Pagaya Technologies 2025 Q3 Earnings Record Net Income Surges 131.4%

Pagaya Technologies (PGY) delivered a remarkable Q3 2025 earnings report, surpassing expectations with a net income of $23.27 million, a dramatic turnaround from a $74.23 million loss a year prior. The company raised full-year guidance and reported 36.3% revenue growth to $339.89 million, driven by strong performance in AI-driven credit solutions.

Revenue

Pagaya’s total revenue surged 36.3% year-over-year to $339.89 million in Q3 2025, fueled by robust demand for its AI-powered underwriting tools. Fees revenue accounted for the lion’s share at $339.89 million, while interest income added $14.92 million. Other income, including non-core streams, contributed $10.28 million. The segment also reported a net investment loss of $4.64 million, which was offset by operational gains, resulting in a total revenue and other income of $350.17 million.

Earnings/Net Income

The company returned to profitability with an EPS of $0.27 in Q3 2025, reversing a $0.93 loss in the prior-year period. Net income soared 131.4% to $23.27 million, marking a record high for the quarter and the strongest performance in four years. This turnaround underscores improved cost management and normalized impairments.

The EPS outperformance and net income rebound highlight Pagaya’s ability to scale profitably amid macroeconomic challenges.

Post-Earnings Price Action Review

The strategy of buying PGY shares post-earnings beats and holding for 30 days has historically shown favorable outcomes. Following the Q3 2025 report, PGY’s stock surged 12.8% post-announcement and gained an additional 5.1% in subsequent trading, reflecting strong market confidence. The company raised 2025 full-year net income guidance to $72–$82 million, while projecting network volume of $10.75 billion. However, risks such as regulatory scrutiny of AI credit models and potential credit impairments of $25–$37.5 million per quarter remain critical factors. Historical volatility metrics suggest a lower average true range (ATR) due to recent momentum, but macroeconomic headwinds could temper gains.

[CEO Commentary]

CEO Gal Krubiner attributed Q3 success to "strong performance in core credit risk management solutions" and "increased adoption of AI-driven underwriting tools." Challenges included "heightened competition in fintech lending" and "regulatory scrutiny in key markets." Strategic priorities for 2025 include expanding platform integration in emerging markets and accelerating R&D in predictive analytics. Krubiner expressed cautious optimism, emphasizing the company’s "robust long-term positioning in high-growth regions."

[Guidance]

The CEO outlined Q4 2025 revenue growth of 12% year-over-year, with EPS guidance of $0.30–$0.33. Capital expenditures are projected to rise 8% to support infrastructure expansion. The company aims to maintain 20% EBITDA margins while scaling operations in Southeast Asia. No long-term CAPEX or revenue targets were disclosed beyond Q4 2025.

[Additional News]

Recent non-earnings developments include a $500 million corporate debt raise rated by all three major agencies, expanding Pagaya’s revolving credit facility to $132 million. The company also secured $10.75 billion in projected network volume for 2025, reflecting growing lender adoption of its AI-driven platform. Additionally, Pagaya faces heightened regulatory scrutiny over AI credit underwriting models, with potential implications for future partnerships. These updates underscore both operational strength and evolving risks in the fintech sector.