What happened
Shares of Pagaya Technologies (NASDAQ: PGY) were up 19.9% as of 10:30 a.m ET Friday, according to data provided by S&P Global Market Intelligence, after the financial ecosystem AI infrastructure company announced better-than-expected second-quarter results.
Pagaya's quarterly revenue climbed 8% year over year, to $195.6 million -- well above the high end of guidance for a range of $180 million to $190 million -- translating to adjusted (non-GAAP) net income of $0.9 million, or slightly above breakeven on a per-share basis. Analysts, on average, were modeling an adjusted net loss of $0.02 per share on revenue of $187.8 million.
So what
Pagaya's revenue beat was largely driven by a 14% increase in revenue from fees, which comprised around 95% of its total top line. Network volume increased to $1.96 billion, also above its outlook for a range of $1.8 billion to $1.9 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly quadrupled on a year-over-year basis, to $17.5 million, far above guidance for a range of $5 million to $10 million.
"We delivered another strong quarter while advancing our core mission to connect more people to financial opportunity," stated Pagaya co-founder and CEO Gal Krubiner. "Network volume reached a record-high as we continued to achieve consistent results for our lending partners and investors."
Now what
As such, Pagaya reiterated its outlook for total revenue and other income of between $775 million and $825 million but also raised its full-year 2023 outlook to call for network volume of between $7.6 billion and $8.1 billion (up from between $7.5 billion and $8 billion previously) and adjusted EBITDA of between $40 million and $50 million (up from between $15 million and $30 million before).
In the end, this was a solid beat-and-raise performance from Pagaya, and its stock is simply responding in kind.
10 stocks we like better than Pagaya Technologies
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Pagaya Technologies wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 1, 2023
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
