Figure (FIGR) Q4 2025 earnings review
Volume Accelerates, But Heavy Stock-Based Comp Masks Real Profitability
Figure delivered a massive quarter with Consumer Loan Volume up 131% YoY to $2.7 billion, defying historical Q4 seasonality. The core strategy—shifting to a capital-light marketplace model—is working exceptionally well, as the newly launched Figure Connect platform now handles 54% of all volume. However, the GAAP bottom line tells a messier story. Net income plummeted sequentially to $15.1 million from $89.8 million in Q3. This was driven by a massive $40.2 million stock-based compensation charge. Adjusted EBITDA, which ignores this dilution, remained robust at $81.3 million with a 51.6% margin. Armed with $1.2 billion in cash, the Board authorized a $200 million share repurchase program to signal confidence.
🐂 Bull Case
Figure Connect grew from zero a year ago to $1.47 billion in Q4. This capital-light model requires less balance sheet risk and drove Adjusted EBITDA margins up 31 percentage points YoY to 51.6%.
The company's blockchain infrastructure is seeing exponential adoption. The $YLDS stablecoin ballooned to $328 million at quarter-end (and $464 million by mid-February), creating a massive, native liquidity pool for tokenized real-world assets.
🐻 Bear Case
GAAP Net Income was crushed by a $40.2 million stock-based compensation charge, accounting for 64% of the full-year SBC expense in a single quarter. True profitability is lower than Adjusted EBITDA suggests due to this heavy shareholder dilution.
The Net Take Rate fell to 3.8% in Q4, down from the 9-month average of 4.1%. While Figure Connect is more capital-efficient, it captures less net revenue per unit, meaning total volume must continuously outpace margin compression.
⚖️ Verdict: 🟢
Bullish. The underlying operating engine is accelerating flawlessly. If management can normalize the stock-based compensation run-rate, the sheer scale of the Connect marketplace and $YLDS adoption will drive massive cash flow.
Key Themes
Figure Connect Driving Margin Expansion
Accelerating. The shift to a capital-light infrastructure model is the defining story of Figure's year. Connect volume grew from $1.13 billion in Q3 to $1.46 billion in Q4, now representing 54% of all marketplace activity. This shift structuralizes high margins, pushing Adjusted EBITDA margin to 51.6% and moving the company closer to its long-term >60% target.
DeFi Ecosystem Hitting Hypergrowth
Accelerating. The adoption of Figure's proprietary blockchain rails is no longer theoretical. The $YLDS yield-bearing stablecoin surged from just $21 million in Q3 to $328 million by year-end, and hit $464 million by mid-February. Concurrently, Democratized Prime matched offers exploded to $206 million. This ecosystem provides a cheaper, faster alternative to traditional warehouse lines.
Asset Diversification and Auto Finance Entry
Stable. Figure is proving its platform is asset-agnostic. Beyond HELOCs, first-lien volume expanded to 19% of the marketplace. Furthermore, new product categories (SMB, Crypto Backed, DSCR, and RTL) contributed $97 million in Q4. Management also announced a strategic partnership with Agora Data to bring externally originated auto loans onto the blockchain marketplace.
Stock-Based Compensation Obscuring Profitability
Decelerating. A major red flag for earnings quality: despite touting a highly profitable model, GAAP Net Income dropped sharply QoQ. The culprit was a massive $40.2 million stock-based compensation expense in Q4 (up from $17.5 million in Q3 and $4.2 million in 24Q4). Management attributes this to one-time grants and accelerated vesting, but it represents very real equity dilution that directly contradicts the clean 'high margin' narrative.
Take Rate Compression
Decelerating. The Net Take Rate ticked down to 3.8% in Q4. While this is slightly up YoY (3.4%), it is a noticeable drop from the 9-month 2025 average of 4.1%. Management explicitly warned that the Figure Connect model captures less net revenue per unit of volume. As Connect becomes the dominant channel, investors must prepare for structurally lower take rates.
Reliance on Macro 'Liability Flight'
Stable. Management's long-term vision of a $100 billion valuation relies heavily on a macro thesis: that capital will increasingly flee traditional bank deposits in favor of yield-bearing stablecoins like $YLDS. This exposes Figure to significant macroeconomic risk, specifically regarding interest rate policy and evolving SEC regulations surrounding stablecoins and tokenized assets.
Pioneering the OPEN Network
Figure launched OPEN, the on-chain public equity network, and became the first company to launch a blockchain-native share class. This moves Figure beyond debt markets and proves their technology can successfully tokenize and trade public equities, potentially unlocking a massive new TAM.
Other KPIs
Accelerating. Up 106% YoY, driven by triple-digit growth in loan volume. The spread between GAAP Net Revenue ($159.9M) and Adjusted Net Revenue was minor this quarter, reflecting a small $2.3M valuation change in Mortgage Servicing Rights (MSRs).
Reversing. While up 156% YoY, this is a severe sequential deceleration from the $89.8 million reported in Q3. The drop is primarily due to the exhaustion of a one-time $32 million tax benefit recognized in Q3, combined with a $40 million stock-based compensation charge in Q4.
Stable. The company boasts a pristine balance sheet post-IPO. This massive cash pile provides more than enough coverage for the newly announced $200 million share repurchase program and funds future blockchain infrastructure investments.
Key Questions
Stock-Based Compensation Run-Rate
Q4 saw an outsized $40.2 million SBC charge driven by 'one-time fully vested grants.' What is the normalized quarterly run-rate for stock-based compensation expected in FY26?
Take Rate Floor for Figure Connect
With the Net Take Rate compressing to 3.8% as Figure Connect grows, where does management see the floor for this metric once Connect surpasses the 60% volume target?
Economics of the Agora Data Partnership
Auto finance represents a massive new vertical. Can you break down the unit economics of bringing externally originated auto loans onto the Figure marketplace versus your core HELOC products?
Regulatory Timeline for OPEN
With the launch of the OPEN network and the first blockchain-native share class, what are the remaining regulatory hurdles before we see external enterprise adoption of tokenized equities on your platform?