Luzon Credit: How Much Of 2025 Came From Old Deferred Revenue, And What Is Left For 2026
In 2025, Luzon Credit recognized NIS 5.749 million from contract liabilities that were already sitting on the balance sheet at the start of the year, about 18% of annual revenue. That tail is not gone yet, but it is much smaller than it was in 2024, and what remains is no longer enough to carry the 2026 revenue plan on its own.
The main article argued that 2025 was a transition year, not a breakout year. This continuation isolates one layer inside that transition: how much of 2025 revenue came from fresh activity, and how much was simply released from an older stock of purchasing-group fees that was already sitting on the balance sheet.
That matters because the 2025 revenue decline was not only about weaker activity. A large part of it also came from the fact that the old accounting cushion had already become much smaller. In 2025 the company recognized NIS 5.749 million from contract liabilities that were on the books at the start of the year. That is about 18.1% of annual revenue of NIS 31.703 million. In 2024, the same line contributed NIS 16.896 million, or about 31.9% of revenue.
That is the core point. More than half of the year-over-year revenue decline, NIS 11.147 million out of NIS 21.181 million, is explained simply by a much smaller release from the old stock. So the right question is not only why revenue fell. It is how much of the revenue that remained still leaned on old contracts, and how much of that stock is left going into 2026.
How Much Of 2025 Came From The Past
| Metric | 2024 | 2025 | Why it matters |
|---|---|---|---|
| Reported revenue | NIS 52.884 million | NIS 31.703 million | A year-over-year decline of about 40.1% |
| Revenue recognized from contract liabilities opened at the start of the year | NIS 16.896 million | NIS 5.749 million | The old tail weakened by NIS 11.147 million |
| Share of reported revenue | 31.9% | 18.1% | Still material, but no longer the dominant support it was in 2024 |
| Revenue after stripping out the release from the old stock | NIS 35.988 million | NIS 25.954 million | Even without the old tail there was still a decline, but a milder one, about 27.9% |
| Contract-liability balance at year-end | NIS 15.231 million | NIS 9.482 million | The reported balance kept running down |
That number matters even more here because direct-lending activity contributed only NIS 226 thousand of revenue in 2025. In other words, almost the entire top line still sits on the brokerage platform and its fee stream. When NIS 5.749 million out of NIS 31.703 million comes from releasing an older balance, this is no side note.
It also explains why a surface read of 2025 can be misleading. If you look only at reported revenue, you see a 40% drop. If you separate out the revenue that came from the opening balance, you see something else as well: 2025 was already standing on much less support from the past, but it was not yet standing fully on fresh activity either.
This Is Not Just A Technical Line Item
Fees from purchasing groups are not recognized all at once. The company recognizes them over time, on a straight-line basis, starting from contract signing and over the expected period in which the customer gets access to the platform. In some agreements recognition continues until the expected date of full drawdown of the loan amount, and in some cases there are extension rights as well.
That is where the sensitivity comes from. The auditors flagged revenue recognition and contract assets tied to purchasing groups as a key audit matter, not only because of size, but because the estimate depends on the expected contract period, borrowers meeting conditions precedent, extension options, and actual utilization of the credit line. In the estimate notes, the company itself says that in purchasing-group transactions it assesses, based on past experience and existing economic conditions, the expected period in which the customer will have access to the platform.
That is the real economic meaning. This balance is not a fixed coupon sitting on the balance sheet waiting to become revenue automatically. It depends on contract duration, drawdown pace, and management assumptions that the auditors explicitly chose to test in depth.
There is another sign that the old stock is maturing. The asset recognized from costs to obtain contracts fell from NIS 247 thousand at end-2024 to zero at end-2025, after NIS 247 thousand of amortization during the year. At the same time, the remaining contract-liability balance is presented entirely within current liabilities, not long-term liabilities. So even from a balance-sheet classification perspective, this is not being presented as a broad long-dated cushion, but as a balance that sits much closer to the near-term window.
What Is Left For 2026
At the end of 2025, NIS 9.482 million of contract liabilities remained on the balance sheet. Alongside that, a separate deferred-revenue line of NIS 308 thousand also appeared within payables and accruals. But the main story still sits in the purchasing-group contract-liability balance, not in that smaller deferred-revenue line.
The right way to read the NIS 9.482 million is as a ceiling, not as a forecast. Even if the entire balance were recognized during 2026, it would cover only about 27% of the 2026 P2P fee budget of NIS 35.120 million, and only about 22.1% of the total 2026 revenue budget of NIS 42.896 million. In other words, even under a very generous scenario, about NIS 25.638 million would still be missing just to hit the P2P fee target, before considering that recognition is straight-line and therefore not necessarily all realized within one year.
That also connects directly to what the company itself wrote in the directors' report about adjusted EBITDA. Its formal explanation for the shift to negative adjusted EBITDA in 2025 referred not only to weaker credit-brokerage activity, but also to the end of the old deferred-revenue release by the end of the second quarter of 2025. In other words, by the company's own framing, the second half of 2025 was already much closer to the world after the old stock.
That is why 2026 starts from a different place. It is not starting from zero, because NIS 9.482 million still remains. But it is also not starting with the same cushion that existed in 2024, or even with the same contribution that existed in 2025. Put simply, the next year will have to rely much more on generating fresh revenue, and much less on digesting old contracts.
Conclusion
The right read of 2025 is not that revenue was artificial. It is that revenue still contained a transition layer coming from the past. NIS 5.749 million, about 18% of the top line, came from contract liabilities that were already on the books at the start of the year. That is still material, but it is far below 2024, when the same mechanism contributed NIS 16.896 million.
That leads directly to the 2026 conclusion. A cushion still exists, NIS 9.482 million, but it is already too small to carry next year's revenue budget on its own, and it also rests on estimates and a recognition method that are not automatic. So the real 2026 test will not be whether there is still something left to release from the past. It will be whether the company can build enough fresh revenue so that the next report does not lean again on a layer that is steadily running out.
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