PGY

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated interim financial statements included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and our audited annual consolidated financial statements as of and for the year ended December 31, 2025, and the related notes included in our Annual Report on Form 10-K filed on March 2, 2026, and as amended on April 30, 2026 and June 1, 2026 (collectively, the “2025 Annual Report on Form 10-K”). Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of the 2025 Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. In this section “we,” “us,” “our” and “Pagaya” refer to Pagaya Technologies Ltd. Company Overview Pagaya’s mission is to deliver more financial opportunity to more people, more often. We believe our mission will be accomplished by becoming the trusted lending technology partner for the consumer finance ecosystem, with an expansive product suite (the fee-generating side of our business) fueled by effective and efficient capital and risk management (the capital efficiency side of our business). Both sides of our business working harmoniously to meet the complex needs of the leading financial institutions. We are a product-focused technology company that deploys sophisticated data science and proprietary, AI-powered technology to enable better outcomes for financial institutions, their existing and potential customers, and institutional or sophisticated investors. We have built, and we are continuing to scale, a leading AI and data network for the benefit of financial services and other service providers, their customers, and investors. Services providers integrated in our network, which we refer to as our ‘‘Partners,’’ range from high-growth financial technology companies to incumbent banks and financial institutions. We believe Partners benefit from our network to extend financial products to their customers, in turn helping those customers fulfill their financial needs. These assets originated by Partners with the assistance of Pagaya’s AI technology are eligible to be acquired by (i) investment funds managed or advised by Pagaya or one of its affiliates, (ii) asset backed securitization (“ABS”) vehicles sponsored or administered by Pagaya or one of its affiliates, (iii) special purpose vehicles established by third-party investors to facilitate the purchase of assets under forward flow agreements and (iv) other similar vehicles (“Financing Vehicles”). In recent years, investments in digitization have improved the front-end delivery of financial products, upgrading customer experience and convenience. Notwithstanding these advances, we believe underlying approaches to the determination of creditworthiness for financial products are often outdated and overly manual. In our experience, providers of financial services tend to utilize a limited number of factors to make decisions, operate with siloed technology infrastructure and have data limited to their own experience. As a result, we believe financial services providers approve a smaller proportion of their application volume than is possible with the benefit of modern technology, such as our AI technology and data network. At our core, we are a technology company that deploys data science and technology to drive better results across the financial ecosystem. We believe our solution drives a “win-win-win” for Partners, their customers and potential customers, and investors. First, by utilizing our network, Partners are able to approve more customer applications, which we believe drives superior revenue growth, enhanced brand affinity, opportunities to promote other financial products and decreased unit-level customer acquisition costs. Partners realize these benefits with limited incremental risk or funding requirements. Second, Partners’ customers benefit from enhanced and more convenient access to financial products. Third, investors benefit through gaining exposure to these assets originated by Partners with the assistance of our AI technology and acquired by the Financing Vehicles through our network. Our Economic Model Pagaya’s revenues are primarily derived from Network Volume. We define Network Volume as the gross dollar value of assets originated by our Partners with the assistance of our artificial intelligence (“AI”) technology1. We generate revenue from network AI fees, contract fees, interest income and investment income. Revenue from fees is comprised of network AI fees and contract fees. Network AI fees can be further broken down into two fee streams, including AI integration fees and capital markets 1 Our proprietary technology uses machine learning models as a subset of artificial intelligence that go through extensive testing, validation, and governance processes before they can be used or modified. The machine learning models are static and do not have the ability to self-correct, self-improve, and/or learn over time. Any change to the models requires human intervention, testing, validation, and governance approvals before a change can be made. 28 Table of Contents execution fees. We primarily earn AI integration fees for the creation and delivery of the assets that comprise our Network Volume. Capital markets execution and contract fees are primarily earned from investors. Multiple funding channels are utilized to enable the purchase of network assets from our Partners, such as asset backed securitizations and forward flow arrangements. Capital markets execution fees are primarily earned from the market pricing of ABS transactions, as well as upon the execution of forward flow transactions, while contract fees are management, performance and similar fees. Additionally, we earn interest income from our investments in loans and securities, including risk retention holdings and additional investments we may make in our sponsored asset backed securitizations, and from our corporate cash balances. We earn investment income associated with our ownership interests in certain investment fund where Pagaya is the Registered Investment Advisor (“RIA”) and other proprietary investments. We incur costs when Network Volume is acquired by the Financing Vehicles. These costs, which we refer to as ‘‘Production Costs,’’ compensate our Partners for acquiring and originating assets. Accordingly, the amount and growth of our Production Costs are highly correlated to Network Volume. An important operating metric to evaluate the success of our economic model, therefore, is FRLPC, or Fee Revenue Less Production Costs. FRLPC is a not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). See the section below entitled “Reconciliation of Non-GAAP Financial Measures” for a description and reconciliation of this measure to the most directly comparable GAAP measure. Additionally, we have built what we believe to be a leading data science and AI organization that has enabled us to assist our Partners as they make decisions to extend credit to consumers. Excluding Production Costs, headcount, technology overhead and research and development expenses represent the most significant portion of our expenses. Key Factors Affecting Our Performance Expanded Usage of Our Network by Our Existing Partners Our AI technology typically enables Partners to convert a larger proportion of their application volume into originated loans, enabling them to expand their ecosystem and generate incremental revenues. Our Partners have historically seen rapid scaling of origination volume on our network shortly after onboarding and the contribution of Pagaya’s network to Partners’ total origination volume tends to increase over time. Additionally, we continue to introduce and develop new asset types, products and services, enabling Partners to expand their relationship with Pagaya and further increase origination volumes. Adoption of Our Network by New Partners We devote significant time to, and have a team that focuses on, onboarding and managing Partners to our network. We believe that our success in adding new Partners to our network is driven by our distinctive value proposition: driving significant revenue uplift to our Partners at limited incremental cost or credit risk to the Partner. Our success adding new Partners has contributed to our overall Network Volume growth and driven our ability to rapidly scale new asset classes and products. Continued Improvements to Our AI Technology We believe our historical growth has been significantly influenced by improvements to our AI technology, which are in turn driven both by the deepening of our proprietary data network and the strengthening of our AI technology. As our existing Partners grow their usage of our network, new Partners join our network, and as we expand our network into new asset classes and products, the value of our data asset increases. Our technology improvements thus benefit from a flywheel effect that is characteristic of AI technology, in that improvements are derived from a continually increasing base of training data for our technology. We have found, and we expect to continue to experience, that more data leads to more efficient pricing and greater Network Volume. Since inception, we have evaluated more than $4.2 trillion in application volume. In addition to the accumulation of data, we make improvements to our technology by leveraging the experience of our research and development specialists. Our research team is central to accelerating the sophistication of our AI technology and expanding into new markets and use cases. We are reliant on these experts’ success in making these improvements to our technology over time. Availability and Pricing of Funding from Investors 29 Table of Contents Regardless of market conditions, the availability and pricing of funding from investors is critical to our growth. We have diversified our investor network and will continue to seek to further diversify our investor base. For the six months ended June 30, 2026 and 2025, our top 5 investors collectively accounted for approximately 44% and 52%, respectively, of our total funding. Performance of Assets Originated with the Assistance of Our Proprietary Technology The availability of funding from investors is a function of demand for consumer credit, as well as the performance of such assets originated with the assistance of our AI technology and purchased by Financing Vehicles. Our AI technology and data-driven insights are designed to enable relative outperformance versus the broader market. We believe that investors in Financing Vehicles view our AI technology as an important component in delivering assets that meet their investment criteria. Impact of Macroeconomic Cycles and Global and Regional Conditions We expect economic cycles to affect our financial performance and related metrics. Macroeconomic conditions, including persistent inflation, elevated interest rates, supply chain constraints, geopolitical tensions, climate-related disruptions, and evolving global conflicts, may affect consumer demand for financial products, our Partners’ ability to generate and convert customer application volume, and the availability and cost of funding from investors through our Financing Vehicles. Geopolitical instability persists in the Middle East and Eastern Europe. The ongoing conflict between Israel, the U.S., and Iran that erupted in February 2026 has resulted in volatility and disruption of global energy and financial markets, which has increased our cost of capital and may diminish investor appetite for risk assets. Management is actively monitoring the situation for systemic risks and will continue to evaluate our operational protocols as the security landscape evolves. Although these regional dynamics remain a source of uncertainty, to date we have not experienced material impacts on our business from this conflict. Prolonged hostilities or further escalation of this conflict could exacerbate disruptions to the global energy and financial markets, global inflationary pressures, and supply chain challenges, all of which could adversely affect consumer credit demand, investor appetite for risk assets, and our Network Volume. Macroeconomic pressures, including sustained high interest rates and inflation, continue to shape our operating environment. Central banks, including the Federal Reserve, have maintained elevated rates into early 2026 to combat inflationary trends, increasing borrowing costs and potentially straining borrowers’ ability to service debt. This could lead to higher delinquencies, defaults, and charge-offs, reducing investor returns and dampening demand for assets generated on our platform. Inflation, though moderating from its 2022-2023 peak, remains above historical norms, driving up operating costs such as employee compensation, financing expenses, and technology investments. Meanwhile, the elevated risk-free rate environment has shifted investor preferences, with some favoring safer assets over consumer credit. While our ability to raise funding remains intact, the cost of capital has risen, necessitating adjustments in conversion ratios to meet investor return expectations. Adverse developments in the financial sector, such as regional bank stresses, liquidity concerns, or prolonged U.S. federal debt ceiling debates, could further complicate our operating landscape. Should these events escalate into systemic liquidity issues, they could impair our Partners’ and counterparties’ ability to meet obligations, disrupt funding flows, or destabilize financial markets, adversely affecting our performance. Similarly, ongoing trade tensions, particularly between the U.S. and China, and potential tariff escalations could introduce additional uncertainty. Economic downturns or prolonged uncertainty may pressure the performance of assets acquired by Financing Vehicles from our network. Key Operating Metric We collect and analyze operating and financial data of our business to assess our performance, formulate financial projections and make strategic decisions. In addition to total revenues, net operating income, other measures under U.S. GAAP, and certain non-GAAP financial measures (see the section below entitled “Reconciliation of Non-GAAP Financial Measures”), we consider Network Volume to be a key operating metric we use to evaluate our business. The following table sets forth our Network Volume for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Network Volume $ 3,535 $ 2,648 $ 6,159 $ 5,048 30 Table of Contents Network Volume We believe that Network Volume metric is a helpful indicator for our overall scale and reach, as we generate revenue primarily on the basis of Network Volume. In addition, Network Volume directly influences Fee Revenue Less Production Cost (FRLPC), a key non-GAAP measure we use to assess operational efficiency. While maintaining a focus on profitable growth, which may result in a different targeted volume mix, we believe the growth in Network Volume highlights the scalability of our business, which, in turn, affects our operational leverage and profitability. Network Volume is primarily driven by our relationships with our Partners. We believe Network Volume has benefited from continuous improvements to our proprietary technology, enabling our network to more effectively identify assets for acquisition by the Financing Vehicles, thereby providing additional investment opportunities to investors. As a result, when viewed in combination with financial profitability metrics, the expansion of Network Volume provides insights into the effectiveness of our business strategies and the ability to leverage operational efficiencies across different asset classes. Network Volume is comprised of assets across several asset classes, including personal loans, auto loans, and point-of-sale receivables. Components of Results of Operations Revenue We generate revenue from network AI fees, contract fees, interest income and investment income. Network AI fees and contract fees are presented together as Revenue from fees in the consolidated financial statements. Revenue from fees is recognized after applying the five-step model consistent with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Consumers” (“ASC 606”). Revenue from fees is inclusive of network AI fees and contract fees. Network AI fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees. We earn AI integration fees for the creation and delivery of the assets that comprise our Network Volume. Multiple funding channels are used to enable the purchase of network assets from our Partners, such as ABS and forward flow arrangements. Capital markets execution fees are earned from the market pricing of ABS transactions, as well as upon the execution of forward flow transactions. Contract fees. Contract fees primarily include administration and management fees, and performance fees. Administration and management fees are contracted upon the establishment of ABS trusts and investment funds. These fees are earned as the ABS trusts purchase loans and as the Company provides services to the ABS trusts and investment funds over their remaining lives. Performance fees are earned if certain Financing Vehicles exceed contractual return hurdles for investors and a significant reversal in the amount of cumulative revenue recognized is not expected to occur. We also earn interest income from our investments in loans and securities, including risk retention holdings and additional investments we may make in our sponsored asset backed securitizations, and our corporate cash balances. We earn investment income associated with our ownership interests in certain investment funds where we are the RIA and other proprietary investments. Costs and Operating Expenses Costs and operating expenses consist of Production Costs, technology, data and product development expenses, sales and marketing expenses, and general and administrative expenses. Salaries and personnel-related costs, including benefits, bonuses, share-based compensation, and outsourcing comprise a significant component of several of these expense categories. A portion of our non-share-based compensation expense and, to a lesser extent, certain operating expenses (excluding Production Costs) are denominated in the new Israeli shekel (“NIS”), which could result in variability in our operating expenses which are presented in U.S. Dollars. Production Costs Production Costs are primarily comprised of expenses incurred when Network Volume is transferred from Partners into Financing Vehicles, as our Partners are responsible for marketing and customer interaction and facilitating additional application flow. Accordingly, the amount and growth of our Production Costs are highly correlated to Network Volume. Technology, Data and Product Development 31 Table of Contents Technology, data and product development expenses primarily comprise costs associated with the maintenance and ongoing development of our network and AI technology, including salaries and personnel-related costs, allocated overhead, and other development-related expenses. Technology, data and product development costs, net of amounts capitalized in accordance with U.S. GAAP, are expensed as incurred. Capitalized internal-use software is amortized on a straight-line method over the estimated useful life, which averages three years. We have invested and believe continued investments in technology, data and product development are important to achieving our strategic objectives. Sales and Marketing Sales and marketing expenses, related to Partner onboarding, development, and relationship management, as well as capital markets investor engagement and marketing, are comprised primarily of salaries and personnel-related costs, as well as the costs of certain professional services, and allocated overhead. Sales and marketing expenses are expensed as incurred. Sales and marketing expenses in absolute dollars may fluctuate from period to period based on the timing of our investments in our sales and marketing functions. These investments may vary in scope and scale over future periods depending on our pipeline of new Partners and strategic investors. General and Administrative General and administrative expenses primarily comprise salaries and personnel-related costs for our executives, finance, legal and other administrative functions, insurance costs, professional fees for external legal, accounting and other professional services and allocated overhead costs. General and administrative expenses are expensed as incurred. Gains and (Losses) on Investments in Loans and Securities Gains and (losses) on investments in loans and securities primarily reflects changes in fair value that management identifies as credit losses or reversals of previously recognized credit losses, including remeasurements of investments accounted for under the fair value option, and any gain or loss realized upon sale or termination of such instruments. As of the end of each reporting period, management reviews each available for sale security where the fair value is less than the amortized cost to determine whether any portion of the decline in fair value is due to a credit loss and/or whether or not we intend to sell or will be required to sell such security before recovery of its amortized cost basis. The portion of any recovery (or decline) in fair value which management identifies as a credit loss (or a reversal of previously recognized credit loss) is recognized as gain (or loss) on investments in loans and securities. Other Expenses, Net Other expenses, net primarily consists of interest expenses from borrowings, allowance for doubtful accounts, changes in the fair value of warrant liabilities, and other non-recurring items. Gains and (Losses) from Extinguishment of Debt Gains and (losses) from extinguishment of debt represents the difference between the reacquisition price and the net carrying amount of any retired debt. These amounts include gains from debt repurchases at a discount and losses related to early payment penalties and the write-off of unamortized deferred issuance costs and original issue discounts. Such amounts are recognized in the unaudited condensed consolidated statements of income upon the settlement of the underlying obligations. Income Tax (Benefit) Expense We account for taxes on income in accordance with ASC 740, “Income Taxes” (“ASC 740”). We are eligible for certain tax benefits in Israel as a Preferred Technological Enterprise (“PTE”), where income is generally subject to a 12% tax rate unless subject to Pillar Two taxation. Following Israel’s adoption of the OECD Pillar Two framework and the introduction of a Qualified Domestic Minimum Top-Up Tax (“QDMTT”) in late 2025, we became subject to a minimum corporate tax rate of 15%. Accordingly, as we generate taxable income in Israel, our effective tax rate is expected to be lower than the statutory corporate tax rate for Israeli companies of 23%, but subject to the 15% minimum corporate tax rate. Our taxable income generated in the United States or derived from other sources in Israel which is not eligible for tax benefits will be subject to the regular corporate tax rate in their respective tax jurisdictions. Net Loss Attributable to Noncontrolling Interests 32 Table of Contents Net loss attributable to noncontrolling interests in the unaudited condensed consolidated statements of income is a result of our investments in certain of our consolidated variable interest entities (‘‘VIEs’’) and consists of the portion of the net loss of these consolidated entities that is not attributable to us. Results of Operations The following table sets forth operating results for the periods indicated (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue Revenue from fees $ 365,639 $ 317,714 $ 664,630 $ 600,418 Other Income Interest income 22,205 10,739 39,871 18,415 Investment (loss) income, net (802) (2,055) 485 (2,446) Total Revenue and Other Income 387,042 326,398 704,986 616,387 Production costs 218,715 191,465 396,276 358,548 Technology, data and product development (2) 17,348 18,455 33,288 37,899 Sales and marketing (2) 10,087 19,660 21,219 29,254 General and administrative (2) 35,093 40,349 68,399 86,532 Total Costs and Operating Expenses 281,243 269,929 519,182 512,233 Operating Income 105,799 56,469 185,804 104,154 Gains and (losses) on investments in loans and securities (1) (42,318) (14,251) (80,314) (43,275) Other expenses, net (1) (22,972) (20,181) (38,438) (38,890) Gains and (losses) from extinguishment of debt (1) 737 (496) 1,504 (496) Income Before Income Taxes 41,246 21,541 68,556 21,493 Income tax (benefit) expense (1,088) 4,978 2,061 2,438 Net Income Including Noncontrolling Interests 42,334 16,563 66,495 19,055 Less: Net loss attributable to noncontrolling interests (2,939) (92) (3,472) (5,493) Net Income Attributable to Pagaya Technologies Ltd. $ 45,273 $ 16,655 $ 69,967 $ 24,548 Earnings per share attributable to Pagaya Technologies Ltd.’s ordinary shareholders: Basic $ 0.53 $ 0.20 $ 0.82 $ 0.30 Diluted $ 0.49 $ 0.20 $ 0.77 $ 0.29 Weighted average shares outstanding: Basic 83,184,935 76,873,529 82,926,257 76,347,801 Diluted 97,247,579 79,667,635 96,963,421 78,301,110 (1) Prior period amounts have been reclassified to conform to the current period’s presentation. (2) The following table sets forth share-based compensation for the periods indicated below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Technology, data and product development $ 1,061 $ 1,326 $ 2,255 $ 2,423 Sales and marketing 1,584 8,731 3,115 13,511 General and administrative 5,924 8,171 10,395 15,466 Total share-based compensation in operating expenses $ 8,569 $ 18,228 $ 15,765 $ 31,400 Comparison of Three Months Ended June 30, 2026 and 2025 33 Table of Contents Total Revenue and Other Income Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Revenue from fees $ 365,639 $ 317,714 $ 47,925 15 % Interest income 22,205 10,739 11,466 107 % Investment (loss) income, net (802) (2,055) 1,253 61 % Total Revenue and Other Income $ 387,042 $ 326,398 $ 60,644 19 % Total revenue and other income, increased by $60.6 million, or 19%, to $387.0 million for the three months ended June 30, 2026, compared to $326.4 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in revenue from fees and interest income. Revenue from fees for the three months ended June 30, 2026 increased by $47.9 million, or 15%, to $365.6 million, compared to $317.7 million for the three months ended June 30, 2025. The increase was primarily due to a $32.5 million increase in Network AI fees, comprised of AI integration fees and capital markets execution fees, to $318.4 million for the three months ended June 30, 2026 from $285.9 million for the three months ended June 30, 2025. The increase in Network AI fees was primarily driven by improved economics in AI integration fees earned from certain Partners, as well as growth in Network Volume, which increased by 33% to $3.5 billion for the three months ended June 30, 2026 from $2.6 billion for the three months ended June 30, 2025. Contract fees, comprised of administration and management fees, performances fees, and servicing fees, increased by $15.5 million to $47.2 million for the three months ended June 30, 2026 from $31.8 million for the three months ended June 30, 2025, reflecting an increase in the assets held by securitization vehicles driven by continued business growth. Interest income for the three months ended June 30, 2026 increased by $11.5 million, or 107%, to $22.2 million compared to $10.7 million for the three months ended June 30, 2025. The increase in interest income was directly related to our investments in loans and securities, including risk retention holdings and related securities held in our consolidated VIEs, as well as certain risk retention holdings held directly by our consolidated subsidiaries. For further information, see “—Net Loss Attributable to Noncontrolling Interests.” The increase was primarily the result of a higher average balance in investments in loans and securities, as well as changes in the structure and composition of our asset portfolio toward a greater proportion of cash-yielding senior note tranches of our sponsored securitization transactions. Investment loss for the three months ended June 30, 2026 decreased by $1.3 million to $0.8 million, compared to $2.1 million for the three months ended June 30, 2025, reflecting a less unfavorable impact from the change in valuation of certain proprietary investments. Costs and Operating Expenses Three Months Ended June 30, 2026 2025 (in thousands) Production costs $ 218,715 $ 191,465 Technology, data and product development 17,348 18,455 Sales and marketing 10,087 19,660 General and administrative 35,093 40,349 Total Costs and Operating Expenses $ 281,243 $ 269,929 Production Costs Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Production costs $ 218,715 $ 191,465 $ 27,250 14 % Production costs for the three months ended June 30, 2026 increased by $27.3 million, or 14%, to $218.7 million, compared to $191.5 million for the three months ended June 30, 2025. The increase was due to growth in Network Volume, which increased by 33% to $3.5 billion for the three months ended June 30, 2026 from $2.6 billion for the three months ended June 30, 2025, 34 Table of Contents attributable to continued business growth as well as shifts in the composition of the asset classes and products comprising our Network Volume. Technology, Data and Product Development Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Technology, data and product development $ 17,348 $ 18,455 $ (1,107) (6) % Technology, data and product development costs for the three months ended June 30, 2026 decreased by $1.1 million, or 6%, to $17.3 million, compared to $18.5 million for the three months ended June 30, 2025. The decrease was driven by a $3.3 million decrease in depreciation expenses, net of capitalization (as explained below). The reduction in depreciation expense was primarily due to an increase in the estimated useful life of internal-use software effective January 1, 2026. This decrease was partially offset by a $1.4 million increase in compensation expenses primarily driven by the appreciation of the Israeli Shekel against the U.S. Dollar. During the three months ended June 30, 2026 and 2025, we capitalized $3.9 million and $4.0 million of software development costs, respectively. Depreciation expense was $2.6 million and $5.9 million during the three months ended June 30, 2026 and 2025, respectively. Sales and Marketing Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Sales and marketing $ 10,087 $ 19,660 $ (9,573) (49) % Sales and marketing costs for the three months ended June 30, 2026 decreased by $9.6 million, or 49%, to $10.1 million, compared to $19.7 million for the three months ended June 30, 2025. The decrease was primarily driven by a $10.1 million decrease in compensation expenses, including shared-based compensation, which was partially offset by a $0.3 million increase in amortization of intangible assets. General and Administrative Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) General and administrative $ 35,093 $ 40,349 $ (5,256) (13) % General and administrative costs for the three months ended June 30, 2026 decreased by $5.3 million, or 13%, to $35.1 million, compared to $40.3 million for the three months ended June 30, 2025. Excluding the impact of one-time item of $2.4 million in the prior year period, general and administrative expenses decreased by $2.8 million due to a $2.2 million decrease in share-based compensation and a $0.4 million decrease in miscellaneous expenses. Gains and (Losses) on Investments in Loans and Securities Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Gains and (losses) on investments in loans and securities $ (42,318) $ (14,251) $ (28,067) (197) % Losses on investments in loans and securities for the three months ended June 30, 2026 increased by $28.1 million, or 197% to $42.3 million, compared to $14.3 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in credit-related impairment losses on ABS securities. Of the credit-related impairment loss in the current period, $4.3 million is attributable to the noncontrolling interests in certain VIEs and accordingly does not impact net income attributable to Pagaya shareholders. 35 Table of Contents Other Expense, Net Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Other expense, net $ (22,972) $ (20,181) $ (2,791) (14) % Other expense, net for the three months ended June 30, 2026 increased by $2.8 million, or 14%, to $23.0 million, compared to $20.2 million for the three months ended June 30, 2025. The increase was primarily driven by a $3.5 million of a reserve against certain assets during the current period and the absence of a $2.2 million favorable adjustment on the contingent liability associated with the Theorem acquisition recorded in the prior year period. These increases were partially offset by lower interest expenses of $3.4 million. Gains and (Losses) from Extinguishment of Debt Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Gains and (losses) from extinguishment of debt $ 737 $ (496) $ 1,233 NM NM: Not Meaningful Gain from extinguishment of debt for the three months ended June 30, 2026 was $0.7 million, compared to a loss of $0.5 million for the three months ended June 30, 2025. The $0.7 million gain resulted from the repurchase of $3.8 million of the outstanding 2030 Notes at a price equal to 78.5% of the principal amount during the current period. Income Tax (Benefit) Expense Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Income tax (benefit) expense $ (1,088) $ 4,978 $ (6,066) NM Income tax benefit for the three months ended June 30, 2026 was $1.1 million, compared to income tax expense of $5.0 million for the three months ended June 30, 2025. The change was primarily attributable to a favorable change in uncertain tax positions and the utilization of net operating loss carryforwards. Net Loss Attributable to Noncontrolling Interests Three Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Net loss attributable to noncontrolling interests $ (2,939) $ (92) $ (2,847) NM Net loss attributable to noncontrolling interests for the three months ended June 30, 2026 increased by $2.8 million to $2.9 million, compared to $0.1 million for the three months ended June 30, 2025. The increase was driven by the net loss generated by our consolidated VIEs associated with investments in asset backed securitizations. This amount represented the net loss of the consolidated VIEs held by other investors in the VIEs for which we have no economic rights. This amount was primarily driven by $4.3 million of credit-related impairment losses in the current period. For further information regarding credit-related impairment losses, see “—Total Revenue and Other Income” and “—Gains and (Losses) on Investments in Loans and Securities.” Comparison of Six Months Ended June 30, 2026 and 2025 Total Revenue and Other Income 36 Table of Contents Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Revenue from fees $ 664,630 $ 600,418 $ 64,212 11 % Interest income 39,871 18,415 21,456 117 % Investment (loss) income, net 485 (2,446) 2,930 NM Total Revenue and Other Income $ 704,986 $ 616,387 $ 88,599 14 % Total revenue and other income for the six months ended June 30, 2026 increased by $88.6 million, or 14%, to $705.0 million, compared to $616.4 million for the six months ended June 30, 2025. The increase was primarily driven by an increase in revenue from fees and interest income. Revenue from fees for the six months ended June 30, 2026 increased by $64.2 million, or 11%, to $664.6 million, compared to $600.4 million for the six months ended June 30, 2025. The increase was primarily due to a $46.0 million increase in Network AI fees, comprised of AI integration fees and capital markets execution fees, to $585.4 million for the six months ended June 30, 2026 from $539.3 million for the six months ended June 30, 2025. The increase in Network AI fees was primarily driven by improved economics of AI integration fees earned from certain Partners, as well as the growth in Network Volume, which increased by 22% to $6.2 billion for the six months ended June 30, 2026 from $5.0 billion for the six months ended June 30, 2025. Contract fees, comprised of administration and management fees, performances fees, and servicing fees, increased by $18.2 million to $79.3 million for the six months ended June 30, 2026 from $61.1 million for the six months ended June 30, 2025, reflecting an increase in the assets held by securitization vehicles driven by continued business growth. Interest income for the six months ended June 30, 2026 increased by $21.5 million, or 117%, to $39.9 million compared to $18.4 million for the six months ended June 30, 2025. The increase in interest income was directly related to our investments in loans and securities, including risk retention holdings and related securities held in our consolidated VIEs, as well as certain risk retention holdings held directly by our consolidated subsidiaries. For further information, see “—Net Loss Attributable to Noncontrolling Interests.” The increase was primarily the result of a higher average balance in investments in loans and securities, as well as changes in the structure and composition of our asset portfolio toward a greater proportion of cash-yielding senior note tranches of our sponsored securitization transactions. Investment income for the six months ended June 30, 2026 was $0.5 million, compared to a loss of $2.4 million for the six months ended June 30, 2025, reflecting a favorable impact from the change in valuation of certain proprietary investments. Costs and Operating Expenses Six Months Ended June 30, 2026 2025 (in thousands) Production costs $ 396,276 $ 358,548 Technology, data and product development 33,288 37,899 Sales and marketing 21,219 29,254 General and administrative 68,399 86,532 Total Costs and Operating Expenses $ 519,182 $ 512,233 Production Costs Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Production costs $ 396,276 $ 358,548 $ 37,728 11 % Production costs for the six months ended June 30, 2026 increased by $37.7 million, or 11%, to $396.3 million, compared to $358.5 million for the six months ended June 30, 2025. The increase was due to growth in the Network Volume, which increased by 22% to $6.2 billion for the six months ended June 30, 2026 from $5.0 billion for the six months ended June 30, 2025, attributable to continued business growth as well as shifts in the composition of the asset classes comprising our Network Volume. 37 Table of Contents Technology, Data and Product Development Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Technology, data and product development $ 33,288 $ 37,899 $ (4,611) (12) % Technology, data and product development costs for the six months ended June 30, 2026 decreased by $4.6 million, or 12%, to $33.3 million, compared to $37.9 million for the six months ended June 30, 2025. The decrease was driven by a $6.5 million decrease in depreciation expenses, net of capitalization (as explained below). The reduction in depreciation expense was primarily due to an increase in the estimated useful life of certain internal-use software effective January 1, 2026. This decrease was partially offset by a $2.0 million increase in compensation expenses primarily driven by the appreciation of the Israeli Shekel against the U.S. Dollar. During the six months ended June 30, 2026 and 2025, we capitalized $7.5 million and $8.4 million of software development costs, respectively. Depreciation expense was $4.7 million and $12.2 million during the six months ended June 30, 2026 and 2025, respectively. Sales and Marketing Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Sales and marketing $ 21,219 $ 29,254 $ (8,035) (27) % Sales and marketing costs for the six months ended June 30, 2026 decreased by $8.0 million, or 27%, to $21.2 million, compared to $29.3 million for the six months ended June 30, 2025. The decrease was primarily driven by a $9.3 million decrease in compensation expenses, including shared-based compensation, which was partially offset by a $0.6 million increase in amortization of intangible assets. General and Administrative Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) General and administrative $ 68,399 $ 86,532 $ (18,133) (21) % General and administrative costs for the six months ended June 30, 2026 decreased by $18.1 million, or 21%, to $68.4 million, compared to $86.5 million for the six months ended June 30, 2025. Excluding the impact of one-time item of $8.8 million in the prior year period, general and administrative expenses decreased by $9.3 million due to a $5.9 million decrease in compensation expenses, including share-based compensation, and a $2.5 million decrease in miscellaneous expenses. Gains and (Losses) on Investments in Loans and Securities Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Gains and (losses) on investments in loans and securities $ (80,314) $ (43,275) $ (37,039) (86) % Losses on investments in loans and securities for the six months ended June 30, 2026 increased by $37.0 million, or 86%, to $80.3 million, compared to $43.3 million for the six months ended June 30, 2025. The increase was primarily driven by an increase in credit-related impairment losses on ABS securities. Of the credit-related impairment loss in the current period, $6.0 million is attributable to the noncontrolling interests in certain VIEs and accordingly does not impact net income attributable to Pagaya shareholders. Other Expense, Net 38 Table of Contents Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Other expense, net $ (38,438) $ (38,890) $ 452 1 % Other expense, net for the six months ended June 30, 2026 remained relatively flat compared to the six months ended June 30, 2025. Favorable items included lower interest expenses of $4.9 million and a benefit of $1.2 million from foreign currency exchange adjustment. These items were offset by the absence of a $5.4 million favorable adjustment on the contingent liability associated with the Theorem acquisition recorded in the prior year period. Gain and (Loss) From Extinguishment of Debt Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Gains and (losses) from extinguishment of debt $ 1,504 $ (496) $ 2,000 NM NM: Not Meaningful Gain from extinguishment of debt for the six months ended June 30, 2026 was $1.5 million, compared to a loss of $0.5 million for the six months ended June 30, 2025. The $1.5 million gain resulted from the repurchase of $7.4 million and $3.8 million of the outstanding 2030 Notes at a price equal to 87.3% and 78.5% of the principal amount, respectively, during the current period. Income Tax Expense Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Income tax expense $ 2,061 $ 2,438 $ (377) (15) % Income tax expense for the six months ended June 30, 2026 decreased by $0.4 million, or 15%, to $2.1 million, compared to $2.4 million for the six months ended June 30, 2025. The decrease was primarily attributable to changes in uncertain tax positions and the utilization of net operating loss carryforwards. Net Loss Attributable to Noncontrolling Interests Six Months Ended June 30, 2026 2025 Change % Change (in thousands, except percentages) Net loss attributable to noncontrolling interests $ (3,472) $ (5,493) $ 2,021 37 % Net loss attributable to noncontrolling interests for the six months ended June 30, 2026 decreased by $2.0 million, or 37%, to $3.5 million, compared to $5.5 million for the six months ended June 30, 2025. The decrease was driven by the net loss generated by our consolidated VIEs associated with our risk retention holdings, which represents the net loss of the consolidated VIEs held by other investors in the VIEs for which we have no economic rights. This amount was primarily driven by a $6.0 million of credit-related impairment loss on the risk retention holdings during the current period. For further information regarding credit-related impairment losses, see “—Total Revenue and Other Income” and “—Gains and (Losses) on Investments in Loans and Securities.” Reconciliation of Non-GAAP Financial Measures To supplement the unaudited condensed consolidated financial statements prepared and presented in accordance with U.S. GAAP, we use the non-GAAP financial measures such as Fee Revenue Less Production Costs (“FRLPC”), FRLPC as a % of Network Volume (“FRLPC %”), Adjusted Net Income, and Adjusted EBITDA to provide investors with additional information about our financial performance and to enhance the overall understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our business. We are presenting these non-GAAP financial measures because we believe they provide an additional tool for investors to use in comparing our core financial performance over multiple periods with the performance of other companies. 39 Table of Contents However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the unaudited condensed consolidated financial statements prepared and presented in accordance with U.S. GAAP. To address these limitations, we provide a reconciliation of FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA to the most directly comparable U.S. GAAP measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA in conjunction with their respective related U.S. GAAP financial measures. FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 are summarized below ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Fee Revenue Less Production Cost (FRLPC) $ 146,924 $ 126,249 $ 268,354 $ 241,870 Fee Revenue Less Production Costs % (FRLPC %) 4.2 % 4.8 % 4.4 % 4.8 % Adjusted Net Income $ 100,992 $ 50,624 $ 168,488 $ 103,813 Adjusted EBITDA $ 123,520 $ 86,283 $ 217,686 $ 165,866 FRLPC is defined as operating income plus technology, data and product development, sales and marketing, and general and administrative costs, and less interest income and net investment income (loss). We use FRLPC as part of our overall assessment of performance, including the preparation of our annual budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance. The Company is including a reconciliation between FRLPC and operating income, which we consider the most directly comparable GAAP financial measure. FRLPC is designed to assess operational efficiency by measuring fee revenue against production costs, excluding operating expenses not directly tied to revenue production, such as technology development, sales and marketing, and general and administrative costs. FRLPC is intended to highlight the scalability of our platform as Network Volume (the gross dollar amount of assets originated using our technology) increases, demonstrating our ability to efficiently generate fee revenue while managing production costs. FRLPC %, defined as FRLPC divided by Network Volume, further illustrates this efficiency, showing how effectively we convert Network Volume into fee revenue relative to production costs as our platform scales. Adjusted Net Income is defined as net income (loss) attributable to Pagaya Technologies Ltd. excluding share-based compensation expense, change in fair value of contingent liability, change in fair value of warrant liability, impairment loss on certain investments, restructuring expenses, transaction-related expenses, and non-recurring expenses associated with mergers and acquisitions and other one-time expenses. Adjusted EBITDA is defined as net income (loss) attributable to Pagaya Technologies Ltd. excluding share-based compensation expense, change in fair value of contingent liability, change in fair value of warrant liability, impairment, including credit-related charges, restructuring expenses, transaction-related expenses, non-recurring expenses associated with mergers and acquisitions and other one-time expenses, interest expense, income tax expense (benefit), and depreciation and amortization. These items are excluded from our Adjusted Net Income and Adjusted EBITDA measures because they are noncash in nature, or because the amount and timing of these items is unpredictable, is not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful. We believe FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, we have included FRLPC, FRLPC %, Adjusted Net Income, and Adjusted EBITDA in this report because these are key measurements used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. However, these non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. 40 Table of Contents The following tables present reconciliations of FRLPC and FRLPC % to operating income, and Adjusted Net Income and Adjusted EBITDA to net income (loss) attributable to Pagaya Technologies Ltd., in each case the most directly comparable U.S. GAAP measure ($ in thousands, unless otherwise noted): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating Income $ 105,799 $ 56,469 $ 185,804 $ 104,154 Add: Technology, data and product development 17,348 18,455 33,288 37,899 Add: Sales and marketing 10,087 19,660 21,219 29,254 Add: General and administrative 35,093 40,349 68,399 86,532 Less: Interest income 22,205 10,739 39,871 18,415 Less: Investment income (loss), net (802) (2,055) 485 (2,446) Fee Revenue Less Production Costs (FRLPC) $ 146,924 $ 126,249 $ 268,354 $ 241,870 Network Volume (in millions) $ 3,535 $ 2,648 $ 6,159 $ 5,048 Fee Revenue Less Production Costs % (FRLPC %) 4.2 % 4.8 % 4.4 % 4.8 % Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net Income Attributable to Pagaya Technologies Ltd. $ 45,273 $ 16,655 $ 69,967 $ 24,548 Adjusted to exclude the following: Share-based compensation 8,569 18,228 15,765 31,400 Fair value adjustment to contingent liability — (2,205) — (5,389) Fair value adjustment to warrant liability 214 479 (3,948) 1,578 Impairment loss on certain investments, net 37,972 14,795 74,348 42,598 Write-off of capitalized software and other assets 5,581 216 7,447 1,924 Restructuring expenses — 263 — 1,225 Transaction-related expenses — 9 — 23 Non-recurring expenses 3,383 2,184 4,909 5,906 Adjusted Net Income $ 100,992 $ 50,624 $ 168,488 $ 103,813 Adjusted to exclude the following: Interest expenses 19,701 23,088 39,360 44,300 Income tax (benefit) expense (1,088) 4,978 2,061 2,438 Depreciation and amortization 3,915 7,593 7,777 15,315 Adjusted EBITDA $ 123,520 $ 86,283 $ 217,686 $ 165,866 Liquidity and Capital Resources As of June 30, 2026 and December 31, 2025, the principal sources of liquidity were cash and cash equivalents, and restricted cash and cash equivalents of $304.4 million and $288.3 million, respectively. We believe these sources will be sufficient to meet our current liquidity needs for the next twelve months, from the date of issuance of the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and be sufficient to support our future cash needs, however, we can provide no assurance that our liquidity and capital resources will meet future funding requirements. Our primary requirements for liquidity and capital resources are to purchase and finance risk retention requirements, invest in technology, data and product development, and to attract, recruit and retain a strong employee base, as well as to fund potential 41 Table of Contents strategic transactions, including acquisitions, if any. We intend to continue to make strategic investments to support our business plans. We do not have capital expenditure commitments as the vast majority of our capital expenditures relate to the capitalization of certain compensation and non-compensation expenditures used in the development and improvement of our proprietary technology. There are numerous risks to the Company’s financial results, liquidity and capital raising, some of which may not be quantified in the Company’s current estimates. The principal factors that could impact liquidity and capital needs are a prolonged inability to adequately access funding in the capital markets or in bilateral agreements, including as a result of macroeconomic conditions such as rising interest rates and higher cost of capital, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and the continuing market adoption of the Company’s network. We expect to fund our operations with existing cash and cash equivalents, cash generated from operations, including cash flows from investments in loans and securities, and additional secured borrowing, including repurchase agreements. We may also raise additional capital, including through borrowings, as described in the section below titled “2025 Revolving Credit Facility,” or through the sale or issuance of equity or debt securities, as described below in the sections titled “Shelf Registration Statement” and “Senior Notes.” The ownership interest of our shareholders will be, or could be, diluted as a result of sales or issuances of equity or debt securities, and the terms of any such securities may include liquidation or other preferences that adversely affect the rights of our shareholders of Class A Ordinary Shares. We intend to support our liquidity and capital position by pursuing diversified sources of financing, including debt financing, secured borrowing, or equity financing. The rates, terms, covenants and availability of such additional financing are not guaranteed and will be dependent on not only macro-economic factors, but also on factors such as our results of our operations and the returns generated by loans originated with the assistance of our AI technology. Additional debt financing, such as secured or unsecured borrowings, including repurchase agreements, credit facilities or corporate bonds, and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, we will receive the proceeds from any exercise of any public warrants in cash. Each public warrant that was issued and exchanged for each EJFA Private Placement Warrant in the merger of Rigel Merger Sub Inc., a Cayman Islands exempted company and a wholly-owned subsidiary of Pagaya, with and into EJF Acquisition Corp (“EJFA”), as contemplated by the EJFA Merger Agreement (“EJFA Merger”). EJFA Merger entitles the holder thereof to purchase one Class A Ordinary Share at a price of $138 per share (as adjusted for the 1-for-12 reverse share split). Following the 1-for-12 reverse share split effective March 2024, each warrant entitles holder to purchase 1/12 of a Class A Ordinary Share (or equivalently, 12 warrants are required to obtain 1 Class A Ordinary Share). The aggregate amount of proceeds could be up to $169.6 million if all such warrants are exercised for cash. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity. As of July 29, 2026, the price of our Class A Ordinary Shares was $16.19 per share. We believe the likelihood that warrant holders will exercise their public warrants that were issued in the EJFA Merger, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of Class A Ordinary Shares. If the market price for our Class A Ordinary Shares is less than $138 per share, we believe warrant holders will be unlikely to exercise on a cash basis their public warrants that were issued in the EJFA Merger. To the extent the public warrants are exercised by warrant holders, ownership interests of our shareholders will be diluted as a result of such issuances. Moreover, the resale of Class A Ordinary Shares issuable upon the exercise of such warrants, or the perception of such sales, may cause the market price of our Class A Ordinary Shares to decline and impact our ability to raise additional financing on favorable terms. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing related to such acquisitions or investments. In the event that we pursue additional financing, we may not be able to raise such financing on terms acceptable to us or at all. Additionally, as a result of any of these actions, we may be subject to restrictions and covenants in the agreements governing these transactions that may place limitations on us and we may be required to pledge collateral as security. If we are unable to raise additional capital or generate cash flows necessary to expand operations and invest in continued innovation, we may not be able to compete successfully. Securitizations 42 Table of Contents In connection with asset-backed securitizations, we sponsor and establish securitization vehicles to purchase loans originated by our Partners. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. To comply with risk retention regulatory requirements, we retain at least 5% of the credit risk of the securities issued by securitization vehicles (“Risk Retention Holdings”). In addition to these mandatory holdings, we may hold other interests in our securitization vehicles (“Additional Investments”). Additional Investments consist of interests acquired on a discretionary basis, as well as interests previously classified as Risk Retention Holdings for which the regulatory holding requirements have expired. We may purchase these Additional Investments to facilitate the execution of specific securitization transactions, or for investment purposes where we believe the risk-adjusted return is attractive. We may also sell Additional Investments when we view the market opportunity as attractive. The following table presents the carrying value (fair value) of our investments in loans and securities as of June 30, 2026 and December 31, 2025 distinguishing between our Risk Retention Holdings and Additional Investments (in thousands): June 30, December 31, 2026 2025 Risk Retention Holdings Notes $ 110,229 $ 99,640 Certificates 431,841 404,618 Total Risk Retention Holdings $ 542,070 $ 504,258 Additional Investments Notes $ 394,278 $ 308,551 Certificates 91,930 127,882 Loans 11,840 4,578 Total Additional Investments $ 498,048 $ 441,011 Total Investments in Loans and Securities $ 1,040,118 $ 945,269 As of June 30, 2026 and December 31, 2025, our total Risk Retention Holdings were $542.1 million and $504.3 million, and represented approximately 52% and 53% of total investments in loans and securities, respectively. As of June 30, 2026, our total Additional Investments were $498.0 million and $441.0 million, and represented approximately 48% and 47% of total investments in loans and securities, respectively. Total Additional Investments increased by $57.0 million as of June 30, 2026 compared to December 31, 2025. In the ordinary course of business, we enter into certain financing arrangements to finance our investments in loans and securities, including both our Risk Retention Holdings and Additional Investments. From time to time, the Company makes cash deposits that serve to collateralize guarantees for related transactions, included in restricted cash and cash equivalents on the unaudited condensed consolidated balance sheets. For further information, refer to Note 4, “Investments,” and Note 6, “Borrowings,” to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Shelf Registration Statement On October 4, 2023, we filed a shelf registration statement on Form F-3 (the “Shelf Registration”) with the SEC that was declared effective on October 16, 2023. Under this Shelf Registration, we may, from time to time, offer and sell in one or more 43 Table of Contents offerings Class A Ordinary Shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in combination with any of these securities, up to an aggregate amount of $500 million. Cash Flows The following table presents summarized consolidated cash flow information for the periods presented (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 117,887 $ 91,777 Net cash used in investing activities $ (134,847) $ (152,192) Net cash provided by financing activities $ 30,969 $ 74,652 Operating Activities Our primary uses of cash in operating activities are for the ordinary course of business, with the primary use related to employee and personnel-related expenses. As of June 30, 2026, we had 493 employees (220 in the U.S. and 273 in Israel) compared to 524 employees (262 in the U.S. and 262 in Israel) on June 30, 2025. For the six months ended June 30, 2026, net cash provided by operating activities increased by $26.1 million to $117.9 million, compared to $91.8 million for the six months ended June 30, 2025. This reflects net income including noncontrolling interests of $66.5 million, adjusted for non-cash charges of $117.1 million, and net cash outflows of $65.8 million from changes in our operating assets and liabilities. Non-cash charges during six months ended June 30, 2026 primarily consisted of (1) impairment losses on investments in loans and securities, which increased by $34.4 million compared to the same period in 2025, primarily driven by changes in the fair value of investments in loans and securities as a result of fluctuations in key inputs to the discounted cash flow models used to determine fair value, partially offset by fair value option gains from ABS resecuritizations at lower interest rates during the current period, of which $6.0 million is not attributable to Pagaya, but rather attributable to the VIEs noncontrolling interests, (2) share-based compensation, which decreased by $15.6 million compared to the same period in 2025, (3) depreciation and amortization, which decreased by $7.5 million compared to the same period in 2025, primarily from capitalized software, and (4) fair value adjustment to warrant liability, which decreased by $5.5 million compared to the same period in 2025, driven by changes in the market price of our Class A Ordinary Shares. For the six months ended June 30, 2026, net cash flows resulting from changes in operating assets and liabilities decreased by $32.7 million to net cash outflows of $65.8 million, compared to net cash outflows of $33.0 million for the six months ended June 30, 2025. Investing Activities Our primary uses of cash in investing activities are the purchase of Risk Retention Holdings and Additional Investments. For the six months ended June 30, 2026, net cash used in investing activities decreased by $17.3 million to $134.8 million, compared to $152.2 million for the six months ended June 30, 2025, primarily driven by purchases of Risk Retention Holdings and Additional Investments. Purchases of Risk Retention Holdings and Additional Investments during the six months ended June 30, 2026 totaled $496.0 million, an increase of $221.9 million compared to the same period in 2025. This cash outflow was partially offset by proceeds received from existing Risk Retention Holdings and Additional Investments, which totaled $365.1 million during the six months ended June 30, 2026, an increase of $235.7 million compared to the same period in 2025. Financing Activities For the six months ended June 30, 2026, net cash provided by financing activities decreased by $43.7 million to $31.0 million, compared to $74.7 million for the six months ended June 30, 2025. The current period financing cash inflows were primarily comprised of $185.2 million of proceeds from secured borrowings and $114.7 million of proceeds drawn on the revolving credit facility, partially offset by $127.5 million of repayments on secured borrowings, $114.7 million of repayments on the revolving credit facility, $18.2 million of distributions to noncontrolling interests, and $9.5 million of repurchases of the 2030 Notes. 44 Table of Contents The year-over-year decrease in financing cash flows was primarily driven by lower secured borrowing proceeds of $185.2 million in the current period compared to $244.9 million in the prior year period, as well as $9.5 million of 2030 Notes repurchases and $9.8 million of higher distributions to noncontrolling interests in the current period. These items were partially offset by a $29.4 million decrease in secured borrowing repayments, which declined from $156.9 million in the prior year period to $127.5 million in the current period. Indebtedness Borrowings as of June 30, 2026 primarily includes revolving credit facility, long-term debt, secured borrowings, and exchangeable notes. A detailed description of each of our borrowing arrangements is included in Note 6 Borrowing in the notes to the condensed consolidated financial statements. 2025 Revolving Credit Facility On October 1, 2025, the Company refinanced its revolving credit facility by way of terminating its prior credit agreement and entering into a new three-year revolving credit facility (the “2025 Revolving Credit Facility”) with a syndicate of financial institutions. The 2025 Revolving Credit Facility provides a committed borrowing capacity of $132 million. Borrowings under the 2025 Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to 1.00% floor) plus a margin of 2.50% and (ii) an adjusted term SOFR (subject to 1.00% floor) plus a margin of 3.50%. A commitment fee accrues on any unused portion of the commitments under the 2025 Revolving Credit Facility at a rate per annum of 0.25% and is payable quarterly in arrears. The terms and conditions of the 2025 Revolving Credit Facility include customary covenants and restrictions. As of June 30, 2026, the Company had $0.0 million in borrowings outstanding, which was repaid in full during the second quarter of 2026. Senior Notes On July 28, 2025, the Company, through Pagaya US Holding Company LLC (“Pagaya US”), a wholly-owned subsidiary of the Company, issued $500 million aggregate principal amount of 8.875% Senior Unsecured Notes due 2030 (the “2030 Notes”). The 2030 Notes will accrue interest at a rate of 8.875% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The 2030 Notes will mature on August 1, 2030, unless earlier repurchased or redeemed. The 2030 Notes will be fully and unconditionally guaranteed, on a senior unsecured basis, by the Company and each of the Company’s subsidiaries (other than Pagaya US) that was a guarantor under the prior credit agreement (collectively, the “Guarantors”). The 2030 Notes and the related note guarantees will be senior unsecured obligations of Pagaya US and the Guarantors. In December 2025, the Company repurchased $6.9 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.4% of the principal amount. The Company paid total consideration of $6.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt. This gain is net of the written-off carrying value, which included associated pro rata unamortized debt issuance costs, and is reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations included in the Annual Report on Form 10-K. In February 2026, the Company repurchased $7.4 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.3% of the principal amount. The Company paid total consideration of $6.5 million, excluding accrued interest. This transaction resulted in a $0.8 million gain on extinguishment of debt, which is net of the write-off associated unamortized debt issuance costs and the carrying value of the repurchased notes. In May 2026, the Company repurchased $3.8 million of the outstanding 2030 Notes at a price equal to 78.5% of the principal amount. The Company paid total consideration of $3.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt. This gain is net of the written-off carrying value, which included associated pro rata unamortized debt issuance cost. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $481.9 million. As of June 30, 2026, after deducting $10.0 million in unamortized issuance costs, the net carrying amount of the 2030 Notes was $471.9 million, which is recorded within long-term debt on the unaudited condensed consolidated balance sheets. 45 Table of Contents Receivables Facility In April 2025, Pagaya Structured Products LLC, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement (the “LSA Agreement”) with a certain lender. This agreement established a 24-month Capitalized Interest Amounts Facility (the “CIA Facility”) with a maximum principal amount of $24 million to finance eligible capitalized interest amounts related to sponsored securitization transactions. In March 2026, the maximum principal amount under the CIA Facility was increased to $30 million. Additionally, in June 2025, Pagaya Structured Products LLC entered into a 30-month Accrued Loan Purchasing Fee Receivables Facility (the “ALPF Facility”) with a maximum principal amount of $65 million to finance certain eligible receivables from sponsored securitization transactions. Borrowings under the CIA Facility bear interest at a rate per annum equal to the adjusted term Secured Overnight Financing Rate (“SOFR”) (subject to a 1.00% floor) plus a margin of 4.00%, while borrowings under the ALPF Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 1.9%. As of June 30, 2026 and December 31, 2025, the combined outstanding principal balance under the CIA Facility and ALPF Facility was $93.5 million and $87.0 million respectively, which is recorded within secured borrowing on the unaudited condensed consolidated balance sheets. In July 2026, Pagaya Structured Products LLC, a wholly-owned subsidiary of the Company, entered into an Amendment to its the ALPF Facility with the lender, which increased the aggregate borrowing commitment from $65 million to $100 million. Pursuant to the amendment, the revolving period end date was extended from June 11, 2027, to July 16, 2028, and the scheduled maturity date was extended from December 11, 2027, to January 16, 2029. All other terms, including the interest rate, remained the same at the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 1.9%. Exchangeable Notes On October 1, 2024, Pagaya US issued $160 million in aggregate principal amount of 6.125% exchangeable notes due 2029 (the “2029 Notes”). The issuance was in connection with a purchase agreement dated September 26, 2024, with certain initial purchasers. The 2029 Notes bear interest at a rate of 6.125% per annum, payable semiannually in arrears on April 1 and October 1 of each year, beginning April 1, 2025, and mature on October 1, 2029, unless earlier repurchased, redeemed, or exchanged. The 2029 Notes are exchangeable for cash, Class A Ordinary Shares of the Company, or a combination of both, at the Company’s discretion, subject to certain conditions. For further information, see Note 6 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Contractual Obligations, Commitments and Contingencies From time to time, the Company enters into purchase commitments with our third-party cloud computing web services providers. As of June 30, 2026, the total remaining contractual obligations from these purchase commitments are approximately $8.8 million, of which $6.4 million is for the next 12 months. The Company may pay more than the minimum purchase commitment based on usage. Additionally, the Company has contractual obligations related to its lease for corporate office space. During the normal course of business, we enter into certain lease contracts with lease terms through 2032. As of June 30, 2026, the total remaining contractual obligations are approximately $39.5 million, of which $8.0 million is for the next 12 months. Refer to Note 9, “Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for details regarding when these obligations are due. In the ordinary course of business, the Company may provide indemnifications or loss guarantees of varying scope and terms to customers and other third parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap. For our forward flow agreements, loans purchased have a contractual performance requirement which is measured periodically over the life of the underlying loans. If the loan’s performance is below the contractual requirement, the counterparty may have first loss up until a contractual agreed limit. If the loans’ performance is below the counterparty’s first loss limit or if there is no first loss limit, then Pagaya would be required to make a payment to the counterparty such that the loans purchased would have 46 Table of Contents achieved the contractual performance requirement. There is a contractual maximum loss for Pagaya’s loss protection with the counterparty taking full risk of loss beyond Pagaya’s loss protection. Our guarantee of contractual loss protection for the buyer meets the accounting definition of a derivative, and therefore we recognize, at inception and each reporting period, a liability for the fair value of the estimated loss protection payments, if any. As of June 30, 2026, there have been no known events or circumstances that have resulted in a material indemnification liability and the Company did not incur material costs to defend lawsuits or settle claims related to these indemnifications. For certain contracts meeting the definition of a guarantee or a derivative, the guarantor must recognize, at inception, a liability for the fair value of the obligation undertaken in issuing the guarantee. In addition, the guarantor must disclose the maximum potential amount of future payments that the guarantor could be required to make under the guarantee, if there were a default by the guaranteed parties. The determination of the maximum potential future payments is based on the notional amount of the guarantees without consideration of possible recoveries under recourse provisions or from collateral held or pledged. As of June 30, 2026, the unfunded maximum potential amount of undiscounted future payments the Company could be required to make under these guarantees totaled $141.3 million. Additionally, in accordance with the guarantee contracts, the Company is required to fund segregated cash balances to provide protection in the event the Company is not able to meet its contractual commitments. As of June 30, 2026, $48.1 million has been segregated and recognized within restricted cash on the unaudited condensed consolidated balance sheet in accordance with these contractual requirements. For a discussion of our long-term debt obligations and operating lease obligations as of June 30, 2026, refer to Note 6, “Borrowings,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and Note 14, “Leases,” to the consolidated financial statements included in the 2025 Annual Report on Form 10-K for additional information. Off-Balance Sheet Arrangements In the ordinary course of business, we engage in activities with unconsolidated VIEs, including our sponsored securitization vehicles, which we contractually administer. To comply with risk retention regulatory requirements, we retain at least 5% of the credit risk of the securities issued by sponsored securitization vehicles. From time to time, we may, but are not obligated to, purchase assets from the Financing Vehicles. Such purchases could expose us to loss. For additional information, refer to Note 5, “Consolidation and Variable Interest Entities,” to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Critical Accounting Policies and Estimates Our significant accounting policies and their effect on our financial condition and results of operations are more fully described in our audited consolidated financial statements included in the 2025 Annual Report on Form 10-K. Management has reassessed the critical accounting policies and estimates as disclosed in Note 2, “Summary of Significant Accounting Policies,” to the audited consolidated financial statements included in the 2025 Annual Report on Form 10-K and determined that there were no significant changes in our critical accounting policies and estimates during the three months ended June 30, 2026.

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in market prices. Our market risk exposure primarily relates to fluctuations in credit risk. We are exposed to market risk directly through investments in loans and securities held on our unaudited condensed consolidated balance sheets and access to the securitization markets. Credit Risk Credit risk refers to the risk of loss arising from individual borrower default due to inability or unwillingness to meet their financial obligations. The performance of certain financial instruments, including investments in loans, securitization notes and residual certificates on our unaudited condensed consolidated balance sheets, is dependent on the credit performance. To manage this risk, we monitor borrower payment performance and utilize our proprietary, AI-powered technology to evaluate individual loans in a manner that we believe is reflective of the credit risk. The fair values of these loans, securitization notes, and residual certificates are estimated based on a discounted cash flow model which involves the use of significant unobservable inputs and assumptions, the most significant of which is expected credit losses. Accordingly, these instruments are sensitive to changes in credit risk. As of June 30, 2026 and December 31, 2025, we were exposed to credit risk on $1,040 million and $945 million, respectively, of investments in loans and securities held on our 47 Table of Contents unaudited condensed consolidated balance sheets, with $986 million and $871 million, respectively, representing net exposure exclusive of non-controlling interests. We monitor our portfolio risk through internal monitoring as well as competitor and market assessments, reviewing macro-economic trends, and associated stress testing. Loans and related risk retention securities are monitored throughout the entire lifecycle. This risk monitoring framework provides timely and actionable feedback on managing credit risk exposures. The following table summarizes the potential effect that changes in estimates would have on the fair value of our investments in loans and securities as of June 30, 2026 given a hypothetical change in significant unobservable inputs (in millions): Change in Fair Value Basis point change scenario June 30, 2026 Credit loss rate increase of 100 basis points $ (117.0) Credit loss rate decrease of 100 basis points $ 133.1 These scenarios illustrate a hypothetical, instantaneous shift in the value of our investments in loans and securities and do not represent management's performance expectations. As of June 30, 2026, our portfolio is comprised of 49% ABS securitization notes and 50% ABS residual certificates. Of the current portfolio of investments, 29% was originated in 2026, 36% in 2025, 20% in 2024 and 15% in 2023 and prior. We would normally expect more seasoned vintages and more senior investments to be less impacted by changes in credit loss rates. To manage this risk, management integrates these sensitivities into our continuous portfolio monitoring and stress-testing framework, ensuring our operations and capital structure remains resilient to such fluctuations. We are also exposed to credit risk in the event of non-performance by the financial institutions holding our cash or providing access to our credit line. We maintain our cash deposits in highly-rated financial institutions. In the United States, the majority of our cash deposits are held at federally insured accounts. We manage this risk by maintaining our cash deposits at well-established, well-capitalized financial institutions and diversifying our counterparties. Discount Rate Risk The discount rate risk refers to the risk of loss of future earnings, values or future cash flows that may result from changes in market discount rates. The fair values of loans, securitization notes, and residual certificates are estimated based on a discounted cash flow model, where the discount rate represents an estimate of the required rate of return by market participants. The changes in the discount rates reflect the expected returns of similar financial instruments available in the market and can be caused by changes in the interest rates. The following table summarizes the potential effect that changes in estimates would have on the fair value of our investments in loans and securities as of June 30, 2026 given a hypothetical change in significant unobservable inputs (in millions): Change in Fair Value Basis point change scenario June 30, 2026 Discount rate increase of 100 basis points $ (8.5) Discount rate decrease of 100 basis points $ 8.8 These scenarios illustrate potential market shifts rather than internal forecasts. While changes in market discount rates, reflecting the required rate of return for market participants—can influence the estimated fair value of our loans and securitization notes and residual certificates, management incorporates these hypothetical fluctuations into our proactive capital allocation and deal execution strategies. This modeling ensures we maintain operational stability and consistent access to funding across varying market conditions. Interest Rate Risk The interest rates charged on the loans originated by Partners are subject to change by the platform sellers, originators, and/or servicers. Higher interest rates could negatively impact collections on the underlying loans, leading to increased delinquencies, defaults, and our borrowers’ bankruptcies, all of which could have a substantial adverse effect on our business. This would also impact future loans and securitizations. 48 Table of Contents Additionally, we maintain certain financing sources with varying degrees of interest rate sensitivities, including floating-rate interest payments on Pagaya’s credit facilities. Accordingly, trends in the prevailing interest rate environment can influence interest expense and payments and adversely affect our results of our operations. For additional information, see “Item 2. Liquidity and Capital Resources”. We also rely on securitization transactions, with notes of those transactions typically bearing a fixed coupon. For future securitization issuances, higher interest rates could affect overall deal economics as well as the returns we would generate on our related risk retention investments and discretionary investments. Foreign Exchange Risk Foreign currency exchange rates do not pose a material market risk exposure. However, given the compensation and non-compensation expenses denominated in NIS, our inability or failure to manage foreign exchange risk could adversely affect our results of operations.

Please refer to Note 9, “Commitments and Contingencies,” to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any such other legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition, or cash flows. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 49 Table of Contents

The risks described under Item 1A, “Risk Factors,” in the 2025 Annual Report on Form 10-K could materially and adversely affect our business, financial condition, results of operations, cash flows, future prospects, and the trading price of our Class A Ordinary Shares. The risks and uncertainties described therein are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial may also become important factors that adversely affect our business. You should carefully read and consider such risks, together with all of the other information in the 2025 Annual Report on Form 10-K, in this Quarterly Report on Form 10-Q (including the disclosures in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our unaudited condensed consolidated financial statements and the related notes thereto), and in the other documents that we file with the SEC. There have been no material changes from the risk factors previously disclosed under Item 1A, “Risk Factors,” in the 2025 Annual Report on Form 10-K.