INVESTMENTS

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

As of September 30, 2025, our investments in loans and securities portfolio consisted of (i) investments held at fair value with changes in fair value recorded in unrealized gain (loss) on available for sale securities, excluding the portion relating to any credit loss; (ii) loans held for investment at amortized cost, less an allowance for potential uncollectible amounts; and (iii) investments held at fair value, with changes in fair value recorded in earnings, for which we elected the fair value option. Below is a

disaggregated presentation of our investments in loans and securities, including fair value adjustments, accrued interest income and net of the allowance for credit losses, as applicable (in thousands):

	Carrying Value
	September 30, 2025		December 31, 2024
Investments in loans and securities
Securitization notes, available for sale	$	333,166	$	240,273
Securitization certificates, available for sale	504,202		533,243
Other loans and receivables, at amortized cost	1,610		4,893
Total	838,978		778,409
Investments in securities, under the fair value option
Securitization notes	11,597		—
Securitization certificates	37,161		—
Total	48,758		—
Total investments in loans and securities	$	887,736	$	778,409

Investments in Loans and Securities

The amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of investments in securities as of September 30, 2025 and December 31, 2024 were as follows (in thousands). As provided in Note 6, a portion of these investments in securities are consolidated as a result of the Company’s determination that it is the primary beneficiary of certain VIEs.

	As of September 30, 2025
Investments in securities, available for sale(1):	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Non-Credit Related Adjustments		Allowance for Credit Losses		Fair Value
Securitization notes	$	335,533	$	559	$	(53)	$	(2,873)	$	333,166
Securitization certificates	979,623		11,759		(53,719)		(433,461)		504,202

(1) Includes accrued interest receivable of $21.7 million.

	As of December 31, 2024
Investments in securities, available for sale(2):	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Non-Credit Related Adjustments		Allowance for Credit Losses		Fair Value
Securitization notes	$	240,396	$	386	$	(509)	$	—	$	240,273
Securitization certificates	1,048,734		7,926		(14,676)		(508,741)		533,243

(2) Includes accrued interest receivable of $14.3 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.

The following tables set forth the fair value and gross unrealized losses on investments in securities without an allowance for credit losses aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, as of the dates indicated (in thousands):

	As of September 30, 2025
	Less than or equal to 1 year				Greater than 1 year				Total
Investments in securities, available for sale:	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securitization notes	$	74	$	—	$	7,076	$	(53)	$	7,150	$	(53)

	As of December 31, 2024
	Less than or equal to 1 year				Greater than 1 year				Total
Investments in securities, available for sale:	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securitization notes	$	66	$	(1)	$	27,295	$	(508)	$	27,361	$	(509)

The following table sets forth the amortized cost and fair value of investments in securities by contractual maturities, as of the date indicated (in thousands):

	As of September 30, 2025
	Within 1 year				Greater than 1 year, less than or equal to 5 years				Total
Investments in securities, available for sale(1):	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securitization notes	$	2,352	$	5,834	$	333,181	$	327,332	$	335,533	$	333,166
Securitization certificates	20,332		18,406		959,291		485,796		979,623		504,202

	As of December 31, 2024
	Within 1 year				Greater than 1 year, less than or equal to 5 years				Total
Investments in securities, available for sale(1)(2):	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securitization notes	$	9,907	$	9,903	$	230,489	$	230,370	$	240,396	$	240,273
Securitization certificates	11,554		11,554		1,037,180		521,689		1,048,734		533,243

(1) Based on expected maturity date cash flows.

(2) Includes accrued interest receivable of $14.3 million, previously reported within “Fee and other receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation.

The following table sets forth gross proceeds and related investment gains and losses, as well as losses on write-downs and the allowance for credit losses of securities, for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Investments in loans and securities:
Proceeds from sales/maturities/prepayments	$	48,845	$	23,083	$	178,196	$	89,905
Gross investment gains from sales and maturities	$	(12)	$	—	$	(8,702)	$	—
Gross investment losses from sales and maturities	$	16,288	$	—	$	16,288	$	—
Write-offs charged against the allowance	$	211	$	4,810	$	804	$	7,109
Reductions (additions) to allowance for credit losses	$	57,385	$	(79,171)	$	72,216	$	(159,085)

The following tables set forth the activity in the allowance for credit losses for investments in loans and securities, as of the dates indicated (in thousands):

	Three Months Ended September 30, 2025
	Securitization notes		Securitization certificates		Other Loans and Receivables		Total
Balance, beginning of period	$	(2,873)	$	(490,897)	$	(1,100)	$	(494,870)
Additions to allowance for credit losses not previously recorded	—		(11,510)		—		(11,510)
Reductions for securities sold during the period	—		72,443		—		72,443
Additions (reductions) on securities with previous allowance	—		(3,497)		(51)		(3,548)
Write-offs charged against the allowance	—		—		211		211
Balance, end of period	$	(2,873)	$	(433,461)	$	(940)	$	(437,274)

	Nine Months Ended September 30, 2025
	Securitization notes		Securitization certificates		Other Loans and Receivables		Total
Balance, beginning of period	$	—	$	(508,741)	$	(1,553)	$	(510,294)
Additions to allowance for credit losses not previously recorded	(2,873)		(57,630)		—		(60,503)
Reductions for securities sold during the period	—		150,766		—		150,766
Additions (reductions) on securities with previous allowance	—		(17,856)		(191)		(18,047)
Write-offs charged against the allowance	—		—		804		804
Balance, end of period	$	(2,873)	$	(433,461)	$	(940)	$	(437,274)

	Three Months Ended September 30, 2024
	Securitization notes		Securitization certificates		Other Loans and Receivables		Total
Balance, beginning of period	$	—	$	(174,077)	$	(4,053)	$	(178,130)
Additions to allowance for credit losses not previously recorded	—		(21,118)		—		(21,118)
Additions (reductions) on securities with previous allowance	—		(55,930)		(2,123)		(58,053)
Write-offs charged against the allowance	—		—		4,810		4,810
Recoveries of amounts previously written off	—		—		(443)		(443)
Balance, end of period	$	—	$	(251,125)	$	(1,809)	$	(252,934)

	Nine Months Ended September 30, 2024
	Securitization notes		Securitization certificates		Other Loans and Receivables		Total
Balance, beginning of period	$	—	$	(98,679)	$	(2,279)	$	(100,958)
Additions to allowance for credit losses not previously recorded	—		(112,263)		—		(112,263)
Additions to the allowance for credit losses arising from purchases	—		—		(3,246)		(3,246)
Additions (reductions) on securities with previous allowance	—		(40,183)		(3,393)		(43,576)
Write-offs charged against the allowance	—		—		7,109		7,109
Recoveries of amounts previously written off	—		—		—		—
Balance, end of period	$	—	$	(251,125)	$	(1,809)	$	(252,934)

Investments in securities, under the fair value option

The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We elected the fair value option to measure certain securities, as we believe that fair value best reflects the economic transaction of investing in certain new securities. We determined the fair value of certain securities using a discounted cash flow methodology, while also considering market data as it became available. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within the gains and (losses) on investments in loans and securities in the unaudited condensed consolidated statements of operations. We report the changes in fair value within (gains) and losses on investments in loans and securities in the unaudited condensed consolidated statements of cash flow.

The following table presents activities of investments in securities for which we elected the fair value option. See Note 10 for the assumptions used in our fair value model (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Investments in securities under the fair value option	2025		2024		2025		2024
Balance, beginning of period	$	32,888	$	—	$	—	$	—
Purchases	7,829		—		28,855		—
Principal payments	(9,010)		—		(9,010)		—
Change in fair value	17,051		—		28,913		—
Balance, end of period	$	48,758	$	—	$	48,758	$	—

Equity Method and Other Investments

The following investments, including those accounted for under the equity method, are included within Equity method and other investments in the unaudited condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 (in thousands):

	Carrying Value
	September 30, 2025		December 31, 2024
Investments in Pagaya SmartResi F1 Fund, LP (1)	$	9,689	$	12,530
Other (2)	5,158		9,403
Total	$	14,847	$	21,933

(1) The Company owns approximately 5.4% and is the general partner of Pagaya Smartresi F1 Fund LP.

(2) Represents the Company’s proprietary investments. Income (loss) from these investments is included in Investment income (loss), net in the unaudited condensed consolidated statements of operations.