Pagaya Technologies Ltd. PGY used its second-quarter 2026 earnings call to emphasize accelerating partner-led growth, especially in auto, while maintaining its underwriting posture. Management also raised its full-year GAAP net income guidance after record network volume and profitability.
Non-GAAP earnings per share of $1.07 beat the Zacks Consensus Estimate of $0.71. Total revenues of $387 million surpassed the consensus estimate of $358.2 million.
PGY Auto Flywheel Drives Volume Growth
CEO Gal Krubiner said that Pagaya’s growth reflected its partner-focused strategy, with network volume reaching a record $3.5 billion, up 33% year over year. Auto accounted for more than three-quarters of the year-over-year increase.
President Sanjiv Das said that dynamic offer optimization allows partners to adjust loan amount, APR, down payment and term in real time, helping lenders make more competitive offers at the dealer desk.
A Jefferies analyst asked why auto was accelerating. President Sanjiv Das cited product optimization, closer alignment with market terms and access to application flow that partners previously kept for themselves.
Pagaya Expands Through Partners & Products
Das said that Pagaya is onboarding about seven partners across personal loans, auto and point of sale, with regional banks gaining importance in the personal-loan pipeline.
Das added that the Affiliate Optimizer product generated more than $1 billion in personal-loan network volume in the second quarter. Pagaya also expects additional personal-loan partners to join Experian Activate and several new partners to go live in the second half.
Krubiner said that the embedded platform is designed to scale products across existing partners with limited incremental investment, allowing new product capabilities to be replicated throughout the network.
PGY Raises Net Income Outlook
CFO Jonathan Dobres said that Pagaya raised its full-year GAAP net income guidance by about 25% at the mid-point. The new guidance is $155-$180 million.
For the third quarter, CFO Jonathan Dobres guided network volume of $3.43-$3.63 billion, total revenues and other income to $370-$390 million, adjusted EBITDA to $120-$130 million, and GAAP net income to $42-$52 million.
For 2026, management expects network volume of $12.5-$13.25 billion, revenues of $1.43-$1.53 billion and adjusted EBITDA of $460-$490 million.
Pagaya Defends Underwriting Discipline
A Stephens analyst asked whether faster growth reflected looser underwriting. CEO Krubiner said that the company’s underwriting posture has not changed and attributed growth primarily to new products and deeper partner integration.
President Das said that more than 45% of application flow now comes from non-decline channels as Pagaya moves further up partners’ lending funnels.
Das said that the average personal-loan borrower has about $120,000 of income, a 680 FICO score and a 28% debt-to-income ratio. CFO Jonathan Dobres added that 2025 and 2026 vintages are performing in line with underwriting expectations.
PGY Funding Mix Supports Scale
Das said that Pagaya completed a record $3.7 billion in ABS funding across six transactions, while its last three securitizations were upsized amid investor demand.
CFO Jonathan Dobres said that about 40% of flow now comes from non-prefunded ABS products. The funding mix includes forward flow, committed revolving structures and traditional prefunded ABS.
A Canaccord Genuity analyst asked about forward-flow conditions. CFO Jonathan Dobres said that funding channels are more diversified and committed than before, with forward flow remaining one part of a broader funding strategy.
Pagaya’s Focus After Q2
Krubiner kept the strategic focus on extending more products across more partners while preserving operating leverage. Core operating expenses declined 6% year over year even as network volume expanded.
Dobres informed that core operating expenses are already sized for significant growth. Management’s posture coming out of the second quarter centers on scaling the existing platform, maintaining credit discipline and broadening committed funding sources.
PGY Zacks Signals Favor Value & Growth
PGY currently carries a Zacks Rank #3 (Hold), with Value and Growth Scores of A, a Momentum Score of D and a VGM Score of A. The profile combines strong value and growth characteristics with weaker momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Under the Zacks framework, A and B Style Scores are more favorable, while the strongest combinations generally pair those grades with a Zacks Rank #1 or #2 (Buy). PGY’s Zacks Rank can change as earnings estimates are revised after the just-reported results.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Pagaya Technologies Ltd. (PGY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
