Record Revenue and Profitability
Adjusted net revenue up 92% YoY to $167M; adjusted EBITDA up ~190% YoY to $83M; adjusted EBITDA margin 50% (vs 33% prior year) — company cites a 'rule of 140' performance versus industry rule of 40 benchmark.
Figure Technology Solutions, Inc. Class A
· FIGR
May 11th, 2026
Summary
- Earnings Call Date:
- 2026-05-11
- Change Since:
- -29.69%
- Next Earnings Date:
- 2026-11-12
Earnings Call Sentiment
PositiveThe call conveyed a strongly positive operating and financial quarter: robust top-line growth (adjusted net revenue +92%), rapid marketplace volume expansion (CLM +110% YoY, first month above $1B), improving profitability (adjusted EBITDA margin 50%), meaningful product and DeFi progress (Democratized Prime, YLDS, OPEN, Hastra expansion), strong liquidity (~$1.5B cash) and securitization execution (~$1.9B priced). Key near-term challenges relate to mix-driven take-rate dynamics, short-term margin impact from retained inventory to seed DeFi pools (~$2M interest expense, ~1.4% EBITDA drag), the need to onboard third-party borrowers and large partners (3–6 month ramps), and regulatory/adoption risks for some blockchain-specific initiatives. Overall, highlights substantially outweigh the lowlights, reflecting strong momentum but with identifiable timing and execution risks as the company scales its blockchain-native capital market ecosystem.
Company Guidance
Figure guided Q2 FY2026 consumer loan marketplace (CLM) volume of $3.8–$4.1B, building on Q1 CLM volume of ~ $2.9B (March $1.2B) and >110% YoY CLM growth; Q1 adjusted net revenue was $167M (+92% YoY) with a net take rate of 3.8% (in line with prior 3.5–4% guidance) and adjusted EBITDA margin of 50% (Rule of 140 performance) and a mid‑term adjusted EBITDA target of ~60%; Democratized Prime matched offers were $368M and YLDS outstanding $598M, loans held for sale ~ $500M, cash ~ $1.5B and ~ $350M of loans retained on the balance sheet to seed DeFi (adding ~ $2M QoQ interest expense and ~1.4% margin impact); available lender supply was 1.2x borrower demand, the company has priced five securitizations YTD totaling ~ $1.9B, plans to add 8–10 third‑party originators in 2026 (on track to exceed), expects a full‑year effective tax rate nearer ~20% absent further option‑exercise benefits, and assumes large partner ramps of roughly 3–6 months in its modeling.
Rapid Consumer Loan Marketplace (CLM) Growth
CLM volume grew over 110% YoY to approximately $2.9B (Q1'26 vs $1.4B Q1'25); March was the first month above $1B at $1.2B; company provided Q2 CLM volume guidance of $3.8B–$4.1B.
Marketplace Mix Shift Toward Capital-Light Connect
Figure Connect accounted for 56% of CLM volume (up from 54% last quarter); net take rate was 3.8%, in line with guidance (3.5%–4.0%).
Commercial Scale and Partner Expansion
Added 80 new partners (most ever) including a seventh-largest national lender and onboarding Flagstar Bank as the largest bank originator on the marketplace; large 'whale' partners contributed materially (example: one well did >$150M in the quarter).
Product Diversification and First-Lien Traction
First-lien volume increased to 20% of total (from 14% YoY and 19% last quarter); SCR and residential transition loans grew ~70% in Q1; SMB/business-purpose volume nearly $60M for the quarter.
Progress in DeFi, Tokenization and OPEN
Yields and Democratized Prime balances both grew ~80% QoQ; Democratized Prime matched-offer balances $368M and YLDS circulation $598M; Hastra/Prime token expanded to Solana and Ethereum; ON‑chain Public Equity Network (OPEN) has pipeline with issuer filings underway.
Strong Capital Markets Execution and Credit Performance
Priced 5 securitizations totaling nearly $1.9B year-to-date; executed >$1.15B whole loan sales in March alone; BWIC auction produced record low spread demonstrating institutional demand and resilient credit performance.
Strong Liquidity and Strategic Inventory
Ended quarter with ~$1.5B cash and cash equivalents; loans held for sale ~ $500M; retained ~ $350M of loans on balance sheet intentionally to support Democratized Prime marketplace buildout.
AI and Operational Efficiency Gains
AI investments driving efficiency: 25% YoY increase in engineering 'story' completion, 70% chat containment improvement; operations & processing costs declined 20% from 93 bps to 74 bps of volume.
Operator
Welcome to the Figure Technology Solutions First Quarter 2026 Earnings Conference Call. [Operator Instructions] Lastly, today's call is being recorded. I'd like to now turn the call over to Bryan Michaleski, Head of Investor Relations. Please go ahead.
Bryan Michaleski
Good morning. Welcome to Figure's First Quarter 2026 Earnings Call. My name is Bryan Michaleski, Head Investor Relations here at Figure. Joining me on today's call are Mike Cagney, Executive Chairman, Co-Founder, Figure; Michael Tannenbaum, our Chief Executive Officer; and Macrina Kgil, our Chief Financial Officer. Before we begin today, I'd like to briefly note that in today's call, we will refer to certain non-GAAP measures. These measures have been reconciled to their GAAP equivalents in the earnings release we issued today or yesterday as well as in the appendix to our supplemental slide presentation posted to our website. As a reminder, non-GAAP measures are not intended to be a substitute for GAAP results. I'd also highlight that certain comments made today may be considered forward-looking statements under federal securities law.
The company cautions you that forward-looking statements involve substantial risks and uncertainties and a number of factors, many of which of are beyond the company's control, can cause actual results, events or circumstances to differ materially from those described in the statements. For more information, please refer to the risk factors we've identified in our most recent 10-K and other SEC filings. We are not undertaking any commitment to update these statements if conditions change, exce...
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