Figure Technology Solutions Q4 Earnings Call Highlights

27 Feb 2026, 04:14 by Danessa Lincoln · The Markets Daily

Figure Technology Solutions (NASDAQ:FIGR) executives used the company’s fourth quarter and full year 2025 earnings call to outline priorities for 2026, emphasizing continued marketplace scale, product expansion into new asset categories, and further development of its blockchain-based ecosystem. Management said the quarter’s reported results were consistent with a preview provided earlier in the month.

Three priorities for 2026

Chief Executive Officer Michael Tannenbaum said Figure is focused on three areas as it looks ahead to 2026:

Scaling the marketplace, particularly through Figure Connect and increased volume in the company’s “capital-light exchange.”
Broadening products inside the marketplace, including “mortgage-adjacent categories” where it already has partner relationships.
Expanding the blockchain ecosystem around the marketplace, including tokenization, decentralized finance, and atomic settlement.

Tannenbaum highlighted Figure Connect as the company’s “operating system” for capital flows, noting that more than half of consumer loan marketplace volume transacted through Connect in the quarter for the first time. He said increased Connect penetration reduces reliance on balance sheet intermediation and supports a more capital-light model with “more durable” margins.

AI initiatives and operating model

Tannenbaum described artificial intelligence as primarily a growth enabler for Figure and its partner ecosystem, rather than a cost-cutting tool. He said partners are beginning to steer more activity toward Figure’s workflow because of its speed and simplicity, including a demonstration of an “AI salesperson” guiding borrowers through a white-label Figure product.

On the operational side, he said Figure launched an AI customer service agent with roughly three-quarters chat containment, allowing staff to shift toward enhanced support and growth-oriented tasks. He also said AI has been embedded into property title review workflows and used as a parallel validation step against underwriting guidelines, with the goal of reducing errors and improving asset quality and standardization.

He also argued that while AI can improve underwriting and servicing, it “cannot create liquidity” or replicate years of standardized asset performance history, stating, “you can’t AI your way into AAA.”

Product expansion: third-party assets, SMB lending, and first liens

As part of its second pillar—expanding the types of products in its marketplace—Figure emphasized the ability to bring third-party originated assets onto its rails. Tannenbaum announced a partnership with Agora Data aimed at bringing auto finance assets into the company’s Democratized Prime platform, which he said is expected to bring “tens of millions of dollars” of auto finance volume to Democratized Prime and Connect “in just the next few months.”

In response to analyst questions, Tannenbaum described the Agora opportunity as threefold: entry into the auto finance sector (which he said has about $1.5 trillion outstanding), monetization through Democratized Prime by financing third-party assets, and an “upsell” path into Figure Connect for permanent loan acquisition by buyers.

Figure also discussed small and medium-sized business lending. Tannenbaum said platform partners originated more than $46 million of SMB loans in Q4, “twice as much as the prior period.” He added that Figure is finalizing a strategic partnership with Newtek, initially focused on delivering Figure’s HELOC for small business through a partner-branded channel. Over time, he said the relationship could evolve into a broader lending, banking, and money movement partnership anchored by Figure’s SEC-registered stablecoin, YLDS.

First lien mortgage products were another focus. Tannenbaum said first lien represented roughly 19% of originations in Q4, up from 12% a year earlier, and described growing partner adoption and investor comfort. He repeatedly emphasized cost and speed advantages, stating Figure can do a mortgage “in less than $1,000 and in five days,” compared with an industry average cost of $11,045. He positioned first lien growth as increasingly central, saying 2026 will be “the year of the first lien” for Figure.

Blockchain ecosystem: Democratized Prime, YLDS, and OPEN

For the third pillar—blockchain ecosystem expansion—Tannenbaum provided updates on Democratized Prime, which he described as an on-chain short-term financing marketplace competing with traditional warehouse lines and prime brokerage in a “structurally different way.” He said Democratized Prime showed “nearly 10x quarter-over-quarter growth,” expanding from $20 million to over $200 billion in matched offers, and that the platform had more than 1,000 active participants. He also noted cross-chain expansion through a Real-World Asset Consortium partnership that extended access into the Solana ecosystem.

On YLDS, Tannenbaum described it as a regulated, yield-bearing stablecoin integrated into the company’s capital markets infrastructure. He said YLDS in circulation was nearing half a billion and had increased by more than 20x since the end of the third quarter. CFO Macrina Kgil later said YLDS ended the quarter at $328 million, while Democratized Prime ended with a balance of $206 million.

Tannenbaum also highlighted the launch of what he called the first blockchain-native share class by a public company through a marketplace called OPEN (On-Chain Public Equity Network). He said OPEN supports 24/7 trading on an ATS with atomic settlement, wallet-based self-custody, and on-chain ownership records through an integrated transfer agent model. He said equity on OPEN can be used as programmable collateral, including borrowing at up to 80% loan-to-value and cross-collateralization with other on-chain assets.

Financial results, profitability, and capital

Kgil said Figure reported consumer loan marketplace volume of $2.7 billion in Q4, up 131% year-over-year, driven by new partner expansion and growth in newer products such as SMB and DSCR loans. She noted winter months (November through February) are seasonally slower for home-based lending but said Figure still posted sequential quarterly growth, with new partners and newer product categories offsetting seasonal headwinds.

Adjusted net revenue was $158 million, up 106% year-over-year, with 130% growth in volume-correlated adjusted net revenue and 47% growth in servicing and interest income combined. Net take rate was 3.8%, 40 basis points higher year-over-year, which Kgil attributed primarily to better gain-on-sale execution. She said 54% of volume came from Connect in Q4, compared with “very little” Connect volume in the year-ago quarter.

Quarter-over-quarter, Kgil said net take rate declined due to lower gain-on-sale premium in line with broader market execution and mix shifts, including more first lien securitizations and the impact of sliding-scale fees for larger Connect partners. She guided to a near- to medium-term net take rate range of 3.5% to 4%, citing factors such as product mix, marketplace participation, and capital markets conditions.

On profitability, Kgil reported GAAP net income of $15 million, a 9.4% margin, and said results reflected higher share-based compensation from one-time fully vested grants to third-party advisors and accelerated recognition for certain restricted stock units. She said stock-based compensation is expected to normalize around $21 million over the next few quarters. Adjusted EBITDA was $81.3 million, up 426% year-over-year, and adjusted EBITDA margin expanded to 51.6% from 20.2% a year earlier. Kgil said the company’s medium-term goal is adjusted EBITDA margin above 60%.

Figure ended the quarter with about $1.2 billion in cash and cash equivalents. Loans held for sale were approximately $404 million. Kgil said loans held for sale can fluctuate based on timing of sales and securitizations and could increase if Figure holds certain loans longer to supply collateral for Democratized Prime demand, though she said balances may normalize as more third-party supply comes onto the platform.

Kgil also announced the board authorized a $200 million share repurchase program, calling it a reflection of balance sheet strength and confidence in the long-term opportunity, while emphasizing it does not obligate the company to repurchase a specific amount and will be executed in a disciplined manner.

During Q&A, management said it had not seen a change in demand for Figure loans despite broader market concerns about private credit, with Kgil saying jitters appear centered on commercial loans rather than residential mortgage-type assets. Tannenbaum also said the company has had “zero losses” on crypto-backed loans to date and described the ability to liquidate collateral quickly if loan-to-value thresholds are breached.

Tannenbaum also addressed a recent security incident, describing it as a phishing attack that affected loan inquiry records and a limited number of customer accounts. He said impacted information included personal data and Social Security numbers for approximately 12,400 individuals, that notifications have begun, and that the incident is not expected to have a material impact on financial results.

About Figure Technology Solutions (NASDAQ:FIGR)

Figure is building the future of capital markets using blockchain-based technology. Figure’s proprietary technology powers next-generation lending, trading and investing activities in areas such as consumer credit and digital assets. Our application of the blockchain ledger allows us to better serve our end-customers, improve speed and efficiency, and enhance standardization and liquidity. Using our technology, we continue to develop dynamic, vertically-integrated marketplaces across the approximately $2 trillion consumer credit market and the rapidly growing approximately $4 trillion cryptocurrency and digital asset market.