Why Did Pagaya Technologies Stock Soar 11.4%?

Pagaya Technologies' stock surged 11.4% in pre-market trading on May 7, 2025, driven by strong first-quarter financial results that exceeded expectations.

Pagaya Technologies reported a significant turnaround to GAAP profitability earlier than anticipated, achieving a net income of $8 million for the first quarter ending March 31, 2025. This marks a substantial year-over-year increase, highlighting the company's strong operational leverage and growing partner adoption. The company also raised its full-year guidance for total revenue, GAAP net income, and adjusted EBITDA, indicating continued growth in the second quarter and full year 2025.

The company's revenue for Q1 2025 was $290 million, representing an 18% increase from $245 million in Q1 2024. This growth was primarily driven by a 19% increase in consumer credit and residential real estate solutions. Pagaya also expanded its funding network with three new investors, raising $1.4 billion across three transactions in Q1.

Despite the positive financial results, challenges with profitability, high debt levels, and mixed technical signals limit the overall score. However, the promise of future profitability and strategic partnerships provides a positive long-term outlook for Pagaya Technologies.