Pagaya Technologies is an Israeli-American financial technology company based in New York City. The company evaluates loan applications using artificial intelligence (AI) with the aim of modernizing credit checks. The company has been listed on the New York Stock Exchange since 2022.3 Its shares trade on Nasdaq under the symbol PGY.1Wikipedia text CC BY-SA 4.0
Pagaya Technologies is an Israeli-American financial technology company based in New York City. The company evaluates loan applications using artificial intelligence (AI) with the aim of modernizing credit checks. The company has been listed on the New York Stock Exchange since 2022.3
Financials
From the company’s reports to the SEC. Every number links to the filing it came from.
Revenue910115$1.3B in 2025+1275% since 2020Operating income910115$263.8M in 2025+1141% since 2020Net income910115$81.4M in 2025+462% since 2020
Revenue121314$365.6M in Q2 FY2026+15% since Q2 FY2025Operating income121314$105.8M in Q2 FY2026+87% since Q2 FY2025Net income121314$45.3M in Q2 FY2026+172% since Q2 FY2025
Every line of the income statement as filed: the last 3 fiscal years, latest first.5
Period ending
2025-12-31
2024-12-31
2023-12-31
Revenue from fees
$1.3B
$1.0B
$772.8M
Interest income
$48.4M
$32.3M
$38.7M
Investment (loss) income
-$8.4M
-$4.6M
$489.0K
Total Revenue and Other Income
$1.3B
$1.0B
$812.1M
Production costs
$749.2M
$597.7M
$508.9M
Technology, data and product development
$75.2M
$76.6M
$74.4M
Sales and marketing
$53.6M
$50.4M
$49.8M
General and administrative
$159.6M
$240.8M
$203.4M
Total Costs and Operating Expenses
$1.0B
$965.4M
$836.5M
Operating Income (Loss)
$263.8M
$66.8M
-$24.4M
Gains and (losses) on investments in loans and securities
-$107.0M
-$404.1M
-$131.3M
Other expenses, net
-$80.4M
-$83.6M
-$25.5M
Gains and (losses) from extinguishment of debt
-$24.8M
-$200.0K
$0
Income (Loss) Before Income Taxes
$51.6M
-$421.1M
-$181.2M
Income tax (benefit) expense
-$19.7M
$24.6M
$15.6M
Net Income (Loss) Including Noncontrolling Interests
$71.4M
-$445.7M
-$196.7M
Less: Net income (loss) attributable to noncontrolling interests
-$10.0M
-$44.3M
-$68.3M
Net Income (Loss) Attributable to Pagaya Technologies Ltd.
$81.4M
-$401.4M
-$128.4M
Basic (in dollars per share)
$0.99
-$5.66
-$2.14
Diluted (in dollars per share)
$0.93
-$5.66
-$2.14
Basic (in shares)
78.3M shares
70.9M shares
60.0M shares
Diluted (in shares)
83.1M shares
70.9M shares
60.0M shares
No quarter-by-quarter statement was filed.
Total assets910115$1.5B in 2025+162% since 2021Total liabilities910115$960.5M in 2025+807% since 2021Shareholders’ equity910115$480.0M in 2025+3489% since 2019Cash910115$235.3M in 2025+4724% since 2019
Total assets15131412$1.7B in Q2 FY2026+21% since Q2 FY2025Total liabilities15131412$1.0B in Q2 FY2026+18% since Q2 FY2025Shareholders’ equity15131412$594.2M in Q2 FY2026+62% since Q2 FY2025Cash121314$249.3M in Q2 FY2026+36% since Q2 FY2025
Every line of the balance sheet as filed: the last 5 fiscal years (annual) or 5 quarters (quarterly), latest first.5
Period ending
2025-12-31
2024-12-31
2023-12-31
2023-05-31
2022-12-31
Cash and cash equivalents
$235.3M
$187.9M
$186.5M
Restricted cash and cash equivalents
$53.0M
$38.6M
$36.1M
Fees receivables
$153.2M
$127.1M
Fair Value
$945.3M
$778.4M
Equity method and other investments
$13.5M
$21.9M
Right-of-use assets
$30.6M
$36.9M
Property, equipment and software, net
$30.2M
$38.0M
Goodwill
$22.9M
$23.1M
Intangible assets, net
$7.7M
$12.8M
Other assets
$54.2M
$26.4M
Total Assets
$1.5B
$1.3B
Accounts payable
$3.9M
$7.0M
Accrued expenses and other liabilities
$74.6M
$45.4M
Operating lease liabilities
$34.2M
$37.1M
Income taxes payable and other tax liabilities
$18.7M
$41.2M
Warrant liability
$4.7M
$893.0K
$3.2M
Secured borrowing
$193.9M
$176.1M
Exchangeable notes
$148.8M
$146.3M
Long-term debt
$481.6M
$321.3M
Total Liabilities
$960.5M
$775.3M
Redeemable convertible preferred shares, no par value, 6,666,666 shares authorized, 2,027,147 and 5,000,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively; aggregate liquidation preference of $60,814 and $150,000 as of December 31, 2025 and 2024, respectively.
$30.1M
$74.2M
$74.2M
$74.2M
$0
Additional paid-in capital
$1.4B
$1.3B
Accumulated other comprehensive loss
-$48.3M
-$11.5M
Accumulated deficit
-$862.7M
-$944.0M
Total Pagaya Technologies Ltd. shareholders equity
$480.0M
$326.5M
Noncontrolling interests
$75.3M
$115.1M
Total shareholders equity
$555.4M
$441.5M
$665.7M
$765.4M
Total Liabilities, Redeemable Convertible Preferred Shares, and Shareholders Equity
$1.5B
$1.3B
Shares authorized (in shares)
6.7M shares
6.7M shares
Shares issued (in shares)
2.0M shares
5.0M shares
Shares outstanding (in shares)
2.0M shares
5.0M shares
5.0M shares
0 shares
Aggregate liquidation preference
$60.8M
$150.0M
Ordinary shares, authorized (in shares)
840.0M shares
Accrued interest receivable
$25.8M
$14.3M
Period ending
2025-12-31
2024-12-31
2023-12-31
2023-05-31
2022-12-31
Cash and cash equivalents
$235.3M
$187.9M
$186.5M
Restricted cash and cash equivalents
$53.0M
$38.6M
$36.1M
Fees receivables
$153.2M
$127.1M
Fair Value
$945.3M
$778.4M
Equity method and other investments
$13.5M
$21.9M
Right-of-use assets
$30.6M
$36.9M
Property, equipment and software, net
$30.2M
$38.0M
Goodwill
$22.9M
$23.1M
Intangible assets, net
$7.7M
$12.8M
Other assets
$54.2M
$26.4M
Total Assets
$1.5B
$1.3B
Accounts payable
$3.9M
$7.0M
Accrued expenses and other liabilities
$74.6M
$45.4M
Operating lease liabilities
$34.2M
$37.1M
Income taxes payable and other tax liabilities
$18.7M
$41.2M
Warrant liability
$4.7M
$893.0K
$3.2M
Secured borrowing
$193.9M
$176.1M
Exchangeable notes
$148.8M
$146.3M
Long-term debt
$481.6M
$321.3M
Total Liabilities
$960.5M
$775.3M
Redeemable convertible preferred shares, no par value, 6,666,666 shares authorized, 2,027,147 and 5,000,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively; aggregate liquidation preference of $60,814 and $150,000 as of December 31, 2025 and 2024, respectively.
$30.1M
$74.2M
$74.2M
$74.2M
$0
Additional paid-in capital
$1.4B
$1.3B
Accumulated other comprehensive loss
-$48.3M
-$11.5M
Accumulated deficit
-$862.7M
-$944.0M
Total Pagaya Technologies Ltd. shareholders equity
$480.0M
$326.5M
Noncontrolling interests
$75.3M
$115.1M
Total shareholders equity
$555.4M
$441.5M
$665.7M
$765.4M
Total Liabilities, Redeemable Convertible Preferred Shares, and Shareholders Equity
$1.5B
$1.3B
Shares authorized (in shares)
6.7M shares
6.7M shares
Shares issued (in shares)
2.0M shares
5.0M shares
Shares outstanding (in shares)
2.0M shares
5.0M shares
5.0M shares
0 shares
Aggregate liquidation preference
$60.8M
$150.0M
Ordinary shares, authorized (in shares)
840.0M shares
Accrued interest receivable
$25.8M
$14.3M
Cash from operations910115$238.6M in 2025+5505% since 2020Capital spending910115$13.9M in 2025+1167% since 2020Free cash flow910115$224.7M in 2025+7011% since 2020
Cash flow is reported year to date, not quarter by quarter, so there are no separate quarterly figures.
Every line of the cash flow as filed: the last 3 fiscal years, latest first.5
Period ending
2025-12-31
2024-12-31
2023-12-31
Net income (loss) including noncontrolling interests
$71.4M
-$445.7M
-$196.7M
Equity method and other investments loss (income)
$8.4M
$4.6M
-$488.0K
Depreciation and amortization
$30.1M
$28.8M
$19.1M
Share-based compensation
$54.1M
$61.5M
$71.1M
Fair value adjustment to warrant liability
$3.8M
-$2.3M
$1.8M
(Gains) and losses on investments in loans and securities
$108.9M
$408.1M
$134.5M
Write-off of capitalized software and other assets
$4.9M
$3.2M
$2.5M
Amortization of deferred costs
$11.3M
$3.7M
$0
Losses (gains) from extinguishment of debt
$17.9M
$0
$0
Losses (gains) on foreign exchange
$1.1M
$4.2M
-$1.3M
Other non-cash items
$0
$367.0K
$0
Fees receivables
-$26.3M
-$23.0M
-$25.5M
Accrued interest on investments
-$42.8M
-$21.7M
-$26.5M
Right-of-use assets
$6.3M
$1.1M
$3.9M
Other assets
-$13.3M
-$9.2M
$12.9M
Accounts payable
$3.4M
$5.7M
-$448.0K
Accrued expenses and other liabilities
$28.5M
$6.9M
-$17.8M
Operating lease liability
-$6.5M
$522.0K
-$3.7M
Income taxes
-$22.5M
$21.2M
$5.0M
Net cash provided by (used in) operating activities
$238.6M
$47.8M
-$21.7M
Proceeds from the maturity and prepayment of investments in loans and securities
$273.0M
$132.4M
$203.3M
Proceeds from the sales of investments in loans and securities
$79.2M
$114.1M
$0
Proceeds from equity method and other investments
$0
$31.0K
$0
Cash and restricted cash acquired from Darwin Homes, Inc.
$1.6M
Purchases of investments in loans and securities
-$632.2M
-$693.9M
-$566.2M
Purchases of property, equipment and software
-$13.9M
-$17.7M
-$20.2M
Purchases of intangible assets
$0
-$5.5M
$0
Purchases of equity method and other investments
$0
-$175.0K
$0
Purchases of other assets
-$16.0M
$0
$0
Acquisition of Theorem Technology, Inc., net of cash acquired
$159.0K
-$9.1M
Net cash used in investing activities
-$309.7M
-$479.9M
-$381.5M
Proceeds from sale of ordinary shares, net of issuance costs
$0
$90.0M
$0
Proceeds from long-term debt
$500.0M
$341.8M
$0
Proceeds from exchangeable notes
$0
$152.0M
$0
Proceeds from issuance of redeemable convertible preferred shares, net
$0
$0
$74.2M
Proceeds from secured borrowing
$356.0M
$265.7M
$338.5M
Proceeds received from noncontrolling interests
$0
$64.0M
$20.0M
Proceeds from revolving credit facility
$0
$59.0M
$130.0M
Proceeds from exercise of stock options, warrants and contributions to ESPP
$6.9M
$3.3M
$4.3M
Proceeds from issuance of ordinary shares from the Equity Financing Purchase Agreement
$0
$11.9M
$27.9M
Distributions made to noncontrolling interests
-$25.8M
-$9.8M
-$43.8M
Payments made to revolving credit facility
$0
-$149.0M
-$55.0M
Payments made to secured borrowing
-$341.4M
-$361.4M
-$206.4M
Payments made to long-term debt
-$353.7M
-$14.0M
$0
Debt issuance costs
-$12.5M
-$16.7M
$0
Settlement of share-based compensation in satisfaction of tax withholding requirements
$0
$0
-$650.0K
Net cash provided by financing activities
$129.6M
$436.7M
$289.1M
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents
$3.3M
-$586.0K
-$515.0K
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents
$61.8M
$4.0M
-$114.5M
Cash paid for income taxes
$2.5M
$4.9M
$9.2M
Cash paid for interest expense
$91.8M
$80.3M
$17.8M
Cash paid for operating leases
$13.1M
$13.1M
$14.1M
Initial recognition (derecognition) of right-of-use assets and operating lease liability
-$113.0K
-$17.7M
-$1.8M
In-kind distributions
$0
$0
$20.6M
Issuance of ordinary shares in connection with acquisitions
$0
$6.0M
$18.1M
Stock-based compensation included in capitalized internal-use software
$3.8M
$7.1M
$8.3M
Contingent consideration liability in connection with the acquisition of Theorem
Pagaya technologies sits at the top of its group. 68 entities, 5 countries on record. Switch between the flow chart and the network, and select any entity to see its details.
Avital PardoFiled SC 13D/A on Pagaya technologies, latest Sep 15, 2023 (2 filings since Dec 7, 2022)
TIGER GLOBAL MANAGEMENT LLCFiled SC 13G/A on Pagaya technologies, latest Aug 4, 2023 (4 filings since Jul 5, 2022)
Gal KrubinerFiled SC 13D on Pagaya technologies, latest Dec 7, 2022
Yahav YulzariFiled SC 13D on Pagaya technologies, latest Dec 7, 2022
Pagaya technologiesNew York City
Adoor Property Management LLC Subsidiary · Delaware, United States
Apple Orchard Finance Trust Subsidiary · Delaware, United States
Asset Acquisition Capital LLC Subsidiary · Delaware, United States
Citrus Tree Finance LLC Subsidiary · Delaware, United States
Darwin Adoor Member LLC Subsidiary · Delaware, United States
Darwin Homes Missouri, LLC Subsidiary · Delaware, United States
Darwin Homes Ohio, LLC Subsidiary · Delaware, United States
Darwin Homes Services, LLC Subsidiary · Delaware, United States
Darwin Homes Texas, LLC Subsidiary · Texas, United States
Darwin Homes, Inc. Subsidiary · Delaware, United States
Darwin Turnkey, LLC Subsidiary · Delaware, United States
MDP Loan Funds Ltd. Subsidiary · Israel
Olive Branch Finance LLC Subsidiary · Delaware, United States
Orange Grove Finance Trust Subsidiary · Delaware, United States
Origin Property Services LLC Subsidiary · Delaware, United States
Pagaya Acquisition Trust Subsidiary · Delaware, United States
Pagaya Acquisition Trust II Subsidiary · Delaware, United States
Pagaya Acquisition Trust III Subsidiary · Delaware, United States
Pagaya Acquisition Trust IV Subsidiary · Delaware, United States
Pagaya Acquisition Trust V Subsidiary · Delaware, United States
Pagaya Acquisition Trust VI Subsidiary · Delaware, United States
Pagaya Acquisition Trust VII Subsidiary · Delaware, United States
Pagaya Acquisition Trust VIII Subsidiary · Delaware, United States
Pagaya Auto Loans Manager Ltd. Subsidiary · Cayman Islands
Pagaya Depositor Trust II Subsidiary · Delaware, United States
and 42 more
Built from subsidiaries listed in Exhibit 21 of annual reports filed with the SEC; major holders from Schedules 13D and 13G. Each entity in the chart links to its source.
What it owns
What Pagaya technologies reports owning in its annual reports to the SEC: buildings, land and equipment, real estate and locations, investments, intangible assets and inventory, at the end of its latest fiscal year and a year before.
Our main offices are in New York, NY (Headquarters) and Tel Aviv, Israel. None of our facilities are owned by Pagaya. We believe that our current facilities are adequate to meet our current needs, and we believe we can acquire suitable additional or alternative space as needed.
Pagaya Technologies was founded in Israel in 2016. The company was founded by Gal Krubiner, Avital Pardo, and Yahav Yulzari with the aim of using AI and machine learning in lending to replace traditional credit checks. Initially, the company acted as an asset manager for institutional clients and, at the same time, developed a data-driven credit model. With the help of private funds and asset-backed securities (ABS), consumer loans were financed at an early stage; by 2020, Pagaya managed assets of more than US$1.6 billion for banks and other institutions and had issued over US$1 billion in ABS. Among the investors in the company was Singapore's sovereign wealth fund GIC.
In September 2021, Pagaya announced a merger with the US acquisition company EJF Acquisition Corp. The SPAC (special purpose acquisition company) transaction valued Pagaya at approximately US$8.5 billion. During the listing process, development and administrative activities were divided between Tel Aviv and New York, and the company claimed that the number of employees grew to aprroximately 1,000 by 2022.
In January 2024, management also announced that it would relocate its headquarters to New York, as the majority of its partners and sales are based in the US; however, the technical development site in Tel Aviv remained unchanged.
At the 2025 Mind the Tech conference in New York, CEO Gal Krubiner presented his vision of the platform serving all major US banks, with the company seeing itself as a bridge between Israeli technology culture and the US financial market.
Chief Legal OfficerEric Watson named Jun 6, 202335
Chief Financial OfficerMichael Kurlander named Jul 6, 2022 to Jun 6, 202335
General CounselRichmond Glasgow named Jul 6, 2022 to Jan 20, 202336
DirectorAmy Pressman named Aug 26, 2022 to Jun 6, 202335
DirectorHarvey Golub named Aug 26, 2022 to Jun 6, 202335
DirectorKevin Stein named Aug 26, 2022 to Jun 6, 202335
DirectorMircea Ungureanu named Aug 26, 2022 to Jun 6, 202335
Products and brands
Pagaya views itself as a B2B platform connecting banks, lenders, and institutional investors. Its core product is an AI-powered decision-making platform that evaluates credit applications using large datasets and machine learning algorithms. This platform is embedded into partners' workflows via application programming interfaces (APIs): when a banking partner turns down an application, the anonymized data is routed to Pagaya. The models assess creditworthiness, extend their own offer, and Pagaya assumes the credit default risk; the bank retains the customer relationship and earns servicing fees. Funding is provided through forward-flow agreements, the issuance of asset-backed securities (ABS), and proprietary credit funds. For example, a 2024 agreement with asset manager Castlelake allows for the purchase of up to $1 billion in consumer loans, broadening its refinancing base.
The platform targets "second-look" lending to increase partners' approval rates. According to company figures, the underlying dataset covers trillions of dollars in applications, enabling the use of non-traditional creditworthiness indicators. Pagaya's network is active across various credit segments, including unsecured personal loans, auto loans, credit cards, retail buy now, pay later models, and real estate financing; over the long term, the company also aims to expand into the mortgage and insurance sectors. Partners include Prosper, LendingClub, SoFi, U.S. Bank, Ally, Klarna, Visa, and major auto lenders. In terms of its business model, Pagaya focuses on fee income derived from origination and servicing, while credit risk is largely passed on to institutional investors.
Feb 13, 2025Reported quarterly or annual results52
Upcoming dates from Nasdaq's calendar; past results from the company's 8-K filings (Item 2.02). The full markets calendar
Filings
472 filings to the SEC since October 2021: 7 annual reports, 8 quarterly reports, 34 major events, 161 insider forms, 37 large holders, 4 private raises, 221 other. The latest 20:
127 open-market trades by officers, directors and large owners since October 2021: 9 buys and 118 sales. Grants, option exercises and gifts are left out.
Where the company's money came from, by calendar year: private offerings filed with the SEC,
federal grants, loans, contracts and other assistance from USAspending.gov, and PPP loans from the SBA.
Each bar links to the records below.
Private offerings the company reported to the SEC on Form D. The amount is what the latest filing says was sold so far, charted in the year of the first sale. Covers filings since Oct 1, 2021.
May 24, 2023Raised $75 million in a private offering of equity35Form D: 3 investors so farForm D
Jan 5, 2023Raised $17.5 million in a private offering of equity36Form D: 42 investors so farForm D
Aug 17, 2022Raised $1 million in a private offering of equity64Form D: $303 million offered in allForm D
Jun 22, 2022Raised $3.4 billion in a private offering of equity65Form D: 62 investors so farForm D
SEC filer profile
How Pagaya technologies is registered with the Securities and Exchange Commission, from its EDGAR record and the cover page of its latest annual report.
From the cover page of the 10-K filed Mar 2, 2026 (Section 12(b) of the Exchange Act).16
Risk factors and legal proceedings
The risks Pagaya technologies names in Item 1A of its 10-K filed Mar 2, 2026: 73 risks under these headings, as written.16
Risks Related to the Operations of Our Business
We are a rapidly growing company, which may result in increased risks, uncertainties, expenses and difficulties, and it may be difficult to evaluate our future prospects.
Our revenue and FRLPC growth rate and financial performance in recent periods may not be indicative of future performance and such growth may slow over time. In addition, the historical returns attributable to the Financing Vehicles should not be indicative of the future results of the Financing Vehicles and poor performance of the Financing Vehicles would likely cause a decline in our revenue, net income and cash flow.
If we fail to effectively manage our growth, our business, financial condition, and results of operations could be adversely affected. In addition, we may from time to time undertake internal corporate reorganizations that may adversely impact our business and results of operations.
Our business and the performance of Financing Vehicles may be adversely affected by economic conditions and other factors that we cannot control. These factors include interest rates, rising inflation, the instability of the banking system, acts of war, supply chain disruptions, labor shortages, the wind-down of stimulus programs, unemployment rates, conditions in the housing market, immigration policies, government shutdowns, trade wars or other impacts of tariffs and delays in tax refunds, as well as events such as natural disasters, terrorism, catastrophes, and pandemics.
We have incurred U.S. GAAP net losses, and we may not be able to remain profitability in the future.
Adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our operations and liquidity. Adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our operations and liquidity.
Our business, financial condition and results of operations could be adversely affected as a result of an unexpected failure of a vendor, bank or other third party service provider that presents concentration risks to us or our Partners.
We are heavily dependent on our AI technology. If we are unable to continue to improve our AI technology or if our AI technology does not operate or perform as we expect, contains errors or is otherwise ineffective, our network may improperly evaluate products, not be able to process the volume we have historically, and our growth prospects, business, financial condition and results of operations could be adversely affected.
We rely on our Partners to originate assets facilitated with the assistance of our AI technology. Currently, a limited number of Partners account for a substantial portion of our Network Volume — the financial products facilitated with the assistance of our AI technology — and, ultimately, our Revenue. If these Partners were to cease or limit operations with us, our business, financial condition and results of operations could be adversely affected.
If we are unable to both retain existing Partners and attract and onboard new Partners on attractive commercial terms, our business, financial condition and results of operations could be adversely affected.
Our ability to raise capital from asset investors is vital to our ability to offer products to Partners. If we are unable to raise capital from asset investors at competitive rates, or at all, it would materially reduce our revenue and cash flow and adversely affect our financial condition.
The other 62 risks
A reduction in fee revenues earned from Financing Vehicles could have an adverse effect on our results of operations. The growth of the assets of such Financing Vehicles and related fees generated, as well as our ability to deploy capital into investments, would slow or decrease if we are unable to raise new and successor Financing Vehicles, all of which would materially reduce our fee revenues and cash flows and adversely affect our financial condition.
If we are unable to develop and maintain diverse and robust funding sources for our network, our growth prospects, business, financial condition and results of operations could be adversely affected. In addition, certain of our funds Financing Vehicles have periodic redemption features and a substantial withdrawal of capital by one or more asset investors, or use of such features, may have an adverse effect on the Financing Vehicles’ performance and our ability to raise new Financing Vehicles.
Our AI technology has not yet been extensively tested during different economic conditions, including down-cycles. We continue to build and refine our AI technology to offer new products and services as we expand into new markets, such as real estate and point-of-sale, and if our AI technology does not perform as well in these new markets as it has in our existing business and we are unable to manage the related risks and effectively execute our growth strategy as we develop new products, our growth prospects, business, financial condition and results of operations could be adversely affected.
The industry in which we operate is highly competitive, and if we fail to compete effectively, we could experience price reductions, reduced margins or loss of revenues.
A significant portion of our current revenues are derived from Financing Vehicles that acquire consumer credit assets and related financial products, and as a result, we are particularly susceptible to fluctuations in consumer credit activity and the capital markets.
If our estimates, judgments or assumptions relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.
Our reputation and brand are important to our success. If we are unable to continue developing our reputation and brand, or if our brand or reputation is compromised, our ability to retain existing and attract new Partners and asset investors and our ability to maintain and improve our relationship with regulators of our industry could be adversely affected. As a result, our business, financial condition and results of operations may suffer.
If we are unable to manage the risks associated with fraudulent activity, our brand and reputation, business, financial condition, and results of operations could be adversely affected and we could face material legal, regulatory and financial exposure (including fines and other penalties).
We are subject to risks related to our dependency on our Founders, key personnel, employees and independent contractors, including highly-skilled technical experts, as well as attracting, retaining and developing human capital in a highly competitive market.
The funding component of our business related to the Financing Vehicles is highly competitive.
Our failure to deal appropriately with conflicts of interest in the funding component of our business, related to our allocation of investment opportunities between Financing Vehicles, could damage our reputation and adversely affect our businesses. Conflicts of interest may also arise in our allocation of costs and expenses, and we are subject to increased regulatory scrutiny and uncertainty with regard to those determinations.
We have historically, and may in the future need to raise additional funds, including, but not limited to, through equity, debt, secured borrowings, or convertible debt financings to support business growth, and those funds may be unavailable on acceptable terms, or at all. As a result, we may be unable to meet our future capital requirements, which could limit our ability to grow and jeopardize our ability to continue our business.
Any legal proceedings, investigations or claims against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome. In addition, our business and operations could be negatively affected if they become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our share price.
Although we currently maintain insurance coverage, such coverage may not be sufficient to cover the types or extent of claims or loss that may be incurred or received.
Our risk management policies and procedures, and those of our third-party vendors upon which we rely, may not be fully effective in identifying or mitigating risk exposure. If our policies and procedures do not adequately protect us from exposure to these risks, we may incur losses that would adversely affect our financial condition, reputation and market share.
If there is a pledge of a substantial amount of Pagaya Ordinary Shares, a change of control could occur and could materially and adversely affect our financial condition, results of operation and cash flows.
We actively evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products and other assets in the future. We may not be able to realize the potential benefits of any such future business investments or acquisitions, and we may not be able to successfully integrate acquisition targets, which could hurt our ability to grow our business.
A disruption or failure in services provided by third parties could materially and adversely affect our business.
We are exposed to risks relating to our incorporation and location in Israel.
We could be adversely affected by the soundness of other financial institutions.
Risks Related to Technology, Intellectual Property and Data
Regulators may assert, and courts may conclude, that certain uses of AI technology leads to unintentional bias or discrimination.
We may be unable to sufficiently, and it may be difficult and costly to, obtain, maintain, protect, or enforce our intellectual property and other proprietary rights.
Our technology relies in part on third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to utilize our technology and increase our costs.
Our proprietary AI technology relies in part on the use of our Partners’ borrower data and third-party data, and if we lose the ability to use such data, or if such data contains gaps or inaccuracies, our business could be adversely affected.
Cyberattacks, security breaches or similar compromise of our information technology systems, or those of third parties upon which we rely, or our data could adversely impact our brand and reputation and our business, operating results and financial condition.
Our Financing Vehicles rely on third-party service providers for a substantial portion of our business activities, and any disruption of service experienced by such third-party service providers or our failure to manage and maintain existing relationships or identify other high-quality, third-party service providers could harm our reputation, business, results of operations and growth prospects.
Under applicable employment laws, we may not be able to enforce covenants not to compete.
Risks Related to our Single Family Rental (“SFR”) Operations
The SFR market is highly competitive, and we may be unable to compete successfully against our existing and future competitors.
The success of our SFR operations depends on general economic conditions, the health of the U.S. real estate industry generally, and risks generally incident to the ownership and leasing of single-family rental real estate, and our SFR operations may be negatively impacted by economic and industry downturns, including seasonal and cyclical trends, and volatility in the single-family rental real estate lease market.
Our SFR Partners depend on residents and their willingness to meet their lease obligations and renew their leases. Poor tenant selection, defaults, and non-renewals by residents may adversely affect our reputation and the financial performance of our SFR operations.
A significant number of our SFR Partners’ residential properties are part of HOAs and we and our residents are subject to the rules and regulations of such HOAs, which are subject to change and which may be arbitrary or restrictive, and violations of such rules may subject us to additional fees and penalties and litigation with such HOAs, which would be costly.
Our dependence upon third parties for key services may have an adverse effect on our operating results or reputation if the third parties fail to perform.
We rely on information supplied by prospective residents in managing our business.
We are subject to payment-related and leasing fraud from tenants and an increase in or failure to deal effectively with fraud, fraudulent activities, fictitious transactions, or illegal transactions.
We may not be able to effectively control the timing and costs relating to the renovation and maintenance of our properties, which may adversely affect our SFR operations.
Laws, regulations, and rules that affect the short-term rental and the long-term rental business may expose us to significant penalties, which could have an adverse effect on our SFR operations.
Compliance with governmental laws, regulations, and covenants that are applicable to our SFR Partners’ properties or that may be passed in the future, including tenant relief laws, affordability covenants, permit, license, and zoning requirements, may adversely affect our ability to manage customer properties and could adversely affect our growth strategy.
Risks Related to Dual Class Structure
The dual class structure of Pagaya Ordinary Shares has the effect of concentrating voting power with certain shareholders—in particular, our Founders—which will effectively eliminate your ability to influence the outcome of many important determinations and transactions, including a change in control.
The dual class structure of Pagaya Ordinary Shares may adversely affect the trading market for Class A Ordinary Shares.
Risks Related to Our Legal and Regulatory Environment
Litigation, regulatory actions, consumer complaints and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses.
Changes in laws or regulations relating to privacy, cybersecurity, data protection, or the protection, use or transfer of personal information, or any actual or perceived failure by us to comply with such laws and regulations or any other obligations relating to privacy, data protection, or the protection or transfer of personal information, could adversely affect our business.
A heightened regulatory and enforcement environment in the financial services industry may have an adverse impact on our Partners and our business.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements, our activities may be restricted, and our ability to conduct business could be materially adversely affected.
The SEC oversees and directly regulates the activities of our subsidiaries that are registered investment advisers under the Investment Advisers Act.
We and the Financing Vehicles rely on complex exemptions from statutes in conducting the funding component of our business.
Securitizations expose us to certain risks, and we can provide no assurance that we will be able to access the securitization market in the future, which could materially and adversely affect our ability to execute on our business plan.
We are subject to anti-corruption, anti-bribery, anti-money laundering, economic and trade sanctions and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.
As the political and regulatory framework for AI technology and machine learning evolves, our business, financial condition and results of operations may be adversely affected.
If obligations by one or more Partners that utilize our network were subject to successful challenge that the Partner was not the “true lender,” such obligations may be unenforceable, subject to rescission or otherwise impaired, we or other program participants may be subject to penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business, financial condition and results of operations.
If assets originated by our Partners were found to violate the laws of one or more states, whether at origination or after sale by our Partners, assets acquired, directly or indirectly, by the Financing Vehicles may be unenforceable or otherwise impaired, we (or the Financing Vehicles) may be subject to, among other things, fines and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business and results of operations.
The CFPB has at times taken expansive views of its authority to regulate consumer financial services, creating uncertainty as to how the agency’s actions or the actions of any other new government agency could adversely affect our business, financial condition and results of operations.
We may be subject to regulatory risks related to our operations in Israel.
Uncertainty and instability resulting from the ongoing conflict between Russia and Ukraine could adversely affect our business, financial condition and operations.
Risks Related to Our Operations in Israel
Conditions in Israel and relations between Israel and other countries could adversely affect our business, including current uncertainty and instability resulting from the war between Israel and various terrorist organizations, as well as other regional hostilities.
A large concentration of our staff resides in Israel and many of our employees and independent contractors in Israel are required to perform military reserve duty, which may disrupt their work for us.
Your rights and responsibilities as our shareholder will be governed by Israeli law, which differs in some respects from the law governing the rights and responsibilities of shareholders of U.S. and other non-Israeli corporations.
Provisions of Israeli law and the Pagaya Articles may delay, prevent, or make undesirable an acquisition of all or a significant portion of our shares or assets.
The Pagaya Articles contain a forum selection clause for substantially all disputes between us and our shareholders, which could limit our shareholders’ ability to bring claims and proceedings against us, our directors, officers, and other employees and independent contractors. It may be difficult to enforce a U.S. judgment against us or our officers, directors or employees in Israel or the United States, to assert a U.S. securities laws claim in Israel or serve process on our Israeli-based officers, directors and employees.
Risks Related to Being a Public Company
Our management team has limited experience managing a public company.
We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives.
Concentration of voting power among certain Shareholders, namely our Founders, will limit other shareholders’ ability to influence corporate matters and delay or prevent a third party from acquiring control over us.
We do not intend to pay cash dividends for the foreseeable future.
Legal proceedings
Please refer to Note 15. Commitments and Contingencies of the accompanying notes to our consolidated financial statements.
From time to time, we may become involved in legal proceedings or be subject to claims arising in the normal course of business. We may also become involved in other judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of our businesses. We are not presently party to any litigation that, if determined adversely to us, we believe would be likely to have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Future litigation may be necessary, among other things, to defend ourselves or our Partners in connection with determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights. The results of any litigation cannot be predicted with certainty, particularly in the areas of unsettled and evolving law in which we operate, and an unfavorable resolution in any legal proceedings could materially affect our future business, financial condition, or results of operations. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
