Marketplace Revenue
Marketplace revenue consists of (i) origination fees, (ii) servicing fees, (iii) gain on sales of loans and (iv) net fair value adjustments, as described below.
Origination Fees: Fees charged to borrowers in connection with the origination of loans that are held for sale.
Servicing Fees: The Company receives servicing fees to compensate it for servicing loans on behalf of marketplace investors, including managing payments from borrowers and remittances to those investors. The amount of servicing fee revenue earned is predominantly affected by the servicing rates paid by investors and the outstanding principal balance of loans serviced for investors. Servicing fee revenue related to loans sold also includes the associated change in the fair value of servicing assets.
Gain on Sales of Loans: In connection with loan sales to marketplace investors, the Company capitalizes the initial fair value of servicing rights. A gain or loss is recorded based on the level to which the contractual servicing fee is above or below an estimated market rate of servicing at the time of sale. Additionally, the Company recognizes transaction costs, if any, as a loss on sale of loans.
Net Fair Value Adjustments: The Company records adjustments to the carrying value of loans, for which it has elected to account for under the fair value option, to reflect their fair value. These adjustments include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs. In addition, as loans are held on the Balance Sheet, incremental fair value adjustments on the loans are recorded in “Net fair value adjustments” within “Marketplace revenue,” whereas the associated interest income is recorded within “Net interest income.”
The following table presents components of marketplace revenue for the periods presented:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, | 2025 | | 2024 | | 2023 |
| Origination fees | $ | 372,815 | | | $ | 283,420 | | | $ | 279,146 | |
| Servicing fees | 58,988 | | | 64,933 | | | 98,613 | |
| Gain on sales of loans | 59,087 | | | 49,097 | | | 47,839 | |
| Net fair value adjustments | (134,946) | | | (154,659) | | | (134,114) | |
| Total marketplace revenue | $ | 355,944 | | | $ | 242,791 | | | $ | 291,484 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.