The men have also admitted one charge of possession of methamphetamine.
They were charged in December 2019 after a person reported to police that the men were in possession of objectionable material and the drug.
According to court documents, Pengelly is a manager and Bradley's occupation is listed as supervisor.
It is understood he has been breeding and exhibiting boxer dogs for 40 years and is well known in that community.
A source told the Herald the material found at the men's home was "gross".
"This would be the worst child exploitation material we've come across," the source said.
"The brutality is next level."
More than 750 video files were found at a property owned and occupied by both men, totalling more than 118 hours of disturbing footage.
The content was found on three of 11 devices seized by police in a raid in December 2019 - a laptop, iPhone and external hard drive.
The Herald has chosen not to publish detailed and specific descriptions of much of the content due to its extremely graphic nature.
Also found at the house, in a bedside table in the master bedroom, police found four point bags of methamphetamine.
The men were charged and last week pleaded guilty to the charges when they appeared in the Pukekohe District Court.
They will be sentenced in November in the Papakura District Court.
Police were not able to comment on the case before Pengelly and Bradley were sentenced.
However the Summary of Facts was provided to the Herald, and revealed what the men told officers after they were arrested.
"Bradley stated that he smoked methamphetamine with Pengelly and another person on the night of 21 December 2019," the summary stated.
"The defendant admitted to possessing bestiality pornography and that there was child exploitation material at the address as someone he could not longer remember left it at his address.
"Bradley admitted to watching it."
Pengelly told police he watched bestiality pornography on a laptop he shared with Bradley.
"He states that he has never downloaded images of child exploitation material," said the summary.
"When challenged on where it came from, he states that he doesn't know."
Police told the court that an estimated 200 new child sexual abuse images are circulated daily on the internet.
According to a United Nations expert, the number of sexual predators connected to the internet at any one time was estimated to be 750,000.
"The UN has estimated that between 10,000 and 100,000 minors are victims of child sexual abuse networks," said the Summary of Facts.
"The number of child sexual abuse images has quadrupled between 2003 and 2007.
"The demand for new child sexual abuse images results in a continuing cycle of sexual abuse of existing victims and demands for new victims.
"Any sexual offence involving a child is horrific - but by photographing, filming an distributing images and movies of the abuse, the victim is victimised every time their images is viewed on the internet."
Police said the abused child "carries this burden for the rest of their life."
"(Pengelly and Bradley have), by distributing and possessing imagery of child sexual abuse, directly contributed to the further victimisation of these children and fuelled an international demand for such imagery," they told the court.
"In New Zealand, over a million clicks on illegal child sex abuse websites were identified by the Department of Internal Affairs through a two-year trial period ending in 2009.
"There is an increasing trend towards younger victims and greater brutality; infants and toddlers are being raped for the enjoyment of viewers.
"An estimated 20 per cent of all pornography traded over the internet is child exploitation material and since 1997 the number of child exploitation images on the internet has increased by 1500 per cent.
"The figures are concerning - but are a correct reality of the offending across New Zealand.
"The internet is a worldwide, easy access source of information and a major gateway for offenders to access child exploitation material for sexual gratification."
HOW TO REPORT ONLINE CHILD ABUSE
New Zealand Police have a specialist team working to protect children from online child abuse — the Online Child Exploitation Across New Zealand (OCEANZ) team.
OCEANZ liaise directly with anyone who reports online child abuse.
And they will provide advice on what you need to do and how police will investigate your complaint.
If you know of anyone with child exploitation material or you have concerns about online child abuse - you should make an online report directly to OCEANZ.
Online child abuse is defined as "any kind of abuse of a child that happens on the internet".
To contact OCEANZ or for more information - CLICK HERE.
You can also make a report by phoning or visiting your local police station. CLICK HERE FOR A DIRECTORY.
