Figure Technology Solutions (FIGR) Q3 2026 earnings review
Figure loan volume doubles, but its fee rate keeps falling
Figure Technology Solutions, a blockchain-based marketplace for originating and trading loans, is growing volume fast while its fee rate falls. Standalone loan volume more than doubled from a year ago, and closing the Kiavi real estate lender purchase early pushed total volume up 135% to $5.8 billion. Chief executive Michael Tannenbaum said Figure Connect reached 72% of standalone volume, which lifted operating profit margins before one-offs to 58%, even as reported net profit stayed flat against a year-ago tax benefit.
| Standalone loan volume (ex-Kiavi) | $5.12B +107% from a year ago ($5.80B total, +135%) |
|---|---|
| Net revenue | $287.1M +84% from a year ago |
| Net take rate | 3.5% -0.9 percentage points from a year ago |
| Q4 gross take rate outlook | 3.1%–3.4% down from 3.9% in Q3 |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because faster adoption of the marketplace is offset by steeper fee compression and a heavier balance sheet. On the positive side, partner additions sped up and operating leverage improved. The bad news: net take rate hit the 3.5% floor of its target range, management switched to a fourth-quarter gross take rate outlook that points below 3% net by our math, and related-party debt jumped while the YLDS stablecoin shrank again.
The question now is whether lower fee rates are just the math of adding bigger, higher-margin partners or a sign of ongoing price cuts to keep volume growing. If the shift is healthy, profit margins will top 60% even as take rates drop; if discounts are the cause, revenue growth will keep lagging volume and margins will stall. Fourth-quarter operating profit margins and standalone home equity volume will tell.
🐂 Bull Case
Figure Connect Reached Its Medium-Term Goal Early
Figure Connect is the company's online credit marketplace where third-party lenders sell loans directly to institutional buyers. Chief executive Michael Tannenbaum noted that it is "with Figure Connect now making up 72% of our standalone volume" that the marketplace is expanding. That 72% share already beats the roughly 70% medium-term goal management set just three months ago.
- Figure Connect volume: $4.26 billion, up 277% from a year ago
- Ecosystem and technology fees: $110 million, up 208% from a year ago
- Adjusted EBITDA margin (operating profit before one-offs as a share of adjusted revenue): 57.7%, up 2.6 percentage points from a year ago
- General and administrative overhead: 20.6% of net revenue, down 2.7 percentage points from a year ago
This shift matters because matching buyers and sellers requires less of the lender's own cash and staff than holding loans. Technology and product development costs fell 3.2 percentage points of revenue from a year ago, and sales and marketing fell 1.3 percentage points. The company also deployed an artificial intelligence Loan Officer Assistant with partner Sierra that processed $260 million in loans and has "driven a 29% increase in funded dollars per loan approval", bringing the 60% medium-term profit margin target within reach.
What to watch: Adjusted EBITDA margin in the fourth quarter, when the company absorbs a full three months of Kiavi's operations. Maintaining a margin near 58% would show that Kiavi's real estate loans carry the same cost efficiency as the home equity marketplace.
Partner Additions and New Loans Keep Scaling
Figure grows by signing up banks and mortgage lenders to use its loan origination software and marketplace. Tannenbaum said that "The successful acquisition of Kiavi adds diversified new asset classes to our ecosystem and supercharges our marketplace growth." Even before counting Kiavi, the company added 123 standalone lending partners this quarter to reach 612, faster than the 102 it added in the second quarter.
Closing the Kiavi purchase on September 1 — ahead of the year-end schedule — brought the total partner network to 894, including over 20 banks. Kiavi contributed $677 million of loan volume in September alone and brings an $8 billion yearly run-rate in residential transition loans (short-term financing for house flippers) and rental property loans. Meanwhile, small and medium business loan volume crossed a $500 million yearly run-rate across more than 150 partners, and the company "Actioned $30 million in initial cost synergies since closing the transaction".
What to watch: standalone partner additions in the fourth quarter. Another gain of more than 100 partners would show that traditional home equity lender sign-ups are still accelerating alongside the Kiavi integration.
🐻 Bear Case
Fee Rates Hit the Floor and Head Lower
Figure measures the revenue it keeps from each dollar of loans traded on its marketplace using gross take rate (marketplace revenue before marketing costs, divided by loan volume) and net take rate (which deducts marketing costs). Last quarter management maintained a 3.5% to 4.0% target range for net take rate, while warning it would sit near the bottom.
In the third quarter, net take rate fell 0.9 percentage points from a year ago to 3.5%, hitting the exact floor of that target. Gross take rate dropped 1.3 percentage points from a year ago to 3.9%. For the fourth quarter, management stopped giving a net take rate outlook and instead forecast a gross take rate of 3.1% to 3.4%.
That switch matters because large lenders on Figure Connect receive volume discounts, so revenue grows much slower than loan volume: total volume rose 135% from a year ago, but revenue rose 84%. By our math, if marketing costs stay at the third quarter's 0.4 percentage points of volume, the fourth-quarter outlook points to a net take rate of about 2.85%, well below the old 3.5% floor.
What to watch: whether net revenue grows at least as fast as loan volume in the first quarter of 2027, once a full quarter of Kiavi is in the base. A wider gap between volume and revenue growth would prove that volume-tier discounts are still eroding pricing.
On-Chain Lending Grows Through Related-Party Debt
Tannenbaum said the company is working on "bringing large institutional buyers onto our blockchain rails" through two digital products: Prime, an on-chain lending pool matching borrowers and lenders, and YLDS, an interest-bearing digital certificate used like a stablecoin. While matched loan offers on Prime jumped 50% from last quarter to $588 million, YLDS in circulation fell 9.4% to $504 million, shrinking for a second consecutive quarter.
More importantly, the balance sheet shows that much of this blockchain activity still relies on companies affiliated with Figure. Current debt owed to related parties rose 40% from last quarter to $593 million (up 257% since December 2025), and related parties now account for $67 million, or 39%, of net accounts receivable, plus $81 million of payables to loan owners. The release also did not update how much of Prime's $600 million borrower demand comes from outside customers rather than Figure's own loans.
What to watch: the related-party footnote in the upcoming third-quarter 10-Q filing, specifically third-party borrowing on Prime and affiliated YLDS holdings. A rise in independent borrowing is required to prove institutional buyers are adopting the blockchain rails without Figure funding the pool itself.
Debt Tripled While Buybacks Stayed on Paper
Figure describes its marketplace shift as "reflecting the rapid transition toward our capital light model", and the board raised its share buyback authorization by $200 million to $400 million. Yet treasury stock on the balance sheet stayed at $9.7 million (312,500 shares), meaning the company bought back no shares under its existing $200 million program during the third quarter.
Instead, the balance sheet grew much heavier to fund the Kiavi purchase and loan inventory. Total debt rose 81% from last quarter to $1.74 billion (more than triple its December 2025 level), non-funding interest expense more than tripled from a year ago to $16.1 million, and loans held for sale on the balance sheet climbed 59% since December to $644 million.
What to watch: treasury stock and non-funding interest expense in the fourth quarter. Actual share repurchases and a flattening in loans held for sale would show whether the business is genuinely freeing up cash.
Risks this quarter didn't answer
Four standing concerns regarding credit quality, customer concentration, regulation, and accounting metrics received no new numbers in the earnings release.
- Loan delinquencies and repurchase obligations: not in the release; the third-quarter 10-Q filing's credit and securitization footnotes will show whether late payments kept rising above 1.1%.
- Originator and buyer concentration: not in the release; the 10-Q filing will show whether the top five partners and loan buyers still account for roughly half of volume.
- Digital asset regulation: no new disclosures on how securities regulators treat YLDS, the OPEN equity network, or on-chain lending.
- Accounting complexity and metric changes: management excluded $15.5 million of acquisition costs and $8.4 million of amortization from Adjusted EBITDA, dropped the net take rate outlook, and has not yet published the contribution-margin metric it discussed last quarter.
👓 Other Themes
Interest Rate Swings Shifted Mortgage Valuations
Changes in interest rates and credit spreads continue to swing the value of loans and servicing rights that Figure holds. Gain on sale of loans fell 7.8% from a year ago to $57.8 million, and changes in model assumptions reduced the fair value of mortgage servicing rights (the right to collect payments for a fee) by $7.9 million, though higher volume lifted net servicing asset gains to $39.4 million.
💲 Other KPIs
Pre-tax profit rose 75.1% from a year ago, tracking the 83.6% rise in net revenue. Reported net income looked flat at $89.3 million (down 0.6%) only because the third quarter of 2025 included a one-time $31.5 million tax benefit from a corporate restructuring, whereas Figure recorded a $12.9 million tax expense this quarter.
Diluted shares increased 90.4% from a year ago because the company completed its initial public offering in September 2025, which kept diluted earnings per share growth to 5.9% ($0.36 vs $0.34). Compared with the second quarter of 2026, the diluted share count rose 0.2% as stock-based compensation totaled $24.3 million.
🔮 Guidance
New. The plan calls for $6.45 billion at the middle of the range, up 138% from a year ago and up 11% from the third quarter. However, this includes a full quarter of Kiavi, which carries an $8 billion yearly run-rate ($2 billion per quarter). By our math, stripping out $2 billion for Kiavi leaves about $4.45 billion of standalone volume, slowing underlying growth from 107% in Q3 to about 65% in Q4.
New. Management introduced a gross take rate outlook (revenue from marketplace volume before deducting marketing costs) of 3.25% at the middle of the range, down 0.65 percentage points from 3.9% in the third quarter. The release no longer provides a net take rate outlook. By our math, deducting the third quarter's 0.4 percentage point marketing gap leaves an implied net take rate of about 2.85%, down from 3.5% in Q3.
❓ Key Questions
Why drop the net take rate outlook for Q4?
Net take rate hit the 3.5% floor of its target range in Q3, and management switched to guiding gross take rate at 3.1%–3.4% for Q4. Investors need to know how much of the 0.65-point drop comes from Kiavi's loan mix versus volume discounts on Figure Connect.
How much of Prime borrowing is from unrelated third parties?
Matched offers on Prime rose from $392 million to $588 million, but current debt to related parties also jumped by $168 million to $593 million. Last quarter Figure's own loans made up $360 million of the pool; the release did not update the third-party share.
What is the standalone Q4 volume outlook excluding Kiavi?
The $6.2–$6.7 billion Q4 volume plan includes a full quarter of Kiavi, which brings an $8 billion annual run-rate. By our math, that implies standalone home equity volume falls from $5.12 billion in Q3 to roughly $4.45 billion in Q4.
Why double the buyback plan with zero Q3 repurchases?
The board added $200 million to the share repurchase program to reach $400 million, yet treasury stock was unchanged in Q3 with almost all of the original $200 million unused. Meanwhile, total debt rose to $1.74 billion and non-funding interest expense hit $16.1 million.