Company: PGYWW
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001883085-25-000169
Chunk: 12

Company: Pagaya Technologies Ltd.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 that an incentive is consideration payable, which is not in exchange for distinct goods or services, to a customer, the incentive is recorded as a reduction of revenue. 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. Contract FeesContract fees include administration and management fees, performances fees, and servicing fees. Contract fees totaled $31.8 million and $20.8 million for the three months ended June 30, 2025 and 2024, respectively, and $61.1 million and $42.5 million for the six months ended June 30, 2025 and 2024, respectively. All of these fees are recognized over the service period for the Financing Vehicles managed or administered by the Company and the payment term is monthly as a fixed percentage of the entity’s assets, except for the portion of management fees that are recognized at the point in time based on contract terms. 

10

Performance fees are earned when certain Fund 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 of Financing Vehicles. As such, there are revenues that result from performance obligations satisfied in the previous year. During the three and six months ended June 30, 2025, $0.2 million and $0.8 million, respectively, worth of fees were recognized, which represent performance obligations satisfied in the previous year that were greater than the original estimate. During the three months ended June 30, 2024, $0.1 million worth of fees were recognized, which represent performance obligations satisfied in the previous year that were greater than the original estimate. During the six months ended June 30, 2024, $3.2 million worth of fees were reversed, which represent performance obligations satisfied in the previous year that were less 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 and payment is received monthly from the Financing Vehicles. 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. Total Revenue