PGY Gains as Q2 Earnings Beat on Record Revenues, 2026 View Raised

Net income attributable to Pagaya (GAAP basis) was a record $45.3 million, up significantly from $16.7 million in the prior-year quarter.

PGY’s Revenues Improve, Expenses Rise

Total revenues and other income were a record $387 million, up 18.6% year over year. The increase was driven by a rise in interest income and revenues from fees. A decline in net investment loss also supported the rise. The top line surpassed the Zacks Consensus Estimate of $358.2 million.

Total costs and operating expenses increased 4.2% year over year to $281.2 million. The rise was due to higher production costs.

In the second quarter, network volume was a record $3.54 billion, which grew 33.5% year over year, driven by growth in the company’s auto vertical, while maintaining focus on prudent underwriting.

Revenue from fees less production costs (FRLPC) was a record $146.9 million, which increased 16.4% year over year.

FRLPC as a percentage of network volume contracted by 60 basis points (bps) year over year to 4.2%, driven by asset class mix, new partner and product contributions, and tighter pricing on the asset-backed securities (ABS) transactions reflecting higher cost of capital in light of market conditions.

PGY’s Balance Sheet Solid

As of June 30, 2026, total assets were $1.69 billion, up 9.5% from Dec. 31, 2025.

Long-term debt was $471.9 million and shareholders’ equity was $594.2 million.

In the second quarter, the company raised a record $3.7 billion in ABS funding across six transactions.

PGY Management’s Outlook

Q3

Management expects network volume of $3.425-$3.625 billion.

Total revenues are expected between $370 million and $390 million.

The adjusted EBITDA is expected to be $120-$130 million and GAAP net income is anticipated to be $42-$52 million.

2026

The company raised its 2026 outlook.

Network volume of $12.5-$13.25 billion is expected, changed from the previously mentioned $11.45-$13 billion.

Total revenues are projected to be $1.425-$1.525 billion, changed from the previous $1.4-$1.575 billion.

Management raised its full-year net income guidance as well. It expects GAAP net income of $155-180 million, up from the previously mentioned $110-$160 million. Similarly, adjusted EBITDA is expected to be $460-$490 million, up from the previously stated $420-$460 million.

Our Take on Pagaya

Secular growth in embedded credit, rising efficiency, diversified funding sources and broader multi-product adoption will likely continue to drive Pagaya’s scalable and profitable expansion in the near term. However, uncertainty around the single-family rental strategy might limit the company’s near-term volumes.

Currently, PGY carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Expected Earnings Release of PGY’s Peers

LendingTree, Inc. TREE reported second-quarter 2026 adjusted net income per share of $1.27, which missed the Zacks Consensus Estimate of $1.46. The figure compares favorably with $1.13 in the prior-year quarter.

TREE’s results were affected by a decline in Consumer segment revenues and higher total costs. However, growth in revenues and adjusted EBITDA, along with strong Insurance segment performance, supported the results to some extent.

Upstart Holdings, Inc. UPST is scheduled to report quarterly results on Aug. 4.

The Zacks Consensus Estimate for UPST’s quarterly earnings has been unchanged at 58 cents over the past week. The figure indicates 61.1% growth from the prior-year quarter’s actual.

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This article originally published on Zacks Investment Research (zacks.com).

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