Oct 29, 2026 earnings call — Banks join Pagaya network, funding expands
Pagaya delivered record GAAP net income of $50 million and grew network volume 29% to $3.6 billion.
Revenue $0.4B (est $0.4B) · EPS $1.07 (est $0.47) · Next-quarter revenue outlook $1.4B–$1.5B
Key quotes
"This quarter, we are pleased to welcome 2 new bank partners, Citizens Financial Group for Personal Loans and FNBO for home improvement point-of-sale financing."
"We executed $1.8 billion of personal loan securitization and $1.2 billion of auto securitizations in Q3 and increased our investor network to over 180 unique investors."
"In the short term, higher rates lower FRLPC as a percentage of volume. Q3 came in at 4.1%, the low end of our 4% to 5% target range."
Analyst Q&A 10
new bank deals and Q4 volume
Q (John Hecht · Jefferies): Why did Citizens and FNBO sign up, and how is the pipeline evolving? Also, what drives the Q4 volume guide and mix, including approval rates?
A: Management said banks are shifting to Pagaya because it is faster and easier than building internal programs, letting banks relaunch products in months not years. They said the pipeline is growing, driven by big banks, and Q4 volume mix is similar to the year with PL largest and Auto growing; Klarna removal reduces volume but not FRLPC EBITDA.
"So we can take a project that could take for a bank something like 2 to 3 years and with our technology capabilities and with the capital market capabilities, really to bring it up to life in 6 to 9 months." — Gal Krubiner (CEO)
borrower quality and operating leverage
Q (Sanjay Sakhrani · KBW): How does moving to larger banks change loan types and borrower quality? Will operating leverage persist or require more investment?
A: Management said larger banks give access to higher-income borrowers and better collateral, citing Personal Loan average application income around $120,000 and Auto borrower income rising to $88,000. They added onboarding has scaled without higher costs and they expect continued operating leverage as partners and volume grow.
"If you take a look on, for example, the personal loan and the actual income of what it used to be a year ago, was much lower, and now we're talking about $120,000 for application." — Gal Krubiner (CEO)
spread tightening and funding mix
Q (Moshe Orenbuch · TD Cowen): Why are spreads tightening despite broader market moves, and what does that mean for Q4 and 2027?
A: Management said credit performance is strong and their funding has become more diverse, shifting from mainly prefunded ABS to a mix of channels, which is lowering spreads. They also highlighted new revolving structures, forward flow and bank-led warehouses that further reduce cost of capital and support growth.
"We set a strategy to have a long-term diverse committed capital base." — Jonathan Dobres (CFO)
FRLPC level drivers
Q (Kyle Joseph · Stephens): Will FRLPC move back toward prior mid-4% range and how do new partners affect it?
A: Management said they already pushed APR increases through and as those moves flow into performance, FRLPC should move up into the 4%–5% range in 2027. They said new partners lower FRLPC at first, but as partners mature their rates converge to similar levels, so FRLPC should recover over time.
"On the rate side, we've moved these APR increases through." — Jonathan Dobres (CFO)
pipeline size and partner value
Q (Peter Christiansen · Citi): How should we size the larger pipeline and are new pipeline partners materially bigger than prior cohorts?
A: Management said the pipeline is 50% larger year-over-year and is shifting toward major banks, which can generate much larger volume and fee income. They added that individual partners can eventually contribute tens of millions of annual contribution margin, and Auto OEM engagements are another sizable growth source.
"we kind of like have a line in sight for each partner to eventually contribute $30 million of annual in contribution margin." — Gal Krubiner (CEO)
how much growth expense can support
Q (Guru Sidaarth · Oppenheimer): How much extra volume can current costs handle before you must increase spending, and where would incremental spending go?
A: Management said operating leverage is a built-in feature and they can keep onboarding pipeline partners in current asset classes without increasing operating costs. They expect that trend to continue so earnings can grow faster than FRLPC under current cost structure.
"As Sanjiv mentioned earlier, the operating leverage is a feature of our business model." — Jonathan Dobres (CFO)
multi-product onboarding pace
Q (Harold Goetsch · B. Riley): Are new lenders launching multiple products at onboarding now versus one product before? How fast can they scale?
A: Management said lenders now start with multiple capabilities from day 1 because Pagaya embeds all products in its API, unlike a year ago when they launched one product at a time. That multi-product onboarding helps accelerate growth and explains the faster ramp.
"The short answer is that they are starting with multiple capabilities on day 1." — Sanjiv Das (PRESIDENT)
consumer response to rate increases
Q (David Scharf · Citizens): After raising APRs, have you seen changes in consumer application behavior or delinquencies? Also, thoughts on Affiliate Optimizer and channel shifts?
A: Management said they have not seen adverse consumer behavior or delinquencies; they noted the broader market moved rates too and their borrowers are higher income so a 1% increase is not materially harmful. On channels, they plan to be everywhere and work with agents, comparison sites or direct flows, focusing on infrastructure to close loans regardless of channel.
"Just this morning, the GDP was in the last quarter was the highest it's been in the last year." — Gal Krubiner (CEO)
rate moves and partner guidance
Q (Joseph Vafi · Canaccord Genuity): If the Fed tightens more, what are the model impacts? Will partner onboarding guidance increase next year?
A: Management said rate expectations are largely embedded and their APR moves provide a buffer; on partners they will keep guidance at 2 to 4 partners a year, noting demand is strong but onboarding timing can be outside their control. They prefer to keep the same responsible guidance.
"we'd like to keep our guidance the same that we've always had, which is 2 to 4 partners a year." — Sanjiv Das (PRESIDENT)
credit impact of higher APRs
Q (Randy Binner · Texas Capital): Does higher APR hurt borrowers' ability to pay, and is there a level where it becomes harmful?
A: Management said so far higher APRs have not hurt payment ability for their higher-income borrowers and small increases (50–150 basis points) transmitted over time do not materially affect ability to pay. They noted very large moves (400–600 basis points) could materially impact borrower ability to pay.
"I would just say that like since we are already at elevated high interest rate, like even now we're at 4 points, it's not like we are at 0." — Gal Krubiner (CEO)