Basic earnings per share is computed using the weighted-average number of shares outstanding during the period. Diluted earnings 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: Class A and Class B. The computation of the diluted earnings per share of Class A Ordinary Shares assumes the conversion of Class B Ordinary Shares, while the diluted earnings per share of Class B Ordinary Shares 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 Ordinary Shares and Class B Ordinary Shares 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 earnings (loss) per share for each class under the two-class method.

The Preferred Shares are a participating security, whereby if a dividend is declared to the holders of ordinary shares, the holders of Preferred Shares would participate to the same extent as if they had converted the Preferred Shares to ordinary shares. Net loss is attributed to ordinary shareholders and participating securities based on their participation rights. Net loss attributable to ordinary shareholders is not allocated to the Preferred Shares as the holders of the Preferred Shares do not have a contractual obligation to share in any losses.

The following table sets forth the calculation of basic and diluted earnings (loss) per share attributable to ordinary shareholders for the year ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share data):


	Year Ended December 31, 2025
Basic EPS:
Numerator:
Net income attributable to Pagaya Technologies Ltd.	$	81,389
Less: Undistributed earnings allocated to preferred shares	4,105
Net income attributable to Pagaya Technologies Ltd. ordinary shareholders, basic	$	77,284
Denominator:
Weighted average shares used for earnings per ordinary share, basic	78,336,095
Earnings per share attributable to ordinary shareholders, basic	$	0.99

Diluted EPS:
Numerator:
Net income attributable to Pagaya Technologies Ltd. ordinary shareholders, diluted	$	77,284
Denominator:
Shares used in computation of basic earnings per share	78,336,095
Ordinary share warrants	785,890
Share options	3,031,605
Unvested RSUs	943,637

Weighted average shares used for earnings per ordinary share, diluted	83,097,227
Earnings per share attributable to ordinary shareholders, diluted	$	0.93


	Year Ended December 31, 2024	Year Ended December 31, 2023
Numerator:
Net loss attributable to Pagaya Technologies Ltd. ordinary shareholders, basic and diluted		$	(401,406)	$	(128,438)
Denominator:
Weighted average shares used for net loss per ordinary share, basic and diluted		70,879,807		60,038,893
Net loss per share attributable to ordinary shareholders, basic and diluted		$	(5.66)	$	(2.14)

EPS for Class B ordinary shares and EPS for preferred shares are not presented separately, as under the two-class method, the EPS for Class A, Class B and preferred shares are the same.

The following potentially dilutive outstanding securities as of December 31, 2025, 2024 and 2023 were excluded from the computation of diluted earnings (loss) per share because their effect would have been anti-dilutive for the periods:


	December 31,
	2025	2024	2023
Share options	—	3,740,789	3,895,087
Options to restricted shares	—	19,948,408	20,046,080
RSUs	425,251	3,009,918	3,034,203

Ordinary share warrants	1,229,166	2,016,321	2,016,326
Redeemable convertible preferred shares	—	5,000,000	5,000,000
Exchangeable notes	11,434,704	11,434,704	—
Net potential dilutive outstanding securities	13,089,121	45,150,140	33,991,696