Pagaya tops Q3 estimates, CEO addresses credit loss concerns

Pagaya Technologies (PGY, PGYWW) exceeded Wall Street expectations in its third quarter, generating revenue of $257.23 million, surpassing the projected $249.68 million. Adjusted earnings per share reached $0.44, outperforming Wall Street's forecast of $0.22 by two-fold. Despite these strong results, the stock faced downward pressure due to larger-than-expected credit losses during the quarter. Pagaya CEO Gal Krubiner joins Market Domination to discuss the company's $70 million charge to its third quarter balance sheet. "The reality is that these types of charges that we saw coming on the balance sheet... are actually from transactions that we did in 2023, that are maturing these days," he explains to Julie Hyman and Josh Lipton. Krubiner notes that during that period, high benchmark rates and elevated capital market costs made financing consumer lending expensive. "What you see right now is the seasoning of these assets that are coming into play with a very high cost of capital of the transaction that had been closed to finance these assets that are impairing what is being left on the balance sheet from that spread," Krubiner elaborates. However, he adds that "the more important piece is that when you think about the future and how these asset classes are performing, they're actually performing very well." To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Angel Smith