Pagaya Technologies (NASDAQ:PGY) expects recently signed lending partners to begin contributing material loan volume in the second half of 2027, while it pursues a large auto manufacturer and another large bank as potential partners, Chief Financial Officer Jon Dobres said at a company discussion.
Dobres said Pagaya has more than 35 lending partners across personal loans, auto loans and point-of-sale financing. Its network produced a run rate of approximately $14 billion in funded loans over the past 12 months and a $200 million run rate of GAAP net income, he said.
The CFO said most of Pagaya’s new partners this year were in personal loans, including Citizens, while FNBO was a point-of-sale addition. New relationships typically ramp slowly because Pagaya wants to observe actual loan performance before increasing volume, he said.
Credit stance and partner growth
Dobres said Pagaya limited originations in its riskiest tiers around the end of 2025 and beginning of 2026, not because it was seeing pressure in those tiers but because lower-income borrowers are more exposed to persistent inflation.
Pagaya’s personal loan originations now have average borrower income of approximately $120,000 to $125,000 and average FICO scores in the high 600s, he said. Dobres said the company’s credit stance has not changed since the earlier adjustment and that he is comfortable with current underwriting and performance.
In auto lending, Pagaya grew this year without adding a material number of new partners, Dobres said. He attributed growth in part to working with existing lenders, including Ally, to reach borrower groups beyond applicants those lenders had initially declined.
Dobres said Pagaya feels comfortable that it will add a large auto original equipment manufacturer in the first half of 2027. He also said the company feels good about adding another large bank for personal loans during 2027, though he did not name either prospective partner.
In point-of-sale lending, Dobres expects initial growth in 2027 to come largely from existing relationships, including Sezzle and FlexPay. Pagaya also sees additional prospective partners in that business, he said.
Funding and operating costs
Pagaya is diversifying its funding sources while continuing to use pre-funded asset-backed securities, Dobres said. He estimated that ABS represents roughly 50% of total funding, down from about 75% a year earlier. The shift is intended to diversify capital sources rather than respond to stress in the ABS market, he said.
Dobres said forward-flow arrangements, in which Pagaya sells whole loans, generally have less attractive economics than ABS but do not require the company to put up cash upfront. He said forward flow could represent approximately 15% to 20% of funding.
Pagaya has announced an off-balance-sheet warehouse with ATLAS SP Partners and expects a second, bank-led facility in auto lending to be online by the beginning of December, Dobres said. The latter would provide capital over a two-year committed period.
Dobres said Pagaya does not foresee material increases in its core operating expenses over its projection period under its current business plan. He said the company has the sales, technology, data science and compliance resources needed for its existing pipeline.
AI and potential new products
Pagaya processes an annual run rate of $1.4 trillion in loan application flow, Dobres said, calling the largely proprietary data a competitive differentiator for its underwriting models. He also said the company is preparing for AI-driven loan shopping as a potential acquisition channel, alongside existing affiliates such as Credit Karma and LendingTree.
Credit cards are the most likely next asset class for Pagaya, potentially within 12 to 18 months, Dobres said. He said the company would pursue the market through partnerships and is proceeding carefully. Elective medical lending is not a core focus, although Pagaya has some exposure through point-of-sale partners, he added.
About Pagaya Technologies (NASDAQ:PGY)
Pagaya Technologies Ltd. is a financial technology company that provides artificial intelligence and data analytics tools to banks, lenders and other financial institutions. Its technology helps partners evaluate consumer credit applications and connect approved borrowers with funding from institutional investors. The company’s network supports lending products such as personal loans, auto loans and point-of-sale financing. Pagaya works with its partners to help expand their lending capacity while providing investors with access to credit-related assets.
