← All thesesFIGRNeutralMedium convictionSunday 18 October 2026עברית

Figure Technology Solutions

A software maker that turns home equity into loans in days, not weeks, then sells those loans to investors through its own marketplace.

Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth3/4 →

Volume up 132% and revenue 113% in Q2 2026, organic, but almost all from one product, home equity lines, and Kiavi was bought.

Business quality3/4 ↓

A real cost edge, $717 a loan against an industry $11,109, but the take rate is falling and rivals and a Freddie Mac pilot attack.

Financial position3/4 ↓

$1.44B of cash covers loans for sale and the notes run to 2031, but operating cash was negative and loan sales need bond markets open.

Execution record3/4 →

Q3 volume hit the top of guidance and Q2 beat, but the take rate sank to the range's floor and the adjusted measure changed twice.

Per share capture2/4 →

Stock pay is 16.0% of revenue, the founder award adds up to 8.5M shares, and the $200M buyback went unused.

Potential3/4 →

About 4.7% of a $179.3B market that grew 21.0% in 2025, with partner gains visible each quarter; nothing beyond one joint venture is contracted.

Risk profile3/4 →

One serious dependency: home equity lines are over 98% of loans, so rates and house prices drive profit; founders also control the votes.

Valuation3/4 ↑

About 29 times this year's normal-tax profit pace pays for growth roughly as planned; at 45 times trailing it pays more, so not Cheap.

Evidence quality3/4 →

Filed figures, HMDA and the MBA carry the case, but credit quality, Kiavi's profit and the take-rate causes rest on management's word.

The bet · 2-3 years
Safe, little upside1.0×

If it works 1.0× · if it fails you keep about 100%.

The Verdict

We rate Figure Technology Solutions Neutral. Its software makes a home equity loan far more cheaply than other lenders, and volume more than doubled in a year, so the business is solid. But each dollar of loans earns it less than a year ago, cash ran negative and much of profit is gains on selling loans that higher rates cut. The price is fair if growth continues, with no cushion if it slows and nothing for the blockchain products. As a bet, those products are safe with little upside, and come free. Conviction is medium until the September quarter shows whether the take rate holds.

The long caseIf money and loans move onto blockchains, Figure already runs a registered yield-paying token and a lending pool backed by home loans.

The evidence under this - 9 claims
C08factmedium confidence
Figure reports a median of 10 days from application to funding for a home equity loan, against an industry median of about 43 days, and a production cost of about $717 a loan in 2025.
against this
  • Both figures are Figure's own, and the 43-day industry figure comes from unnamed 'industry sources'.
  • The MBA's $11,109 is for all mortgages, mostly first liens with appraisals, so it overstates the cost of a typical home equity loan.
historical · FY2025written 2026-10-18
C09factmedium confidence
The Mortgage Bankers Association put the industry's cost to produce a mortgage at $11,109 a loan in Q3 2025, against a long-run average of $7,799 since 2008.
historical · Q3 2025written 2026-10-18
C03facthigh confidence
Consumer Loan Marketplace volume was $8.4B in 2025, up 63%; $4,259M in Q2 2026, up 132%; and a preliminary $5,119M in Q3 2026, up 107% and before any Kiavi loans.
historical · FY2025 to Q3 2026written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
C25facthigh confidence
Over the four quarters to June 2026 cash from operations was minus $86.5M while net income was $237.1M; in 2025 it was $62.6M against $133.9M.
historical · four quarters to Q2 2026written 2026-10-18
C05facthigh confidence
Of Q2 2026 revenue of $225.6M, ecosystem and technology fees were $72.9M, gain on sale of loans $57.6M, gain on servicing asset $29.1M, origination fees $26.3M, interest $22.8M and servicing fees $11.3M.
historical · Q2 2026written 2026-10-18
C28inferencemedium confidence
At $27.13 the 246,969,949 diluted shares are worth about $6.70B, 45.1 times trailing pretax profit taxed at 26% and 29.4 times Q2 2026's pretax profit without the $5.9M Reflow gain, annualised and taxed at 26%; that is 4.7 times shareholders' equity.
derivedC04 and C26 for pretax profit, C27 for the 26% rate, C42 for the $5.9M gain, C24 for equity, C29 for the close; diluted shares from the Q2 2026 income statement
against this
  • Q2 2026 is the best quarter on record, so annualising it flatters the run rate if volume or sale gains slip.
  • On the 224,377,872 shares outstanding the market value is $6.09B and the multiples are about 9% lower.
current state · 2026-10-16written 2026-10-18
C31facthigh confidence
YLDS, Figure's stablecoin, had $504M in circulation at 30 September 2026, down from $556M in June, and Democratized Prime matched $588M of loans; YLDS earned $1.1M of net interest in 2025 and the exchange no material revenue.
current state · 2026-09-30written 2026-10-18
C04facthigh confidence
Revenue was $506.9M in 2025, up 48.7%, with net income of $133.9M; in Q2 2026 revenue was $225.6M, up 113%, net income $87.4M and diluted earnings $0.35 a share; revenue over the four quarters to June 2026 was $708.9M.
historical · FY2025 and Q2 2026written 2026-10-18
01

The company

A homeowner who wants to borrow against the house usually waits weeks while a bank checks the title, the value and the income by hand. Figure's software does most of that automatically, so a loan can fund in days.

Banks, credit unions and mortgage lenders use it to make loans under their own names; Figure also lends under its own brand. Almost every loan is a home equity line, and many are then sold to investors through Figure Connect, its marketplace. Nearly 500 lenders now use it.

The evidence under this - 3 claims
C01facthigh confidence
Figure sells a loan origination system that lenders use to make home equity lines of credit, a marketplace called Figure Connect where those loans are sold, and lending under its own brand; home equity lines were over 98% of 2025 originations and it reports one segment.
current state · 2025-12-31written 2026-10-18
C02facthigh confidence
In Q2 2026 loans made on Figure's system under partners' brands were $3,536M and under Figure's own brand $723M; $2,773M, 65% of the $4,259M total, went through Figure Connect.
historical · Q2 2026written 2026-10-18
C14facthigh confidence
Figure had 489 active lending partners at Q2 2026, adding 102 in the quarter, from about 250 at its September 2025 listing; no customer was more than 10% of revenue.
against this

Management said one new partner became the largest or second largest within a quarter, so volume may be more concentrated than the revenue test shows.

current state · 2026-06-30written 2026-10-18

How it makes money

Figure keeps a slice of every loan made on its system: fees from the lenders that use it, fees for setting the loan up, and gains when it sells the loans it made to investors. It also earns interest while it holds loans and fees for collecting payments. What keeps lenders coming back is that their loans get made faster and cheaper.

The evidence under this - 3 claims
C05facthigh confidence
Of Q2 2026 revenue of $225.6M, ecosystem and technology fees were $72.9M, gain on sale of loans $57.6M, gain on servicing asset $29.1M, origination fees $26.3M, interest $22.8M and servicing fees $11.3M.
historical · Q2 2026written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
C01facthigh confidence
Figure sells a loan origination system that lenders use to make home equity lines of credit, a marketplace called Figure Connect where those loans are sold, and lending under its own brand; home equity lines were over 98% of 2025 originations and it reports one segment.
current state · 2025-12-31written 2026-10-18
Where the money comes from, stream by stream
StreamShare of sales (Q2 2026)How it earns it
Ecosystem and technology fees32.3%Fees partners pay per dollar of loans made on the software and traded on Figure Connect, cut by volume tiers.
Gain on sale of loans25.5%The profit when Figure sells loans it made under its own brand or bought, which falls when rates rise.
Gain on servicing asset12.9%The value Figure puts on the right to service loans it sells, booked at sale.
Origination fees11.7%Fees charged to borrowers when a loan is made.
Interest income10.1%Interest on loans held before sale, including those seeding Democratized Prime.
Servicing fees5.0%Fees for collecting payments on loans after they are sold.
Marketable securities and other2.5%Income on retained bond slices, the Hastra royalty and small items.

Who runs it

Michael Tannenbaum has run Figure since 2024 and listed it in 2025; Michael Cagney, who co-founded it and once ran SoFi, is chairman. Cagney and his co-founder June Ou hold 71% of the votes through ten-vote shares. Insiders sold far more than they bought this year. Cagney's large founder award pays out only as the share price climbs, and nothing in anyone's pay rides on the slice Figure keeps or on loan losses.

The evidence under this - 3 claims
C36facthigh confidence
Michael Cagney and June Ou, the founders, beneficially own all the Class B shares, which carry 10 votes each and 71.3% of the votes; directors and officers hold 72.3% of the votes and 8.3% of Class A.
current state · 2026-04-09written 2026-10-18
C37facthigh confidence
Cagney's founder award is 3,200,942 options at $25, 3,200,942 restricted units and 2,133,961 performance units vesting at share prices of $32.50 to $63.00; the chief executive was paid $9.86M for 2025.
historical · FY2025written 2026-10-18
C38facthigh confidence
Over 365 days insiders made 1 open-market purchase of 4,000 shares and 104 sales of 4,166,743 shares, counting the founders' joint holdings twice; 48 discretionary sales were 3,567,165 of those shares, mostly in November and December 2025.
historical · 365 days to 2026-10-18written 2026-10-18
02

Why it wins, and who could beat it

Why customers come back

The advantage is cost. Figure says it made each loan for about $717 in 2025, while the Mortgage Bankers Association, which surveys lenders, put the industry's cost at $11,109. Figure's cost per dollar of loans kept falling as volume doubled.

That cheapness has a price of its own: the more lenders sell straight onto the marketplace, the less Figure keeps from each dollar.

The evidence under this - 4 claims
C08factmedium confidence
Figure reports a median of 10 days from application to funding for a home equity loan, against an industry median of about 43 days, and a production cost of about $717 a loan in 2025.
against this
  • Both figures are Figure's own, and the 43-day industry figure comes from unnamed 'industry sources'.
  • The MBA's $11,109 is for all mortgages, mostly first liens with appraisals, so it overstates the cost of a typical home equity loan.
historical · FY2025written 2026-10-18
C09factmedium confidence
The Mortgage Bankers Association put the industry's cost to produce a mortgage at $11,109 a loan in Q3 2025, against a long-run average of $7,799 since 2008.
historical · Q3 2025written 2026-10-18
C10facthigh confidence
Operations and processing cost about 67 basis points of volume in Q2 2026, down from 79 a year earlier, while volume more than doubled.
historical · Q2 2026written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18

The threat

Rivals are listed and described in their own filings: Better sells home equity loans online, Upstart runs a lending platform for banks, Blend sells loan software. Freddie Mac was also allowed to test buying second mortgages, which could bring a far bigger buyer to the market Figure sells into.

The evidence under this - 2 claims
C45facthigh confidence
Listed rivals describe overlapping products in their own 10-Ks: Better offers home equity loans on a digital platform, Upstart runs a lending platform for banks and credit unions, Blend sells origination software, and Rocket originates mortgages at national scale.
current state · 2025-12-31written 2026-10-18
C44facthigh confidence
FHFA conditionally approved a Freddie Mac pilot in June 2024 to buy closed-end second mortgages, capped at $2.5B of purchases over 18 months.
historical · 2024written 2026-10-18

The rivals: BETR, RKT, UPST, BLND, FMCC, CRCL, COIN, and 1 more that is private, in-house or listed abroad.

Who else does this, rival by rival
TickerRivalWhere it competesHow far alongPriced against it
BETRBetter Home & FinancePriced against it: One segment onlyConsumer Loan MarketplaceOn saleOne segment only
RKTRocket CompaniesPriced against it: One segment onlyConsumer Loan MarketplaceOn saleOne segment only
UPSTUpstartPriced against it: Same productConsumer Loan MarketplaceOn saleSame product
BLNDBlend LabsPriced against it: One segment onlyConsumer Loan MarketplaceOn saleOne segment only
FMCCFreddie Mac's second-mortgage purchase pilotPriced against it: Different productConsumer Loan MarketplaceAnnouncedDifferent product
CRCLCircle's USDCPriced against it: Different productBlockchain capital-markets productsOn saleDifferent product
COINCoinbasePriced against it: Different productBlockchain capital-markets productsOn saleDifferent product
Not listedBanks and private lenders to property investorsPriced against it: Not listedKiaviOn saleNot listed
03

How big it could get

How big this could get

Lenders made $179.3B of loans secured on a home that already had a mortgage in 2025, up from $132.6B two years earlier, by the government's count of mortgage filings. Figure's marketplace volume was about a twentieth of that, though the two are not measured the same way. Behind it sits $35.8T of equity Americans hold in their homes.

The evidence under this - 3 claims
C17facthigh confidence
HMDA counted $132.6B of originated second-lien home loans in 2023, $148.3B in 2024 and $179.3B in 2025, when 1,558,203 loans were made, up 9.2% by count.
historical · 2023 to 2025written 2026-10-18
C21factmedium confidence
Figure's $8.4B of 2025 marketplace volume is about 4.7% of the $179.3B of second-lien loans HMDA counted for 2025, though Figure's measure also includes loans traded on Connect and is not defined the same way.
historical · FY2025written 2026-10-18
C19facthigh confidence
Households held $35.81T of equity in their homes in Q2 2026, up 2.2% in a year, and banks held $291.9B of home equity lines on 7 October 2026, up 6.4% from $274.3B a year earlier.
current state · 2026-10-07written 2026-10-18

Who has signed

One buyer has committed money in advance: Sixth Street, an investment firm, set up a fund with Figure in 2025 to buy home equity loans through the marketplace, putting up most of the equity. Everyone else buys loan by loan.

The evidence under this - 1 claim
C50facthigh confidence
Sixth Street and Figure formed Fig SIX in February 2025 to buy home equity loans through Figure Connect, with up to $210.5M of equity committed, $200.0M of it Sixth Street's.
current state · 2025-12-31written 2026-10-18
04

The results

The numbers

Is it growing?Fast

Sales grew 89% over the twelve months to Jun 2026, faster than the 49% in the year to Dec 2025.

Dec 2023: $210MDec 2024: $341MDec 2025: $507M12 mo to Jun 2026: $709M$210M$709M
Is it profitable?Strong

Operating margin is 28%, up from −24% in the year to Dec 2023.

Dec 2023: −24%Dec 2024: 2.7%Dec 2025: 23%12 mo to Jun 2026: 28%−24%28%
Does it earn good returns?Decent

Each dollar put into the business earns 19% a year after tax, up from 1.6% in the year to Dec 2024.

Dec 2024: 1.6%Dec 2025: 10%12 mo to Jun 2026: 19%1.6%19%
Is it making cash?Burning

Operations used $86.5M of cash, 12% of sales, before capital spending, which the filer does not tag.

Dec 2023: −$33.4MDec 2024: −$127MDec 2025: $62.6M12 mo to Jun 2026: −$86.5M−$33.4M−$86.5M
Is the balance sheet safe?Net cash

It holds $1.44B of cash against $316M of debt, $1.12B more cash than it owes.

Dec 2024: −$184MDec 2025: $968M12 mo to Jun 2026: $1.12B−$184M$1.12B
All the numbers

Filed figures from the company's 10-K and 10-Q, read 2026-10-18. Fiscal years end in December.

Dec 2023Dec 2024Dec 202512 mo to Jun 2026
Size and growth
Sales$210M$341M$507M$709M
Sales growth-+63%+49%+89%
Profit
Operating margin−24%2.7%23%28%
Net margin−23%5.0%26%33%
What growth costs, per sales dollar
Research and development23%18%13%8.8%
Sales and marketing25%16%15%14%
General and admin28%31%26%27%
Pay in shares6.4%13%14%16%
Cash
Cash from operations−$33.4M−$127M$62.6M−$86.5M
Balance sheet
Cash and short-term investments-$290M$1.20B$1.44B
Debt-$473M$230M$316M
Net cash-−$184M$968M$1.12B
Returns and shares
Return on capital-1.6%10%19%
Shares (diluted)--142M247M

What growth costs

Growth has made Figure more profitable: sales roughly doubled while overhead rose far less, and processing cost per loan dollar fell. The one cost that keeps rising faster than sales is pay in shares, which dilutes owners.

The evidence under this - 3 claims
C04facthigh confidence
Revenue was $506.9M in 2025, up 48.7%, with net income of $133.9M; in Q2 2026 revenue was $225.6M, up 113%, net income $87.4M and diluted earnings $0.35 a share; revenue over the four quarters to June 2026 was $708.9M.
historical · FY2025 and Q2 2026written 2026-10-18
C10facthigh confidence
Operations and processing cost about 67 basis points of volume in Q2 2026, down from 79 a year earlier, while volume more than doubled.
historical · Q2 2026written 2026-10-18
C39facthigh confidence
Stock pay was $72.4M in 2025 and $113.7M over the four quarters to June 2026, 16.0% of revenue; diluted shares were 246,969,949 in Q2 2026 against 224,377,872 outstanding on 7 August.
historical · four quarters to Q2 2026written 2026-10-18

The last report (13 Aug)

Quarter ended June 2026, filed figures.

113%
Sales growth
against the same quarter a year earlier
35.1%
Growth from the quarter before
against 4.4% the quarter before that
34¢
Operating profit
per dollar of sales

The June quarter looked like a breakout. Loans made on Figure's system reached $4,259M, up 132%, revenue more than doubled to $225.6M and net income was $87.4M.

The catch was the slice. Figure kept 3.6 cents of every loan dollar, against 4.0 a year earlier, and management expects the September quarter at the bottom of its range. Preliminary September volume then came in up 107%.

What it did to the thesisIt proved the volume half of the case: lenders keep joining and loans keep growing. It weakened the economics half, because Figure keeps less of each loan and expects to keep less again. Whether profit can grow faster than that slice shrinks is left open.

The quarter in detail

Sales growth from the previous quarter, filed figures.

Earnings per share $0.37 against $0.24 expected; $0.35 as filed, the gap being what the company adds back.

The evidence under this - 3 claims
C03facthigh confidence
Consumer Loan Marketplace volume was $8.4B in 2025, up 63%; $4,259M in Q2 2026, up 132%; and a preliminary $5,119M in Q3 2026, up 107% and before any Kiavi loans.
historical · FY2025 to Q3 2026written 2026-10-18
C04facthigh confidence
Revenue was $506.9M in 2025, up 48.7%, with net income of $133.9M; in Q2 2026 revenue was $225.6M, up 113%, net income $87.4M and diluted earnings $0.35 a share; revenue over the four quarters to June 2026 was $708.9M.
historical · FY2025 and Q2 2026written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
What management did with the money

Figure borrowed $600M at 8.5% to buy Kiavi, a lender to property investors, for about $590M in cash. The board approved $200M of buybacks in February and none had been bought by June.

Insiders in 2026Q3: 1 purchases and 18 sales, from their Form 4 filings.

The evidence under this - 2 claims
C22facthigh confidence
Figure closed its purchase of Kiavi, a lender to property investors, on 1 September 2026 for about $590M of cash net of cash acquired, funded mainly by $600M of 8.5% notes due 31 July 2031.
historical · Q3 2026written 2026-10-18
C40facthigh confidence
The board authorised $200M of buybacks on 25 February 2026, to February 2027, and none were bought by 30 June; an automatic shelf registration was filed on 2 October 2026.
current state · 2026-10-02written 2026-10-18
05

The price, and where we disagree

In short. Fair. The price pays for loan volume to keep growing fast while Figure keeps a slightly smaller slice, and pays nothing extra for the stablecoin or the lending pool.

Share price
$27.13
close,
Price for each $1 of yearly profit
24.6
its 3-year normal 75.6

The shares are down about two-thirds from their high and sit close to the $25 they listed at, even though volume more than doubled. They fell after a miss in February and gave back the gain after a beat in August.

The answer arrives soon. In November Figure reports the September quarter, the first test of whether the slice it keeps holds at the bottom of its range, and the first month with Kiavi inside the numbers.

The evidence under this - 5 claims
C29facthigh confidence
The shares closed at $27.13 on 16 October 2026, 65.2% below the 52-week high of $78.00 and down 39.2% over 252 sessions; they listed at $25 in September 2025.
current state · 2026-10-16written 2026-10-18
C51facthigh confidence
The shares fell from $34.04 to $25.28 the day after Q4 2025 results, when adjusted earnings of $0.06 a share missed the $0.13 estimate, and rose from $30.68 to $35.76 after Q2 2026's beat before falling to $27.13.
historical · 2026-02-26 to 2026-10-16written 2026-10-18
C03facthigh confidence
Consumer Loan Marketplace volume was $8.4B in 2025, up 63%; $4,259M in Q2 2026, up 132%; and a preliminary $5,119M in Q3 2026, up 107% and before any Kiavi loans.
historical · FY2025 to Q3 2026written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
C22facthigh confidence
Figure closed its purchase of Kiavi, a lender to property investors, on 1 September 2026 for about $590M of cash net of cash acquired, funded mainly by $600M of 8.5% notes due 31 July 2031.
historical · Q3 2026written 2026-10-18
The betSafe, little upside
If it works
1.0×
from today's value, at the stated multiple
If it fails
keep 100%
of today's market value: the rest of the company, less its debt
How we read the multiple

At $27.13 a buyer pays about 29 times this year's profit pace, taxed at a normal rate, or 45 times the past year's. That is a growth price, but profit has grown faster than revenue as each loan got cheaper to make.

The market is pricing a company whose slice of each loan is slipping. If the slice holds, the price is undemanding; if it keeps falling, today's profit is the high point.

Against its own history. Far cheaper than its own short record, but that record is barely a year of trading after listing, so the gap mostly shows early enthusiasm fading.

The evidence under this - 3 claims
C28inferencemedium confidence
At $27.13 the 246,969,949 diluted shares are worth about $6.70B, 45.1 times trailing pretax profit taxed at 26% and 29.4 times Q2 2026's pretax profit without the $5.9M Reflow gain, annualised and taxed at 26%; that is 4.7 times shareholders' equity.
derivedC04 and C26 for pretax profit, C27 for the 26% rate, C42 for the $5.9M gain, C24 for equity, C29 for the close; diluted shares from the Q2 2026 income statement
against this
  • Q2 2026 is the best quarter on record, so annualising it flatters the run rate if volume or sale gains slip.
  • On the 224,377,872 shares outstanding the market value is $6.09B and the multiples are about 9% lower.
current state · 2026-10-16written 2026-10-18
C53inferencemedium confidence
The price treats Figure as a company whose profit per dollar of loans is slipping, while the filings show profit growing faster than revenue as costs per loan fall.
derivedC28 reads about 29 times this year's pace, C06 and C07 show the take rate falling, C10 and C04 show costs per dollar falling and profit doubling
against this
  • Cash from operations was negative over four quarters (C25), so the profit is not yet cash.
  • Nearly two-fifths of Q2 2026 revenue was gains booked on selling loans and servicing rights (C05), which fall when rates rise (C20).
current state · 2026-10-16written 2026-10-18
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
Priced against its rivals

Only Upstart Holdings sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.

The bet: what it pays if it works

The bet is on Figure's blockchain products: a stablecoin that pays interest, a lending pool backed by home loans, and an exchange. They earn almost nothing today, and insiders hold most of the stablecoin.

Counted at the price this thesis gives the loan business, the core alone is worth about what the company costs today, so these products come free. If they grow as hoped they add little on top; if they fade, little is lost.

Blockchain capital-markets products revenue in two to three yearsMillion dollars of balances neededAt the stated multiple
$5.00Mabout 1.2K at 100% kept1.0×
$15.00M (the big win)about 3.8K at 100% kept1.0×
$40.00Mabout 10.0K at 100% kept1.1×

To pay 2× (a Fair bet) it would need about $708.70M of Blockchain capital-markets products revenue (about 177.2K million dollars of balances); to pay 5× (a Cheap bet), about $2.84B of Blockchain capital-markets products revenue (about 709.3K million dollars of balances), at the same multiple.

Each row is Blockchain capital-markets products alone, plus the rest of the company (Figure without the blockchain products: the home equity marketplace and Kiavi) counted at about $5.04B.

The steps it has to take

  • Done YLDS launched as a registered yield-paying stablecoin
  • Done Democratized Prime lending pool launched
  • Done OPEN launched for issuing shares on Figure's blockchain
  • In progress Third-party borrowing on the pool passes $1B due 2027-06
  • Not started Figure reports revenue for the pool or the exchange due 2027-03
  • Not started YLDS and pool balances reach $3.75B together due 2028-12
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Cheap bet at about
$5.55
80% below the price (close, )
The option
free
what Blockchain capital-markets products is worth if it works, and the price pays nothing for it
The evidence under this - 4 claims
C31facthigh confidence
YLDS, Figure's stablecoin, had $504M in circulation at 30 September 2026, down from $556M in June, and Democratized Prime matched $588M of loans; YLDS earned $1.1M of net interest in 2025 and the exchange no material revenue.
current state · 2026-09-30written 2026-10-18
C32facthigh confidence
At 30 June 2026 related parties held $424.6M of the YLDS certificates against $120.1M held by others; Hastra, which holds YLDS for its protocol, pays Figure a 50 basis point royalty, $0.4M in Q2.
current state · 2026-06-30written 2026-10-18
C47facthigh confidence
Democratized Prime charges borrowers 50 basis points of the balance a year, and YLDS earns Figure a 35 basis point spread on balances outstanding.
current state · 2026-06-30written 2026-10-18
C28inferencemedium confidence
At $27.13 the 246,969,949 diluted shares are worth about $6.70B, 45.1 times trailing pretax profit taxed at 26% and 29.4 times Q2 2026's pretax profit without the $5.9M Reflow gain, annualised and taxed at 26%; that is 4.7 times shareholders' equity.
derivedC04 and C26 for pretax profit, C27 for the 26% rate, C42 for the $5.9M gain, C24 for equity, C29 for the close; diluted shares from the Q2 2026 income statement
against this
  • Q2 2026 is the best quarter on record, so annualising it flatters the run rate if volume or sale gains slip.
  • On the 224,377,872 shares outstanding the market value is $6.09B and the multiples are about 9% lower.
current state · 2026-10-16written 2026-10-18

Where we disagree with the market

The market believes

A fast-growing lender whose slice of every loan keeps shrinking, so growth is worth less than it looks.

We believe

Costs are falling faster than the slice, so profit can still grow, but we cannot yet tell which wins.

Analysts stay positive, yet their price targets fell over the year and a seventh of the floating shares is sold short. The market has met good and bad reports alike by selling.

The case against us is fair: rising mortgage rates cut the gains on selling loans, and a big new buyer like Freddie Mac would compete for the same loans.

What analysts say, and the evidence
Analysts positive
89%
of 9, 1 Oct
Four months earlier
75%
of 8, 1 Jun
The evidence under this - 5 claims
C30facthigh confidence
Analysts in the vendor snapshot rate it 6 buy and 1 hold, and the average new price target fell 26.5% over the year; 14.5% of the floating shares were sold short at 30 September 2026.
current state · 2026-10-16written 2026-10-18
C51facthigh confidence
The shares fell from $34.04 to $25.28 the day after Q4 2025 results, when adjusted earnings of $0.06 a share missed the $0.13 estimate, and rose from $30.68 to $35.76 after Q2 2026's beat before falling to $27.13.
historical · 2026-02-26 to 2026-10-16written 2026-10-18
C20facthigh confidence
The 30-year mortgage rate was 7.40% on 15 October 2026, against 6.49% at the end of June and 6.34% a year earlier.
current state · 2026-10-15written 2026-10-18
C44facthigh confidence
FHFA conditionally approved a Freddie Mac pilot in June 2024 to buy closed-end second mortgages, capped at $2.5B of purchases over 18 months.
historical · 2024written 2026-10-18
C53inferencemedium confidence
The price treats Figure as a company whose profit per dollar of loans is slipping, while the filings show profit growing faster than revenue as costs per loan fall.
derivedC28 reads about 29 times this year's pace, C06 and C07 show the take rate falling, C10 and C04 show costs per dollar falling and profit doubling
against this
  • Cash from operations was negative over four quarters (C25), so the profit is not yet cash.
  • Nearly two-fifths of Q2 2026 revenue was gains booked on selling loans and servicing rights (C05), which fall when rates rise (C20).
current state · 2026-10-16written 2026-10-18
06

What could go wrong, and how we would know

The risks

  • A shrinking slice. Partners moving onto the marketplace, volume discounts and higher rates all cut what Figure keeps from each loan dollar.
  • Profit ahead of cash. Cash from operations ran negative over the past year while net income was strongly positive.
  • Rates cut sale gains. The 30-year mortgage rate has climbed since June, which lowers what investors pay for Figure's loans.
  • Loans it may buy back. If borrowers miss early payments, Figure can be made to buy back a growing pool of loans it sold.
  • A borrowed acquisition. Kiavi was bought with new 8.5% debt on management's promise of profit not yet shown.
  • Founders hold the votes. Two founders control the company, and insiders have sold far more stock than they bought.
The evidence under this - 8 claims
C07management claimmedium confidence
Management says the take rate falls because Figure Connect earns the least per dollar, its largest partners now go straight to Connect, volume tiers cut each partner's fee as it grows, rising rates cut sale gains, and first-lien loans earn less.
against this
  • An analyst on the call showed ecosystem fees per dollar of Connect volume falling quarter after quarter, which is pricing, not only mix.
  • Management said the speed of large partners moving to Connect was 'not a dynamic we anticipated' when it set the range.
current state · 2026-08-13written 2026-10-18
C25facthigh confidence
Over the four quarters to June 2026 cash from operations was minus $86.5M while net income was $237.1M; in 2025 it was $62.6M against $133.9M.
historical · four quarters to Q2 2026written 2026-10-18
C20facthigh confidence
The 30-year mortgage rate was 7.40% on 15 October 2026, against 6.49% at the end of June and 6.34% a year earlier.
current state · 2026-10-15written 2026-10-18
C13facthigh confidence
At 30 June 2026 Figure could be required to buy back loans with up to $2.9B of principal if borrowers miss early payments, up from $1.8B in December, and had booked $19.2M against that.
current state · 2026-06-30written 2026-10-18
C22facthigh confidence
Figure closed its purchase of Kiavi, a lender to property investors, on 1 September 2026 for about $590M of cash net of cash acquired, funded mainly by $600M of 8.5% notes due 31 July 2031.
historical · Q3 2026written 2026-10-18
C23management claimlow confidence
Management says Kiavi will add about 40% to volume and $100M of adjusted profit a year, and pays back its price in under 4 years before financing.
against this
  • No Kiavi revenue or profit has been filed, so the $100M cannot be checked.
  • The 8.5% notes cost about $51M a year before tax, half the claimed profit.
forwardwritten 2026-10-18
C36facthigh confidence
Michael Cagney and June Ou, the founders, beneficially own all the Class B shares, which carry 10 votes each and 71.3% of the votes; directors and officers hold 72.3% of the votes and 8.3% of Class A.
current state · 2026-04-09written 2026-10-18
C38facthigh confidence
Over 365 days insiders made 1 open-market purchase of 4,000 shares and 104 sales of 4,166,743 shares, counting the founders' joint holdings twice; 48 discretionary sales were 3,567,165 of those shares, mostly in November and December 2025.
historical · 365 days to 2026-10-18written 2026-10-18
What we still do not know
  • Whether the slice Figure keeps settles near the bottom of its range or keeps falling as the marketplace grows.
  • Whether Kiavi earns the profit management promised, which no filing has yet shown.
  • Whether the stablecoin and lending pool attract outside money, since insiders hold most of the stablecoin today.
The evidence under this - 5 claims
C06facthigh confidence
The net take rate, what Figure keeps per dollar of loans made, was 3.6% in Q2 2026 against 4.0% a year earlier; management guided 3.5% to 4% and expects Q3 at the bottom of that range.
historical · Q2 2026written 2026-10-18
C15management claimmedium confidence
Management expects Figure Connect to approach 70% of volume in the medium term and targets an adjusted profit margin of 60%; it was 54.6% in Q2 2026, about 52% without a one-off gain.
against this
  • The adjusted profit measure was redefined twice in 2026 (C42).
  • The take rate is falling as Connect grows, so more Connect lifts the margin but cuts revenue per dollar of loans.
forwardwritten 2026-10-18
C23management claimlow confidence
Management says Kiavi will add about 40% to volume and $100M of adjusted profit a year, and pays back its price in under 4 years before financing.
against this
  • No Kiavi revenue or profit has been filed, so the $100M cannot be checked.
  • The 8.5% notes cost about $51M a year before tax, half the claimed profit.
forwardwritten 2026-10-18
C32facthigh confidence
At 30 June 2026 related parties held $424.6M of the YLDS certificates against $120.1M held by others; Hastra, which holds YLDS for its protocol, pays Figure a 50 basis point royalty, $0.4M in Q2.
current state · 2026-06-30written 2026-10-18
C48management claimmedium confidence
Third-party borrowing on Democratized Prime reached about $170M on 6 August 2026, from about $7M at December, and small-business pools were added.
current state · 2026-08-06written 2026-10-18

What would change our view

  1. Neutral→AttractiveCheaper on the same profit

    It needs:

    • ○The shares fall to 20 times this year's profit pace, taxed at a normal rate, with that profit unchanged.about $18.46 today, 32% below the last close
  2. Neutral→AttractiveThe economics hold as volume grows

    It needs all of:

    • ○The slice Figure keeps rises back to 3.8 cents per loan dollar or more.checked at the next results, due by 12 Nov
    • ○Cash from operations over four quarters turns positive.checked at the next results, due by 12 Nov
  3. Neutral→UnattractiveThe economics break

    It needs any of:

    • ○The slice Figure keeps falls below 3.3 cents per loan dollar.checked at the next results, due by 12 Nov
    • ○More than 2% of sold-on loans are 60 or more days late.checked at the next results, due by 12 Nov
We would also be wrong if
  • Quarterly marketplace volume falls from a year earlier, leaving Kiavi out.
  • Kiavi's first full year adds less than $50M of adjusted profit.

What is coming

  • 12 November 2026 Q3 2026 results: The take rate with rates higher, Kiavi's first month and the promised contribution-margin disclosure.
Every dated event ahead
  • 12 November 2026 Q3 2026 results: The take rate with rates higher, Kiavi's first month and the promised contribution-margin disclosure.
  • February 2027 Q4 2026 results and 2027 outlook: A full quarter of Kiavi, the 2027 volume outlook and whether YLDS balances recover.
  • 27 February 2027 End of the $200M buyback authorisation: Whether management buys shares back near its own $32 purchase or lets the authorisation lapse.
Since we wrote this
Written
18 Oct
Price the thesis read
$27.13
16 Oct
  • 18 OctThesis writtenNeutral, medium convictionWritten 25 days before Q3 2026 results, after the Kiavi close and with the shares near their 52-week low.

Also checked 1 time with nothing new to act on.

Sources 25

Where this came from

Sources - 25

Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.

  1. S01primarycompany filing2026-03-16
    business, products and launch dates, competition, licences, cost per loan and days to fund, HELOC share of originations, YLDS and Democratized Prime economics, Sixth Street joint venture, headcount, risk factors including HASH and material weaknesses
    backsC01C04C08C09C25C29C31C34C35C39C43C46C47C49C50C52
  2. S02primarycompany filing2026-08-14
    share count, balance sheet, debt and YLDS certificates, related parties including Hastra, securitisation trusts and delinquency, loan repurchase commitments, segment note, customer concentration, buyback, controls
    backsC01C02C04C05C11C13C14C24C25C26C32C39C40C42C52
  3. S03primarycompany release2026-08-13
    Q2 2026 results, take rate, volume, partners, adjusted measures and their definition changes, YLDS and Democratized Prime balances, Q3 2026 volume guidance
    Consumer Loan Marketplace volume was $4.3 billion in the quarter, a 132% increase from the prior year. This included Figure Connect Volume of $2.8 billion. ... Added 102 origination partners in the quarter, reaching 489 total active partners ... operations and processing costs declined to approximately 67 basis points of Consumer Loan Marketplace volume, down from 79 basis points in Q2 2025.
    backsC02C03C04C05C06C10C14C15C31C42C47C48
  4. S04primarytranscript2026-08-13
    Figure Q2 2026 earnings call transcript (FMP)
    Connect mix target, the take-rate explanation, Kiavi payback and EBITDA, tax rate, credit statistics, securitisation spreads, the HMDA counterfactual, Democratized Prime seeding; questions from KBW and Autonomous on volume-tier pricing
    Figure Connect is likely to approach 70% of volume in the medium term rather than our previous estimate of 60% ... Take rate for the quarter was 3.6%, towards the low end of our guided range ... an under 4-year unlevered payback period and adds 40% to our volume as well as $100 million of EBITDA ... Over the long run, we still believe an annual effective tax rate of 26% is appropriate.
    backsC06C07C11C12C14C15C16C23C26C27C33
  5. S05primarycompany release2026-02-26
    full-year 2025 volume, take rate, partners, adjusted measures, the $200M buyback authorisation
    FIGURE TECHNOLOGY SOLUTIONS REPORTS STRONG FOURTH QUARTER 2025 RESULTS; ANNOUNCES AUTHORIZATION FOR $200
    backsC03C21C40
  6. S06primarycompany release2026-10-07
    Q3 2026 volume of $5,119M against $2,469M a year earlier, YLDS of $504M and Democratized Prime matched offers of $588M at September 30
    Consumer Loan Marketplace Volume as presented in this release for September and Q3 2026 excludes volume originated on the Kiavi platform following the September 1, 2026 closing
    backsC03C31
  7. S07primarycompany filing2026-09-01
    Kiavi closing, about $590M of cash net of cash acquired, funding from the 8.500% notes, repayment of Kiavi's facilities
    backsC22
  8. S08primarycompany filing2026-07-14
    $600M of 8.500% senior notes due 31 July 2031, interest each 31 January and 31 July, termination of the bridge commitment
    backsC22
  9. S09primarycompany filing2026-04-24
    beneficial ownership and voting power, executive pay, quarterly bonus plan, the Founder Retention Award, leaders' roles and start dates
    backsC36C37
  10. S10primaryregulator2026-10-18
    count and dollars of originated subordinate-lien home loans reported under HMDA, 2023, 2024 and 2025
    {"parameters":{"actions_taken":"1","lien_statuses":"2"},"aggregations":[{"count":1558203,"sum":1.79336375E11 ... 2024: {"count":1426350,"sum":1.4826481E11 ... 2023: {"count":1322828,"sum":1.3257406E11
    backsC17C18C21
  11. S11primaryregulator2026-10-18
    Figure's own lender's reported second-lien originations, 2024 and 2025
    {"parameters":{"lei":"254900UL88QFG0E40516","actions_taken":"1","lien_statuses":"2"},"aggregations":[{"count":29974,"sum":2.5146E9 ... 2024: {"count":31710,"sum":2.41422E9
    backsC18
  12. S12primarygovernment data2026-10-18
    households' equity in real estate, Q2 2026 and Q2 2025
    OEHRENWBSHNO 2026-04-01 35814740 ... OEHRENWBSHNO 2025-04-01 35029251 (millions of dollars)
    backsC19
  13. S13primarygovernment data2026-10-18
    home equity lines held by banks, a year apart
    RHEACBW027SBOG 2025-10-01 274.3224 ... RHEACBW027SBOG 2026-10-07 291.856 (billions of dollars)
    backsC19
  14. S14primaryindustry data2026-10-18
    the 30-year mortgage rate a year ago, at the end of Q2 2026 and now
    MORTGAGE30US 2025-10-02 6.34 ... MORTGAGE30US 2026-06-25 6.49 ... MORTGAGE30US 2026-10-15 7.4
    backsC20
  15. S15secondaryindustry data2025-12-02
    the industry's cost to produce a mortgage in Q3 2025 and its long-run average
    Per-loan costs increased to $11,109, up from $10,965, ... remained well above the long-term average of $7,799 per loan since 2008.
    backsC09
  16. S16primaryregulator2024-06-21
    the size and length of the Freddie Mac closed-end second mortgage pilot
    A maximum volume of $2.5 billion in purchases; A maximum duration of 18 months;
    backsC44
  17. S17secondaryindustry data2026-10-18
    total dollar stablecoin supply a year apart
    2025-10-17 totalCirculatingUSD peggedUSD 304327837414 ... 2026-10-17 totalCirculatingUSD peggedUSD 304867336372
    backsC46
  18. S18primarycompany filing2026-02-10
    Upstart's description of its lending marketplace for banks and credit unions
    backsC45
  19. S19primarycompany filing2026-03-13
    Better's description of its digital mortgage and home equity lending
    backsC45
  20. S20primarycompany filing2026-03-16
    Blend's description of its origination software platform
    backsC45
  21. S21secondaryvendor data2026-10-18
    Research pack, frozen 2026-10-18 (FMP market data, FINRA short interest, filed cohort)
    daily closes, the 252-session range and return, analyst ratings and price-target drift, short interest, insider statistics, the earnings calendar, the cohort
    backsC29C30C38C51
  22. S22primarycompany filing2026-10-18
    open-market purchases and sales over 365 days, with the 10b5-1 flag on each sale
    backsC38
  23. S23primarycompany filing2026-03-02
    Rocket's description of its mortgage, real estate and personal finance businesses
    backsC45
  24. S24primarycompany release2026-02-13
    the preliminary 2025 revenue, profit and volume ahead of the full release
    Figure Technology Solutions Announces Preliminary Fourth Quarter & Full Year 2025 Financial Results
    backsC04
  25. S25primarycompany release2026-07-07
    preliminary Q2 2026 volume and the launch of a weekly operating dashboard
    FIGURE TECHNOLOGY SOLUTIONS REPORTS PRELIMINARY JUNE & Q2 2026 OPERATING DATA
    backsC03
Rendered from content/FIGR/thesis.json · thesis reviewed 2026-10-18. This page explains a company; it does not say what to pay, when to buy or how much.