Cover
Cover | 12 Months Ended |
Dec. 31, 2022 | |
Cover [Abstract] | |
Document Type | POS AM |
Entity Registrant Name | Pagaya Technologies Ltd. |
Entity Central Index Key | 0001883085 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Amendment Flag | true |
Amendment Description | This post-effective amendment is being filed to update the Registration Statement to (i) include information contained in the registrant’s annual report on Form 20-F for the fiscal year ended December 31, 2022 and (ii) to update certain other information in such Registration Statement. |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 309,793 | $ 190,778 |
Restricted cash | 22,539 | 7,000 |
Short-term deposits | 0 | 5,020 |
Fees and other receivables (including related party receivables of $49,427 and $32,332 of December 31, 2022 and December 31, 2021, respectively) | 59,219 | 32,332 |
Investments in loans and securities | 1,007 | 5,142 |
Prepaid expenses and other current assets (including related party assets of $18,783 and $1,367 as of December 31, 2022 and December 31, 2021, respectively) | 27,258 | 6,263 |
Total current assets | 419,816 | 246,535 |
Restricted cash | 4,744 | 6,797 |
Fees and other receivables (including related party receivables of $38,332 and $19,208 as of December 31, 2022 and December 31, 2021, respectively) | 38,774 | 19,208 |
Investments in loans and securities | 462,969 | 277,582 |
Equity method and other investments | 25,894 | 14,841 |
Right-of-use asset | 61,077 | |
Property and equipment, net | 31,663 | 7,648 |
Deferred tax assets, net | 5,681 | |
Deferred offering costs | 0 | 11,966 |
Prepaid expenses and other assets | 142 | 0 |
Total non-current assets | 625,263 | 343,723 |
Total Assets | 1,045,079 | 590,258 |
Current liabilities: | ||
Accounts payable | 1,739 | 11,580 |
Accrued expenses and other liabilities (including related party liabilities of $636 and $2,510 as of December 31, 2022 and December 31, 2021, respectively) | 49,496 | 17,093 |
Operating lease liability - current | 8,530 | |
Secured borrowing - current | 61,829 | 0 |
Income taxes payable - current | 6,424 | 0 |
Total current liabilities | 128,018 | 28,673 |
Non-current liabilities: | ||
Warrant liability | 1,400 | 27,469 |
Revolving credit facility | 15,000 | 0 |
Secured borrowing - non-current | 77,802 | 37,905 |
Operating lease liability - non-current | 49,097 | |
Income taxes payable - non-current | 7,771 | 11,812 |
Deferred tax liabilities, net - non-current | 568 | |
Total non-current liabilities | 151,638 | 77,186 |
Liabilities | 279,656 | 105,859 |
Redeemable convertible preferred shares | 0 | 307,047 |
Shareholders’ equity (deficit): | ||
Additional paid-in capital | 968,432 | 113,170 |
Accumulated other comprehensive income (loss) | (713) | 0 |
Accumulated deficit | (414,199) | (111,878) |
Total Pagaya Technologies Ltd. shareholders’ equity | 553,520 | 1,292 |
Noncontrolling interests | 211,903 | 176,060 |
Total shareholders’ equity | 765,423 | 177,352 |
Total Liabilities, Redeemable Convertible Preferred Shares and Shareholders’ Equity | $ 1,045,079 | $ 590,258 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Related party receivables | $ 49,427 | $ 32,332 |
Related party assets | 18,783 | 1,367 |
Due from related parties | 38,332 | 19,208 |
Current liabilities: | ||
Related party liabilities | $ 636 | $ 2,510 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Revenue | ||||
Revenue from fees (including related party revenues of $653,471, $445,866 and $91,740 for the years ended December 31, 2022, 2021 and 2020, respectively) | $ 685,414 | $ 445,866 | $ 91,740 | |
Other Income | ||||
Interest income | 57,758 | 28,877 | 6,993 | |
Investment income (loss) | [1] | 5,756 | (155) | 277 |
Total Revenue and Other Income | 748,928 | 474,588 | 99,010 | |
Costs and Operating Expenses | ||||
Production costs | 451,084 | 232,324 | 49,085 | |
Research and development | 150,933 | 66,211 | 12,332 | |
Sales and marketing | 104,203 | 49,627 | 5,668 | |
General and administrative | 294,213 | 132,235 | 10,672 | |
Total Costs and Operating Expenses | 1,000,433 | 480,397 | 77,757 | |
Operating Income (Loss) | (251,505) | (5,809) | 21,253 | |
Other income (loss), net | (24,869) | (55,839) | (55) | |
Income (Loss) Before Income Taxes | (276,374) | (61,648) | 21,198 | |
Income tax expense (benefit) | 16,400 | 7,875 | 1,276 | |
Net Income (Loss) Including Noncontrolling Interests | (292,774) | (69,523) | 19,922 | |
Less: Net income (loss) attributable to noncontrolling interests | 9,547 | 21,628 | 5,452 | |
Net Income (Loss) Attributable to Pagaya Technologies Ltd. | (302,321) | (91,151) | 14,470 | |
Per share data: | ||||
Less: Undistributed earnings allocated to participating securities | 12,205 | 19,558 | 9,558 | |
Less: Deemed dividend distribution | 0 | 23,612 | 0 | |
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders | $ (314,526) | $ (134,321) | $ 4,912 | |
Net income (loss) per share attributable to Pagaya Technologies Ltd.: | ||||
Basic (in dollars per share) | [2] | $ (0.69) | $ (0.69) | $ 0.03 |
Diluted (in dollars per share) | [2] | $ (0.69) | $ (0.69) | $ 0.02 |
Weighted average shares outstanding: | ||||
Basic (in shares) | [2] | 459,044,846 | 195,312,586 | 191,146,436 |
Diluted (in shares) | [2] | 459,044,846 | 195,312,586 | 206,915,248 |
[1]Includes income from proprietary investments.[2]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Thousands | 12 Months Ended | |||
Jun. 22, 2022 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Statement [Abstract] | ||||
Related party revenue | $ 653,471 | $ 445,866 | $ 91,740 | |
Reverse stock split | 0.0054 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) Including Noncontrolling Interests | $ (292,774) | $ (69,523) | $ 19,922 |
Other Comprehensive Loss: | |||
Noncredit component of other than temporary impairment losses | (2,122) | 0 | 0 |
Comprehensive Income (Loss) Including Noncontrolling Interests | (294,896) | (69,523) | 19,922 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 8,138 | 21,628 | 5,452 |
Comprehensive Income (Loss) Attributable to Pagaya Technologies Ltd. | $ (303,034) | $ (91,151) | $ 14,470 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Series D | Series E | Series B | Total Pagaya Technologies Ltd. Shareholders’ Equity (Deficit) | Ordinary Shares (Class A and Class B) | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Non-Controlling Interests | ||
Beginning balance at Dec. 31, 2019 | [1] | 240,046,195 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | $ 43,613 | |||||||||||
Redeemable Convertible Preferred Shares | ||||||||||||
Number of shares issued (in shares) | [1] | 63,806,415 | ||||||||||
Issuance of convertible preferred shares net of issuance costs | $ 48,146 | |||||||||||
Issuance of preferred shares upon exercise of warrants (in shares) | [1] | 17,953,350 | ||||||||||
Issuance of preferred shares upon exercise of warrants | $ 14,222 | |||||||||||
Ending balance at Dec. 31, 2020 | [1] | 321,805,960 | ||||||||||
Ending balance (in shares) at Dec. 31, 2020 | $ 105,981 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | [1] | 188,621,632 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ 13,375 | $ (11,426) | $ 0 | $ 159 | $ 0 | $ (11,585) | $ 24,801 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 1,775,510 | 1,775,510 | [1] | |||||||||
Share-based compensation | $ 156 | 156 | 156 | |||||||||
Contributions of interests in consolidated VIEs | 74,560 | 74,560 | ||||||||||
Return of capital to interests in consolidated VIEs | (19,868) | (19,868) | ||||||||||
Net Income (Loss) Including Noncontrolling Interests | 19,922 | 14,470 | 14,470 | 5,452 | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | [1] | 190,397,142 | ||||||||||
Ending balance at Dec. 31, 2020 | $ 88,145 | 3,200 | $ 0 | 315 | 0 | 2,885 | 84,945 | |||||
Redeemable Convertible Preferred Shares | ||||||||||||
Number of shares issued (in shares) | [1] | 45,853,066 | 35,006,986 | |||||||||
Issuance of convertible preferred shares net of issuance costs | $ 36,639 | $ 136,006 | ||||||||||
Issuance of preferred shares upon exercise of warrants (in shares) | [1] | 1,000,616 | 2,732,401 | |||||||||
Issuance of preferred shares upon exercise of warrants | $ 6,009 | $ 22,412 | ||||||||||
Ending balance at Dec. 31, 2021 | [1] | 406,399,029 | ||||||||||
Ending balance (in shares) at Dec. 31, 2021 | $ 307,047 | $ 105,016 | $ 136,006 | $ 36,635 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 3,948,649 | 3,948,649 | [1] | |||||||||
Issuance of ordinary shares upon exercise of share options | $ 346 | 346 | 346 | |||||||||
Share-based compensation | 68,090 | 68,090 | 68,090 | |||||||||
Deemed contribution | 23,612 | 23,612 | 23,612 | |||||||||
Deemed dividend distribution | (23,612) | (23,612) | ||||||||||
Issuance of ordinary share warrants | 20,807 | 20,807 | 20,807 | |||||||||
Contributions of interests in consolidated VIEs | 151,035 | 151,035 | ||||||||||
Return of capital to interests in consolidated VIEs | (81,548) | (81,548) | ||||||||||
Net Income (Loss) Including Noncontrolling Interests | (69,523) | (91,151) | (91,151) | 21,628 | ||||||||
Ending balance (in shares) at Dec. 31, 2021 | [1] | 194,345,791 | ||||||||||
Ending balance at Dec. 31, 2021 | $ 177,352 | 1,292 | $ 0 | 113,170 | 0 | (111,878) | 176,060 | |||||
Redeemable Convertible Preferred Shares | ||||||||||||
Issuance of ordinary shares in connection with the Merger and PIPE Investment, net of issuance costs of $57,400 (in shares) | [1] | (406,399,029) | ||||||||||
Issuance of ordinary shares in connection with the Merger and PIPE Investment, net of issuance costs of $57,400 | $ (307,047) | |||||||||||
Ending balance at Dec. 31, 2022 | [1] | 0 | ||||||||||
Ending balance (in shares) at Dec. 31, 2022 | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 16,725,583 | 16,725,583 | [1] | |||||||||
Issuance of ordinary shares upon exercise of share options | $ 1,617 | 1,617 | 1,617 | |||||||||
Issuance of ordinary shares upon vesting of RSUs (in shares) | [1] | 122,906 | ||||||||||
Issuance of ordinary shares upon exercise of warrants (in shares) | [1] | 22,539,369 | ||||||||||
Number of shares of common stock issued (in shares) | [1] | 46,536 | ||||||||||
Issuance of ordinary shares related to commitment shares | 1,000 | 1,000 | 1,000 | |||||||||
Issuance of ordinary shares in connection with the Merger and PIPE Investment, net of issuance costs of $57,400 (in shares) | [1] | 449,531,406 | ||||||||||
Issuance of ordinary shares in connection with the Merger and PIPE Investment, net of issuance costs of $57,400 | 581,359 | 581,359 | 581,359 | |||||||||
Share-based compensation | 250,711 | 250,711 | 250,711 | |||||||||
Issuance of ordinary share warrants | 20,575 | 20,575 | 20,575 | |||||||||
Contributions of interests in consolidated VIEs | 105,469 | 105,469 | ||||||||||
Return of capital to interests in consolidated VIEs | (77,764) | (77,764) | ||||||||||
Other comprehensive income (loss) | (2,122) | (713) | (713) | (1,409) | ||||||||
Net Income (Loss) Including Noncontrolling Interests | (292,774) | (302,321) | (302,321) | 9,547 | ||||||||
Ending balance (in shares) at Dec. 31, 2022 | [1] | 683,311,591 | ||||||||||
Ending balance at Dec. 31, 2022 | $ 765,423 | $ 553,520 | $ 0 | $ 968,432 | $ (713) | $ (414,199) | $ 211,903 | |||||
[1]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (Parenthetical) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Temporary equity, issuance costs | $ 412 | ||
Issuance costs | $ 57,400 | ||
Series D | |||
Temporary equity, issuance costs | $ 11 | $ 128 | |
Series E | |||
Temporary equity, issuance costs | $ 158 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Cash flows from operating activities | ||||
Net Income (Loss) Including Noncontrolling Interests | $ (292,774) | $ (69,523) | $ 19,922 | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Equity method income (loss) | [1] | (5,756) | 155 | (277) |
Loss on sale of equity method investments | 0 | 421 | 0 | |
Depreciation and amortization | 6,294 | 815 | 290 | |
Share-based compensation | 241,689 | 67,785 | 156 | |
Fair value adjustment to warrant liability | (11,088) | 53,019 | 489 | |
Issuance of ordinary shares related to commitment shares | 1,000 | 0 | 0 | |
Other than temporary impairment of investments in loans and securities | 33,704 | 0 | 0 | |
Impairment of goodwill and other intangible assets | 3,209 | 0 | 0 | |
Gain from the extinguishment of the Option | 0 | 0 | (543) | |
Change in operating assets and liabilities: | ||||
Fees and other receivables | (46,453) | (27,555) | (19,720) | |
Deferred tax assets, net | 5,681 | (3,378) | (2,303) | |
Deferred tax liabilities, net | 568 | 0 | 0 | |
Prepaid expenses and other assets | (23,227) | (4,738) | 123 | |
Right-of-use asset | 7,742 | |||
Accounts payable | (9,841) | 10,999 | 427 | |
Accrued expenses and other liabilities | 32,403 | 13,407 | 2,457 | |
Operating lease liability | (11,192) | |||
Income tax payable | 2,383 | 8,404 | 3,236 | |
Net cash (used in) provided by operating activities | (40,000) | 49,811 | 4,257 | |
Proceeds from the sale/maturity/prepayment of: | ||||
Investments in loans and securities | 112,897 | 28,904 | 29,008 | |
Short-term deposits | 5,020 | 53,412 | (48,353) | |
Equity method and other investments | 453 | 8,925 | 350 | |
Payments for the purchase of: | ||||
Investments in loans and securities | (355,633) | (202,366) | (102,665) | |
Property and equipment | (22,406) | (6,624) | (1,097) | |
Equity method and other investments | (5,750) | (22,991) | 0 | |
Net cash used in investing activities | (265,419) | (140,740) | (122,757) | |
Cash flows from financing activities | ||||
Proceeds from sale of ordinary shares in connection with the EJFA Merger and PIPE Investment, net of issuance costs | 291,872 | 0 | 0 | |
Proceeds from issuance of redeemable convertible preferred shares, net | 0 | 172,645 | 64,810 | |
Proceeds from issuance of ordinary share warrants, net | 0 | 20,807 | 0 | |
Proceeds from secured borrowing | 139,413 | 37,905 | 0 | |
Proceeds received from noncontrolling interests | 105,469 | 151,035 | 74,560 | |
Proceeds from revolving credit facility | 42,100 | 0 | 0 | |
Proceeds from exercise of stock options | 1,617 | 346 | 0 | |
Proceeds from exercise of redeemable convertible preferred shares warrants | 0 | 400 | 0 | |
Distribution made to noncontrolling interests | (77,764) | (81,548) | (19,868) | |
Distribution made to revolving credit facility | (27,100) | 0 | 0 | |
Distribution made to secured borrowing | (37,687) | 0 | 0 | |
Payment for deferred offering costs | 0 | (11,966) | 0 | |
Net cash provided by financing activities | 437,920 | 289,624 | 119,502 | |
Net increase in cash, cash equivalents and restricted cash | 132,501 | 198,695 | 1,002 | |
Cash, cash equivalents and restricted cash, beginning of period | 204,575 | 5,880 | 4,878 | |
Cash, cash equivalents and restricted cash, end of period | 337,076 | 204,575 | 5,880 | |
Reconciliation of cash, cash equivalents, and restricted cash within the consolidated statements of financial position to the amounts shown in the statements of cash flow above: | ||||
Cash and cash equivalents | 309,793 | 190,778 | 5,066 | |
Restricted cash | 22,539 | 7,000 | 0 | |
Restricted cash, non-current | 4,744 | 6,797 | 814 | |
Cash, cash equivalents and restricted cash | 337,076 | 204,575 | 5,880 | |
Supplemental disclosures of cash flow information | ||||
Cash paid for taxes | 6,941 | 2,609 | 324 | |
Cash paid for interests | 4,341 | 0 | 0 | |
Supplemental disclosure of non-cash investing and financing activities | ||||
Initial recognition of ROU assets and operating lease liability | 68,819 | |||
Deemed dividend from Secondary transactions | 0 | 23,612 | 0 | |
Issuance of redeemable convertible preferred shares upon exercise of warrants | 0 | 28,421 | 1,899 | |
Issuance of the Option | 0 | 0 | 543 | |
Asset-Backed Securities | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Loss on investments | 15,007 | 0 | 0 | |
Other loans and receivables | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Loss on investments | $ 10,651 | $ 0 | $ 0 | |
[1]Includes income from proprietary investments. |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS DESCRIPTION | BUSINESS DESCRIPTION Pagaya Technologies Ltd. and its consolidated subsidiaries (together “Pagaya” or the “Company”) is a technology company that deploys sophisticated data science, machine learning and AI technology to drive better results for financial services and other service providers, their customers, and asset investors. Services providers integrated with Pagaya’s network, which are referred to as “Partners,” range from high-growth financial technology companies to incumbent banks and financial institutions, auto finance providers and residential real estate service providers. Partners have access to Pagaya’s network in order to assist with extending financial products to their customers, in turn helping those customers fulfill their financial needs and dreams. These assets originated by Partners with the assistance of Pagaya’s AI technology are eligible to be acquired by Financing Vehicles. Pagaya Technologies Ltd. was founded in 2016 and is organized under the laws of the State of Israel. Pagaya has its primary offices in Israel and the United States. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”) if any. All intercompany accounts and transactions have been eliminated. The Company’s functional and reporting currency is the U.S. Dollar. Variable Interest Entities A VIE is a legal entity that has a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which may change with fluctuations in the fair value of the VIE’s net assets. A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and an obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates a VIE when it is deemed to be the primary beneficiary. The Company assesses whether or not it is the primary beneficiary of a VIE at initial involvement and on an ongoing basis. Refer to Note 7 for additional information. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying consolidated financial statements, which Management believes are critical in understanding and evaluating the Company’s reported financial results include, but are not limited to: (i) share-based compensation; (ii) derivative and/or freestanding liabilities pertaining to warrants and preferred share; (iii) the Option; (iv) consolidation of VIEs; (v) revenue recognition; (vi) deferred tax assets and valuation allowance; (vii) valuation of goodwill and intangible assets; and (viii) the determination of allowance for loan loss reserves for loans held for investment. The Company bases its estimates or assumptions on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. The novel coronavirus (“COVID-19”) pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company’s customers. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements for the years ended December 31, 2022, 2021 and 2020. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods. Segment Reporting The Company manages its operations and allocates resources as a single operating segment. Further, the Company manages, monitors and reports its financials as a single reporting segment. The Company’s chief operating decision-maker is its Chief Executive Officer who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment. Foreign Currency The functional and reporting currency of the Company is the U.S. Dollar as it is the currency of the primary economic environment in which Pagaya’s operations are conducted. The monetary assets and liabilities denominated in currencies other than the U.S. Dollar are accordingly remeasured into U.S. Dollars at exchange rates in effect at the end of each period in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the Statements of Operations and Comprehensive Income (Loss) within Other expenses, net, as appropriate. Foreign currency translations were immaterial in all periods presented. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions or highly liquid investments purchased with an original maturity of three months or less. Cash equivalents are stated at carrying value, which approximates fair value. Restricted cash consists primarily of deposits restricted by standby letters of credit for lease facilities. The Company has no ability to draw on such funds as long as the funds remain restricted under the applicable agreements. The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flow (in thousands): December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 309,793 $ 190,778 Restricted cash 22,539 7,000 Restricted cash, non-current 4,744 6,797 Cash, cash equivalents and restricted cash $ 337,076 $ 204,575 Bank Deposits Bank deposits with original maturities of more than three months but less than one year are included in short term bank deposits. Bank deposits with maturities of more than one year are included in long-term deposits. Such deposits are stated at cost which approximates fair values. Concentrations of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents, restricted cash, bank deposits and fees receivable. Cash and cash equivalents are principally maintained with major financial institutions, which management assesses to be of high credit quality. The Company has not experienced any losses on these deposits. The Company’s fees receivable balances are predominantly with agreements with customers, and these are subject to normal credit risks which management believes to be not significant. Significant customers are those which represent 10% or more of the Company’s total revenue for each respective period presented. Three related parties individually represented greater than 10% of total revenue and collectively totaled approximately 42% for year ended December 31, 2022. Two related parties individually represented greater than 10% of total revenue and collectively totaled approximately 42% for the year ended December 31, 2021. During the year ended December 31, 2020, three related parties individually represented greater than 10% of total revenue and collectively totaled approximately 57%. Fair Value Measurement ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon models that use, as inputs, observable market-based parameters to the greatest extent possible. Additionally, ASC 820 established a fair value hierarchy to categorize the use of inputs into the following three levels: Level 1 —Quoted prices, unadjusted, for identical assets or liabilities in active markets. Level 2 —Pricing inputs are other than quoted prices in active markets and include 1) quoted prices for similar assets or liabilities in active markets, 2) quoted prices for identical or similar assets or liabilities in markets that are not active, and 3) or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means. Level 3 —Pricing inputs are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. Management believes that the carrying amount of cash and cash equivalents, fees receivable, accounts payables and other current liabilities approximate their fair value due to the short-term maturities of these instruments. Investments in Loans and Securities A wholly-owned subsidiary (“Sponsor”) previously sponsored 30 securitization transactions (the “Securitizations”) during 2022, 2021 and 2020, each through a separate trust structure with an asset portfolio consisting of unsecured consumer loans, auto loans or real estate assets. Each Securitization’s asset portfolio was structured by the Sponsor, which is also the administrator of each Securitization. The Sponsor, directly and indirectly through affiliates, retained at least 5% of the economic risk in the Securitizations to comply with risk retention required by Title 17 U.S. Code of Federal Regulations Part 246, Credit Risk Retention, promulgated by Securities and Exchange Commission. The Sponsor determines the appropriate classification of loans and securities at the time of purchase. The Company’s direct investments in securitizations are classified as held-to-maturity and carried at amortized cost. The Company classifies investments as held-to-maturity when it has the intent and ability to hold the security to maturity. When evaluating intent for a particular security, the Company considers circumstances that have in the past led, or may in the future lead, to a decision to sell securities. The Company analyzes each security to determine whether it has the intent and ability to hold until maturity on a continual basis. Investments in loans and securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability and the yield of alternative investments will be classified as available for sale (“AFS”). These investments are carried at fair value determined using public market prices, dealer quotes, and prices obtained from independent pricing services that may be derivable from observable and unobservable market inputs. The Company may have investments classified as AFS from time to time but does not have any investments classified as AFS as of December 31, 2022 or December 31, 2021. Certain loans, which the Company purchased from the Sponsor, are classified as held for investment. Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts. Amortized cost basis represents principal amounts outstanding, net of unearned income, premiums or discounts on purchased loans and charge-offs. The Company’s intent and ability to designate loans as held for investment in the future may change based on changes in business strategies, the economic environment, and market conditions. As of December 31, 2022 and 2021, the Company held $13.8 million and $12.7 million of loans held for investment, respectively. Trading securities are bought and held principally for the purpose of reselling in the near term with the objective of generating revenues on short-term variations in price. Trading securities are held at fair value with realized gains and losses recorded on a trade date basis. The Company does not have any investments classified as trading as of December 31, 2022 or December 31, 2021. An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company determines whether the impairment has resulted from a credit loss or other factors. The Company determines whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and reasonable and supportable forecasts of economic conditions. The Company recognizes an allowance for credit losses, up to the amount of the impairment when appropriate, and write down the amortized cost basis of the investment if it is more likely than not the Company will be required, or the Company intends to sell the investment before recovery of its amortized cost basis, or the Company did not expect to collect cash flows sufficient to recover the amortized cost basis of the investment. The recognition of other-than-temporary impairment losses is dependent on the facts and circumstances related to the specific investment. If the Company intends to sell the investment or it is more likely than not that the Company would be required to sell the investment prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the income statement as an other-than-temporary impairment. The Company recognizes the credit loss portion through other income (loss), net in the statements of operations and the noncredit loss portion in accumulated other comprehensive loss. Equity Method Investments The Company uses the equity method of accounting for investments in entities that the Company does not control but has the ability to exercise significant influence over the financial and operating policies of the investee. Under the equity method of accounting, the Company’s share of the investee’s underlying net income or loss is recorded as investment income or loss on the consolidated Statements of Operations and Comprehensive Income (Loss). Distributions received from the investment reduce the Company’s carrying value of the investee. The Company elected to account for its equity investments using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if their respective values have appreciated or have been impaired, and adjustments are recorded as necessary. During the year ended December 31, 2022, the Company recorded an income in amount of $5.8 million related to revaluation of its investments in privately held companies. See Note 6 for additional information. Property and Equipment, Net Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Useful lives by asset category are as follows: Computer and software 3 to 7 years Equipment 3 to 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life (10 years) Internal-Use Software 2 years Maintenance and repairs that do not enhance or extend the asset’s useful life are expensed as incurred. Major replacements, improvements and additions are capitalized. Upon the sale or retirement of property and equipment, the cost and the related accumulated depreciation or amortization are removed from the consolidated financial statements, with any resulting gain or loss included in the consolidated Statements of Operations and Comprehensive Income (Loss). Property and equipment is tested for when there is an indication that the carrying value of an asset group may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined not to be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value and recorded in the period the determination is made. Internal-Use Software Internally developed software is capitalized upon completion of the preliminary project stage, when it becomes probable that the project will be completed, and the software will be used as intended. Capitalized costs primarily consist of salaries and payroll related costs for employees directly involved in development efforts. Costs related to the preliminary project stage and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are capitalized if they result in additional functionalities or substantial enhancements. Capitalized internal-use software is included in property and equipment, net, in the consolidated balance sheets, and amortization expense is included in general and administrative expenses in the consolidated statements of operations. The Company reviews on a regular basis list of projects that are in process and if the project is to be abandoned or discontinued and the capitalized costs associated with that project are expensed immediately. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded at their initial fair value on the date of issuance and remeasured each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a non-cash other income or expense in the accompanying consolidated statements of operations and comprehensive income. Revenue Recognition The Company’s revenue consists of two components: revenue from fees and revenue from other income, which is comprised of interest income and investment income. The amount of revenue from fees recognized reflects the consideration that the Company expects to receive in exchange for services provided. The Company applied the following five steps: 1. Identification of the contract with the customer: The Company determines a contract with a customer exists when each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, a conclusion has been reached that the customer has the ability and intent to pay, and the contract has commercial substance. 2. Identification of the performance obligations in the contract: Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct and separately identifiable, whereby the customer can benefit from the services. 3. Determination of the transaction price: The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms and conditions vary by contract. 4. Allocation of the transaction price to the performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation. 5. Recognition of revenue when, or as, a performance obligation is satisfied: Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised delivery of service to the customer. Revenue From Fees Revenue from fees is comprised of Network AI fees and Contract fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees. AI integration fees are earned from Partners in Financing Vehicles for the creation, sourcing and delivery of that assets that comprise Network Volume. The Company utilizes multiple funding channels to enable the purchase of network assets from Partners, such as asset backed securitizations (“ABS”). Capital markets execution fees are earned from the market pricing of ABS transactions. Contract fees are related to the management, performance and other fees earned for administering Financing Vehicles. These fees are the result of agreements with customers and are recognized in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is generally recognized on a gross basis in accordance with ASC 606 related to reporting revenue on a gross basis as a principal versus on a net basis as an agent. This is because the Company is primarily responsible for integrating the various services fulfilled by Partners and is ultimately responsible to the Financing Vehicles for the fulfillment of the related services. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records revenue on a net basis. Network AI fees, comprised of AI integration fees and capital markets execution fees, totaled $616.9 million, $387.1 million and $65.8 million, for the years ended December 31, 2022, 2021 and 2020, respectively. Expenses to third parties for services that are integrated with the Company’s technology are recorded in the consolidated Statements of operations as Production Costs. Real estate fees, which are included in Network AI fees, are earned for the obligations to arrange for the purchase of real estate assets, provide administrative services, arrange for the eventual sale of the assets, and provide pre-and post-purchase services including the right to earn performance fees. All of these fees are recognized over time except for the purchase and sale obligations, which are satisfied at the point in time of the respective transactions. As the Company is a principal for these services, revenues are recorded on a gross basis. Contract fees include administration and management fees, performances fees, and servicing fees. Contract fees totaled $68.5 million, $58.8 million and $25.9 million for the year ended December 31, 2022, 2021 and 2020, respectively. The Company recognizes administration fees over the service period for the Financing Vehicles managed or administered by the Company. Performance fees are earned when certain Financing Vehicles exceed contractual return thresholds. They are recognized only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. An estimate is made by the Company based on a variety of factors including market conditions and expected loan performance. In the following period, the true performance is measured and then adjusted to ensure that the fees accurately represent actual performance. As such, there are revenues that result from performance obligations satisfied in the previous year. During the years ended 2022, 2021 and 2020, $3.8 million, $1.2 million and $0.0 million, respectively, worth of fees represent performance obligations satisfied in the previous year that were lesser than the original estimate. Servicing fees for the Financing Vehicles, which primarily involve collecting payments and providing reporting on the loans within the securitization vehicles, are recognized over the service period. These duties have been considered to be agent responsibilities and does not include acting as a loan servicer. Accordingly, servicing fees are recorded on a net basis. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between payment and the transfer of services is expected to be one year or less. For the years ended December 31, 2022, 2021 and 2020, the finance component out of total consideration was not material. Once revenue is recognized, it is recorded on the balance sheet in fees and other receivables until the payment is received from the customer. The timing of the recognition depends on the type of service as described above. 2022 2021 2020 (in thousands) Services transferred at a point in time $ 661,646 $ 420,460 $ 75,180 Services transferred over time 23,768 25,406 16,560 Total revenue from fees, net $ 685,414 $ 445,866 $ 91,740 The Company had no material contract assets, contract liabilities, or deferred contract costs recorded as of December 31, 2022 and December 31, 2021. Interest Income Interest income is recognized based on projected cashflow according to the ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company accrues interest income on investments based on the effective interest rate of the investments and recorded as interest income as earned. Interest income earned from cash and cash equivalents is recorded on an accrual basis to the extent such interest is earned and expected to be collected. Production Costs Production costs are primarily comprised of (i) fees the Company pays in Partners when network volume is acquired by Financing Vehicles as the Partners are responsible for marketing and customer interaction, facilitating the flow of additional application flow, and (ii) expenses the Company incurs to renovate single family residence assets. Research and development costs Research and development costs are primarily engineering and product development expenses which primarily consists of payroll and other employee-related expenses, including share-based compensation expenses, for the engineering and product development teams as well the costs of systems and tools used by these teams. These costs are recognized in the period incurred. Leases The Company accounts for its leases under ASC 842, Leases. Under this guidance, lessees classify arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated statements of financial position as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, including common maintenance fees, insurance and property tax, are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. Share-Based Compensation The Company grants options to employees and nonemployees. The Company measures options based on the estimated grant date fair values, which the Company determines using the Black-Scholes option-pricing model. The Company records the resulting expense in the consolidated Statements of Operations and Comprehensive Income (Loss) using the straight-line method over the period of service required to vest in the award, which is generally two For nonemployee share options, the fair value is remeasured as the share options vest, and the resulting change in fair value, if any, is recognized in the consolidated Statements of Operations and Comprehensive Income (Loss) during the period the related services are rendered. The Company also grants options to restricted shares to certain employees and directors. The Company measures options to restricted shares based on the estimated grant date fair values, which the Company determines using the Monte Carlo simulation model implemented in a risk-neutral valuation framework. The Company records the resulting expense in the consolidated Statements of Operations and Comprehensive Income (Loss) using the straight-line method over the period of service required to vest in the award, which is generally two Income Taxes The Company uses the liability method of accounting for income taxes, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the deferred tax assets and liabilities are determined based on the differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws expected to apply to taxable income when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under assets and liabilities, respectively. The calculation of tax liabilities involves dealing with uncertainties in the application of complex federal and state tax laws and regulations. ASC 740, “Income Taxes” (“ASC 740”) states that a tax benefit from an uncertain tax position may be recognized (1) when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records unrecognized tax benefits as liabilities in accordance with ASC 740 and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from management’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. The Company recognizes interest and penalties related to unrecognized tax benefits in taxes on income expense. Basic and Diluted Net income (loss) per Ordinary Share The Company calculates net income (loss) per share using the two-class method required for participating securities. The two-class method requires income (loss) available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s redeemable convertible preferred shares c |
MERGER
MERGER | 12 Months Ended |
Dec. 31, 2022 | |
Reverse Recapitalization [Abstract] | |
MERGER | MERGER On June 22, 2022 (the “EJFA Closing Date”), the Company consummated the previously announced business combination pursuant to the Agreement and Plan of Merger, dated September 15, 2021 (the “EJFA Merger Agreement”), by and among the Company, EJF Acquisition Corp., a Cayman Islands exempted company (“EJFA”), and Rigel Merger Sub Inc., a Cayman Islands exempted company and wholly-owned subsidiary of the Company (“EJFA Merger Sub”). On the EJFA Closing Date, the following transactions occurred pursuant to the terms of the EJFA Merger Agreement: • (i) immediately prior to the effective time (the “Effective Time”) of the EJFA Merger (as defined below), each preferred share, with nominal value New Israeli Shekel 0.01, of Pagaya (each, a “Pagaya Preferred Share”) was converted into ordinary shares, with no par value, of Pagaya (each, a “Pagaya Ordinary Share”) in accordance with Pagaya’s organizational documents (the “Conversion”), (ii) immediately following the Conversion but prior to the Effective Time, Pagaya adopted amended and restated articles of association of Pagaya, (iii) immediately following such adoption but prior to the Effective Time, Pagaya effected a stock split of each Pagaya Ordinary Share and each Pagaya Ordinary Share underlying any outstanding options to acquire Pagaya Ordinary Shares, whether vested or unvested, into such number of Pagaya Ordinary Shares calculated in accordance with the terms of the EJFA Merger Agreement such that each Pagaya Ordinary Share has a value of $10.00 per share after giving effect to such stock split (the “Stock Split”), with the three founders of Pagaya (including any trusts the beneficiary of which is a founder of Pagaya and to the extent that a founder of Pagaya has the right to vote the shares held by such trust) (in their capacity as shareholders of Pagaya, the “Founders”) each receiving Class B ordinary shares of Pagaya, without par value (the “Pagaya Class B Ordinary Shares”), which carry voting rights in the form of ten (10) votes per share of Pagaya, and the other shareholders of Pagaya receiving Class A ordinary shares of Pagaya, without par value (the “Pagaya Class A Ordinary Shares”), which are economically equivalent to the Pagaya Class B Ordinary Shares and carry voting rights in the form of one (1) vote per share of Pagaya, in accordance with Pagaya’s organizational documents (the “Reclassification” and, together with the Conversion and the Stock Split, the “Capital Restructuring”); • at the Effective Time, EJFA Merger Sub merged with and into EJFA (the “EJFA Merger”), with EJFA continuing as the surviving company after the EJFA Merger (the “Surviving Company”), and, as a result of the EJFA Merger, the Surviving Company became a direct, wholly-owned subsidiary of Pagaya; and • at the Effective Time, (i) each Class B ordinary share, par value $0.0001 per share, of EJFA (the “EJFA Class B Shares”) issued and outstanding immediately prior to the Effective Time other than all shares of EJFA held by EJFA, EJFA Merger Sub or Pagaya or any of its subsidiaries at that time (such shares, the “Excluded Shares”), was no longer outstanding and was converted into the right of the holder thereof to receive one Pagaya Class A Ordinary Share after giving effect to the Capital Restructuring, (ii) each Class A ordinary share, par value $0.0001 per share, of EJFA (the “EJFA Class A Shares”) issued and outstanding immediately prior to the Effective Time other than the Excluded Shares was no longer outstanding and was converted into the right of the holder thereof to receive one Pagaya Class A Ordinary Share after giving effect to the Capital Restructuring, (iii) each issued and outstanding warrant of EJFA sold to the public and to Wilson Boulevard LLC, a Delaware limited liability company, in a private placement in connection with EJFA’s initial public offering (the “EJFA Warrants”) was automatically and irrevocably assumed by Pagaya and converted into a corresponding warrant exercisable for Pagaya Class A Ordinary Shares (“Pagaya Warrants”). The warrants acquired in the EJFA Merger include (a) redeemable warrants issued by EJFA and sold as part of the units in the EJFA IPO (whether they were purchased in the EJFA IPO or thereafter in the open market), which are exercisable for an aggregate of 9,583,333 shares of common stock at a purchase price of $11.50 per share (the “EJFA Public Warrants”) and (b) warrants issued by EJFA to Wilson Boulevard LLC in a private placement simultaneously with the closing of the EJFA IPO, which are exercisable for an aggregate of 5,166,667 shares of common stock at a purchase price of $11.50 per share (the “EJFA Private Placement Warrants”). See Note 10 for additional information. The EJFA Merger was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Pagaya has been determined to be the accounting acquirer, primarily due to the fact that Pagaya Shareholders will continue to control the post-Closing combined company. On the EJFA Closing Date, simultaneous with the closing of the EJFA Merger, the Company completed a PIPE financing whereby the Company received $350 million gross proceeds in exchange for 35,000,000 shares of common stock. Total gross proceeds resulting from the transactions were $350 million, out of which total transaction costs amounted to approximately $57.3 million. The transaction costs allocated to the warrants liabilities in the amount of $1.2 million were recognized as expenses in the Company’s consolidated statement of operations and comprehensive income (loss). In connection with the EJFA Merger, the Company’s board of directors approved a 1:186.9 stock split and a change in par value from NIS 0.01 to no par value. As a result, all shares, options, warrants, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these consolidated financial statements as if the stock split and change in par value had been in effect as of the date of these consolidated financial statements. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Property and equipment, net Property and equipment, net, consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Computer and software $ 37,517 $ 7,638 Equipment 765 566 Leasehold improvements 922 681 Property and equipment, gross 39,204 8,885 Less: accumulated depreciation and amortization (7,541) (1,237) Property and equipment, net $ 31,663 $ 7,648 The Company capitalized $29.4 million, $4.0 million and $0.5 million, of internally developed costs during the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and December 31, 2021, internally developed software costs balances, included in property and equipment, net, are $28.2 million and $4.4 million, respectively. Depreciation and amortization expense was $6.3 million, $0.8 million and $0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, the Company wrote off certain internally developed software, and reported $0.7 million of impairment loss within other income (loss), net Prepaid and other current assets Prepaid and other current assets, consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Prepaid expenses $ 7,092 $ 3,345 Related party receivables 18,783 1,367 Other current assets 1,383 1,551 Total Prepaid expenses and other current assets $ 27,258 $ 6,263 Accrued expenses and other liabilities Accrued expenses and other liabilities consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Employee payables $ 14,482 $ 15,191 Other short-term liabilities 35,014 1,902 Total accrued expenses and other liabilities $ 49,496 $ 17,093 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS As of December 31, 2022 and 2021, the Company had secured borrowings with an outstanding balance of $139.6 million and $38.0 million, respectively, as well as a revolving credit facility with an outstanding balance of $15.0 million and $0.0 million, respectively. The Company was in compliance with all covenants. Risk Retention Master Repurchase In December 2021, RRRR Repo Funding Trust 2021-1 (the “2021 RR entity”), a consolidated VIE, entered into a master repurchase agreement (the “2021 RRRR Repurchase Agreement”) to finance the Company’s risk retention balance in notes retained from two securitization transactions. Under this agreement, the balance borrowed by the 2021 RR entity has an interest rate of 3.618% per annum (as may be adjusted in accordance with the 2021 RRRR Repurchase Agreement) and is repaid using cash proceeds received by the 2021 RR entity as part of monthly cash distributions from the two securitization notes and amounts on deposit in a reserve account. As of December 31, 2022 and 2021, the outstanding principal balance under the 2021 RRRR Financing Agreement $25.6 million and $38.0 million, respectively. In February and May 2022, Pagaya Structured Products LLC (the “PSP”), a wholly-owned subsidiary, entered into master repurchase agreements (the “Master Agreements”) to finance the Company’s risk retention balance in certain notes and certificates retained from securitization transactions. As of December 31, 2022, the outstanding principal balance under the Master Agreements was $99.0 million. Receivables Facility In October 2022, Pagaya Receivables LLC, a wholly-owned subsidiary, entered into a Loan and Security Agreement (the “LSA Agreement”) with certain lenders, which provides for a 3-year loan facility (the “Receivables Facility”) in a maximum principal amount of $22 million to finance certain eligible receivables purchased from sponsored securitization transactions. Borrowings under the Receivables Facility bear interest at a rate per annum equal to the adjusted term Secured Overnight Financing Rate (subject to a 0.00% floor) plus a margin of 2.20%, and the balance is repaid using cash proceeds received from the receivables. As of December 31, 2022, the outstanding principal balance under the Receivables Facility was $15.0 million. Revolving Credit Facility In September 2022, the Company entered into a Senior Secured Revolving Credit Agreement (the “Credit Agreement”) with certain lenders. The Credit Agreement provides for a 3-year senior secured revolving credit facility (the “Revolving Credit Facility”) in an initial principal amount of $167.5 million, which includes a sub-limit for letters of credit in an initial aggregate principal amount of $50.0 million, of which up to the U.S. dollar equivalent of $20.0 million may be issued in new Israeli shekels. The Revolving Credit Facility replaced the 2021 Credit Facility (as defined below). Proceeds of borrowings under the Revolving Credit Facility may be used to finance the Company’s ongoing working capital needs, permitted acquisitions or for general corporate purposes of the Company and its subsidiaries. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to either (i) a base rate (determined based on the prime rate and subject to a 1.00% floor) plus a margin of 1.75% or (ii) an adjusted term Secured Overnight Financing Rate (subject to a 0.00% floor) plus a margin of 2.75%. A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility at a rate per annum of 0.25% and is payable quarterly in arrears. The Company may voluntarily prepay borrowings under the Revolving Credit Facility at any time and from time to time without premium or penalty, subject only to the payment of customary “breakage” costs. No amortization payments are required to be made in respect of borrowings under the Revolving Credit Facility. As of December 31, 2022, the outstanding principal balance under the Revolving Credit Facility was $15.0 million. Termination of 2021 Credit Facility In connection with entering into the Credit Agreement, the Company repaid all outstanding obligations with respect to, and terminated the commitments under, that certain Credit Agreement, dated as of December 23, 2021 (as amended among the Company and certain lenders (the “2021 Credit Facility”)). As of December 31, 2021, no borrowings was made under the 2021 Credit Facility. |
INVESTMENTS IN LOANS AND SECURI
INVESTMENTS IN LOANS AND SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS IN LOANS AND SECURITIES | INVESTMENTS IN LOANS AND SECURITIES Investments in loans and securities are recorded at amortized cost as of December 31, 2022 and 2021 in the consolidated statements of financial position (in thousands). As provided in Note 7, a portion of these investments in loans and securities are consolidated as a result of the Company’s determination that it is the primary beneficiary of certain VIEs. As of December 31, 2022 Investments in loans and securities Amortized Gross Gross Fair ABS – Consumer / Auto Loan / Real Estate (1) $ 450,210 $ 23,724 $ (7,263) $ 466,671 Other loans and receivables 13,766 — — 13,766 Total $ 463,976 $ 23,724 $ (7,263) $ 480,437 __________________ (1) During the year ended December 31, 2022, the Company recorded impairment loss of $33.7 million within other income (loss), net in the consolidated statements of operations. As of December 31, 2021 Investments in loans and securities Amortized Gross Gross Fair ABS – Consumer / Auto Loan $ 270,067 $ 18,648 $ — $ 288,715 Other loans and receivables 12,657 — — 12,657 Total $ 282,724 $ 18,648 $ — $ 301,372 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 consolidated statements of financial position as of December 31, 2022 and 2021 (in thousands): Carrying Value December 31, 2022 2021 Investments in Pagaya SmartResi F1 Fund, LP (1) $ 16,810 $ 14,352 Other (2) 9,084 489 Total $ 25,894 $ 14,841 __________________ (1) The Company owns approximately 5.4% and is the general partner of Pagaya Smartresi F1 Fund LP. |
CONSOLIDATION AND VARIABLE INTE
CONSOLIDATION AND VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATION AND VARIABLE INTEREST ENTITIES | CONSOLIDATION AND VARIABLE INTEREST ENTITIES The Company has variable interests in securitization vehicles that it sponsors. The Company consolidates VIEs when it is deemed to be the primary beneficiary. In order to be primary beneficiary, the Company must have a controlling financial interest in the VIE. This is determined by evaluating if the Company has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. Consolidated VIEs As of December 31, 2022 and 2021, the Company has determined that it is the primary beneficiary of Pagaya Structured Holdings LLC, Pagaya Structured Holdings II LLC, and Pagaya Structured Holding III LLC (“Risk Retention Entities”). As sponsor of securitization transactions, the Company is subject to risk retention requirements and established the Risk Retention Entities to meet these requirements. Below is a summary of assets and liabilities from the Company’s involvement with consolidated VIEs (i.e., Risk Retention Entities) (in thousands): Assets Liabilities Net Assets As of December 31, 2022 $ 264,854 $ — $ 264,854 As of December 31, 2021 $ 220,293 $ — $ 220,293 Unconsolidated VIEs The Company determined that it is not the primary beneficiary of the trusts which hold the loans and issue securities associated with the securitization transactions the Company sponsors. The Company does not have the power to direct or control the activities which most significantly affect the performance of the trusts, which was determined to be servicing loans. The Company’s maximum exposure to loss from its involvement with unconsolidated VIEs represents the estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is remote, such as where the value of securitization notes and senior and residual certificates the Company holds as part of the risk retention requirement declines to zero. Below is a summary of the Company’s direct interest in (i.e., not held through Risk Retention Entities) variable interests in nonconsolidated VIEs (in thousands): Carrying Amount Maximum Exposure to Loss VIE Assets As of December 31, 2022 $ 200,694 $ 200,694 $ 3,911,589 As of December 31, 2021 $ 57,193 $ 57,193 $ 1,330,396 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Severance pay — Under Israeli employment laws, Israeli employees of the Company are included under Section 14 of the Severance Pay Law, 5723-1963 (“Section 14”). According to Section 14, these employees are entitled to monthly payments made by the Company on their behalf with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments with respect to those employees. The obligation to make the monthly deposits at a rate of 8.33% of their monthly salary is expensed as incurred. In addition, the aforementioned deposits are not recorded as an asset in the consolidated balance sheet, and there is no liability recorded as the Company does not have a future obligation to make any additional payments. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases facilities under operating leases with various expiration dates through 2036. The Company leases office space in New York, Israel and several other locations. The security deposits for the leases are $4.2 million and $2.9 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, $4.2 million and $2.9 million, respectively, have been recognized as restricted cash, non-current in the consolidated balance sheets. The Company’s operating lease expense consists of rent and variable lease payments. Variable lease payments such as common area maintenance were included in operating expenses. Rent expense for the Company’s short-term leases was immaterial for the periods presented. Operating lease expense was as follows (in thousands): Year Ended December 31, 2022 Rent expense $ 11,946 Variable lease payments $ 429 Supplemental information related to the Company’s operating leases was as follows: As of December 31, 2022 Weighted-average remaining lease term (in years) 8.2 Weighted-average discount rate 5.7 % Year Ended December 31, 2022 (in thousands) Cash paid within operating cash flows $ 11,192 Operating lease right-of-use assets recognized in exchange for new operating lease obligations $ 68,819 As of December 31, 2022, future minimum lease commitments under non-cancelable operating leases were as follows (in thousands): 2023 $ 11,526 2024 8,859 2025 7,888 2026 7,888 2027 7,339 Thereafter 29,035 Total 72,535 Less: imputed interest (14,908) Total operating lease liabilities $ 57,627 As previously disclosed in "Note 8. Commitments and Contingencies" to Notes to Consolidated Financial Statements included in the Company’s Registration Statement on Form F-4 and under the previous lease accounting standard, future minimum payments related to operating leases as of December 31, 2021 are as follows: 2022 $ 8,589 2023 7,832 2024 5,762 2025 4,793 2026 4,847 Thereafter 17,151 Total $ 48,974 |
WARRANT LIABILITY
WARRANT LIABILITY | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANT LIABILITY | WARRANT LIABILITY On June 22, 2022, in connection with the EJFA Merger, the Company assumed 9,583,333 Public Warrants and 5,166,667 Private Placement Warrants, all of which were outstanding as of December 31, 2022. See Note 3 for additional information. Public Warrants — Public Warrants may only be exercised for a whole number of shares. The Public Warrants became exercisable on July 22, 2022. The Public Warrants will expire on June 22, 2027 or upon liquidation. The Company will not be obligated to deliver any Class A Ordinary Shares pursuant to the exercise of a public warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No public warrant will be exercisable, and the Company will not be obligated to issue a Class A Ordinary Share upon exercise of a public warrant unless the Class A Ordinary Share, issuable upon such warrant exercise, has been registered, qualified, or deemed to be exempt under the securities laws of the state of residence of the registered holder of the public warrants. Redemption of Public Warrants for Cash Once the warrants become exercisable, the Company may redeem the outstanding warrants: • if, and only if, the closing price of the Class A Ordinary Shares equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending three • in whole and not in part; • at a price of $0.01 per warrant; and • upon not less than 30 days’ prior written notice of redemption to each warrant holder. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of Public Warrants when the per share price of Class A Ordinary Shares equals or exceeds $10.00 Once the public warrants become exercisable, the Company may redeem the outstanding warrants: • if, and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $10.00 per share (subject to adjustment in compliance with the terms of the Warrant Agreement) for any 20 trading days within a 30 trading-day period ending on, and including, the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; • in whole and not in part; and • for cash at a price of at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their public warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table included in the Warrant Agreement, based on the redemption date and the “fair market value” of the Class A Ordinary Shares as described in the Warrant Agreement. If the Company calls the Public Warrants for redemption as described above under “—Redemption of Public Warrants for Cash,” management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A Ordinary Shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, recapitalization, reorganization, merger, or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Class A Ordinary Shares at a price below its exercise price. Additionally, in no event will the Company be required to net-cash settle the warrants. Private Placement Warrants — Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants are exercisable for cash or cashless, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. These warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the consolidated statements of financial position. The warrant liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive income (loss). |
COMMITMENT AND CONTINGENTIES
COMMITMENT AND CONTINGENTIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings — From time to time the Company is subject to legal proceedings and claims in the ordinary course of business. The results of such matters often cannot be predicted with certainty. In accordance with applicable accounting guidance, the Company establishes an accrued liability for legal proceeding and claims when those matters present loss contingencies which are both probable and reasonably estimable. All such liabilities arising from current legal and regulatory matters, to the extent such matters existed, have been recorded in accrued expenses and other liabilities on the consolidated statements of financial position and these matters are immaterial. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES In the ordinary course of business, the Company may enter into transactions with directors, principal officers, their immediate families, and affiliated companies in which they are principal shareholders (commonly referred to as related parties). The Company has transactions with the securitization vehicles and other Financing Vehicles which are also related parties. As of December 31, 2022, the total fee receivables from related parties are $87.8 million, which consist of $83.0 million from securitization vehicles and $4.7 million from other Financing Vehicles. As of December 31, 2021, the total fee receivables from related parties are $51.5 million, which consists of $46.9 million from securitization vehicles and $4.6 million from other Financing Vehicles. As of December 31, 2022 and 2021, prepaid expenses and other assets include amounts due from related parties of $18.8 million and $1.4 million, respectively, all of which were attributable to Financing Vehicles. During the years ended December 31, 2022 and 2021, the Company purchased approximately $29.6 million and $24.0 million of loan principal from Financing Vehicles, respectively. The Company didn’t purchase any loan principal from Financing Vehicles during the year ended December 31, 2020. For the year ended December 31, 2022, the total revenue from related parties is $653.5 million, which consists of $492.1 million from securitization vehicles and $161.4 million from other Financing Vehicles. For the year ended December 31, 2021, the total revenue from related parties is $445.9 million, which consists of $362.7 million from securitization vehicles and $83.2 million from other Financing Vehicles. For the year ended December 31, 2020, the total revenue from related parties is $91.7 million, which consists of $68.5 million from securitization vehicles and $23.2 million from other Financing Vehicles. Other Affiliated Payables |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The below tables contain information about assets that are not measured at fair value on a recurring basis as of December 31, 2022 and 2021 (in thousands): At December 31, 2022 Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash, cash equivalents and restricted cash $ 337,076 $ 337,076 $ — $ — $ 337,076 Investments in loans and securities 463,976 — — 480,437 480,437 Fees and other receivables 97,993 — 97,993 — 97,993 Total $ 899,045 $ 337,076 $ 97,993 $ 480,437 $ 915,506 At December 31, 2021 Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash, cash equivalents and restricted cash $ 204,575 $ 204,575 $ — $ — $ 204,575 Short-term deposits 5,020 5,020 — — 5,020 Investments in loans and securities 282,724 — — 301,372 301,372 Fees and other receivables 51,540 — 51,540 — 51,540 Total $ 543,859 $ 209,595 $ 51,540 $ 301,372 $ 562,507 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): Level December 31, 2022 Warrant liability - Public Warrants 1 $ 909 Warrant liability - Private Placement Warrants 2 490 Total $ 1,400 The following tables summarize the Warrant liability activity for the years ended December 31, 2022, 2021 and 2020 (in thousands): Balance as of December 31, 2019 $ 83 Issuance of Series D warrants / the Option 2,442 Change in fair value / extinguishment of the Option (54) Balance as of December 31, 2020 2,471 Exercise of Series B warrants (22,012) Exercise of Series D warrants (6,009) Change in fair value 53,019 Balance as of December 31, 2021 27,469 Assumed warrants in connection with the Merger (1) 5,594 Change in fair value (11,088) Reclassification (2) (20,575) Balance as of December 31, 2022 $ 1,400 __________________ (1) See Note 3 for additional information. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS | REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS Prior to the EJFA Merger, the Company recorded shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company applied the guidance in ASC 480 and therefore classified all of its outstanding convertible preferred stock as temporary equity. All convertible preferred stock previously classified as temporary equity were converted into ordinary shares, and reclassified to permanent equity as a result of the EJFA Merger. See Note 3 for additional information. Free-standing warrants issued by the Company for the purchase of shares of its convertible preferred stock were classified as liabilities on the accompanying balance sheets at fair value using an Option-Pricing Model (“OPM”). Prior to the EJFA Merger, the liability recorded was adjusted for changes in the fair value at each reporting date and recorded as other income (loss) in the accompanying consolidated statements of operations. As a result of the EJFA Merger, each of the warrants was converted into a warrant to purchase ordinary shares. The Company determined the warrants to be equity classified under ASC 815 and the fair value of the warrants upon consummation of the EJFA Merger was reclassified to additional paid-in capital. Historical information disclosed in this note such as share and per share amounts were not adjusted for the 1:186.9 stock split. Redeemable Convertible Preferred Shares During March 2021, the Company issued 187,347 shares of Series E preferred shares at $838.49 per share to certain investors for gross total proceeds of $157.1 million. In connection with the Series E preferred financing, the Company also issued a total of 144,183 warrants to purchase ordinary shares at an exercise price of $0.001 per share. During March 2021, in connection with the Series E preferred financing, the Company facilitated a secondary transaction between certain investors and the founders, for an aggregate purchase price of $125.0 million. As part of this secondary transaction, certain employees sold 103,162 ordinary shares to Series E investors at $838.49 per share. The Company deemed the transaction as compensatory and recorded share-based compensation expense of $56.8 million for the excess of transaction price over the fair value of ordinary shares. Further, certain existing preferred shareholders sold 45,917 preferred shares to Series E investors at $838.49 per share. The Company has recorded the excess of transaction price over the fair value of preferred of $23.6 million as deemed dividends within retained earnings. During July and August 2021, the Company facilitated a secondary transaction between certain investors and the founders and employees, for an aggregate purchase price of $201.0 million. As part of this secondary transaction, certain employees sold 101,614 ordinary shares to certain investors at $1,147.60 per share. Further, certain existing preferred shareholders sold 73,533 preferred shares to certain investors at $1,147.60 per share. The Company deemed the transaction to be at fair value of ordinary share and as such no compensation was recorded for the sale of 101,614, shares of ordinary shares by employees to the investors. A summary of the authorized, issued and outstanding redeemable convertible preferred shares of Series A, Series A-1, Series B, Series C, Series D and Series E (collectively “Preferred Shares”) as of December 31, 2021 (in thousands, except share and per share amounts) is as follows: December 31, 2021 Shares Authorized Shares Issued and Outstanding Issuance Price Per Share Carrying Value Aggregate Liquidation Preference Series A 370,370 370,370 $ 3.38 $ 1,243 $ 1,837 Series A-1 179,398 172,857 18.90 3,254 4,489 Series B 412,554 412,554 35.81 36,635 18,468 Series C 343,498 343,498 72.57 24,893 30,106 Series D 713,076 688,301 149.35 105,016 183,329 Series E 187,347 187,347 838.49 136,006 165,733 2,206,243 2,174,927 $ 307,047 $ 403,962 Conversion Each Preferred Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, and without the payment of additional consideration by the holder thereof, into one such number of fully paid and non-assessable ordinary shares as is determined by dividing the applicable Original Issue Price of such share by the Conversion Price of such share, in effect at the time of conversion. The initial Conversion Price of a Preferred Share shall be the applicable Original Issue Price; provided, however, that each such Conversion Price shall be subject to adjustment for certain events as set forth in the Company’s Articles of Association, including, share splits, or business combinations. Automatic Conversion: Each Preferred Share shall automatically be converted into ordinary shares, upon the earlier of: (iii) in the event that the Preferred Majority consents in writing to such conversion; provided, however, with respect to the conversion of the Series C Preferred Shares, the consent or affirmative vote of the Series C Preferred Majority shall also be required. With respect to the conversion of the Series D Preferred Shares, the consent or affirmative vote of the Series D Preferred Majority shall also be required; or (iv) immediately prior to the closing of a Qualified IPO, subject to the consummation of such Qualified IPO. In March 2021, the Company amended and restated its Articles of Association to include the consummation of a SPAC Transaction in the mandatory condition of automatic conversion of Preferred Shares to ordinary shares immediately prior to the closing of the SPAC Transaction. Liquidation The Series E Preferred Shares have a senior liquidation preference to the Series D Preferred shares, which have a senior liquidation preference to the Series C Preferred Shares, which have a senior liquidation preference to the series B Preferred shares. The Series B Preferred Shares have a senior liquidation preference to the Series A and the Series A-1 Preferred Shares, collectively. The Series A and the Series A-1 Preferred Shares have liquidity preference to the ordinary shares in the event of i) any voluntary or involuntary liquidation, dissolution or winding up of the Company or ii) any distribution of cash or in kind to Shareholders of the Company (including dividends) (but excluding bonus shares distributed pro-rata to all shareholders) or iii) a “Deemed Liquidation” (events such as change in control, license of substantially all of the Company’s intellectual property, etc.), of the Company, then all dividends, assets or proceeds legally available for distribution to the Shareholders in such event (the “Distributable Proceeds”), will be distributed among the Shareholders in accordance with the following order of preference: Series E Preferred Shareholders are entitled to receive an amount equal to the higher of (A) its original issue price, plus 7% cumulative interest at a rate of 7% per annum, plus (if applicable), an amount equal to any dividends declared but unpaid thereon, less the amount of distributions, including any dividends, actually received in a prior Distribution Event which were paid on account of each such Preferred E Share; or (B) the applicable pro rata portion of the Distributable Proceeds such holder of Series E Preferred Shares would receive had all Preferred Shares which would have received a greater portion of the Distributable Proceeds on an as-converted basis been converted into ordinary shares immediately prior to such Distribution Event (the “Preferred E Preference”). After the preferential payments satisfy in full the Preferred E Preference, Series D Preferred Shareholders are entitled to receive an amount equal to the higher of (A) its original issue price, plus 7% cumulative interest at a rate of 7% per annum, plus an amount equal to all declared but unpaid dividends on each such Preferred D Share, less the amount of distributions, including any dividends, actually received in a prior Distribution Event which were paid on account of each such Preferred D Share; or (B) the applicable pro rata portion of the Distributable Proceeds such holder of Series D Preferred Shares would receive had all Preferred Shares which would have received a greater portion of the Distributable Proceeds on an as-converted basis been converted into ordinary shares immediately prior to such Distribution Event. (the “Preferred D Preference”). After the preferential payments satisfy in full the Preferred D Preference, Series C Preferred Shareholders are entitled to receive an amount equal to the higher of (A) its original issue price, plus 7% cumulative interest at a rate of 7% per annum, plus an amount equal to all declared but unpaid dividends on each such Preferred C Share, less the amount of distributions, including any dividends, actually received in a prior Distribution Event which were paid on account of each such Preferred C Share; or (B) the applicable pro rata portion of the Distributable Proceeds such holder of Series C Preferred Shares would receive had all Preferred Shares which would have received a greater portion of the Distributable Proceeds on an as-converted basis been converted into ordinary shares immediately prior to such Distribution Event. (the “Preferred C Preference”). After the preferential payments satisfy in full the Preferred C Preference, Series B Preferred Shareholders are entitled to receive of an amount equal to the higher of (A) its original issue price, plus 7% cumulative interest at a rate of 7% per annum, plus an amount equal to all declared but unpaid dividends on each such Preferred B Share, less the amount of distributions, including any dividends, actually received in a prior Distribution Event which were paid on account of each such Preferred B Share; or (B) the applicable pro rata portion of the Distributable Proceeds of the holders of Series B Preferred Shares would receive had all Preferred Shares been converted into ordinary shares immediately prior to such Distribution Event (the “Preferred B Preference”). After the preferential payments satisfy in full the Preferred B Preference, Series A and Series A-1 Preferred Shareholders are entitled to receive an amount equal to the higher of (A) its original issue price, plus 7% cumulative interest at a rate of 7% per annum, an amount equal to all declared but unpaid dividends on each such Remaining Preferred Share, less the amount of distributions, including any dividends, actually received in a prior Distribution Event which were paid on account of each such Remaining Preferred Share, prior and in preference to all holders of ordinary shares; or (B) the applicable pro rata portion of the Distributable Proceeds such holder of Series A and Series A-1 Preferred Shares would receive had all Preferred Shares been converted into ordinary shares immediately prior to such of the holders of the Remaining Preferred Shares (the “Preferred A Preference”). Upon payment in full of the preferred preference to the holders of Preferred Shares, the remaining distributable proceeds (if any), will be distributed on a pro-rata basis among the Pagaya holders of ordinary shares. If upon the occurrence of such Distribution Event, the remaining Distributable Proceeds of the Company available for distribution to its shareholders are insufficient to pay the holders of a security class after payment in full of the Preference to all classes which are senior to such class, then the remaining Distributable Proceeds shall be distributed ratably among all the holders of the Remaining Preferred Shares of such class only. Dividends The holders of each series of Preferred Share shall be entitled to receive dividends, out of any funds legally available, prior and in preference to any declaration or payment of any dividend on ordinary shares of the Company, in accordance with the liquidation preference mentioned above. No dividend shall be paid other than out of the profits of the Company, as defined in the Companies Law, and no interest shall be paid by the Company on dividends. The dividend yield is based on the Company’s historical and future expectation of dividends payouts. As of December 31, 2022, the Company has not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. Voting Each holder of Preferred Share shall have one vote for each ordinary share which the Preferred Shares held by such holder of record could be converted into, in every resolution, regardless to whether the vote thereon is conducted by a show of hands, by written consent in lieu of a meeting, or by any other mean, on all matters entitled to be voted on by the Shareholders of the Company or by the holders of Preferred Shares voting together as a single class on an as converted basis (except as otherwise expressly provided herein or as required by law). The board of the Company shall consist of a total of up to eight members. Certain Preferred Shareholders of the Company may appoint a total of four Directors (the “Preferred Directors”) as long as each of them holds at least the Minimum Share Threshold. A majority among the Founders (i.e., two of the three Founders) shall be entitled to appoint three Directors (each such appointed Director, an “Ordinary Director” and collectively, the “Ordinary Directors”). The Ordinary Directors, and the Preferred Directors in office may, by a majority vote among them, appoint one Director who shall have expertise and extensive knowledge in the Company’s field of business. In addition to the voting rights described herein, there are other majority requirements for the taking of certain actions or adoption certain resolutions as forth in the Company’s Articles of Association. Redemption Preferred Shares are not redeemable at the election of the holder, except that in the event of a change in control resulting from the sale or transfer of the Company’s securities, which qualifies as a Liquidation Event. The Company classified its Preferred Shares as temporary equity because they may become redeemable due to certain change in control events that are outside the Company’s control, including a merger, acquisition, or sale of assets of the Company. The Company has not adjusted the carrying values of the Preferred Shares to its redemption value because redemption was not probable as of the balance sheet dates presented. The Option In June 2020, the Company issued 341,473 Series D Preferred Shares to investors at $149.35 per share amounting to $51.0 million, pursuant to a Series D Preferred Share purchase agreement (“Series D Agreement”). The Series D Agreement provided the investors with the ability to purchase an additional 341,473 Series D Preferred Shares at $149.35 per share for a period of 180 days; hereinafter referred to as the Option. The Company accounted for the Option as a liability in accordance with the provisions of ASC 480. The fair value of the Option was calculated upon issuance, at the end of each reporting period, and prior to settlement using the Option-Pricing Method. The Option was initially recorded at its fair value of $0.5 million or $1.59 per share and subsequently remeasured at each reporting period with changes in fair value recognized in other expense, net, within the Statements of Operations and Comprehensive Income (Loss). The remaining proceeds received at issuance of the Series D Preferred Share in June 2020 were attributed to Series D Preferred Share, consistent with the fair value of the Series D Preferred Share as derived from a concurrent valuation and Series D Preferred Shares warrants. In November 2020, the investors exercised a portion of the Option to purchase 96,081 Series D Preferred Shares. Upon extinguishment of the Option pertaining to the remaining 245,392 Series D Preferred shares, the Company recognized a gain of $0.5 million in other expense, net, within Statements of operations and comprehensive income (loss). The Company used the Black-Scholes Method to determine the fair value of the Option. This Method determines the price of an option by calculating the return an investor gets less the amount that investor has to pay, using log normal distribution probabilities to account for volatility in the underlying asset. The following assumptions in determining the fair value of the Option as of issuance date: June 1, 2020 Price of the Underlying Shares 137.88 Exercise Price 149.35 Expected Term 0.38 Risk Free Rate 0.10 % Volatility 16 % In November 2020, subsequent to the approval by the shareholders and the board of directors, the Company entered into a separate firm commitment to issue to its Founders the unexercised 245,392 Series D Preferred shares at $149.35 per share, subject to the actual payment to the Company by the Founders on the closing date which shall be 150 days after the date of approval by the shareholders of the Company. In March 2021, the Company issued to 245,392 shares of Series Preferred D at $149.35 per share to the founders of the Company for gross total proceeds of $36.7 million. Redeemable Convertible Warrants Redeemable Convertible Series B warrants (Series B warrants) During November 2017, the Company issued warrants (the “Series A-1 warrant”) to acquire Series A-1 Preferred Shares for an aggregate exercise amount of $400,000, with an exercise price per share being the lowest price per share paid or payable for the redeemable convertible Series A-1 Preferred Shares (excluding bridge discounts). The Series A-1 warrants have an exercise period of the earlier of nine years or the consummation of an IPO or a deemed liquidation, as defined under the Company’s Articles of Association. During March 2019, the Company and its investor signed an addendum to the Series A-1 warrant, amending its terms whereby (1) Series A-1 warrant would be exercisable for a 14,623 shares of redeemable convertible Series B Preferred Shares (the “Series B warrant”) and (2) the exercise price was determined to be $27.3551. The Company valued the Series B warrant at the modification date and determined the fair value of the Series B warrant to be $0.1 million. The difference in fair value as of the modification date was recorded within other expense, net, in the consolidated Statements of Operations and Comprehensive Income (Loss). During October 2021, all of 14,623 shares of Series B warrant were exercised. As of December 31, 2021, no Series B warrants were outstanding. Redeemable Convertible Series D warrants (Series D warrants) In June 2020, as part of Series D Preferred Shares financing, the Company issued 28,456 warrants to purchase Series D Preferred Shares (“Series D warrants”). The Series D warrants have an exercise price of $0.01. Of the total, 26,782 Series D warrants expire and will no longer be exercisable at the earlier of (a) 10 year contractual term (b) immediately prior to an IPO or a Transaction as defined in Articles of Association or (c) with respect to each vested portion, five years following the date such Series D warrants are vested. Pursuant to the Series D warrant agreement, 20% of the shares underlying these Series D warrant shall vest and become exercisable on each of the first five anniversaries of the date of the Series D warrant if, during such applicable one-year period (each, a “Measurement Period”), the holder acquires certain amount of approved securities as defined in the Series D warrant agreement. The vesting condition allows for a catch-up vesting if vesting conditions are satisfied in a subsequent measurement period. The remaining 1,674 Series D warrants also contain vesting conditions, and expire and will no longer be exercisable at the earlier of (a) 10-year contractual term or (b) immediately prior to an IPO or a Transaction as defined in Articles of Association. Pursuant to the Series D warrant agreement, these Series D warrants require the holder or its affiliates to (a) fulfill certain commercial agreement obligations whereby Company would generate a certain amount of revenue in any 36 months or (b) subscribe for or purchase a certain amount of securities, of, or controlled by, the Company in any 36 month period. In the event of a Transaction, as defined in the Articles of Association, all Series D warrants vest and will be automatically exercised; however, in the event of an acquisition which is described as a deemed liquidation event, the Series D warrants will survive. The Series D warrants are net exercisable. The Series D warrants were initially recorded at their fair value of $1.9 million as a liability and subsequently remeasured at each reporting period with changes in fair value recognized in other expense, net, within the Statements of Operations and Comprehensive Income (Loss). The Company used the option pricing model (“OPM”) to derive the fair value of Series D warrants. The following are the significant assumptions in determining the fair value of the Series D warrants as of December 31, 2021: Series D warrants December 31, 2021 Probability of Occurrence of IPO 85 % Probability of achieving the vesting condition 76 % Volatility 41 % Time to exit (years) 0.75 Exercise Price $ 0.01 Risk Free Rate 0.29 % In August 2021, 5,355 Series D warrants were exercised. The Company remeasured the warrant liability to fair value upon settlement and recorded $3.5 million gains realized on settlement in other income (loss), net, within the consolidated statements of operations. As of December 31, 2021, 23,101 Series D warrants were outstanding. |
ORDINARY SHARES AND ORDINARY SH
ORDINARY SHARES AND ORDINARY SHARE WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
ORDINARY SHARES AND ORDINARY SHARE WARRANTS | ORDINARY SHARES AND ORDINARY SHARE WARRANTS As of December 31, 2022, 10,000,000,000 shares with no par value are authorized, of which, 8,000,000,000 shares are designated as Class A Ordinary Shares, and 2,000,000,000 shares are designated as Class B Ordinary Shares. As of December 31, 2022, the Company had 508,377,200 Class A Ordinary Shares outstanding and 174,934,392 Class B Ordinary Shares outstanding. The rights of the holders of each class of ordinary shares are identical, except with respect to voting. Each share of Class A Ordinary Share is entitled to one vote per share. Each share of Class B Ordinary Share is entitled to 10 votes per share. Shares of Class B Ordinary Share may be converted at any time at the option of the stockholder and automatically convert upon sale or transfer to Class A Ordinary Share. Stock Split On June 22, 2022, the Company executed a 1:186.9 stock split in connection with the EJFA Merger. All prior period references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the stock split. See Note 3 for further details. As of December 31, 2022 and 2021, the Company had reserved ordinary shares for future issuance as follows: December 31, 2022 2021 Share options 76,557,428 87,262,873 Options to restricted shares 242,615,284 245,167,369 RSUs 5,753,975 — Ordinary share warrants 23,468,710 4,316,570 Preferred share warrants — 27,033,450 Convertible preferred shares — 406,399,029 Shares available for future grant of equity awards 107,700,338 40,554,566 Total shares of ordinary share reserved 456,095,735 810,733,856 Ordinary Share Warrants The Company has accounted for the ordinary share warrants as equity-classified warrants as they met the requirements for equity classification under ASC 815, including whether the ordinary share warrants are indexed to the Company’s own ordinary shares. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | SHARE BASED COMPENSATION Share Options —Granted share options expire at the earlier of termination of employment or ten years from the date of grant. Share options generally vest over four years of the employment commencement date or with 25% vesting on the twelve-month anniversary of the employment commencement date, and the remaining on a pro-rata basis each quarter over the next three years. Any options, which are forfeited or not exercised before expiration, become available for future grants. The following table summarized the Company’s share option activity during the years ended December 31, 2022, 2021, and 2020: Number of Options Weighted Average Exercise Price Weighted Average Aggregate Balance, December 31, 2019 16,926,761 $ 0.04 8.8 $ 277 Granted 31,351,141 0.07 — — Exercised (1,775,510) — — — Forfeited (575,705) — — — Balance, December 31, 2020 45,926,687 0.06 9.1 2,905 Granted 50,503,922 1.09 — — Exercised (3,948,649) 0.09 — — Forfeited (5,219,086) 0.52 — — Balance, December 31, 2021 87,262,873 0.62 8.9 184,841 Granted 16,838,536 2.27 — — Exercised (16,725,583) 0.09 — — Forfeited (10,818,398) 1.50 — — Balance, December 31, 2022 76,557,428 $ 0.97 8.3 $ 19,895 Vested and exercisable, December 31, 2022 28,590,058 $ 0.46 7.9 $ 22,301 The weighted-average grant date fair value of employee options granted for the years ended December 31, 2022, 2021 and 2020 was $6.75, $1.09 and $0.02, respectively. The aggregate intrinsic value of options exercised was approximately $19.2 million, $0.3 million and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. The total fair value of share options vested for the years ended December 31, 2022, 2021 and 2020, was $36.0 million, $0.6 million and $0.2 million, respectively. Share-based compensation expense is based on the grant-date fair value on a straight-line basis for graded awards with only service conditions, which is generally the option vesting term of four years. The fair value of each option on the date of grant is determined using the Black Scholes-Merton (BSM) option pricing model using the single-option award approach with the assumptions set forth in the table below. If any of the assumptions used in the BSM change significantly, share-based compensation expense may differ materially in the future from that recorded in the current period. Fair Value of Ordinary Shares —Prior to the Company’s public listing, the absence of an active market for the Company’s ordinary shares required the Company’s board of directors to determine the fair value of its ordinary shares for purposes of granting share options. The Company obtained contemporaneous third-party valuations to assist the board of directors in determining the fair value of the Company’s ordinary share. After the IPO, the fair value of each ordinary share was based on the closing price of the Company’s publicly traded ordinary shares as reported on the date of the grant. Expected Volatility —Prior to the Company’s public listing, volatility is based on historical volatility rates obtained from certain public companies that operate in the same or related business as the Company since there was no market or historical data for Company’s ordinary share. After the IPO, volatility is based on volatility of Company’s publicly traded ordinary shares. Risk-Free Interest Rate —The risk-free interest rate is determined using a U.S. Treasury zero-coupon bonds for the period that coincides with the expected term set forth. Expected Term — The expected term of share options represents the weighted average period the share options are expected to be outstanding. For option grants that are considered to be “plain vanilla”, the Company has opted to use the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options. For other option grants, the Company estimated expected term based on the average expected term used by a peer group of publicly traded companies. This peer group was selected by the Company using criteria including similar industry, similar revenue and market capitalization. Expected Dividend Yield —The dividend yield is based on the Company’s historical and future expectation of dividends payouts. Historically, the Company has not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. The assumptions used to estimate the fair value of share options granted for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Expected volatility 46.91% - 529.23% 41.12% - 48.71% 44.90% - 48.65% Expected term (in years) 5.00-6.19 5.00 - 6.27 5.66 - 6.15 Risk free interest 1.68% - 3.65% 0.60% - 1.39% 0.35% - 0.53% Dividend yield 0.00 0.00 0.00 At December 31, 2022, unrecognized compensation expense related to unvested share options was approximately $194.1 million, which is expected to be recognized over a remaining weighted-average period of 2.5 years. Restricted Stock Units (RSUs) —RSUs generally vest over four years of the employment commencement date or with 25% vesting on the twelve-month anniversary of the employment commencement date, and the remaining on a pro-rata basis each quarter over the next three years. RSUs granted are forfeited at termination of employment. Any RSUs, which are forfeited or not exercised before expiration, become available for future grants. The following table summarized the Company’s RSU activity during the year ended December 31, 2022: Number of RSUs Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2021 — $ — Granted 5,936,379 5.34 Vested (130,406) 7.81 Forfeited (51,998) 5.99 Unvested at December 31, 2022 5,753,975 $ 5.28 At December 31, 2022, unrecognized compensation expense related to RSUs was approximately $27.9 million, which is expected to be recognized over a remaining weighted-average period of 3.3 years. Options to Restricted Shares In March 2021, the Company granted 224 million options to purchase restricted shares (the “First Awards”) at an exercise price of approximately $1.58 per share to certain directors and employees. These First Awards will vest upon the earlier of the following vesting conditions to occur of (i) a Transaction (defined as (a) a sale of all or substantially all assets or shares of the Company; or (b) a merger, consolidation, amalgamation or like transaction; or (c) a scheme of arrangement for the purpose of effecting such sale, merger, consolidation, amalgamation or other transaction) and (ii) Public Event (defined as an IPO or a SPAC) (each, a “Qualifying Event”). The Qualifying Event, further, contains additional market-based vesting conditions driven by the total value of the Company. The First Awards do not get accelerated upon any events. Any Awards that do not vest on such date (if such date is triggered by a Qualifying Event) will remain eligible for vesting following a Qualifying Event. However, any Awards that do not vest on or before the earlier to occur of a Transaction and the expiration date (10 years from the grant date) shall be forfeited. In December 2021, the Company granted 5.1 million options to purchase restricted shares (the “Second Awards”) at an exercise price of approximately $3.38 per share to certain directors. These Second Awards will vest upon the earlier of the following vesting conditions to occur of a Qualifying Event. The Second Awards do not get accelerated upon any events. Any Awards that do not vest on such date (if such date is triggered by a Qualifying Event) will remain eligible for vesting following a Qualifying Event. However, any Awards that do not vest on or before the earlier to occur of a Transaction and the expiration date (10 years from the grant date) shall be forfeited. In December 2021, the Company granted 7.3 million options to purchase restricted shares (the “Third Awards”) at an exercise price of approximately $3.11 per share to certain employees. These Third Awards will vest upon the following: (i) The Valuation-Based Vesting Condition may be satisfied at any date on or after March 31, 2022 based on the Total Value of the Company on such date (which shall be determined based on an independent third party valuation or, if the Company’s shares are publicly traded, based on the average trading price of a share of the Company over a period of sixty (60) days). Any options or shares received in connection with the exercise of an option that have not satisfied the Valuation-Based Vesting Condition on or prior to the ten The following table summarized the Company’s options to restricted shares activity during the years ended December 31, 2022, 2021 and 2020: Number of Options Weighted Average Exercise Price Weighted Average Aggregate Balance, December 31, 2020 — $ — — $ — Granted 245,167,369 1.66 — 1,526 Exercised — — — Forfeited — — — Balance, December 31, 2021 245,167,369 $ 1.66 9.3 1,526 Granted 1,665,825 2.15 — — Exercised — — — — Forfeited (4,217,910) 3.14 — — Balance, December 31, 2022 242,615,284 $ 1.64 8.2 — Vested and exercisable, December 31, 2022 196,797,316 $ 1.60 8.2 $ — At December 31, 2022, unrecognized compensation expense related to options to restricted shares was approximately $40.1 million, which is expected to be recognized over a remaining weighted-average period of 1.7 years. Share-Based Compensation Expense The following table presents the components and classification of share-based compensation for the year ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Research and development $ 81,337 $ 27,042 $ 89 Selling and marketing 58,377 18,458 4 General and administrative 101,975 22,285 63 Total $ 241,689 $ 67,785 $ 156 Share-based compensation for the year ended December 31, 2022 included compensation of $172.2 million related to the vesting of certain performance-based options, which was included in research and development, sales and marking, and general and administrative expenses. Share-based compensation for the year ended December 31, 2021 included compensation of $56.8 million related to a secondary sale by certain employees to certain investors, which was included in research and development, sales and marking, and general and administrative expenses. For further details, refer to Note 14 – Redeemable Convertible Preferred Shares and Redeemable Convertible Preferred Shares Warrants. During December 2021, the Company amended certain employee stock option agreements which resulted in a modification of the exercise price of a certain number of option shares. Generally, the exercise price of the options was increased and resulted in an immaterial change to current and future share-based compensation expense. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Corporate Income Tax - Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. During 2021, Pagaya applied to Israeli Tax authorities for Preferred Technological Enterprise (“PTE”) status and received approval on November 18, 2021. The approval is effective for the tax years 2020 through 2024. Income from a PTE is subject to 12% tax rate. Foreign Exchange Regulations in Israel - Under the Foreign Exchange Regulations, the Company calculates its tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars is translated into NIS according to the exchange rate as of December 31st of each year. Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. The components of income (loss) before income taxes are as follows (in thousands): December 31, 2022 2021 2020 Domestic (Israel) $ (225,429) $ (87,045) $ 14,345 Foreign (50,945) 25,397 6,853 Total income (loss) before income taxes $ (276,374) $ (61,648) $ 21,198 The income tax expense (benefit) consists of (in thousands): December 31, 2022 2021 2020 Current: Domestic $ (4,063) $ 7,067 $ 3,194 Foreign 14,233 4,162 385 Total current 10,170 11,229 3,579 Deferred: Domestic 6,233 (3,359) (2,301) Foreign (3) 5 (2) Total deferred 6,230 (3,354) (2,303) Total income tax provision $ 16,400 $ 7,875 $ 1,276 Effective Tax Rate A reconciliation of the Company’s effective tax rate to the statutory tax rate of the Company is as follows (in thousands): December 31, 2022 2021 2020 Income (loss) before income taxes $ (276,374) $ (61,648) $ 21,198 Israel statutory income tax rate 23 % 23 % 23 % Theoretical income taxes at statutory rate (63,566) (14,179) 4,876 Preferred technological enterprise benefit 24,859 9,378 — Deferred tax assets for which valuation allowance was provided 36,851 1,194 — Permanent differences 17,792 16,037 94 Uncertain tax positions 7,580 26 43 Prior year taxes (4,506) (135) — Subsidiaries taxed at a different tax rate (2,524) (4,559) (1,174) Utilization of carry forward losses for which valuation allowance was provided — (126) (1,577) Reduction in valuation allowance — — (999) Other (86) 239 13 Income tax $ 16,400 $ 7,875 $ 1,276 Effective tax rate NM* NM* 6.0 % __________________ * NM = Not meaningful. Deferred tax assets and liabilities Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2022 and 2021, a valuation allowance was provided reducing the deferred tax assets due to uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. As of December 31, 2022 and 2021, deferred tax assets presented in the balance sheet are comprised as follows (in thousands): December 31, 2022 2021 Carry forward tax losses $ 11,080 $ 727 Research and development cost 929 5,179 Compensations and benefits 24,032 486 Right-of-use asset 7,705 — Initial public offering costs 3,933 — Provision of loans 2,276 — Other 528 753 Deferred tax assets before valuation allowance 50,483 7,145 Valuation allowance 39,678 1,194 Deferred tax assets 10,805 5,951 Operating lease liability (8,116) — Capitalized research and development costs (1,537) — Equity method investments (1,254) — Property and equipment (466) (270) Deferred tax liabilities (11,373) (270) Deferred tax assets (liabilities), net $ (568) $ 5,681 As of December 31, 2022 and 2021, $0.0 million and $1.8 million, respectively, of undistributed earnings held by the Company’s foreign subsidiaries are designated as indefinitely reinvested. If these earnings were re-patriated to Israel, it would be subject to income taxes and to an adjustment for foreign tax credits and foreign withholding taxes in the amount of $0.0 million and $0.3 million, respectively. The Company did not recognize deferred taxes liabilities on undistributed earnings of its foreign subsidiaries, as the Company has the ability and intent to indefinitely reinvest those earnings. Uncertain tax positions: A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows (in thousands): December 31, 2022 2021 Uncertain tax positions, beginning of the year $ 190 $ 164 Increase (decrease) in tax positions for prior years — (20) Increases related to current year tax positions 7,593 28 Revaluation (13) 18 Uncertain tax positions, end of year $ 7,770 $ 190 |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Net income (loss) per share is presented in conformity with the two-class method required for multiple classes of ordinary share and participating securities. Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of share options, restricted stock units and other contingently issuable shares. The dilutive effect of outstanding share options, restricted stock units and other contingently issuable shares is reflected in diluted earnings per share by application of the treasury stock method. The Company has two classes of ordinary share subsequent to the EJFA Merger on June 22, 2022: Class A and Class B. See Note 3 for further details for the EJFA Merger. The computation of the diluted net income per share of Class A stock assumes the conversion of Class B stock, while the diluted net income per share of Class B stock does not assume the conversion of those shares. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A and Class B stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and result in an identical net loss per share for each class under the two-class method. The following table sets forth the calculation of basic and diluted net income (loss) per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 (in thousands, except share and per share data): December 31, 2022 Class A Class B Numerator: Allocation of undistributed earnings: Net income (loss) attributable to Pagaya Technologies Ltd. shareholders $ (238,299) $ (64,022) Less: Undistributed earnings allocated to participating securities (9,620) (2,585) Net income (loss) attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, basic and diluted $ (247,919) $ (66,607) Denominator: Weighted average shares used net income (loss) per ordinary share, basic and diluted 361,832,962 97,211,885 Net income (loss) per share attributable to ordinary shareholders, basic and diluted $ (0.69) $ (0.69) December 31, 2021 2020 Basic net income (loss) per share Numerator: Net income (loss) attributable to Pagaya Technologies Ltd. shareholders $ (91,151) $ 14,470 Less: Undistributed earnings allocated to participating securities (19,558) (9,558) Less: Deemed dividend distribution (23,612) — Net income (loss) attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, basic $ (134,321) $ 4,912 Denominator: Weighted average shares used net income (loss) per ordinary share, basic 195,312,586 191,146,436 Net income (loss) per share attributable to ordinary shareholders, basic $ (0.69) $ 0.03 Dilutive net income (loss) per share Numerator: Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders $ (134,321) $ 4,912 Adjustment for undistributed earnings allocated to participating securities — 239 Adjustment for mark-to-market gain — (543) Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted $ (134,321) $ 4,608 Denominator: Weighted average shares used net income (loss) per ordinary share, basic 195,312,586 191,146,436 Dilutive effect of firm commitment with founders — 303,455 Dilutive effect of share options — 14,304,044 Dilutive effect of the Option — 1,161,313 Weighted average shares used net income (loss) per ordinary share, diluted 195,312,586 206,915,248 Net income (loss) per share attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted $ (0.69) $ 0.02 The following potentially dilutive outstanding securities as of December 31, 2022, 2021 and 2020 were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods: December 31, 2022 2021 2020 Share options 76,557,428 87,262,873 — Options to restricted shares 242,615,284 245,167,369 — RSUs 5,753,975 — — Preferred share warrants — 4,316,570 8,049,587 Ordinary share warrants 23,468,710 26,941,516 — Convertible preferred shares — 406,399,029 321,805,961 Net potential dilutive outstanding securities 348,395,397 770,087,357 329,855,547 |
SEGMENTS AND GEOGRAPHICAL INFOR
SEGMENTS AND GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS AND GEOGRAPHICAL INFORMATION | SEGMENTS AND GEOGRAPHICAL INFORMATION The following table sets forth revenue from fees generated from fees by geographic area (in thousands): December 31, 2022 2021 2020 United States $ 685,129 $ 409,858 $ 68,526 Israel — 3,771 7,142 Cayman 285 32,237 16,072 Total revenue from fees $ 685,414 $ 445,866 $ 91,740 Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands): December 31, 2022 2021 Israel $ 83,270 $ 6,143 United States 9,470 1,505 Total Long-Lived Assets, net (1) $ 92,740 $ 7,648 __________________ |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Acquisition of Darwin Homes, Inc. On January 5, 2023, the Company completed the acquisition of Darwin Homes, Inc. (“Darwin”), a leading real estate investment management platform based in Austin, Texas that offers a comprehensive, tech-enabled solution for acquiring, renovating, and managing single-family rental properties. The Company acquired 100% of Darwin’s equity through an all-stock transaction with a market value of approximately $18 million as of the closing date. As the transaction has closed recently, the purchase accounting has not yet been completed. Reduction in Workforce On January 18, 2023, the Company announced a reduction in workforce of approximately 20% of employees across its Israel and U.S. offices, as compared to its headcount as of December 31, 2022. Other Events Silicon Valley Bank (“SVB”) was closed March 10, 2023 by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. SVB was the lead lender for the Company’s Receivables Facility and Revolving Credit Facility. With regard to the Company’s Revolving Credit Facility, the Company continues to have access to the facility and has ensured the facility is still operational. With respect to the Receivables Facility, it was unaffected. Additionally, the Company held a total of approximately $15 million at SVB as of December 31, 2022, which represented approximately 5% of the Company’s cash and cash equivalents balance as of December 31, 2022. On March 14, 2023, the Company’s deposits with SVB were withdrawn and deposited in accounts at other banks where the Company holds its primary banking relationships. Notwithstanding the closure of SVB, the Company continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and cash requirements from known contractual obligations for at least the next twelve months. Amended Letter Agreement Pursuant to the Letter Agreement, dated June 1, 2020, the Company agreed to provide Radiance Star Pte. Ltd. (“Radiance”), an affiliate of GIC Private Limited, the right to purchase up to a certain amount of qualified securities in certain offerings by the Company and to provide Radiance with notice of any fund offerings or securitization offerings. On March 19, 2023, the Company and Radiance agreed to extend the term of the Letter Agreement by three years (the “Amended Letter Agreement”) to June 1, 2028 on the same terms and amount, including the issuance of 2,640,000 warrants to purchase Class A Ordinary shares at an exercise price of $0.01 that vest annually if certain investment thresholds by Radiance are met. There were no other material changes to the existing terms of the Letter Agreement. Series A Preferred Share Purchase Agreement On April 14, 2023, the Company entered into a securities purchase agreement with Oak HC/FT Partners V, L.P., Oak HC/FT Partners V-A, L.P. and Oak HC/FT Partners V-B, L.P to purchase 60 million shares of Series A convertible Preferred Shares of the Company, no par value, for an aggregate purchase price of $75 million (the “Preferred Offering”). The Preferred Offering is expected to close in the second quarter of 2023, subject to, among other things, the Company obtaining shareholder approval. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”) if any. |
Principles of Consolidation | All intercompany accounts and transactions have been eliminated. |
Variable Interest Entities | A VIE is a legal entity that has a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which may change with fluctuations in the fair value of the VIE’s net assets. A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and an obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates a VIE when it is deemed to be the primary beneficiary. The Company assesses whether or not it is the primary beneficiary of a VIE at initial involvement and on an ongoing basis. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying consolidated financial statements, which Management believes are critical in understanding and evaluating the Company’s reported financial results include, but are not limited to: (i) share-based compensation; (ii) derivative and/or freestanding liabilities pertaining to warrants and preferred share; (iii) the Option; (iv) consolidation of VIEs; (v) revenue recognition; (vi) deferred tax assets and valuation allowance; (vii) valuation of goodwill and intangible assets; and (viii) the determination of allowance for loan loss reserves for loans held for investment. The Company bases its estimates or assumptions on various factors it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. |
Segment Reporting | The Company manages its operations and allocates resources as a single operating segment. Further, the Company manages, monitors and reports its financials as a single reporting segment. The Company’s chief operating decision-maker is its Chief Executive Officer who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment. |
Foreign Currency | The functional and reporting currency of the Company is the U.S. Dollar as it is the currency of the primary economic environment in which Pagaya’s operations are conducted. The monetary assets and liabilities denominated in currencies other than the U.S. Dollar are accordingly remeasured into U.S. Dollars at exchange rates in effect at the end of each period in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the Statements of Operations and Comprehensive Income (Loss) within Other expenses, net, as appropriate. |
Cash, Cash Equivalents and Restricted Cash | Cash and cash equivalents consist of checking, money market and savings accounts held at financial institutions or highly liquid investments purchased with an original maturity of three months or less. Cash equivalents are stated at carrying value, which approximates fair value. Restricted cash consists primarily of deposits restricted by standby letters of credit for lease facilities. The Company has no ability to draw on such funds as long as the funds remain restricted under the applicable agreements. |
Bank Deposits and Investments in Loans and Securities | Bank deposits with original maturities of more than three months but less than one year are included in short term bank deposits. Bank deposits with maturities of more than one year are included in long-term deposits. Such deposits are stated at cost which approximates fair values.A wholly-owned subsidiary (“Sponsor”) previously sponsored 30 securitization transactions (the “Securitizations”) during 2022, 2021 and 2020, each through a separate trust structure with an asset portfolio consisting of unsecured consumer loans, auto loans or real estate assets. Each Securitization’s asset portfolio was structured by the Sponsor, which is also the administrator of each Securitization. The Sponsor, directly and indirectly through affiliates, retained at least 5% of the economic risk in the Securitizations to comply with risk retention required by Title 17 U.S. Code of Federal Regulations Part 246, Credit Risk Retention, promulgated by Securities and Exchange Commission. The Sponsor determines the appropriate classification of loans and securities at the time of purchase. The Company’s direct investments in securitizations are classified as held-to-maturity and carried at amortized cost. The Company classifies investments as held-to-maturity when it has the intent and ability to hold the security to maturity. When evaluating intent for a particular security, the Company considers circumstances that have in the past led, or may in the future lead, to a decision to sell securities. The Company analyzes each security to determine whether it has the intent and ability to hold until maturity on a continual basis. Investments in loans and securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability and the yield of alternative investments will be classified as available for sale (“AFS”). These investments are carried at fair value determined using public market prices, dealer quotes, and prices obtained from independent pricing services that may be derivable from observable and unobservable market inputs. The Company may have investments classified as AFS from time to time but does not have any investments classified as AFS as of December 31, 2022 or December 31, 2021. Certain loans, which the Company purchased from the Sponsor, are classified as held for investment. Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts. Amortized cost basis represents principal amounts outstanding, net of unearned income, premiums or discounts on purchased loans and charge-offs. The Company’s intent and ability to designate loans as held for investment in the future may change based on changes in business strategies, the economic environment, and market conditions. As of December 31, 2022 and 2021, the Company held $13.8 million and $12.7 million of loans held for investment, respectively. Trading securities are bought and held principally for the purpose of reselling in the near term with the objective of generating revenues on short-term variations in price. Trading securities are held at fair value with realized gains and losses recorded on a trade date basis. The Company does not have any investments classified as trading as of December 31, 2022 or December 31, 2021. An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company determines whether the impairment has resulted from a credit loss or other factors. The Company determines whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and reasonable and supportable forecasts of economic conditions. The Company recognizes an allowance for credit losses, up to the amount of the impairment when appropriate, and write down the amortized cost basis of the investment if it is more likely than not the Company will be required, or the Company intends to sell the investment before recovery of its amortized cost basis, or the Company did not expect to collect cash flows sufficient to recover the amortized cost basis of the investment. The recognition of other-than-temporary impairment losses is dependent on the facts and circumstances related to the specific investment. If the Company intends to sell the investment or it is more likely than not that the Company would be required to sell the investment prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the income statement as an other-than-temporary impairment. The Company recognizes the credit loss portion through other income (loss), net in the statements of operations and the noncredit loss portion in accumulated other comprehensive loss. |
Concentrations of Credit Risk and Significant Customers | Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents, restricted cash, bank deposits and fees receivable. Cash and cash equivalents are principally maintained with major financial institutions, which management assesses to be of high credit quality. The Company has not experienced any losses on these deposits. The Company’s fees receivable balances are predominantly with agreements with customers, and these are subject to normal credit risks which management believes to be not significant. |
Fair Value Measurement | ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, when available. If such quoted market prices are not available, fair value is based upon models that use, as inputs, observable market-based parameters to the greatest extent possible. Additionally, ASC 820 established a fair value hierarchy to categorize the use of inputs into the following three levels: Level 1 —Quoted prices, unadjusted, for identical assets or liabilities in active markets. Level 2 —Pricing inputs are other than quoted prices in active markets and include 1) quoted prices for similar assets or liabilities in active markets, 2) quoted prices for identical or similar assets or liabilities in markets that are not active, and 3) or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means. Level 3 —Pricing inputs are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. |
Equity Method Investments | The Company uses the equity method of accounting for investments in entities that the Company does not control but has the ability to exercise significant influence over the financial and operating policies of the investee. Under the equity method of accounting, the Company’s share of the investee’s underlying net income or loss is recorded as investment income or loss on the consolidated Statements of Operations and Comprehensive Income (Loss). Distributions received from the investment reduce the Company’s carrying value of the investee. The Company elected to account for its equity investments using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if their respective values have appreciated or have been impaired, and adjustments are recorded as necessary. |
Property and Equipment, Net | Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Useful lives by asset category are as follows: Computer and software 3 to 7 years Equipment 3 to 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life (10 years) Internal-Use Software 2 years Maintenance and repairs that do not enhance or extend the asset’s useful life are expensed as incurred. Major replacements, improvements and additions are capitalized. Upon the sale or retirement of property and equipment, the cost and the related accumulated depreciation or amortization are removed from the consolidated financial statements, with any resulting gain or loss included in the consolidated Statements of Operations and Comprehensive Income (Loss). Property and equipment is tested for when there is an indication that the carrying value of an asset group may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined not to be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value and recorded in the period the determination is made. |
Internal-Use Software | Internally developed software is capitalized upon completion of the preliminary project stage, when it becomes probable that the project will be completed, and the software will be used as intended. Capitalized costs primarily consist of salaries and payroll related costs for employees directly involved in development efforts. Costs related to the preliminary project stage and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are capitalized if they result in additional functionalities or substantial enhancements. Capitalized internal-use software is included in property and equipment, net, in the consolidated balance sheets, and amortization expense is included in general and administrative expenses in the consolidated statements of operations. The Company reviews on a regular basis list of projects that are in process and if the project is to be abandoned or discontinued and the capitalized costs associated with that project are expensed immediately. |
Warrants | The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. |
Revenue Recognition, Revenue From Fees, and Production Costs | Revenue Recognition The Company’s revenue consists of two components: revenue from fees and revenue from other income, which is comprised of interest income and investment income. The amount of revenue from fees recognized reflects the consideration that the Company expects to receive in exchange for services provided. The Company applied the following five steps: 1. Identification of the contract with the customer: The Company determines a contract with a customer exists when each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, a conclusion has been reached that the customer has the ability and intent to pay, and the contract has commercial substance. 2. Identification of the performance obligations in the contract: Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct and separately identifiable, whereby the customer can benefit from the services. 3. Determination of the transaction price: The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms and conditions vary by contract. 4. Allocation of the transaction price to the performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation. 5. Recognition of revenue when, or as, a performance obligation is satisfied: Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised delivery of service to the customer. Revenue From Fees Revenue from fees is comprised of Network AI fees and Contract fees. Network AI fees can be further broken down into two fee streams: AI integration fees and capital markets execution fees. AI integration fees are earned from Partners in Financing Vehicles for the creation, sourcing and delivery of that assets that comprise Network Volume. The Company utilizes multiple funding channels to enable the purchase of network assets from Partners, such as asset backed securitizations (“ABS”). Capital markets execution fees are earned from the market pricing of ABS transactions. Contract fees are related to the management, performance and other fees earned for administering Financing Vehicles. These fees are the result of agreements with customers and are recognized in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is generally recognized on a gross basis in accordance with ASC 606 related to reporting revenue on a gross basis as a principal versus on a net basis as an agent. This is because the Company is primarily responsible for integrating the various services fulfilled by Partners and is ultimately responsible to the Financing Vehicles for the fulfillment of the related services. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records revenue on a net basis. Network AI fees, comprised of AI integration fees and capital markets execution fees, totaled $616.9 million, $387.1 million and $65.8 million, for the years ended December 31, 2022, 2021 and 2020, respectively. Expenses to third parties for services that are integrated with the Company’s technology are recorded in the consolidated Statements of operations as Production Costs. Real estate fees, which are included in Network AI fees, are earned for the obligations to arrange for the purchase of real estate assets, provide administrative services, arrange for the eventual sale of the assets, and provide pre-and post-purchase services including the right to earn performance fees. All of these fees are recognized over time except for the purchase and sale obligations, which are satisfied at the point in time of the respective transactions. As the Company is a principal for these services, revenues are recorded on a gross basis. Contract fees include administration and management fees, performances fees, and servicing fees. Contract fees totaled $68.5 million, $58.8 million and $25.9 million for the year ended December 31, 2022, 2021 and 2020, respectively. The Company recognizes administration fees over the service period for the Financing Vehicles managed or administered by the Company. Performance fees are earned when certain Financing Vehicles exceed contractual return thresholds. They are recognized only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. An estimate is made by the Company based on a variety of factors including market conditions and expected loan performance. In the following period, the true performance is measured and then adjusted to ensure that the fees accurately represent actual performance. As such, there are revenues that result from performance obligations satisfied in the previous year. During the years ended 2022, 2021 and 2020, $3.8 million, $1.2 million and $0.0 million, respectively, worth of fees represent performance obligations satisfied in the previous year that were lesser than the original estimate. Servicing fees for the Financing Vehicles, which primarily involve collecting payments and providing reporting on the loans within the securitization vehicles, are recognized over the service period. These duties have been considered to be agent responsibilities and does not include acting as a loan servicer. Accordingly, servicing fees are recorded on a net basis. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between payment and the transfer of services is expected to be one year or less. For the years ended December 31, 2022, 2021 and 2020, the finance component out of total consideration was not material. Once revenue is recognized, it is recorded on the balance sheet in fees and other receivables until the payment is received from the customer. The timing of the recognition depends on the type of service as described above. Production Costs Production costs are primarily comprised of (i) fees the Company pays in Partners when network volume is acquired by Financing Vehicles as the Partners are responsible for marketing and customer interaction, facilitating the flow of additional application flow, and (ii) expenses the Company incurs to renovate single family residence assets. |
Interest Income | Interest Income Interest income is recognized based on projected cashflow according to the ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company accrues interest income on investments based on the effective interest |
Research and development costs | Research and development costs are primarily engineering and product development expenses which primarily consists of payroll and other employee-related expenses, including share-based compensation expenses, for the engineering and product development teams as well the costs of systems and tools used by these teams. These costs are recognized in the period incurred. |
Leases | The Company accounts for its leases under ASC 842, Leases. Under this guidance, lessees classify arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated statements of financial position as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, including common maintenance fees, insurance and property tax, are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. |
Share-Based Compensation | The Company grants options to employees and nonemployees. The Company measures options based on the estimated grant date fair values, which the Company determines using the Black-Scholes option-pricing model. The Company records the resulting expense in the consolidated Statements of Operations and Comprehensive Income (Loss) using the straight-line method over the period of service required to vest in the award, which is generally two For nonemployee share options, the fair value is remeasured as the share options vest, and the resulting change in fair value, if any, is recognized in the consolidated Statements of Operations and Comprehensive Income (Loss) during the period the related services are rendered. The Company also grants options to restricted shares to certain employees and directors. The Company measures options to restricted shares based on the estimated grant date fair values, which the Company determines using the Monte Carlo simulation model implemented in a risk-neutral valuation framework. The Company records the resulting expense in the consolidated Statements of Operations and Comprehensive Income (Loss) using the straight-line method over the period of service required to vest in the award, which is generally two |
Income Taxes | The Company uses the liability method of accounting for income taxes, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the deferred tax assets and liabilities are determined based on the differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws expected to apply to taxable income when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under assets and liabilities, respectively. The calculation of tax liabilities involves dealing with uncertainties in the application of complex federal and state tax laws and regulations. ASC 740, “Income Taxes” (“ASC 740”) states that a tax benefit from an uncertain tax position may be recognized (1) when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records unrecognized tax benefits as liabilities in accordance with ASC 740 and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from management’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. The Company recognizes interest and penalties related to unrecognized tax benefits in taxes on income expense. |
Basic and Diluted Net income (loss) per Ordinary Share | The Company calculates net income (loss) per share using the two-class method required for participating securities. The two-class method requires income (loss) available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s redeemable convertible preferred shares contractually entitle the holders of such shares to participate in distribution but does not contractually require the holders of such shares to participate in the Company’s losses. Accordingly, for the periods where the Company is in a net loss position, the Company does not allocate any net loss attributable to ordinary shareholders to the redeemable convertible preferred shares. The Company calculates basic net income (loss) per share attributable to ordinary shareholders by dividing net income (loss) attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Earnings Per Share In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivative and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40), which clarifies an issuer's accounting for certain modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The Company adopted ASU No. 2021-04 beginning January 1, 2022 on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02—Leases, requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than 12 months. The standard is effective for public entities for fiscal years beginning after December 15, 2018 and for the Company for fiscal years beginning after December 15, 2020. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Effective January 1, 2022, the Company adopted ASU 2016-02, using a modified retrospective approach. The impact of this standard resulted in an increase of "right-of-use" assets and lease liabilities related to existing operating leases of approximately $43 million as of January 1, 2022 on the consolidated financial statements. Adoption of the standard also resulted in additional required disclosures. See Note 9 for additional information. Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing a variety of exceptions within the framework of ASC 740. These exceptions include the exception to the incremental approach for intra period tax allocation in the event of a loss from continuing operations and income or a gain from other items (such as other comprehensive income), and the exception to using general methodology for the interim period tax accounting for year-to-date losses that exceed anticipated losses. The guidance will be effective for the Company for the fiscal year beginning January 1, 2022, and interim periods within fiscal years beginning January 1, 2023. Early adoption is permitted. The adoption did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. Financial Instruments—Credit Losses In June 2016, the FASB issued ASU No. 2016-13 (Topic 326), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires an asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for the Company beginning January 1, 2023. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and disclosures. Convertible Debt Instruments In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. The guidance will be effective for the Company for the fiscal year beginning January 1, 2024 and interim periods within those fiscal years. Early adoption is permitted, but no earlier than the fiscal year beginning after December 15, 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flow (in thousands): December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 309,793 $ 190,778 Restricted cash 22,539 7,000 Restricted cash, non-current 4,744 6,797 Cash, cash equivalents and restricted cash $ 337,076 $ 204,575 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flow (in thousands): December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 309,793 $ 190,778 Restricted cash 22,539 7,000 Restricted cash, non-current 4,744 6,797 Cash, cash equivalents and restricted cash $ 337,076 $ 204,575 |
Property and Equipment, Net | Useful lives by asset category are as follows: Computer and software 3 to 7 years Equipment 3 to 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life (10 years) Internal-Use Software 2 years Property and equipment, net, consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Computer and software $ 37,517 $ 7,638 Equipment 765 566 Leasehold improvements 922 681 Property and equipment, gross 39,204 8,885 Less: accumulated depreciation and amortization (7,541) (1,237) Property and equipment, net $ 31,663 $ 7,648 |
Disaggregation of Revenue | 2022 2021 2020 (in thousands) Services transferred at a point in time $ 661,646 $ 420,460 $ 75,180 Services transferred over time 23,768 25,406 16,560 Total revenue from fees, net $ 685,414 $ 445,866 $ 91,740 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and Equipment, Net | Useful lives by asset category are as follows: Computer and software 3 to 7 years Equipment 3 to 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life (10 years) Internal-Use Software 2 years Property and equipment, net, consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Computer and software $ 37,517 $ 7,638 Equipment 765 566 Leasehold improvements 922 681 Property and equipment, gross 39,204 8,885 Less: accumulated depreciation and amortization (7,541) (1,237) Property and equipment, net $ 31,663 $ 7,648 |
Prepaid and Other Current Assets | Prepaid and other current assets, consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Prepaid expenses $ 7,092 $ 3,345 Related party receivables 18,783 1,367 Other current assets 1,383 1,551 Total Prepaid expenses and other current assets $ 27,258 $ 6,263 |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Employee payables $ 14,482 $ 15,191 Other short-term liabilities 35,014 1,902 Total accrued expenses and other liabilities $ 49,496 $ 17,093 |
INVESTMENTS IN LOANS AND SECU_2
INVESTMENTS IN LOANS AND SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Held-to-Maturity | As of December 31, 2022 Investments in loans and securities Amortized Gross Gross Fair ABS – Consumer / Auto Loan / Real Estate (1) $ 450,210 $ 23,724 $ (7,263) $ 466,671 Other loans and receivables 13,766 — — 13,766 Total $ 463,976 $ 23,724 $ (7,263) $ 480,437 __________________ (1) During the year ended December 31, 2022, the Company recorded impairment loss of $33.7 million within other income (loss), net in the consolidated statements of operations. As of December 31, 2021 Investments in loans and securities Amortized Gross Gross Fair ABS – Consumer / Auto Loan $ 270,067 $ 18,648 $ — $ 288,715 Other loans and receivables 12,657 — — 12,657 Total $ 282,724 $ 18,648 $ — $ 301,372 |
Equity Method Investments | The following investments, including those accounted for under the equity method, are included within Equity method and other investments in the consolidated statements of financial position as of December 31, 2022 and 2021 (in thousands): Carrying Value December 31, 2022 2021 Investments in Pagaya SmartResi F1 Fund, LP (1) $ 16,810 $ 14,352 Other (2) 9,084 489 Total $ 25,894 $ 14,841 __________________ (1) The Company owns approximately 5.4% and is the general partner of Pagaya Smartresi F1 Fund LP. |
CONSOLIDATION AND VARIABLE IN_2
CONSOLIDATION AND VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Below is a summary of assets and liabilities from the Company’s involvement with consolidated VIEs (i.e., Risk Retention Entities) (in thousands): Assets Liabilities Net Assets As of December 31, 2022 $ 264,854 $ — $ 264,854 As of December 31, 2021 $ 220,293 $ — $ 220,293 Below is a summary of the Company’s direct interest in (i.e., not held through Risk Retention Entities) variable interests in nonconsolidated VIEs (in thousands): Carrying Amount Maximum Exposure to Loss VIE Assets As of December 31, 2022 $ 200,694 $ 200,694 $ 3,911,589 As of December 31, 2021 $ 57,193 $ 57,193 $ 1,330,396 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | Operating lease expense was as follows (in thousands): Year Ended December 31, 2022 Rent expense $ 11,946 Variable lease payments $ 429 Supplemental information related to the Company’s operating leases was as follows: As of December 31, 2022 Weighted-average remaining lease term (in years) 8.2 Weighted-average discount rate 5.7 % Year Ended December 31, 2022 (in thousands) Cash paid within operating cash flows $ 11,192 Operating lease right-of-use assets recognized in exchange for new operating lease obligations $ 68,819 |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2022, future minimum lease commitments under non-cancelable operating leases were as follows (in thousands): 2023 $ 11,526 2024 8,859 2025 7,888 2026 7,888 2027 7,339 Thereafter 29,035 Total 72,535 Less: imputed interest (14,908) Total operating lease liabilities $ 57,627 As previously disclosed in "Note 8. Commitments and Contingencies" to Notes to Consolidated Financial Statements included in the Company’s Registration Statement on Form F-4 and under the previous lease accounting standard, future minimum payments related to operating leases as of December 31, 2021 are as follows: 2022 $ 8,589 2023 7,832 2024 5,762 2025 4,793 2026 4,847 Thereafter 17,151 Total $ 48,974 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | The below tables contain information about assets that are not measured at fair value on a recurring basis as of December 31, 2022 and 2021 (in thousands): At December 31, 2022 Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash, cash equivalents and restricted cash $ 337,076 $ 337,076 $ — $ — $ 337,076 Investments in loans and securities 463,976 — — 480,437 480,437 Fees and other receivables 97,993 — 97,993 — 97,993 Total $ 899,045 $ 337,076 $ 97,993 $ 480,437 $ 915,506 At December 31, 2021 Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash, cash equivalents and restricted cash $ 204,575 $ 204,575 $ — $ — $ 204,575 Short-term deposits 5,020 5,020 — — 5,020 Investments in loans and securities 282,724 — — 301,372 301,372 Fees and other receivables 51,540 — 51,540 — 51,540 Total $ 543,859 $ 209,595 $ 51,540 $ 301,372 $ 562,507 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): Level December 31, 2022 Warrant liability - Public Warrants 1 $ 909 Warrant liability - Private Placement Warrants 2 490 Total $ 1,400 |
Schedule Of Class Of Warrant Or Right Outstanding | The following tables summarize the Warrant liability activity for the years ended December 31, 2022, 2021 and 2020 (in thousands): Balance as of December 31, 2019 $ 83 Issuance of Series D warrants / the Option 2,442 Change in fair value / extinguishment of the Option (54) Balance as of December 31, 2020 2,471 Exercise of Series B warrants (22,012) Exercise of Series D warrants (6,009) Change in fair value 53,019 Balance as of December 31, 2021 27,469 Assumed warrants in connection with the Merger (1) 5,594 Change in fair value (11,088) Reclassification (2) (20,575) Balance as of December 31, 2022 $ 1,400 __________________ (1) See Note 3 for additional information. |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Temporary Equity | A summary of the authorized, issued and outstanding redeemable convertible preferred shares of Series A, Series A-1, Series B, Series C, Series D and Series E (collectively “Preferred Shares”) as of December 31, 2021 (in thousands, except share and per share amounts) is as follows: December 31, 2021 Shares Authorized Shares Issued and Outstanding Issuance Price Per Share Carrying Value Aggregate Liquidation Preference Series A 370,370 370,370 $ 3.38 $ 1,243 $ 1,837 Series A-1 179,398 172,857 18.90 3,254 4,489 Series B 412,554 412,554 35.81 36,635 18,468 Series C 343,498 343,498 72.57 24,893 30,106 Series D 713,076 688,301 149.35 105,016 183,329 Series E 187,347 187,347 838.49 136,006 165,733 2,206,243 2,174,927 $ 307,047 $ 403,962 |
Fair Value Measurement Inputs and Valuation Techniques | The following assumptions in determining the fair value of the Option as of issuance date: June 1, 2020 Price of the Underlying Shares 137.88 Exercise Price 149.35 Expected Term 0.38 Risk Free Rate 0.10 % Volatility 16 % Series D warrants December 31, 2021 Probability of Occurrence of IPO 85 % Probability of achieving the vesting condition 76 % Volatility 41 % Time to exit (years) 0.75 Exercise Price $ 0.01 Risk Free Rate 0.29 % |
ORDINARY SHARES AND ORDINARY _2
ORDINARY SHARES AND ORDINARY SHARE WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule Of Stock Reserved For Future Issuance | As of December 31, 2022 and 2021, the Company had reserved ordinary shares for future issuance as follows: December 31, 2022 2021 Share options 76,557,428 87,262,873 Options to restricted shares 242,615,284 245,167,369 RSUs 5,753,975 — Ordinary share warrants 23,468,710 4,316,570 Preferred share warrants — 27,033,450 Convertible preferred shares — 406,399,029 Shares available for future grant of equity awards 107,700,338 40,554,566 Total shares of ordinary share reserved 456,095,735 810,733,856 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Option, Activity | The following table summarized the Company’s share option activity during the years ended December 31, 2022, 2021, and 2020: Number of Options Weighted Average Exercise Price Weighted Average Aggregate Balance, December 31, 2019 16,926,761 $ 0.04 8.8 $ 277 Granted 31,351,141 0.07 — — Exercised (1,775,510) — — — Forfeited (575,705) — — — Balance, December 31, 2020 45,926,687 0.06 9.1 2,905 Granted 50,503,922 1.09 — — Exercised (3,948,649) 0.09 — — Forfeited (5,219,086) 0.52 — — Balance, December 31, 2021 87,262,873 0.62 8.9 184,841 Granted 16,838,536 2.27 — — Exercised (16,725,583) 0.09 — — Forfeited (10,818,398) 1.50 — — Balance, December 31, 2022 76,557,428 $ 0.97 8.3 $ 19,895 Vested and exercisable, December 31, 2022 28,590,058 $ 0.46 7.9 $ 22,301 The following table summarized the Company’s options to restricted shares activity during the years ended December 31, 2022, 2021 and 2020: Number of Options Weighted Average Exercise Price Weighted Average Aggregate Balance, December 31, 2020 — $ — — $ — Granted 245,167,369 1.66 — 1,526 Exercised — — — Forfeited — — — Balance, December 31, 2021 245,167,369 $ 1.66 9.3 1,526 Granted 1,665,825 2.15 — — Exercised — — — — Forfeited (4,217,910) 3.14 — — Balance, December 31, 2022 242,615,284 $ 1.64 8.2 — Vested and exercisable, December 31, 2022 196,797,316 $ 1.60 8.2 $ — |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The assumptions used to estimate the fair value of share options granted for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Expected volatility 46.91% - 529.23% 41.12% - 48.71% 44.90% - 48.65% Expected term (in years) 5.00-6.19 5.00 - 6.27 5.66 - 6.15 Risk free interest 1.68% - 3.65% 0.60% - 1.39% 0.35% - 0.53% Dividend yield 0.00 0.00 0.00 |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarized the Company’s RSU activity during the year ended December 31, 2022: Number of RSUs Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2021 — $ — Granted 5,936,379 5.34 Vested (130,406) 7.81 Forfeited (51,998) 5.99 Unvested at December 31, 2022 5,753,975 $ 5.28 |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | The following table presents the components and classification of share-based compensation for the year ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Research and development $ 81,337 $ 27,042 $ 89 Selling and marketing 58,377 18,458 4 General and administrative 101,975 22,285 63 Total $ 241,689 $ 67,785 $ 156 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) before income taxes are as follows (in thousands): December 31, 2022 2021 2020 Domestic (Israel) $ (225,429) $ (87,045) $ 14,345 Foreign (50,945) 25,397 6,853 Total income (loss) before income taxes $ (276,374) $ (61,648) $ 21,198 |
Schedule of Components of Income Tax Expense (Benefit) | The income tax expense (benefit) consists of (in thousands): December 31, 2022 2021 2020 Current: Domestic $ (4,063) $ 7,067 $ 3,194 Foreign 14,233 4,162 385 Total current 10,170 11,229 3,579 Deferred: Domestic 6,233 (3,359) (2,301) Foreign (3) 5 (2) Total deferred 6,230 (3,354) (2,303) Total income tax provision $ 16,400 $ 7,875 $ 1,276 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the Company’s effective tax rate to the statutory tax rate of the Company is as follows (in thousands): December 31, 2022 2021 2020 Income (loss) before income taxes $ (276,374) $ (61,648) $ 21,198 Israel statutory income tax rate 23 % 23 % 23 % Theoretical income taxes at statutory rate (63,566) (14,179) 4,876 Preferred technological enterprise benefit 24,859 9,378 — Deferred tax assets for which valuation allowance was provided 36,851 1,194 — Permanent differences 17,792 16,037 94 Uncertain tax positions 7,580 26 43 Prior year taxes (4,506) (135) — Subsidiaries taxed at a different tax rate (2,524) (4,559) (1,174) Utilization of carry forward losses for which valuation allowance was provided — (126) (1,577) Reduction in valuation allowance — — (999) Other (86) 239 13 Income tax $ 16,400 $ 7,875 $ 1,276 Effective tax rate NM* NM* 6.0 % __________________ * NM = Not meaningful. |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2022 and 2021, deferred tax assets presented in the balance sheet are comprised as follows (in thousands): December 31, 2022 2021 Carry forward tax losses $ 11,080 $ 727 Research and development cost 929 5,179 Compensations and benefits 24,032 486 Right-of-use asset 7,705 — Initial public offering costs 3,933 — Provision of loans 2,276 — Other 528 753 Deferred tax assets before valuation allowance 50,483 7,145 Valuation allowance 39,678 1,194 Deferred tax assets 10,805 5,951 Operating lease liability (8,116) — Capitalized research and development costs (1,537) — Equity method investments (1,254) — Property and equipment (466) (270) Deferred tax liabilities (11,373) (270) Deferred tax assets (liabilities), net $ (568) $ 5,681 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows (in thousands): December 31, 2022 2021 Uncertain tax positions, beginning of the year $ 190 $ 164 Increase (decrease) in tax positions for prior years — (20) Increases related to current year tax positions 7,593 28 Revaluation (13) 18 Uncertain tax positions, end of year $ 7,770 $ 190 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the calculation of basic and diluted net income (loss) per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 (in thousands, except share and per share data): December 31, 2022 Class A Class B Numerator: Allocation of undistributed earnings: Net income (loss) attributable to Pagaya Technologies Ltd. shareholders $ (238,299) $ (64,022) Less: Undistributed earnings allocated to participating securities (9,620) (2,585) Net income (loss) attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, basic and diluted $ (247,919) $ (66,607) Denominator: Weighted average shares used net income (loss) per ordinary share, basic and diluted 361,832,962 97,211,885 Net income (loss) per share attributable to ordinary shareholders, basic and diluted $ (0.69) $ (0.69) December 31, 2021 2020 Basic net income (loss) per share Numerator: Net income (loss) attributable to Pagaya Technologies Ltd. shareholders $ (91,151) $ 14,470 Less: Undistributed earnings allocated to participating securities (19,558) (9,558) Less: Deemed dividend distribution (23,612) — Net income (loss) attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, basic $ (134,321) $ 4,912 Denominator: Weighted average shares used net income (loss) per ordinary share, basic 195,312,586 191,146,436 Net income (loss) per share attributable to ordinary shareholders, basic $ (0.69) $ 0.03 Dilutive net income (loss) per share Numerator: Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders $ (134,321) $ 4,912 Adjustment for undistributed earnings allocated to participating securities — 239 Adjustment for mark-to-market gain — (543) Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted $ (134,321) $ 4,608 Denominator: Weighted average shares used net income (loss) per ordinary share, basic 195,312,586 191,146,436 Dilutive effect of firm commitment with founders — 303,455 Dilutive effect of share options — 14,304,044 Dilutive effect of the Option — 1,161,313 Weighted average shares used net income (loss) per ordinary share, diluted 195,312,586 206,915,248 Net income (loss) per share attributable to attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted $ (0.69) $ 0.02 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive outstanding securities as of December 31, 2022, 2021 and 2020 were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods: December 31, 2022 2021 2020 Share options 76,557,428 87,262,873 — Options to restricted shares 242,615,284 245,167,369 — RSUs 5,753,975 — — Preferred share warrants — 4,316,570 8,049,587 Ordinary share warrants 23,468,710 26,941,516 — Convertible preferred shares — 406,399,029 321,805,961 Net potential dilutive outstanding securities 348,395,397 770,087,357 329,855,547 |
SEGMENTS AND GEOGRAPHICAL INF_2
SEGMENTS AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table sets forth revenue from fees generated from fees by geographic area (in thousands): December 31, 2022 2021 2020 United States $ 685,129 $ 409,858 $ 68,526 Israel — 3,771 7,142 Cayman 285 32,237 16,072 Total revenue from fees $ 685,414 $ 445,866 $ 91,740 Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands): December 31, 2022 2021 Israel $ 83,270 $ 6,143 United States 9,470 1,505 Total Long-Lived Assets, net (1) $ 92,740 $ 7,648 __________________ |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 309,793 | $ 190,778 | $ 5,066 | |
Restricted cash | 22,539 | 7,000 | 0 | |
Restricted cash, non-current | 4,744 | 6,797 | 814 | |
Cash, cash equivalents and restricted cash | $ 337,076 | $ 204,575 | $ 5,880 | $ 4,878 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Three Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 42% | 57% | |
Two Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 42% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments in Loans and Securities (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) securitization | Dec. 31, 2021 USD ($) securitization | Dec. 31, 2020 securitization | |
Accounting Policies [Abstract] | |||
Number of securitization transactions | securitization | 30 | 30 | 30 |
Schedule of Held-to-Maturity Securities [Line Items] | |||
Investments in loans and securities | $ 463,976 | $ 282,724 | |
Other loans and receivables | |||
Schedule of Held-to-Maturity Securities [Line Items] | |||
Investments in loans and securities | $ 13,766 | $ 12,657 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Equity Method Investments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounting Policies [Abstract] | |
Investment income (loss) | $ 5.8 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Computer and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Computer and software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue from fees, net | $ 685,414 | $ 445,866 | $ 91,740 |
Performance obligations satisfied in the previous year | 3,800 | 1,200 | 0 |
Network AI Fees | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from fees, net | 616,900 | 387,100 | 65,800 |
Financial Service | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from fees, net | 68,500 | 58,800 | 25,900 |
Services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from fees, net | 661,646 | 420,460 | 75,180 |
Services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue from fees, net | $ 23,768 | $ 25,406 | $ 16,560 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 61,077 | |
Total operating lease liabilities | $ 57,627 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 43,000 | |
Total operating lease liabilities | $ 43,000 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share options | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 4 years |
Share options | Minimum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 2 years |
Share options | Maximum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 4 years |
Options to restricted shares | Minimum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 2 years |
Options to restricted shares | Maximum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 4 years |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) | Dec. 31, 2022 component |
Accounting Policies [Abstract] | |
Number Of Revenue Components | 2 |
MERGER (Details)
MERGER (Details) $ / shares in Units, $ in Millions | Jun. 22, 2022 USD ($) vote founder $ / shares shares | Dec. 31, 2022 shares | Jun. 21, 2022 ₪ / shares | Mar. 31, 2021 $ / shares |
Schedule Of Reverse Recapitalization [Line Items] | ||||
Preferred share, par or stated value per share (in New Israeli Shekel per share) | ₪ / shares | ₪ 0.01 | |||
Common share, par value (in dollars per share) | $ 10 | |||
Number of founders | founder | 3 | |||
Warrant purchase price (in dollars per share) | $ 0.001 | |||
PIPE financing, gross proceeds received | $ | $ 350 | |||
Number of shares of common stock issued (in shares) | shares | 35,000,000 | |||
Gross proceeds resulting from the transaction | $ | $ 350 | |||
Payments of reverse recapitalization transaction costs | $ | 57.3 | |||
Reverse recapitalization, warrant transaction costs | $ | $ 1.2 | |||
Reverse stock split | 0.0054 | |||
Warrant liability - Public Warrants | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Warrants outstanding (in shares) | shares | 9,583,333 | 9,583,333 | ||
Warrant purchase price (in dollars per share) | $ 11.50 | |||
Warrant liability - Private Placement Warrants | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Warrants outstanding (in shares) | shares | 5,166,667 | 5,166,667 | ||
Warrant purchase price (in dollars per share) | $ 11.50 | |||
Class A | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Number of votes per share | vote | 10 | |||
Number of shares converted per common share (in shares) | shares | 1 | |||
Class A | EJF Acquisition Corp. (EJFA) | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Common share, par value (in dollars per share) | $ 0.0001 | |||
Number of shares converted per common share (in shares) | shares | 1 | |||
Class B | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Number of votes per share | vote | 1 | |||
Class B | EJF Acquisition Corp. (EJFA) | ||||
Schedule Of Reverse Recapitalization [Line Items] | ||||
Common share, par value (in dollars per share) | $ 0.0001 |
BALANCE SHEET COMPONENTS - Prop
BALANCE SHEET COMPONENTS - Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 39,204,000 | $ 8,885,000 | |
Less: accumulated depreciation and amortization | (7,541,000) | (1,237,000) | |
Property and equipment, net | 31,663,000 | 7,648,000 | |
Capitalized internally developed costs | 29,400,000 | 4,000,000 | $ 500,000 |
Internally developed software costs balances | 28,200,000 | 4,400,000 | |
Depreciation and amortization expense | 6,300,000 | 800,000 | 300,000 |
Impairment losses related to property and equipment | $ 700,000 | 0 | $ 0 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (loss), net | ||
Computer and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 37,517,000 | 7,638,000 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 765,000 | 566,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 922,000 | $ 681,000 |
BALANCE SHEET COMPONENTS - Sche
BALANCE SHEET COMPONENTS - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 7,092 | $ 3,345 |
Related party receivables | 18,783 | 1,367 |
Other current assets | 1,383 | 1,551 |
Total Prepaid expenses and other current assets | $ 27,258 | $ 6,263 |
BALANCE SHEET COMPONENTS - Sc_2
BALANCE SHEET COMPONENTS - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Employee payables | $ 14,482 | $ 15,191 |
Other short-term liabilities | 35,014 | 1,902 |
Total accrued expenses and other liabilities | $ 49,496 | $ 17,093 |
BORROWINGS - Narrative (Details
BORROWINGS - Narrative (Details) | 1 Months Ended | |||
Oct. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) securitization | |
The 2021 RRRR Repurchase Agreement | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | $ 25,600,000 | $ 38,000,000 | ||
Number of securitizations | securitization | 2 | |||
Stated interest rate | 3.618% | |||
Master Agreements | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | 99,000,000 | |||
Loan and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | 15,000,000 | |||
Debt instrument, term | 3 years | |||
Line of credit facility, maximum borrowing capacity | $ 22,000,000 | |||
Debt instrument, Secured Overnight Financing rate floor | 0% | |||
Loan and Security Agreement | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.20% | |||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | 139,600,000 | $ 38,000,000 | ||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | $ 15,000,000 | 0 | ||
Debt instrument, term | 3 years | |||
Revolving Credit Facility | Line of Credit | The Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 167,500,000 | |||
Debt instrument, Secured Overnight Financing rate floor | 0% | |||
Debt instrument, base rate floor | 1% | |||
Revolving Credit Facility | Line of Credit | The Credit Agreement | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.75% | |||
Line of credit facility, commitment fee percentage | 0.25% | |||
Revolving Credit Facility | Line of Credit | The Credit Agreement | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.75% | |||
Revolving Credit Facility | Line of Credit | The 2021 Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, outstanding balance | $ 0 | |||
Letter of Credit | Line of Credit | The Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |||
Letter of Credit | Line of Credit | The Credit Agreement | Israel, New Shekels | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 |
INVESTMENTS IN LOANS AND SECU_3
INVESTMENTS IN LOANS AND SECURITIES - Schedule of Investments in loans and securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 463,976 | $ 282,724 |
Gross Unrealized Gains | 23,724 | 18,648 |
Gross Unrealized Losses | (7,263) | 0 |
Fair Value | 480,437 | 301,372 |
Asset-Backed Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 450,210 | 270,067 |
Gross Unrealized Gains | 23,724 | 18,648 |
Gross Unrealized Losses | (7,263) | 0 |
Fair Value | 466,671 | 288,715 |
Impairment loss on debt securities | 33,700 | |
Other loans and receivables | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 13,766 | 12,657 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 13,766 | $ 12,657 |
INVESTMENTS IN LOANS AND SECU_4
INVESTMENTS IN LOANS AND SECURITIES - Equity Method Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method and other investments | $ 25,894 | $ 14,841 | ||
Equity method income (loss) | [1] | 5,756 | (155) | $ 277 |
Pagaya SmartResi F1 Fund LP | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method and other investments | $ 16,810 | 14,352 | ||
Equity method investment, ownership percentage | 5.40% | |||
Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method and other investments | $ 9,084 | $ 489 | ||
[1]Includes income from proprietary investments. |
CONSOLIDATION AND VARIABLE IN_3
CONSOLIDATION AND VARIABLE INTEREST ENTITIES - Consolidated VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Assets | $ 1,045,079 | $ 590,258 |
Liabilities | 279,656 | 105,859 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 264,854 | 220,293 |
Liabilities | $ 0 | $ 0 |
CONSOLIDATION AND VARIABLE IN_4
CONSOLIDATION AND VARIABLE INTEREST ENTITIES - Unconsolidated VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | $ 200,694 | $ 57,193 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount | 200,694 | 57,193 |
VIE Assets | $ 3,911,589 | $ 1,330,396 |
CONSOLIDATION AND VARIABLE IN_5
CONSOLIDATION AND VARIABLE INTEREST ENTITIES - Narrative (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Loan principal purchased | $ 29,600,000 | $ 24,000,000 | $ 0 |
Loss on loans purchased | $ 22,900,000 | $ 8,500,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Security deposit | $ 4.2 | $ 2.9 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Rent expense | $ 11,946 |
Variable lease payments | $ 429 |
Weighted-average remaining lease term (in years) | 8 years 2 months 12 days |
Weighted-average discount rate | 5.70% |
Cash paid within operating cash flows | $ 11,192 |
Operating lease right-of-use assets recognized in exchange for new operating lease obligations | $ 68,819 |
LEASES - Operating Lease Liabil
LEASES - Operating Lease Liability To Be Paid (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease, After Adoption of 842 | ||
2023 | $ 11,526 | |
2024 | 8,859 | |
2025 | 7,888 | |
2026 | 7,888 | |
2027 | 7,339 | |
Thereafter | 29,035 | |
Total | 72,535 | |
Less: imputed interest | (14,908) | |
Total operating lease liabilities | $ 57,627 | |
Operating Leases, Prior to Adoption of 842 | ||
2022 | $ 8,589 | |
2023 | 7,832 | |
2024 | 5,762 | |
2025 | 4,793 | |
2026 | 4,847 | |
Thereafter | 17,151 | |
Total | $ 48,974 |
WARRANT LIABILITY (Details)
WARRANT LIABILITY (Details) | 5 Months Ended | 12 Months Ended | |
Dec. 31, 2022 trading_day vote $ / shares shares | Dec. 31, 2022 vote trading_day $ / shares shares | Jun. 22, 2022 shares | |
Public Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | shares | 9,583,333 | 9,583,333 | 9,583,333 |
Public Warrants | Triggering Event, One | |||
Class of Warrant or Right [Line Items] | |||
Number of trading days | trading_day | 20 | ||
Number of consecutive trading days | vote | 30 | ||
Period prior to notice of redemption | 3 days | ||
Redemption price of warrants (in dollars per share) | $ 0.01 | $ 0.01 | |
Number of days of prior written notice of redemption | 30 days | ||
Public Warrants | Triggering event, Two | |||
Class of Warrant or Right [Line Items] | |||
Number of trading days | trading_day | 20 | ||
Number of consecutive trading days | vote | 30 | ||
Redemption price of warrants (in dollars per share) | $ 0.10 | $ 0.10 | |
Number of days of prior written notice of redemption | 30 days | ||
Public Warrants | Minimum | Triggering Event, One | |||
Class of Warrant or Right [Line Items] | |||
Closing price (in dollars per share) | 18 | $ 18 | |
Public Warrants | Minimum | Triggering event, Two | |||
Class of Warrant or Right [Line Items] | |||
Closing price (in dollars per share) | $ 10 | $ 10 | |
Private Placement Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | shares | 5,166,667 | 5,166,667 | 5,166,667 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Due from related parties | $ 38,332 | $ 19,208 | |
Related party revenue | 653,471 | 445,866 | $ 91,740 |
Other affiliated payables | 636 | 2,510 | |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Related party revenue | 653,500 | 445,900 | 91,700 |
Employees | |||
Related Party Transaction [Line Items] | |||
Other affiliated payables | 600 | 2,500 | |
Assets | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 87,800 | 51,500 | |
Prepaid Expense And Other Assets, Noncurrent | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 18,800 | 1,400 | |
Securitization Vehicles | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 83,000 | 46,900 | |
Related party revenue | 492,100 | 362,700 | 68,500 |
Other Financing Vehicles | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 4,700 | 4,600 | |
Purchases from related party | 29,600 | 24,000 | |
Related party revenue | $ 161,400 | $ 83,200 | $ 23,200 |
FAIR VALUE MEASUREMENT - Schedu
FAIR VALUE MEASUREMENT - Schedule of Assets Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash, cash equivalents and restricted cash | $ 337,076 | $ 204,575 |
Short-term deposits | 5,020 | |
Fair Value | 480,437 | 301,372 |
Fees receivable | 97,993 | 51,540 |
Fair Value, Total | 915,506 | 562,507 |
Carrying Value | ||
Assets | ||
Cash, cash equivalents and restricted cash | 337,076 | 204,575 |
Short-term deposits | 5,020 | |
Fair Value | 463,976 | 282,724 |
Fees receivable | 97,993 | 51,540 |
Fair Value, Total | 899,045 | 543,859 |
Level 1 | Fair Value | ||
Assets | ||
Cash, cash equivalents and restricted cash | 337,076 | 204,575 |
Short-term deposits | 5,020 | |
Fair Value | 0 | 0 |
Fees receivable | 0 | 0 |
Fair Value, Total | 337,076 | 209,595 |
Level 2 | Fair Value | ||
Assets | ||
Cash, cash equivalents and restricted cash | 0 | 0 |
Short-term deposits | 0 | |
Fair Value | 0 | 0 |
Fees receivable | 97,993 | 51,540 |
Fair Value, Total | 97,993 | 51,540 |
Level 3 | Fair Value | ||
Assets | ||
Cash, cash equivalents and restricted cash | 0 | 0 |
Short-term deposits | 0 | |
Fair Value | 480,437 | 301,372 |
Fees receivable | 0 | 0 |
Fair Value, Total | $ 480,437 | $ 301,372 |
FAIR VALUE MEASUREMENT - Sche_2
FAIR VALUE MEASUREMENT - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | $ 1,400 | $ 27,469 | $ 2,471 | $ 83 |
Warrant liability - Public Warrants | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 909 | |||
Warrant liability - Private Placement Warrants | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | $ 490 |
FAIR VALUE MEASUREMENT - Warran
FAIR VALUE MEASUREMENT - Warrant Liability Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Warrants And Rights Outstanding [Roll Forward] | |||
Beginning balance | $ 27,469 | $ 2,471 | $ 83 |
Issuance of Series D warrants / the Option | 2,442 | ||
Change in fair value / extinguishment of the Option | (54) | ||
Fair value adjustment to warrant liability | (11,088) | 53,019 | 489 |
Assumed warrants in connection with the Merger | 5,594 | ||
Issuance of ordinary share warrants | (20,575) | ||
Ending balance | $ 1,400 | 27,469 | $ 2,471 |
Series B Warrant | |||
Warrants And Rights Outstanding [Roll Forward] | |||
Exercise of warrants | (22,012) | ||
Series D Warrant | |||
Warrants And Rights Outstanding [Roll Forward] | |||
Exercise of warrants | $ (6,009) |
REDEEMABLE CONVERTIBLE PREFER_3
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS (Details) | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 USD ($) director vote boardMember $ / shares shares | Aug. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | |||
Temporary Equity [Line Items] | |||||||
Temporary equity, new issues (in shares) | shares | [1] | 63,806,415 | |||||
Proceeds from issuance of redeemable convertible preferred shares, net | $ 0 | $ 172,645,000 | $ 64,810,000 | ||||
Warrant purchase price (in dollars per share) | $ / shares | $ 0.001 | ||||||
Share-based compensation expense | 241,689,000 | 67,785,000 | $ 156,000 | ||||
Excess of transaction price over the fair value | $ 23,600,000 | ||||||
Dividends paid in cash | $ 0 | ||||||
Votes per preferred share | vote | 1 | ||||||
Total number of appointed board members | boardMember | 8 | ||||||
Total number of Directors appointed by Preferred Shareholders | director | 4 | ||||||
Total number of Directors appointed by the Founders | director | 3 | ||||||
Total number of Directors appointed by Ordinary Directors | director | 1 | ||||||
Private Placement | |||||||
Temporary Equity [Line Items] | |||||||
Share-based compensation expense | $ 56,800,000 | ||||||
Private Placement | Founders And Investors | |||||||
Temporary Equity [Line Items] | |||||||
Consideration received on sale | $ 125,000,000 | ||||||
Private Placement | Founders And Employees | |||||||
Temporary Equity [Line Items] | |||||||
Consideration received on sale | $ 201,000,000 | ||||||
Private Placement | Employees | Series E Investors | |||||||
Temporary Equity [Line Items] | |||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 838.49 | $ 1,147.6 | |||||
Number of shares issued in transaction (in shares) | shares | 103,162 | 101,614 | |||||
Share-based compensation expense | $ 56,800,000 | $ 0 | |||||
Private Placement | Preferred Shareholders | Series E Investors | |||||||
Temporary Equity [Line Items] | |||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 838.49 | $ 1,147.6 | |||||
Number of shares issued in transaction (in shares) | shares | 45,917 | 73,533 | |||||
Series E | |||||||
Temporary Equity [Line Items] | |||||||
Temporary equity, new issues (in shares) | shares | 187,347 | 35,006,986 | [1] | ||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 838.49 | ||||||
Proceeds from issuance of redeemable convertible preferred shares, net | $ 157,100,000 | ||||||
Temporary equity, liquidation, cumulative interest percentage | 7% | ||||||
Temporary equity, liquidation, cumulative interest rate | 7% | ||||||
Ordinary Shares (Class A and Class B) | |||||||
Temporary Equity [Line Items] | |||||||
Warrants outstanding (in shares) | shares | 144,183 | ||||||
Series D | |||||||
Temporary Equity [Line Items] | |||||||
Temporary equity, new issues (in shares) | shares | [1] | 45,853,066 | |||||
Temporary equity, liquidation, cumulative interest percentage | 7% | ||||||
Temporary equity, liquidation, cumulative interest rate | 7% | ||||||
Series C | |||||||
Temporary Equity [Line Items] | |||||||
Temporary equity, liquidation, cumulative interest percentage | 7% | ||||||
Temporary equity, liquidation, cumulative interest rate | 7% | ||||||
Series B | |||||||
Temporary Equity [Line Items] | |||||||
Temporary equity, liquidation, cumulative interest percentage | 7% | ||||||
Temporary equity, liquidation, cumulative interest rate | 7% | ||||||
Series A And Series A-1 Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Temporary equity, liquidation, cumulative interest percentage | 7% | ||||||
Temporary equity, liquidation, cumulative interest rate | 7% | ||||||
[1]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
REDEEMABLE CONVERTIBLE PREFER_4
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS - Schedule of Redeemable Preferred Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Temporary Equity [Line Items] | |||||
Shares outstanding (in shares) | [1] | 0 | 406,399,029 | 321,805,960 | 240,046,195 |
Beginning balance (in shares) | $ 0 | $ 307,047 | $ 105,981 | $ 43,613 | |
Aggregate Liquidation Preference | $ 403,962 | ||||
Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 2,206,243 | ||||
Shares outstanding (in shares) | 2,174,927 | ||||
Shares issued (in shares) | 2,174,927 | ||||
Series A | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 1,243 | ||||
Aggregate Liquidation Preference | $ 1,837 | ||||
Series A | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 370,370 | ||||
Shares outstanding (in shares) | 370,370 | ||||
Shares issued (in shares) | 370,370 | ||||
Temporary equity, new issues (in dollars per share) | $ 3.38 | ||||
Series A-1 | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 3,254 | ||||
Aggregate Liquidation Preference | $ 4,489 | ||||
Series A-1 | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 179,398 | ||||
Shares outstanding (in shares) | 172,857 | ||||
Shares issued (in shares) | 172,857 | ||||
Temporary equity, new issues (in dollars per share) | $ 18.90 | ||||
Series B | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 36,635 | ||||
Aggregate Liquidation Preference | $ 18,468 | ||||
Series B | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 412,554 | ||||
Shares outstanding (in shares) | 412,554 | ||||
Shares issued (in shares) | 412,554 | ||||
Temporary equity, new issues (in dollars per share) | $ 35.81 | ||||
Series C | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 24,893 | ||||
Aggregate Liquidation Preference | $ 30,106 | ||||
Series C | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 343,498 | ||||
Shares outstanding (in shares) | 343,498 | ||||
Shares issued (in shares) | 343,498 | ||||
Temporary equity, new issues (in dollars per share) | $ 72.57 | ||||
Series D | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 105,016 | ||||
Aggregate Liquidation Preference | $ 183,329 | ||||
Series D | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 713,076 | ||||
Shares outstanding (in shares) | 688,301 | ||||
Shares issued (in shares) | 688,301 | ||||
Temporary equity, new issues (in dollars per share) | $ 149.35 | ||||
Series E | |||||
Temporary Equity [Line Items] | |||||
Beginning balance (in shares) | $ 136,006 | ||||
Aggregate Liquidation Preference | $ 165,733 | ||||
Series E | Unadjusted For Stock Split | |||||
Temporary Equity [Line Items] | |||||
Shares authorized (in shares) | 187,347 | ||||
Shares outstanding (in shares) | 187,347 | ||||
Shares issued (in shares) | 187,347 | ||||
Temporary equity, new issues (in dollars per share) | $ 838.49 | ||||
[1]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
REDEEMABLE CONVERTIBLE PREFER_5
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS - The Option (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021 | Nov. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Temporary Equity [Line Items] | ||||||||
Temporary equity, new issues (in shares) | [1] | 63,806,415 | ||||||
Temporary equity, gross total proceeds | $ 48,146 | |||||||
Warrant purchase price (in dollars per share) | $ 0.001 | |||||||
Warrant liability | $ 1,400 | $ 27,469 | 2,471 | $ 83 | ||||
Other income (loss), net | $ (24,869) | $ (55,839) | $ (55) | |||||
Rights | ||||||||
Temporary Equity [Line Items] | ||||||||
Warrants outstanding (in shares) | 341,473 | |||||||
Warrant purchase price (in dollars per share) | $ 149.35 | |||||||
Option term | 180 days | |||||||
Warrant liability | $ 500 | |||||||
Warrants And Rights Outstanding, Per Share | $ 1.59 | |||||||
Series D | ||||||||
Temporary Equity [Line Items] | ||||||||
Temporary equity, new issues (in shares) | [1] | 45,853,066 | ||||||
Temporary equity, gross total proceeds | $ 36,639 | |||||||
Number of shares exercised (in shares) | [1] | 1,000,616 | 17,953,350 | |||||
Gross total proceeds | $ 6,009 | $ 14,222 | ||||||
Series D | Rights | ||||||||
Temporary Equity [Line Items] | ||||||||
Temporary equity, new issues (in shares) | 341,473 | |||||||
Temporary equity, new issues (in dollars per share) | $ 149.35 | $ 149.35 | ||||||
Temporary equity, gross total proceeds | $ 51,000 | |||||||
Warrant purchase price (in dollars per share) | $ 149.35 | |||||||
Number of shares exercised (in shares) | 245,392 | 96,081 | ||||||
Number of shares extinguished (in shares) | 245,392 | |||||||
Other income (loss), net | $ 500 | |||||||
Number of shares unexercised (in shares) | 245,392 | |||||||
Temporary equity, days after date of approval, payment due | 150 days | |||||||
Gross total proceeds | $ 36,700 | |||||||
[1]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
REDEEMABLE CONVERTIBLE PREFER_6
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS - Valuation Assumptions (Details) | Dec. 31, 2021 | Jun. 01, 2020 |
Price of the Underlying Shares | Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 137.88 | |
Exercise Price | Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 149.35 | |
Exercise Price | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.01 | |
Expected Term | Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.38 | |
Risk Free Rate | Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.0010 | |
Risk Free Rate | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.0029 | |
Volatility | Rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.16 | |
Volatility | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.41 | |
Probability of Occurrence of IPO | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.85 | |
Probability of achieving the vesting condition | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.76 | |
Time to exit (years) | Series D | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.75 |
REDEEMABLE CONVERTIBLE PREFER_7
REDEEMABLE CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES WARRANTS - Redeemable Convertible Warrants (Details) - USD ($) | 1 Months Ended | |||||||||
Oct. 31, 2021 | Aug. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Nov. 30, 2017 | |
Class of Warrant or Right [Line Items] | ||||||||||
Warrant liability | $ 1,400,000 | $ 27,469,000 | $ 2,471,000 | $ 83,000 | ||||||
Warrant purchase price (in dollars per share) | $ 0.001 | |||||||||
Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 5 years | |||||||||
Tranche One | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Tranche Two | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Tranche Three | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Tranche Four | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Tranche Five | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Series A-1 | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrant liability | $ 400,000 | |||||||||
Option term | 9 years | |||||||||
Series B | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrant liability | $ 100,000 | |||||||||
Number of shares called by warrant or right (in shares) | 14,623 | |||||||||
Warrant purchase price (in dollars per share) | $ 27.3551 | |||||||||
Number of shares exercised (in shares) | 14,623 | |||||||||
Warrants outstanding (in shares) | 0 | |||||||||
Series D | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrant liability | $ 1,900,000 | $ 23,101 | ||||||||
Warrant purchase price (in dollars per share) | $ 0.01 | |||||||||
Number of shares exercised (in shares) | 5,355 | |||||||||
Warrants outstanding (in shares) | 28,456 | |||||||||
Exercise of warrants | $ 3,500,000 | |||||||||
Series D | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrants outstanding (in shares) | 26,782 | |||||||||
Vesting percentage | 20% | |||||||||
Series D | Warrant Terms Two | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrants outstanding (in shares) | 1,674 | |||||||||
Series D | Maximum | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Option term | 10 years | |||||||||
Series D | Maximum | Warrant Terms Two | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Option term | 10 years | |||||||||
Series D | Minimum | Warrant Terms One | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Option term | 5 years | |||||||||
Series D | Minimum | Warrant Terms Two | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Agreement fulfillment term | 36 months |
ORDINARY SHARES AND ORDINARY _3
ORDINARY SHARES AND ORDINARY SHARE WARRANTS - Narrative (Details) | 12 Months Ended | ||||||
Aug. 17, 2022 USD ($) shares | Jun. 22, 2022 shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Aug. 16, 2022 | Mar. 31, 2021 $ / shares | |
Class of Stock [Line Items] | |||||||
Ordinary shares, authorized (in shares) | 10,000,000,000 | ||||||
Reverse stock split | 0.0054 | ||||||
Warrant purchase price (in dollars per share) | $ / shares | $ 0.001 | ||||||
Number of shares of common stock issued (in shares) | 35,000,000 | ||||||
Other income (loss), net | $ | $ (24,869,000) | $ (55,839,000) | $ (55,000) | ||||
Ordinary Share Warrants, Exercise Price 1 | |||||||
Class of Stock [Line Items] | |||||||
Warrants outstanding (in shares) | 5,277,899 | ||||||
Warrant purchase price (in dollars per share) | $ / shares | $ 0.000005 | ||||||
Ordinary Share Warrants, Exercise Price 2 | |||||||
Class of Stock [Line Items] | |||||||
Warrants outstanding (in shares) | 3,440,811 | ||||||
Warrant purchase price (in dollars per share) | $ / shares | $ 0.00005 | ||||||
Class A | |||||||
Class of Stock [Line Items] | |||||||
Ordinary shares, authorized (in shares) | 8,000,000,000 | ||||||
Ordinary shares, outstanding (in shares) | 508,377,200 | ||||||
Ordinary shares, voting rights, votes per share | vote | 1 | ||||||
Class A | B. Riley Principal Capital II, LLC | |||||||
Class of Stock [Line Items] | |||||||
Number of shares of common stock issued (in shares) | 46,536 | ||||||
Other income (loss), net | $ | $ 1,000,000 | ||||||
Class A | B. Riley Principal Capital II, LLC | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Stock purchase agreement, authorized amount | $ | $ 300,000,000 | ||||||
Stock purchase agreement, term | 24 months | ||||||
Stock purchase agreement, minimum price threshold, discount rate | 3% | ||||||
Stock purchase agreement, authorized amount (in shares) | 40,139,607 | ||||||
Stock purchase agreement, percentage of outstanding stock maximum | 9% | ||||||
Number of shares issued in transaction (in shares) | 0 | ||||||
Class B | |||||||
Class of Stock [Line Items] | |||||||
Ordinary shares, authorized (in shares) | 2,000,000,000 | ||||||
Ordinary shares, outstanding (in shares) | 174,934,392 | ||||||
Ordinary shares, voting rights, votes per share | vote | 10 |
ORDINARY SHARES AND ORDINARY _4
ORDINARY SHARES AND ORDINARY SHARE WARRANTS - Schedule of Shares Reserved For Future Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 456,095,735 | 810,733,856 |
Convertible preferred shares | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 0 | 406,399,029 |
Ordinary share warrants | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 23,468,710 | 4,316,570 |
Preferred share warrants | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 0 | 27,033,450 |
Share options | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 76,557,428 | 87,262,873 |
Options to restricted shares | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 242,615,284 | 245,167,369 |
RSUs | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 5,753,975 | 0 |
Shares available for future grant of equity awards | ||
Class of Stock [Line Items] | ||
Total shares of ordinary share reserved | 107,700,338 | 40,554,566 |
SHARE BASED COMPENSATION - Stoc
SHARE BASED COMPENSATION - Stock Option Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Weighted-average grant date fair value of options granted (in dollars per share) | $ 6.75 | $ 1.09 | $ 0.02 |
Aggregate intrinsic value of options exercised | $ 19.2 | $ 0.3 | $ 0.1 |
Fair value of vested options | 36 | $ 0.6 | $ 0.2 |
Unrecognized compensation expense related to unvested share options | $ 194.1 | ||
Share options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
Vesting period | 4 years | ||
Unrecognized compensation expense, period of recognition | 2 years 6 months | ||
Tranche One | Share options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting period | 12 months | ||
Vesting percentage | 25% | ||
Tranche Two | Share options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting period | 3 years |
SHARE BASED COMPENSATION - St_2
SHARE BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Options | ||||
Outstanding at beginning of period (in shares) | 87,262,873 | 45,926,687 | 16,926,761 | |
Granted (in shares) | 16,838,536 | 50,503,922 | 31,351,141 | |
Exercised (in shares) | (16,725,583) | (3,948,649) | (1,775,510) | |
Forfeited (in shares) | (10,818,398) | (5,219,086) | (575,705) | |
Outstanding at end of period (in shares) | 76,557,428 | 87,262,873 | 45,926,687 | 16,926,761 |
Options vested and exercisable (in shares) | 28,590,058 | |||
Weighted Average Exercise Price | ||||
Outstanding, beginning balance (in dollars per share) | $ 0.62 | $ 0.06 | $ 0.04 | |
Granted (in dollars per share) | 2.27 | 1.09 | 0.07 | |
Exercised (in dollars per share) | 0.09 | 0.09 | 0 | |
Forfeited (in dollars per share) | 1.50 | 0.52 | 0 | |
Outstanding, ending balance (in dollars per share) | 0.97 | $ 0.62 | $ 0.06 | $ 0.04 |
Options vested and exercisable (dollars per share) | $ 0.46 | |||
Weighted Average Remaining Contractual Term (Years) | ||||
Options outstanding | 8 years 3 months 18 days | 8 years 10 months 24 days | 9 years 1 month 6 days | 8 years 9 months 18 days |
Options vested and exercisable | 7 years 10 months 24 days | |||
Aggregate Intrinsic Value (000’s) | ||||
Beginning balance | $ 184,841 | $ 2,905 | $ 277 | |
Ending balance | 19,895 | $ 184,841 | $ 2,905 | $ 277 |
Options vested and exercisable | $ 22,301 | |||
Options to restricted shares | ||||
Number of Options | ||||
Outstanding at beginning of period (in shares) | 245,167,369 | 0 | ||
Granted (in shares) | 1,665,825 | 245,167,369 | ||
Exercised (in shares) | 0 | 0 | ||
Forfeited (in shares) | (4,217,910) | 0 | ||
Outstanding at end of period (in shares) | 242,615,284 | 245,167,369 | 0 | |
Options vested and exercisable (in shares) | 196,797,316 | |||
Weighted Average Exercise Price | ||||
Outstanding, beginning balance (in dollars per share) | $ 1.66 | $ 0 | ||
Granted (in dollars per share) | 2.15 | 1.66 | ||
Exercised (in dollars per share) | 0 | 0 | ||
Forfeited (in dollars per share) | 3.14 | 0 | ||
Outstanding, ending balance (in dollars per share) | 1.64 | $ 1.66 | $ 0 | |
Options vested and exercisable (dollars per share) | $ 1.60 | |||
Weighted Average Remaining Contractual Term (Years) | ||||
Options outstanding | 8 years 2 months 12 days | 9 years 3 months 18 days | 0 years | |
Options vested and exercisable | 8 years 2 months 12 days | |||
Aggregate Intrinsic Value (000’s) | ||||
Beginning balance | $ 1,526 | $ 0 | ||
Options granted | 1,526 | |||
Ending balance | 0 | $ 1,526 | $ 0 | |
Options vested and exercisable | $ 0 |
SHARE BASED COMPENSATION - Fair
SHARE BASED COMPENSATION - Fair Value Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected volatility, minimum | 46.91% | 41.12% | 44.90% |
Expected volatility, maximum | 529.23% | 48.71% | 48.65% |
Risk free interest, minimum | 1.68% | 0.60% | 0.35% |
Risk free interest, maximum | 3.65% | 1.39% | 0.53% |
Dividend yield | 0% | 0% | 0% |
Minimum | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | 5 years | 5 years 7 months 28 days |
Maximum | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 2 months 8 days | 6 years 3 months 7 days | 6 years 1 month 24 days |
SHARE BASED COMPENSATION - Rest
SHARE BASED COMPENSATION - Restricted Stock Units (RSUs) Narrative (Details) - RSUs $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 4 years |
Unrecognized compensation expense | $ 27.9 |
Unrecognized compensation expense, period of recognition | 3 years 3 months 18 days |
Tranche One | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 12 months |
Vesting percentage | 25% |
Tranche Two | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 3 years |
SHARE BASED COMPENSATION - Re_2
SHARE BASED COMPENSATION - Restricted Stock Unit (RSUs) Activity (Details) - RSUs | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of RSUs | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 5,936,379 |
Vested (in shares) | shares | (130,406) |
Forfeited (in shares) | shares | (51,998) |
Ending balance (in shares) | shares | 5,753,975 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 5.34 |
Vested (in dollars per share) | $ / shares | 7.81 |
Forfeited (in dollars per share) | $ / shares | 5.99 |
Ending balance (in dollars per share) | $ / shares | $ 5.28 |
SHARE BASED COMPENSATION - Opti
SHARE BASED COMPENSATION - Options to Restricted Shares (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 vote $ / shares shares | Mar. 31, 2021 $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 16,838,536 | 50,503,922 | 31,351,141 | ||
Granted (in dollars per share) | $ / shares | $ 2.27 | $ 1.09 | $ 0.07 | ||
Unrecognized compensation expense related to unvested share options | $ | $ 194.1 | ||||
Options to restricted shares | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 1,665,825 | 245,167,369 | |||
Granted (in dollars per share) | $ / shares | $ 2.15 | $ 1.66 | |||
Unrecognized compensation expense related to unvested share options | $ | $ 40.1 | ||||
Unrecognized compensation expense, period of recognition | 1 year 8 months 12 days | ||||
Options to restricted shares | March 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 224,000,000 | ||||
Granted (in dollars per share) | $ / shares | $ 1.58 | ||||
Expiration period | 10 years | ||||
Options to restricted shares | December 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 7,300,000 | ||||
Granted (in dollars per share) | $ / shares | $ 3.11 | ||||
Expiration period | 10 years | ||||
Number of trading days | vote | 60 | ||||
Vesting period | 4 years | ||||
Options to restricted shares | December 2021 | Director | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 5,100,000 | ||||
Granted (in dollars per share) | $ / shares | $ 3.38 | ||||
Expiration period | 10 years | ||||
Options to restricted shares | Tranche One | December 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Options to restricted shares | Tranche Two | December 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Options to restricted shares | Tranche Three | December 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Options to restricted shares | Tranche Four | December 2021 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 25% |
SHARE BASED COMPENSATION - Shar
SHARE BASED COMPENSATION - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | $ 241,689 | $ 67,785 | $ 156 |
Private Placement | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | 56,800 | ||
Performance Shares | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | 172,200 | ||
Research and development | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | 81,337 | 27,042 | 89 |
Selling and marketing | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | 58,377 | 18,458 | 4 |
General and administrative | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation expense | $ 101,975 | $ 22,285 | $ 63 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic (Israel) | $ (225,429) | $ (87,045) | $ 14,345 |
Foreign | (50,945) | 25,397 | 6,853 |
Income (Loss) Before Income Taxes | $ (276,374) | $ (61,648) | $ 21,198 |
INCOME TAXES - Schedule of the
INCOME TAXES - Schedule of the Components of the Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Domestic | $ (4,063) | $ 7,067 | $ 3,194 |
Foreign | 14,233 | 4,162 | 385 |
Total current | 10,170 | 11,229 | 3,579 |
Deferred: | |||
Domestic | 6,233 | (3,359) | (2,301) |
Foreign | (3) | 5 | (2) |
Total deferred | 6,230 | (3,354) | (2,303) |
Total income tax provision | $ 16,400 | $ 7,875 | $ 1,276 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before income taxes | $ (276,374) | $ (61,648) | $ 21,198 |
Israel statutory income tax rate | 23% | 23% | 23% |
Theoretical income taxes at statutory rate | $ (63,566) | $ (14,179) | $ 4,876 |
Preferred technological enterprise benefit | 24,859 | 9,378 | 0 |
Deferred tax assets for which valuation allowance was provided | 36,851 | 1,194 | 0 |
Permanent differences | 17,792 | 16,037 | 94 |
Uncertain tax positions | 7,580 | 26 | 43 |
Prior year taxes | (4,506) | (135) | 0 |
Subsidiaries taxed at a different tax rate | (2,524) | (4,559) | (1,174) |
Utilization of carry forward losses for which valuation allowance was provided | 0 | (126) | (1,577) |
Reduction in valuation allowance | 0 | 0 | (999) |
Other | (86) | 239 | 13 |
Total income tax provision | $ 16,400 | $ 7,875 | $ 1,276 |
Effective tax rate | 6% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Asset (Liabilities) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Carry forward tax losses | $ 11,080,000 | $ 727,000 |
Compensations and benefits | 24,032,000 | 486,000 |
Right-of-use asset | 7,705,000 | 0 |
Initial public offering costs | 3,933,000 | 0 |
Provision of loans | 2,276,000 | 0 |
Research and development cost | 929,000 | 5,179,000 |
Other | 528,000 | 753,000 |
Deferred tax assets before valuation allowance | 50,483,000 | 7,145,000 |
Valuation allowance | 39,678,000 | 1,194,000 |
Deferred tax assets | 10,805,000 | 5,951,000 |
Operating lease liability | (8,116,000) | 0 |
Capitalized research and development costs | (1,537,000) | 0 |
Equity method investments | (1,254,000) | 0 |
Property and equipment | (466,000) | (270,000) |
Deferred tax liabilities | (11,373,000) | (270,000) |
Deferred tax assets (liabilities), net | (568,000) | |
Deferred tax assets (liabilities), net | 5,681,000 | |
Undistributed earnings of foreign subsidiaries | 0 | 1,800,000 |
Adjustment for foreign tax credits and foreign withholding taxes | 0 | $ 300,000 |
Deferred tax liabilities on undistributed foreign earnings | $ 0 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Uncertain tax positions, beginning of the year | $ 190 | $ 164 |
Increase (decrease) in tax positions for prior years | 0 | (20) |
Increases related to current year tax positions | 7,593 | 28 |
Revaluation | (13) | 18 |
Uncertain tax positions, end of year | $ 7,770 | $ 190 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Jun. 23, 2022 class | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Number of classes of ordinary shares | class | 2 | ||||
Allocation of undistributed earnings: | |||||
Net income (loss) attributable to Pagaya Technologies Ltd. shareholders | $ (302,321) | $ (91,151) | $ 14,470 | ||
Less: Undistributed earnings allocated to participating securities | (12,205) | (19,558) | (9,558) | ||
Less: Deemed dividend distribution | 0 | (23,612) | 0 | ||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders | $ (314,526) | (134,321) | 4,912 | ||
Adjustment for undistributed earnings allocated to participating securities | 0 | 239 | |||
Adjustment for mark-to-market gain | 0 | (543) | |||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted | $ (134,321) | $ 4,608 | |||
Net income (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ / shares | [1] | $ (0.69) | $ (0.69) | $ 0.03 | |
Denominator: | |||||
Weighted average shares used net income (loss) per ordinary share, basic (in shares) | shares | [1] | 459,044,846 | 195,312,586 | 191,146,436 | |
Dilutive effect of firm commitment with founders (in shares) | shares | 0 | 303,455 | |||
Dilutive effect of share options (in shares) | shares | 0 | 14,304,044 | |||
Dilutive effect of the Option (in shares) | shares | 0 | 1,161,313 | |||
Weighted average shares used net income (loss) per ordinary share, diluted (in shares) | shares | [1] | 459,044,846 | 195,312,586 | 206,915,248 | |
Net income (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ / shares | [1] | $ (0.69) | $ (0.69) | $ 0.02 | |
Class A | |||||
Allocation of undistributed earnings: | |||||
Net income (loss) attributable to Pagaya Technologies Ltd. shareholders | $ (238,299) | ||||
Less: Undistributed earnings allocated to participating securities | (9,620) | ||||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders | (247,919) | ||||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted | $ (247,919) | ||||
Net income (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ / shares | $ (0.69) | ||||
Denominator: | |||||
Weighted average shares used net income (loss) per ordinary share, basic (in shares) | shares | 361,832,962 | ||||
Weighted average shares used net income (loss) per ordinary share, diluted (in shares) | shares | 361,832,962 | ||||
Net income (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ / shares | $ (0.69) | ||||
Class B | |||||
Allocation of undistributed earnings: | |||||
Net income (loss) attributable to Pagaya Technologies Ltd. shareholders | $ (64,022) | ||||
Less: Undistributed earnings allocated to participating securities | (2,585) | ||||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders | (66,607) | ||||
Net income (loss) attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted | $ (66,607) | ||||
Net income (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ / shares | $ (0.69) | ||||
Denominator: | |||||
Weighted average shares used net income (loss) per ordinary share, basic (in shares) | shares | 97,211,885 | ||||
Weighted average shares used net income (loss) per ordinary share, diluted (in shares) | shares | 97,211,885 | ||||
Net income (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ / shares | $ (0.69) | ||||
[1]Prior period amounts have been retroactively adjusted to reflect the 1:186.9 stock split effected on June 22, 2022. |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule of Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 348,395,397 | 770,087,357 | 329,855,547 |
Share options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 76,557,428 | 87,262,873 | 0 |
Options to restricted shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 242,615,284 | 245,167,369 | 0 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 5,753,975 | 0 | 0 |
Warrant | Preferred share warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 0 | 4,316,570 | 8,049,587 |
Warrant | Ordinary share warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 23,468,710 | 26,941,516 | 0 |
Convertible preferred shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net potential dilutive outstanding securities (in shares) | 0 | 406,399,029 | 321,805,961 |
SEGMENTS AND GEOGRAPHICAL INF_3
SEGMENTS AND GEOGRAPHICAL INFORMATION - Schedules of Revenue and Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue from fees, net | $ 685,414 | $ 445,866 | $ 91,740 |
Total Long-Lived Assets, net | 92,740 | 7,648 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue from fees, net | 685,129 | 409,858 | 68,526 |
Total Long-Lived Assets, net | 9,470 | 1,505 | |
Israel | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue from fees, net | 0 | 3,771 | 7,142 |
Total Long-Lived Assets, net | 83,270 | 6,143 | |
Cayman | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue from fees, net | $ 285 | $ 32,237 | $ 16,072 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Apr. 14, 2023 | Mar. 19, 2023 | Jan. 18, 2023 | Dec. 31, 2022 | Jan. 05, 2023 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | ||||||||
Cash and cash equivalents | $ 309,793 | $ 190,778 | $ 5,066 | |||||
Warrant purchase price (in dollars per share) | $ 0.001 | |||||||
Silicon Valley Bank | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash and cash equivalents | $ 15,000 | |||||||
Financial Institution Concentration Risk | Cash and Cash Equivalents | Silicon Valley Bank | ||||||||
Subsequent Event [Line Items] | ||||||||
Concentration risk, percentage | 5% | |||||||
Forecast | Workforce Reduction in Israel and United States | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of positions expected to be eliminated (percentage) | 20% | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants and rights, extension term | 3 years | |||||||
Warrant purchase price (in dollars per share) | $ 0.01 | |||||||
Subsequent Event | Class A | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants outstanding (in shares) | 2,640,000 | |||||||
Subsequent Event | Oak HC/FT Partners V, L.P., Oak HC/FT Partners V-A, L.P. And Oak HC/FT Partners V-B, L.P | Private Placement | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares issued in transaction (in shares) | 60,000,000 | |||||||
Consideration received on sale | $ 75,000 | |||||||
Subsequent Event | Darwin Homes, Inc. | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Market value of business acquisition | $ 18,000 |