performance fees.

Interest income increased by $16.1 million, or 50%, to $48.4 million for the year ended December 31, 2025 from $32.3 million for the year ended December 31, 2024. The increase in interest income was directly related to our risk retention holdings and related securities held in our consolidated VIEs as well as certain risk retention holdings held directly by our consolidated subsidiaries. For further information, see “—Net Income (Loss) Attributable to Noncontrolling Interests.” The increase in interest income was primarily the result of changes in structure and composition of asset portfolio.

Investment loss increased by $3.8 million to a loss of $8.4 million for the year ended December 31, 2025, reflecting an impairment recorded on certain proprietary investments.

Costs and Operating Expenses

Year Ended December 31,

2025

2024

(in thousands)

Production costs

$

749,169 

$

597,652 

Technology, data and product development

75,213 

76,571 

Sales and marketing

53,591 

50,404 

General and administrative

159,560 

240,781 

Total Costs and Operating Expenses

$

1,037,533 

$

965,408 

Production Costs

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Production costs

$

749,169 

$

597,652 

$

151,517 

25 

%

Production costs increased by $151.5 million, or 25%, to $749.2 million for the year ended December 31, 2025 from $597.7 million for the year ended December 31, 2024. This increase was due to an increase in the Network Volume attributable to business growth in addition to the composition of the asset classes that make up our Network Volume.

Technology, Data and Product Development

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Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Technology, data and product development

$

75,213 

$

76,571 

$

(1,358)

(2)

%

Technology, data and product development costs for the year ended December 31, 2025 decreased $1.4 million, or 2%, compared to the same period in 2024. This decrease was primarily driven by a $3.7 million decrease in compensation expenses, partially offset by a $1.9 million increase in amortization of intangible assets and a $1.0 million increased in cloud server expenses.

During the year ended December 31, 2025 and 2024, we capitalized $16.1 million and $23.0 million of software development costs, respectively. Amortization expense, including impairment charges, for capitalized software development costs was $23.9 million and $26.5 million for the year ended December 31, 2025 and 2024, respectively.

Sales and Marketing

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Sales and marketing

$

53,591 

$

50,404 

$

3,187 

6 

%

Sales and marketing costs for the year ended December 31, 2025 increased by $3.2 million compared to the same period in 2024. The increase was primarily driven by a $2.2 million increase in amortization of intangible assets and a $1.4 million increase in compensation expenses, including share-based compensation.

General and Administrative

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

General and administrative

$

159,560 

$

240,781 

$

(81,221)

(34)

%

General and administrative costs for the year ended December 31, 2025 decreased by $81.2 million, or 34%, compared to the same period in 2024. The decrease was primarily driven by a $32.4 million lower loss from loan purchases, a $28.9 million decrease in transaction costs charged to general and administrative costs, and a $15.8 million decrease in compensation expenses, including share-based compensation.

Gains and (Losses) on Investments in Loans and Securities

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Gains and (losses) on investments in loans and securities

$

(107,030)

$

(404,150)

$

297,120 

74 

%

Losses on investments in loans and securities for the year ended December 31, 2025 decreased $297.1 million compared to the same period in 2024. The decrease was primarily due to a $316.7 million reduction in credit-related impairment loss on certain investments from $412.1 million in the prior period to $95.4 million in the current period, primarily driven by changes in the fair value of investments in loans and securities as a result of fluctuations in key inputs to the discounted cash flow models used to determine fair value, as well as fair value option gains from ABS resecuritizations at lower interest rates during the current period. Of the credit-related impairment loss of $95.4 million in the current period, $16.7 million is attributable to the noncontrolling interest in certain VIEs and accordingly, is not attributable to Pagaya Shareholders. These improvements were partially offset by a $26.2 million increase in losses (net of gains) from the sale of certain investments in the current period.

Other Expenses Net

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Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Other expenses, net

$

(80,417)

$

(83,612)

$

3,195 

4 

%

Other expenses, net for the year ended December 31, 2025 decreased by $3.2 million, compared to the same period in 2024. The decrease was primarily due to a favorable impact of $5.9 million from a release of contingent liability associated with the acquisition of Theorem and lower interest expenses of $4.8 million from the issuance of $500 million aggregate principal amount of the 2030 Notes and the use of proceeds therefrom that reduced our cost of capital. These decreases were partially offset by an unfavorable impact of $6.2 million from the change in fair value of a warrant liability.

Gains and (Losses) From Extinguishment of Debt

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Gains and (losses) from extinguishment of debt

$

(24,755)

$

(200)

$

(24,555)

NM

NM: Not Meaningful

Loss from extinguishment of debt is $25.5 million one-time loss related to the write-off of deferred issuance costs and the early payment penalty from the repayment of the outstanding principal balance of the term loan and certain secured borrowings using the proceeds from the issuance of the 2030 Notes. This loss was partially offset by a $0.7 million net gain from the repurchase of $6.9 million aggregate principal amount of outstanding 2030 Notes at 87.4% of the principal amount. This gain includes the write-off of associated pro rata unamortized debt issuance costs.

Income Tax (Benefit) Expense

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Income tax (benefit) expense

$

(19,745)

$

24,576 

$

(44,321)

(180)

%

Income tax expense for the year ended December 31, 2025 decreased by $44.3 million, compared to the same period in 2024. The change from income tax expense to benefit was primarily driven by a reduction in uncertain tax positions, a tax benefit recognized for interest expense deduction, and accelerated deduction following the enactment of the new U.S. tax law in the year ended December 31, 2025.

Net Loss Attributable to Noncontrolling Interests

Year Ended December 31,

2025

2024

Change

% Change

(in thousands, except percentages)

Net loss attributable to noncontrolling interests

$

(10,019)

$

(44,292)

$

34,273 

77 

%

Net loss attributable to noncontrolling interests in the year ended December 31, 2025 decreased by $34.3 million, or 77%, compared to the same period in 2024. The decrease was driven by the net loss generated by our consolidated VIEs associated with our risk retention holdings. This amount represented the net loss of the consolidated VIEs held by other investors in the VIE for which we had no economic rights. This amount was the result of a lower credit-related impairment loss of $33.3 million on the risk retention holdings. For further information, see “—Total Revenue and Other Income” and “—Gains and (losses) on Investments in Loans and Securities.”

Reconciliation of Non-GAAP Financial Measures

To supplement our consolidated financial statements prepared and presented in accordance with U.S. GAAP, we use the non-GAAP financial measures FRLPC, FRLPC as percentage of Network Volume (FRLPC %), Adjusted Net Income (Loss) and Adjusted EBITDA to provide investors with additional information about our financial performance and to enhance the overall

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understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our business. We are presenting these non-GAAP financial measures because we believe they provide an additional tool for investors to use in comparing our core financial performance over multiple periods with the performance of other companies.

However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with U.S. GAAP.

To address these limitations, we provide a reconciliation of FRLPC, FRLPC %, Adjusted Net Income (Loss) and Adjusted EBITDA to the most directly comparable U.S. GAAP measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view FRLPC, FRLPC %, Adjusted Net Income (Loss) and Adjusted EBITDA in conjunction with their respective related U.S. GAAP financial measures.

FRLPC, FRLPC %, Adjusted Net Income (Loss) and Adjusted EBITDA

FRLPC, FRLPC %, Adjusted Net Income (Loss) and Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023 are summarized below (in thousands):

Year Ended December 31,

2025

2024

2023

Fee Revenue Less Production Cost (FRLPC)

$

512,172 

$

406,898 

$

263,870 

Fee Revenue Less Production Costs % (FRLPC %)

4.9 

%

4.2 

%

3.2 

%

Adjusted Net Income

$

275,318 

$

66,866 

$

16,556 

Adjusted EBITDA

$

370,987 

$

210,378 

$

82,022 

FRLPC is defined as revenue from fees less production costs. We use FRLPC as part of overall assessment of performance, including the preparation of our annual budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance. The Company is including a reconciliation between FRLPC and operating income, which we consider the most directly comparable GAAP financial measure. FRLPC is designed to assess operational efficiency by measuring fee revenue against production costs, excluding operating expenses not directly tied to revenue production, such as technology development, sales and marketing, and general and administrative costs. FRLPC is intended to highlight the scalability of our platform as Network Volume (the gross dollar amount of assets originated or services rendered using our technology) increases, demonstrating our ability to efficiently generate fee revenue while managing production costs. FRLPC %, defined as FRLPC divided by Network Volume, further illustrates this efficiency, showing how effectively we convert Network Volume into fee revenue relative to production costs as our platform scales.

Adjusted Net Income is defined as net income (loss) attributable to our shareholders excluding share-based compensation expense, change in fair value of warrant liability, change in fair value of contingent liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, and non-recurring expenses associated with mergers and acquisitions and other one-time expenses. Adjusted EBITDA is defined as net income (loss) attributable to our shareholders excluding share-based compensation expense, change in fair value of warrant liability, change in fair value of contingent liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, non-recurring expenses associated with mergers and acquisitions and other one-time expenses, interest expense, depreciation and amortization expense, and provision (and benefit from) for income taxes.

These items are excluded from our Adjusted Net Income and Adjusted EBITDA measures because they are noncash in nature, or because the amount and timing of these items is unpredictable, is not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful.

We believe FRLPC, FRLPC %, Adjusted Net Income and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, we have included FRLPC, FRLPC %, Adjusted Net Income and Adjusted EBITDA in this report because these are key measurements used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. However, this non-

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GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies.

The following tables present a reconciliation of FRLPC to Operating Income, and Adjusted EBITDA to Net Income Attributable to Pagaya Technologies, Ltd., in each case the most directly comparable U.S. GAAP measures ($ in thousands, unless otherwise noted):

Year Ended December 31,

2025

2024

2023

Operating Income (Loss)

$

263,827 

$

66,840 

$

(24,400)

Add: Technology, data and product development

75,213 

76,571 

74,383 

Add: Sales and marketing

53,591 

50,404 

49,773 

Add: General and administrative

159,560 

240,781 

203,351 

Less: Interest income

48,434 

32,291 

38,748 

Less: Investment (loss) income

(8,415)

(4,593)

489 

Fee Revenue Less Production Costs (FRLPC)

$

512,172 

$

406,898 

$

263,870 

Network Volume (in millions)

$

10,534 

$

9,705 

$

8,299 

Fee Revenue Less Production Costs % (FRLPC %)

4.9 

%

4.2 

%

3.2 

%

Year Ended December 31,

2025

2024

2023

Net Income (Loss) Attributable to Pagaya Technologies Ltd.

$

81,389 

$

(401,406)

$

(128,438)

Adjusted to exclude the following:

Share-based compensation

54,118 

61,497 

71,055 

Fair value adjustment to contingent liability

(5,907)

— 

— 

Fair value adjustment to warrant liability

3,830 

(2,349)

1,842 

Impairment loss on certain investments, net

98,321 

394,484 

52,381 

Write-off of capitalized software and other assets

4,920 

3,245 

1,938 

Restructuring expenses

1,392 

3,583 

5,450 

Transaction-related expenses

23 

2,095 

6,153 

Non-recurring expenses (1)

37,232 

5,717 

6,175 

Adjusted Net Income

$

275,318 

$

66,866 

$

16,556 

Adjusted to exclude the following:

Interest expenses

85,337 

90,183 

30,740 

Income tax (benefit) expense

(19,745)

24,576 

15,571 

Depreciation and amortization

30,077 

28,753 

19,155 

Adjusted EBITDA

$

370,987 

$

210,378 

$

82,022 

(1) 2025 amount includes a loss of $24.8 million from extinguishment of debt.

Liquidity and Capital Resources

As of December 31, 2025 and December 31, 2024, the principal sources of liquidity were cash and cash equivalents, and restricted cash and cash equivalents of $288.3 million and $226.5 million, respectively.

Our primary requirements for liquidity and capital resources are to purchase and finance risk retention requirements, invest in technology, data and product development and to attract, recruit and retain a strong employee base, as well as to fund potential strategic transactions, including acquisitions, if any. We intend to continue to make strategic investments to support our business plans.

We do not have capital expenditure commitments as the vast majority of our capital expenditures relate to the capitalization of certain compensation and non-compensation expenditures used in the development and improvement of our proprietary technology.

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There are numerous risks to the Company’s financial results, liquidity and capital raising, some of which may not be quantified in the Company’s current estimates. The principal factors that could impact liquidity and capital needs are a prolonged inability to adequately access funding in the capital markets or in bilateral agreements, including as a result of macroeconomic conditions such as rising interest rates and higher cost of capital, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and the continuing market adoption of the Company’s network.

We expect to fund our operations with existing cash and cash equivalents, cash generated from operations, including cash flows from investments in loans and securities, and additional secured borrowings, including repurchase agreements. We may also raise additional capital, including through borrowings under the credit facility (see further description of the credit facility below in the section titled “2025 Revolving Credit Facility”) or through the sale or issuance of equity or debt securities, as described below in the sections titled “Shelf Registration Statement” and “Senior Note,” as well as the issuance of up to an additional 1,666,666 Series A Preferred Shares. The ownership interest of our shareholders will be, or could be, diluted as a result of sales or issuances of equity or debt securities, and the terms of any such securities may include liquidation or other preferences that adversely affect the rights of our shareholders of Class A Ordinary Shares. We intend to support our liquidity and capital position by pursuing diversified sources of financing, including debt financing, secured borrowings, or equity financing. The rates, terms, covenants and availability of such additional financing is not guaranteed and will be dependent on not only macro-economic factors, but also on Pagaya-specific factors such as the results of our operations and the returns generated by loans originated with the assistance of our AI Technology.

Additional debt financing, such as secured or unsecured borrowings, including repurchase agreements, credit facilities or corporate bonds, and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in “Item 1A.—Risk Factors” in this Annual Report.

In addition, we will receive the proceeds from any exercise of any public warrants in cash. Each public warrant that was issued and exchanged for each EJFA Private Placement Warrant in the EJFA Merger entitles the holder thereof to purchase one Class A Ordinary Share at a price of $138 per share (as adjusted for the 1-for-12 reverse share split). Following the 1-for-12 reverse share split effective March 2024, each warrant entitles the holder to purchase 1/12 of a Class A Ordinary Share (or equivalently, 12 warrants are required to obtain 1 Class A Ordinary Share). The aggregate amount of proceeds could be up to $169.6 million if all such warrants are exercised for cash. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity.

As of February 27, 2026, the price of our Class A Ordinary Shares was $11.19 per share. We believe the likelihood that warrant holders will exercise their public warrants that were issued in the EJFA Merger, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of Class A Ordinary Shares. If the market price for our Class A Ordinary Shares is less than $138 per share, we believe warrant holders will be unlikely to exercise on a cash basis their public warrants that were issued in the EJFA Merger. To the extent the public warrants are exercised by warrant holders, ownership interest of our shareholders will be diluted as a result of such issuances. Moreover, the resale of Class A Ordinary Shares issuable upon the exercise of such warrants, or the perception of such sales, may cause the market price of our Class A Ordinary Shares to decline and impact our ability to raise additional financing on favorable terms. See “Item 1A.—Risk Factors” in this Annual Report.

We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing related to such acquisitions or investments. In the event that we pursue additional financing, we may not be able to raise such financing on terms acceptable to us or at all. Additionally, as a result of any of these actions, we may be subject to restrictions and covenants in the agreements governing these transactions that may place limitations on us and we may be required to pledge collateral as security. If we are unable to raise additional capital or generate cash flows necessary to expand operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition. It is also possible that the actual outcome of one or more of our plans could be materially different than expected or that one or more of the significant judgments or estimates could prove to be materially incorrect.

Securitizations

In connection with asset-backed securitizations, we sponsor and establish securitization vehicles to purchase loans originated by our Partners. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of

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loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria.

To comply with risk retention regulatory requirements, we retain at least 5% of the credit risk of the securities issued by securitization vehicles (“Risk Retention”). In addition to these mandatory holdings, we may hold other interests in our securitization vehicles (“Additional Investments”). Additional Investments consist of interests acquired on a discretionary basis, as well as interests previously classified as Risk Retention for which the regulatory holding requirements have expired. We may purchase these Additional Investments to facilitate the execution of specific securitization transactions, or for investment purposes where we believe the risk-adjusted return is attractive. We may also sell Additional Investments when we view the market opportunity as attractive.

The following table presents the carrying value (fair value) of our investments in loans and securities as of December 31, 2025 and 2024 distinguishing between our Risk Retention and Additional Investments (in thousands):

December 31,

December 31,

2025

2024

Risk Retention

    Notes

$

99,640 

$

27,829 

    Certificates

404,618 

386,930 

Total Risk Retention

$

504,258 

$

414,759 

Additional Investments

    Notes

$

308,551 

$

212,444 

    Certificates

127,882 

146,313 

    Loans

4,578 

4,893 

Total Additional Investments

$

441,011 

$

363,650 

Total Investments in Loans and Securities

$

945,269 

$

778,409 

As of December 31, 2025, our Total Risk Retention represented approximately 53% of our total investments in loans and securities. Our Additional Investments totaled $441.0 million at fair value, increased by $77.4 million compared to December 31, 2024.

In the ordinary course of business, we enter into certain financing arrangements to finance our investments in loans and securities, including both our Risk Retention and Additional Investments. From time to time, the Company makes cash deposits that serve to collateralize guarantees for related transactions, included in restricted cash and cash equivalents on the consolidated balance sheets. For further information, see Note 5 and Note 8 to our consolidated financial statements included elsewhere in this Annual Report.

Shelf Registration Statement

On October 4, 2023, we filed a shelf registration statement on Form F-3 (the “Shelf Registration”) with the SEC that was declared effective on October 16, 2023. Under this Shelf Registration, we may, from time to time, offer and sell in one or more offerings Class A Ordinary Shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in combination with any of these securities, up to $500 million.

Cash Flows

The following table presents summarized consolidated cash flow information for the periods presented (in thousands):

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Year Ended December 31,

2025

2024

2023

Net cash provided by (used in) operating activities

$

238,620 

$

47,751 

$

(21,659)

Net cash used in investing activities

$

(309,710)

$

(479,876)

$

(381,457)

Net cash provided by financing activities

$

129,601 

$

436,688 

$

289,096 

Operating Activities

Our primary uses of cash in operating activities are for ordinary course of business, with the primary use related to employee and personnel-related expenses. As of December 31, 2025, we had 518 employees (242 in the U.S and 276 in Israel), compared to 553 employees (286 in the U.S. and 267 in Israel) on December 31, 2024. During the first and second quarters of 2024, we reduced our headcount by over 20% across our Israel and U.S. offices. This reduction in workforce enabled us to streamline our operations resulting in cost savings.

Net cash provided by operating activities for the year ended December 31, 2025 was $238.6 million, an increase of $190.9 million from net cash provided by operating activities of $47.8 million for the year ended December 31, 2024. This reflects our net income including noncontrolling interests of $71.4 million, adjusted for non-cash charges of $240.5 million and net cash outflows of $73.3 million from changes in our operating assets net of operating liabilities.

Non-cash charges primarily consisted of (1) impairment losses on investments in loans and securities, which decreased by $299.2 million driven by changes in the fair value of investments in loans and securities as a result of fluctuations in key inputs to the discounted cash flow models used to determine fair value, of which $16.7 million is not attributable to Pagaya, but rather attributable to the VIEs noncontrolling interests, (2) share-based compensation, which decreased by $7.4 million, (3) depreciation and amortization, which increased by $1.3 million primarily from capitalized software, (4) fair value adjustment to warrant liability, which increased by $6.2 million driven by changes in the market price of our Class A Ordinary Shares, and (5) loss from extinguishment of debt of $17.9 million associated with the repayment of term loan.

Our net cash flows resulting from changes in operating assets and liabilities decreased by $54.6 million to net cash outflows of $73.3 million for the year ended December 31, 2025 compared to net cash outflows $18.7 million for the same period in 2024.

Investing Activities

Our primary uses of cash in investing activities are the purchase of risk retention assets of sponsored securitization vehicles and investments in equity method and other investments.

For the year ended December 31, 2025, net cash used in investing activities totaled $309.7 million, primarily driven by purchases of risk retention assets. These purchases of risk retention assets amounted to $632.2 million, a decrease of $61.8 million compared to the prior period, driven by diversified funding channels, including asset-backed securitization, pass-through and forward flow transactions, in the current period. This cash outflow was partially offset by proceeds received from existing risk retention assets, which totaled $352.2 million, an increase of $105.7 million compared to the prior period.

Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities of $129.6 million was primarily attributable to $500.0 million of proceeds from the issuance of the 2030 Notes and $356.0 million of proceeds from secured borrowing, partially offset by $353.7 million and $341.4 million of repayments made to term loan and secured borrowing, respectively, and $25.8 million of distributions made to noncontrolling interests.

Indebtedness

2025 Revolving Credit Facility

On October 1, 2025, the Company refinanced the Revolving Credit Facility by way of terminating Credit Agreement and entering into a new three-year revolving credit facility (the “2025 Revolving Credit Facility”) with a syndicate of financial institutions. The 2025 Revolving Credit Facility provides a committed borrowing capacity of $132 million. Borrowings under the 2025 Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to 1.00% floor) plus a margin of 2.50% and (ii) an adjusted term SOFR (subject to 1.00% floor) plus a margin of 3.50%, a reduction from the prior revolving credit facility’s rate of SOFR plus 7.50%. A commitment fee accrues on

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any unused portion of the commitments under the 2025 Revolving Credit Facility at a rate per annum of 0.25% and is payable quarterly in arrears. The terms and conditions of the 2025 Revolving Credit Facility include customary covenants and restrictions.

Senior Notes

On July 28, 2025, the Company, through Pagaya US Holding Company LLC (“Pagaya US”), a wholly-owned subsidiary of the Company, issued $500 million aggregate principal amount of 8.875% Senior Unsecured Notes due 2030 (the “2030 Notes”). The 2030 Notes will accrue interest at a rate of per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The 2030 Notes will mature on August 1, 2030, unless earlier repurchased or redeemed. The 2030 Notes will be fully and unconditionally guaranteed, on a senior unsecured basis, by the Company and each of the Company’s subsidiaries (other than Pagaya US) that is a guarantor under its existing credit agreement (collectively, the “Guarantors”). The 2030 Notes and the related note guarantees will be senior unsecured obligations of Pagaya US and the Guarantors.

The 2030 Notes will be redeemable at the option of Pagaya US. At any time prior to August 1, 2027, Pagaya US may redeem the 2030 Notes, in whole or in part, at its option at a redemption price equal to 100% of the principal amount of the 2030 Notes plus a make-whole premium described in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On and after August 1, 2027, Pagaya US may redeem the 2030 Notes, in whole or in part, at the redemption prices set forth in the 2030 Notes Indenture.

In addition, at any time prior to August 1, 2027, Pagaya US may, from time to time, redeem up to 40% of the aggregate principal amount of the 2030 Notes with an amount of cash not greater than the net cash proceeds from certain equity offerings at the redemption price set forth in the 2030 Notes Indenture, if not less than 50% of the aggregate principal amount of the 2030 Notes remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering.

On July 28, 2025, the Company fully repaid $332.1 million of outstanding principal of its term loan under the Credit Agreement, using the net proceeds from the issuance of the 2030 Notes. Additionally, subsequent to the issuance of the 2030 Notes, the Company repaid $184.4 million of secured borrowing as of December 31, 2025. These repayments reflect the Company’s ongoing strategy to optimize its capital structure by reducing higher-cost debt and extending debt maturities. As a result of these transactions, the Company recognized a loss of $24.8 million, related to the write-off of unamortized deferred issuance costs and an early payment penalty associated with the term loan. This loss is reflected in “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations.

In December 2025, the Company repurchased $6.9 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.4% of the principal amount. The Company paid total consideration of $6.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt. This gain is net of the written-off carrying value, which included associated pro rata unamortized debt issuance costs, is reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $493.1 million as of December 31, 2025.

In February 2026, the Company repurchased $7.4 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.3% of the principal amount. The Company paid total consideration of $6.5 million, excluding accrued interest, resulting in a $0.8 million gain on extinguishment of debt. This gain is net of the written-off carrying value. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $485.7 million.

Receivables Facility

In April 2025, Pagaya Structured Products LLC, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement (the “LSA Agreement”) with certain lenders. This agreement established a 24-months Capitalized Interest Amounts Facility (the “CIA Facility”) with a maximum principal amount of $24 million to finance eligible capitalized interest amounts related to sponsored securitization transactions. Additionally, in June 2025, Pagaya Structured Products LLC entered into a 30-month Accrued Loan Purchasing Fee Receivables Facility (the “ALPF Facility”) with a maximum principal amount of $65 million to finance certain eligible receivables from sponsored securitization transactions. Borrowings under the CIA Facility bear interest at a rate per annum equal to the adjusted term Secured Overnight Financing Rate (“SOFR”) (subject to a 1.00% floor) plus a margin of 4.00%, while borrowings under the ALPF Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 1.9%. As of December 31, 2025, the combined outstanding principal

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balance under the CIA Facility and ALPF Facility was $86.6 million, which is recorded within secured borrowing on the consolidated balance sheets.

In June 2025, Pagaya Receivables LLC, a wholly-owned subsidiary of the Company, repaid the outstanding balance of a 3-year loan facility (the “SVB Receivables Facility) and terminated the related LSA Agreement, which was originally executed in October 2022. Borrowings under the SVB Receivables Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 0.00% floor) plus a margin of 3.50%. As of December 31, 2024, the outstanding principal balance under the SVB Receivable Facility was $31.8 million, which is recorded within secured borrowing on the consolidated balance sheets.

Exchangeable Notes

On October 1, 2024, Pagaya US issued $160 million in aggregate principal amount of 6.125% exchangeable notes due 2029 (the “2029 Notes”). The issuance was in connection with a purchase agreement dated September 26, 2024, with certain initial purchasers.

The 2029 Notes bear interest at a rate of 6.125% per annum, payable semiannually in arrears on April 1 and October 1 of each year, beginning April 1, 2025, and mature on October 1, 2029, unless earlier repurchased, redeemed, or exchanged. The 2029 Notes are exchangeable for cash, Class A Ordinary Shares of the Company, or a combination of both, at the Company’s discretion, subject to certain conditions.

The 2029 Notes are senior, unsecured obligations of Pagaya US and are fully and unconditionally guaranteed on a senior, unsecured basis by the Company. The 2029 Notes rank equally in right of payment with other senior, unsecured indebtedness and are structurally subordinated to all existing and future liabilities of Pagaya US’s subsidiaries.

The initial exchange rate of the 2029 Notes is 71.4669 Class A Ordinary Shares per $1,000 principal amount of 2029 Notes (which is equivalent to an initial exchange price of approximately $13.99 per share). The exchange rate will be subject to adjustment upon the occurrence of certain events. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the indenture governing the 2029 Notes (“the 2029 Notes Indenture”)) or if Pagaya US redeems the 2029 Notes, Pagaya US will, in certain circumstances, increase the exchange rate by a number of additional Class A Ordinary Shares for a holder who elects to convert its 2029 Notes in connection with such make-whole fundamental change or to convert its 2029 Notes called for redemption during the related redemption exchange period.

Prior to the close of business on the business day immediately preceding July 2, 2029, the 2029 Notes will be exchangeable at the option of the holders only upon the satisfaction of one or more specified conditions. These conditions include, among others, the sale price of the Class A Ordinary Shares exceeding 130% of the initial exchange price for a specified number of trading days. On or after July 2, 2029 until the close of business on the second scheduled trading day immediately preceding October 1, 2029, the 2029 Notes will be exchangeable at the option of the holders at any time regardless of the specified conditions.

The 2029 Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the option of Pagaya US at any time, and from time to time, on or after October 5, 2027 and on or before the 41st scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the 2029 Notes are “Freely Tradable” (as defined in the 2029 Notes Indenture), and all accrued and unpaid additional interest, if any, has been paid in full as of the first interest payment date occurring on or before the related “Redemption Notice Date” (as defined in the 2029 Notes Indenture); and (ii) the last reported sale price per Class A Ordinary Share exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the related redemption notice date; and (2) the trading day immediately before the Redemption Notice Date. However, the Company may not redeem less than all of the outstanding 2029 Notes unless at least $50.0 million aggregate principal amount of 2029 Notes are outstanding and not called for redemption as of the related Redemption Notice Date. In addition, calling any 2029 Note for redemption will constitute a make-whole fundamental change with respect to such 2029 Note called for redemption, in which case the exchange rate applicable to the exchange of such 2029 Note called for redemption will be increased in certain circumstances if it is exchanged during the related “Redemption Exchange Period” (as defined in the 2029 Notes Indenture).

If a “Fundamental Change” (as defined in the 2029 Notes Indenture) of the Company occurs, then, subject to a limited exception, noteholders may require Pagaya US to repurchase their 2029 Notes for cash. The repurchase price will be equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

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Credit Agreement

On February 2, 2024, the Company entered into a certain Credit Agreement (the “Credit Agreement”) which provides for a 5-year senior secured revolving credit facility (the “Revolving Credit Facility”) in an initial principal amount of $25 million, which subsequently increased to $35 million, and a 5 year senior secured term loan facility (the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Facilities”) in an initial principal amount of $255 million. Borrowings under the Facilities bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to a 2.00% floor) plus a margin of 6.50% or (ii) an adjusted term Secured Overnight Financing Rate (subject to a 1.00% floor) plus a margin of 7.50%.

In November 2024, the Company amended the Credit Agreement to increase the Term Loan Facility by $100 million, bringing the total principal amount to $355 million. The Company also increased an aggregate principal amount of the Revolving Credit Facility of $15 million, bringing the total principal amount of the Revolving Credit Facility to $50 million. In February 2025, the Company further increased the aggregate principal amount of the Revolving Credit Facility by $8 million, resulting in a total principal amount of the Revolving Credit Facility of $58 million.

On July 28, 2025, the Company fully paid off the outstanding principal balance of its term loan of $332.1 million using the proceeds from the issuance of the 2030 Notes, as discussed above.

As a result of this transaction and the repayment of outstanding balance under the Credit Agreement, the Company has incurred a loss of $23.9 million during the year ended December 31, 2025, related to the write-off of deferred issuance costs and an early payment penalty, reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations.

Contractual Obligations, Commitments and Contingencies

During the normal course of business, we enter into certain lease contracts with lease terms through 2032. As of December 31, 2025, the total remaining contractual obligations are approximately $42.2 million, of which $10.1 million is for the next 12 months. From time to time, the Company enters into a purchase commitment with our third-party cloud computing web services provider. As of December 31, 2025, the total remaining contractual obligations from this purchase commitment are approximately $10.7 million, of which $6.3 million is for the next 12 months. We may pay more than the minimum purchase commitment based on usage. See Note 15 for details regarding when these obligations are due.

In the ordinary course of business, the Company may provide indemnifications or loss guarantees of varying scope and terms to customers and other third parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap.

For our forward flow agreements, loans purchased have a contractual performance requirement which is measured at every reporting period for a specified time period as provided for in the agreement. If the loan pool’s performance is below the contractual requirement, the counterparty may have first loss up until a contractual agreed limit. If the loans’ performance is below the counterparty’s first loss limit or if there is no first loss limit, then Pagaya would be required to make a payment to the counterparty such that the loans purchased would have achieved the contractual performance requirement. There is a contractual maximum loss for Pagaya’s loss protection with the counterparty taking full risk of loss beyond Pagaya’s loss protection. Our guarantee of contractual loss protection for the buyer meets the accounting definition of a derivative, and therefore we recognize, at inception and each reporting period, a liability for the fair value of the estimated loss protection payments, if any.

As of December 31, 2025, there have been no known events or circumstances that have resulted in a material indemnification liability and the Company did not incur material costs to defend lawsuits or settle claims related to these indemnifications. For certain contracts meeting the definition of a guarantee or a derivative, the guarantor must recognize, at inception, a liability for the fair value of the obligation undertaken in issuing the guarantee. In addition, the guarantor must disclose the maximum potential amount of future payments that the guarantor could be required to make under the guarantee, if there were a default by the guaranteed parties. The determination of the maximum potential future payments is based on the notional amount of the guarantees without consideration of possible recoveries under recourse provisions or from collateral held or pledged. As of December 31, 2025, the unfunded maximum potential amount of undiscounted future payments the Company could be required to make under these guarantees totaled $120.2 million. Additionally, in accordance with the guarantee contracts, the Company is required to fund segregated cash balances to provide protection in the event the Company is not able to meet its contractual commitments. As of December 31, 2025, $46.0 million has been segregated and recognized within restricted cash and cash

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equivalents, of which $12.9 million has been accrued within accrued expenses and other liabilities in the consolidated balance sheets in accordance with these contractual requirements.

For a discussion of our debt obligations and operating lease obligations as of December 31, 2025, see Note 8 and Note 14, respectively, to our consolidated financial statements included elsewhere in this Annual Report.

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in activities with unconsolidated VIEs, including our sponsored securitization vehicles, which we contractually administer. To comply with risk retention regulatory requirements, we retain at least 5% of the credit risk of the securities issued by sponsored securitization vehicles. From time to time, we may, but are not obligated to, purchase assets from the Financing Vehicles. Such purchases could expose us to loss. For additional information, refer to Note 6 to the consolidated financial statements elsewhere included in this Annual Report.

Critical Accounting Estimates

The preparation of our consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

We believe that the accounting policies discussed below are critical to our financial results and the understanding of our past and future performance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to be critical if: (1) it requires us to make assumptions because the information was not available at the time or it included matters that were highly uncertain at the time we were making our estimate and (2) changes in the estimate could have a material impact on our financial condition or results of operations. For further information, see Note 2 to our audited consolidated financial statements in this Annual Report on Form 10-K. It should be noted that future events rarely develop exactly as forecasted, and estimates require regular review and adjustment.

Fair Value

Investments in loans and securities, which include whole loans and notes and residual interests in securitizations, are measured at fair value on a recurring basis. The estimate of fair value of these financial assets requires significant judgment. We use a discounted cash flow model to estimate the fair value of these financial assets based on the present value of estimated future cash flows. The cash flow model uses both observable and unobservable inputs and reflects our best estimates of the assumptions a market participant would use to calculate fair value of the particular financial asset. Primary inputs that require significant judgment include discount rates, net credit loss expectations, expected prepayment rates and consideration of any optional redemption features in our investment securities.

As it relates to net credit loss expectations, the most significant unobservable input, management considers a variety of factors including, but not limited to, historical loss trends, origination or vintage analysis, known and inherent risks in the portfolio, recovery rates and current economic conditions. We also take into consideration certain qualitative factors, in which we adjust our quantitative baseline using our best judgment to consider the inherent uncertainty regarding future economic conditions and consumer loan performance.

Additionally, we determine whether an impairment has resulted from a credit loss or other factors. We determine whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and reasonable and supportable forecasts of economic conditions. We recognize the credit loss portion through earnings in the income statement and the noncredit loss portion in accumulated other comprehensive loss.

The underlying assumptions, estimates, and assessments we use to provide for fair value are assessed and updated quarterly, as necessary, to reflect our view of current conditions, which can result in changes to the fair value of investments in loans and securities. It is possible that we will experience material differences in the fair value of investments in loans and securities.