Figure Technology Solutions, Inc. Class A Common Stock

Figure reported Q2 consumer loan marketplace volume of $4.3 billion, up 132% year over year from $1.8 billion, and 4% above the top end of guidance. Adjusted net revenue was $218 million, up 95% year over year from $112 million. Net income was $87 million versus $30 million a year ago, and adjusted EBITDA was $119 million, up 126% year over year from $53 million, with a 55% margin versus 47% a year ago. Figure Connect volume rose to 65% of CLM volume from 42% a year ago, and net take rate was 3.6%, within the 3.5% to 4% range. Balance sheet cash and cash equivalents were $1.44 billion, and subsequent to quarter end the company closed $600 million of senior notes at 8.5%. For Q3, management guided to CLM volume of $4.8 billion to $5.2 billion and said July volume was $1.7 billion, putting the quarter on track near the midpoint.

Michael Tannenbaum framed the quarter as evidence that Figure’s capital markets-on-chain strategy is gaining traction, with strong partner adoption, faster ramping new partners, and growing investor demand. He emphasized that Figure Connect is the core growth engine, saying the model is becoming more capital-light and that larger partners are increasingly going direct to Connect from day one. His tone was confident and expansive, with repeated references to compounding network effects, AI-enabled onboarding, and the company’s role in standardizing multiple asset classes.

Minchung Kgil highlighted broad-based growth across volume, revenue, and margin, pointing out that Figure Connect reached 65% of CLM volume and partner-branded volume reached 83%. She noted net income of $87 million included a $4.4 million tax benefit, and adjusted EBITDA margin was 55%, or about 52% excluding a $5.9 million gain on the sale of a minority-interest business. She also said operations and processing costs improved to about 67 basis points of volume from roughly 79 basis points a year ago, and that the company ended the quarter with $1.44 billion in cash. On capital allocation, she said the $600 million senior notes issuance broadened funding, preserved balance sheet flexibility, and was intended both to finance Kiavi and expand the capital toolkit.

Analysts focused heavily on take rate, asking whether the lower 3.6% take rate reflected pricing cuts or mix shift. Management said it was driven mainly by the rapid shift into Figure Connect, where pricing is lower than the other channels, plus higher interest rates hurting gain on sale and growing first-lien volume; they explicitly said there were no pricing cuts. Questions also centered on buyer growth, with management saying all buyers are Connect-enabled and include insurance companies, asset managers, and credit funds, and that larger volume helps attract more buyers. On the balance sheet, management said the roughly $600 million of loans on balance sheet reflect temporary holding periods while loans are aggregated and that Democratized Prime balances should keep building as the platform scales.