Figure Technology Solutions Inc.

08/14/2026 | Press release | Distributed by Public on 08/14/2026 12:45

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 16, 2026 (the "2025 Form 10-K"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the section titled "Special Note Regarding Forward-Looking Statements" in this Quarterly Report and "Risk Factors" in our 2025 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. U.S. Dollars appearing in tables are presented in thousands unless otherwise indicated. In each table where "n.m." appears, management has deemed the percentage calculation not meaningful.
Business Overview
Figure is building the future of capital markets using blockchain-based technology. Financial services have historically been and are still trust-based markets, which require intermediation. Large institutional companies have been built around this. Blockchain-based technology has the power to distill these multi-party marketplaces down to just two: buyer and seller.
Blockchain can do more than disrupt existing markets. By taking historically illiquid assets, such as loans, and putting these assets and their performance history on-chain, blockchain is able to bring liquidity to historically static markets. That liquidity, coupled with the ability to achieve true digital perfection and control, opens previously inaccessible financing opportunities.
We believe there are three core benefits blockchain delivers to the capital markets. The first is transactional: the reduction of audit, quality control, third-party review and other expenses. The second is liquidity: the ability to support 24x7, real-time bilateral marketplaces. The third is financing: the democratization of capital access through programmable smart contracts that enable peer-to-peer funding and real time loan perfection.
Figure's proprietary technology powers next-generation lending, trading and investing activities in areas such as consumer credit and digital assets. Our application of the blockchain ledger allows us to better serve our end-customers, increase speed and efficiency, and enhance standardization and liquidity. Using our technology, we continue to develop dynamic, vertically-integrated marketplaces.
Reclassifications and Immaterial Error Corrections
The accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations gives effect to certain voluntary reclassifications, a voluntary change in accounting principle, and immaterial error corrections made to the previously reported Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025. These items include changes in the presentation of marketable securities income and customer deposit liability activity within the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, a change in accounting principle for payment stablecoins, and a correction to the presentation of retained beneficial interests in loan securitizations within the Condensed Consolidated Statements of Cash Flows. See "Note 2-Summary of Significant Accounting Policies" in the Condensed Consolidated Financial Statements for further detail. In addition, the Management's Discussion and Analysis of Financial Condition and Results of Operations may have other immaterial corrections and reclassifications that management has deemed necessary to conform prior period presentation to current period presentation for comparability.
Recent Developments
Proposed Acquisition of Kiavi, Inc.
On June 10, 2026, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), to acquire Kiavi, Inc., a Delaware corporation ("Kiavi"), a market leading AI-powered lending platform for residential real estate investors used to buy, renovate, and resell properties.
Under the terms of the Merger Agreement, at the closing of the Merger (the "Closing"), we will pay an aggregate of approximately $532.4 million in cash to Kiavi equity holders, subject to customary purchase price adjustments set forth in the Merger Agreement, including for Kiavi's cash, indebtedness, transaction expenses, operating net working capital, and warehouse working capital.
On July 14, 2026, we closed a private offering of $600.0 million principal amount of 8.500% Senior Notes due 2031 (the "Notes"). The net proceeds from the offering were $586.5 million. We intend to utilize the net proceeds from the offering to fund the cash consideration payable in connection with the proposed acquisition of Kiavi, as well as for general corporate purposes and to pay fees and expenses related to the Notes. The completion of the offering was not conditioned on the completion of the Kiavi acquisition and if the Kiavi acquisition is not completed, the net proceeds will be used for general corporate purposes.
Concurrently with, and as a result of the issuance of the Notes, we terminated the Bridge Loan Facility that was entered into concurrent with the Merger Agreement. Refer to "Note 14-Subsequent Events" in the Condensed Consolidated Financial Statements for further information regarding the issuance of the senior notes.
The obligation to consummate the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of a number of customary closing conditions set forth in the Merger Agreement. In addition, the obligation of us to consummate the Merger is subject to the satisfaction or waiver of certain additional conditions, including the completion of a pre-closing restructuring, the contemporaneous closing of the sale of a subsidiary of Kiavi to a newly formed joint venture between the Company and a third party immediately prior to the Merger, and obtaining certain governmental and regulatory licenses and approvals. The Merger Agreement contains representations, warranties and covenants that are customary for a transaction of this nature.
The Merger Agreement contains mutual termination rights for Kiavi and Figure under certain conditions, as defined in the Merger Agreement. The Merger Agreement also contains a termination right for us if Kiavi has not delivered the Requisite Stockholder Consent (as defined in the Merger Agreement) to us prior to the date specified in the Merger Agreement. Under the Merger Agreement, we may be required to pay a termination fee to Kiavi of $25.0 million if the Merger Agreement is terminated by us under certain conditions, as defined in the Merger Agreement.
Key Operating Metrics
We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because they are used to measure and model the performance of companies similar to us using similar metrics.
The following tables set forth key performance measures that we use to evaluate our business for the three months ended June 30, 2026 and 2025:
Three Months Ended June 30, Six Months Ended June 30,
(In thousands, except percentages) 2026 2025 2026 2025
Ecosystem volume(A):
$ 4,950,335 $ 1,924,208 $ 8,670,753 $ 3,501,918
Consumer loan marketplace volume(B):
4,258,796 1,837,994 7,161,174 3,203,130
Partner-branded volume(C)
3,535,721 1,408,084 5,801,062 2,453,143
Figure-branded volume(D)
723,075 429,910 1,360,112 749,987
Digital asset marketplace volume(E)
691,539 86,214 1,509,579 298,788
Figure connect volume(F)
2,772,935 766,662 4,384,775 1,244,566
Net take rate(G)
3.6 % 4.0 % 3.7 % 3.9 %
Net revenue 225,588 106,077 $ 392,595 $ 190,587
Net income 87,436 29,994 132,483 29,381
Adjusted net revenue(H)
218,445 111,895 385,288 198,877
Adjusted EBITDA(H)
119,379 52,866 201,992 81,210
_______________
(A)Ecosystem Volume consists of Consumer Loan Marketplace Volume and Digital Asset Marketplace Volume.
(B)We define Consumer Loan Marketplace Volume as the total U.S. dollar equivalent value of originations of HELOCs, DSCR, and personal loans on our LOS, as well as the volume of third-party loans traded on Figure Connect. We believe this measure is an indication of our scale and represents a potential revenue opportunity from the technology used for consumer credit loan originations.
(C)We define Partner-branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our partners' brands. Partner-branded volume is inclusive of Figure Connect Volume.
(D)We define Figure-branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our brand.
(E)We define Digital Asset Marketplace Volume as the total U.S. dollar equivalent value of matched trades transacted between a buyer and seller through Figure Exchange. We believe this measure is an indication of our scale and represents a potential opportunity for our digital asset offering.
(F)We define Figure Connect Volume as the total U.S. dollar equivalent value of Consumer Loan Marketplace Volume originated by third-party sellers through our Figure Connect marketplace. We believe this measure is a reflection of the underlying growth of our Figure Connect ecosystem.
(G)Net Take Rate is derived from the sum of ecosystem and technology fees, origination fees, gain on sale of loans, net and gain on servicing asset, net from our Condensed Consolidated Statements of Operations. These items represent revenue generated from Figure-branded and Partner-branded volume. Valuation changes in fair value of mortgage servicing rights, which we believe are not indicative of operating performance, and marketing expenses in our operating expenses are deducted. This net amount is divided by overall consumer loan marketplace volume for that period.
(H)For definitions of Adjusted Net Revenue and Adjusted EBITDA and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see "-Non-GAAP Financial Measures."
As of
(In thousands) June 30, 2026 December 31, 2025
YLDS in circulation(A):
$ 556,033 $ 328,193
Democratized Prime:
Matched offers balance(B)
391,822 206,101
Borrower demand(C)
414,052 246,382
Available lender supply(D)
522,154 213,096
_______________
(A)We define YLDS in Circulation as the total U.S. dollar equivalent value of unsecured face-amount certificates solely backed by the assets of Figure Certificate Company (FCC), which is the issuer of the certificates. This is reported as an end of period outstanding balance.
(B)We define Matched Offers as the U.S. dollar equivalent value of offers matched between borrower and lenders on the Democratized Prime platform. This is reported as an end of period outstanding balance.
(C)We define Borrower Demand as the U.S. dollar equivalent value that borrowers seek to borrow from the lending pool on the Democratized Prime platform. This is reported as an end of period outstanding balance.
(D)We define Lender Supply as the U.S. dollar equivalent value that lenders have made available in the lending pool on the Democratized Prime platform. This is reported as an end of period outstanding balance.
Trends and Other Factors Affecting Our Performance
We believe our performance depends, and will in the future depend, on many factors, including those described in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2025 Form 10-K, to which there have been no material changes. Additionally, third party loans can be accessed on our Democratized Prime platform pursuant to strategic partnerships, which may affect our results of operations and liquidity.
Loan Characteristics
The following table sets forth the weighted-average characteristics of loans we originated or purchased for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
HELOC Loans(A):
Partner-branded:
Loan term (in months) 291 308 293 309
Customer interest rate 9.0 % 9.5 % 8.9 % 9.6 %
Customer FICO score 749 757 751 756
Loan balance (in thousands) $ 91 $ 91 $ 93 $ 91
Figure-branded:
Loan term (in months) 292 294 293 295
Customer interest rate 8.8 % 9.4 % 8.6 % 9.5 %
Customer FICO score 746 749 748 749
Loan balance (in thousands) $ 96 $ 88 $ 98 $ 87
_______________
(A)HELOC loans subject to monthly, amortizing borrower payments and may be prepaid and redrawn within a limited period of time. Personal, mortgage, and other loans are not considered significant.
The following table summarizes loan counts held by the Company at June 30, 2026 and December 31, 2025:
June 30, 2026
December 31, 2025(C)
Count of loans held for sale:
HELOC loans 6,018 3,928
Personal loans(A)
933 1,116
Other(B)
142 169
Total loan count held for sale 7,093 5,213
_______________
(A)Loans collateralized by digital assets.
(B)Primarily contains residential transition loans, other mortgage loans, legacy mortgages and other unsecured loans.
(C)The loan counts as of December 31, 2025 have been corrected.
Components of Results of Operation
Net Revenue
Our net revenue is primarily derived from ecosystem and technology fees, loan originations and sales, including interest income earned thereon, income earned on marketable securities, and loan servicing.
Ecosystem and technology fees
Through our Partner-branded channel, we earn volume-based technology and processing fees, based on the principal balance of each loan originated on our LOS and the principal balance of loans transacted on Figure Connect. Such fees arise from contracts entered into with partners to provide access to a cloud-based lending marketplace platform that is developed by us. Our platform enables partners, who are retail and wholesale lenders, to originate loans branded under the partners' name, by having access to a suite of services such as submission of loan applications, verifying information provided within submitted applications, risk underwriting, delivery of electronic loan offers, and electronic loan documentation signed by the borrower.
We also earn a fee for arranging and facilitating the securitization of HELOCs based on the outstanding principal balance of the transferred HELOCs, which is fully earned on the securitization closing date. Program fees are paid by the trust as the fees are earned and paid upon closing.
Origination fees
Origination fees consist of the fees that we earn from originating loans upon the customer's initial loan draw. Origination fees include loan origination fees and other fees collected from the customer at the time a loan is funded. Origination fees are currently calculated as a percentage of the customer's initial loan balance and are recognized as revenue at a specified point in time, once a customer's loan application has been approved, a credit decision has been reached, and the loan has been funded and processed. These fees are earned through both our Figure-branded channel as well as our Partner-branded channel through wholesale brokers.
Servicing fees
Servicing fees and other revenue consist of the fees that we earn from managing loan portfolios on behalf of the owners of those portfolios. Servicing fees are calculated based on a contractual percentage of the outstanding principal under servicing arrangements and are charged monthly pursuant to our servicing agreements for activities we perform throughout the loan term, including collection, processing and reconciliations of payments received, investor reporting, and customer support. We act as servicer for the majority of the loans facilitated through our platform.
Gain on sale of loans, net
Gain on sale of loans consists of the net proceeds from the difference between the proceeds received at the sale of loans to third-party buyers, and the unpaid principal balance of such loans, including adjustments for changes in fair value for loans sold during the period. These realized and unrealized gains or losses and fair value adjustments are recognized through both our Figure-branded and Partner-branded channels based on the fair value of the loan originated by us, or purchased
from partners, generally represented by the consideration paid relative to the loans' estimated fair value at each quarter end or consideration received upon sale.
We have elected the fair value option for both the Figure-branded loans we originate as well as the Partner-branded loans we purchase from our partners that we hold for sale. Loans held for sale consist of loans we intend to sell, including HELOCs, personal loan products, and mortgage loans we previously originated or purchased. HELOCs and mortgage loans are secured by first or junior liens on customers' real property. Any changes in fair value relating to loans held for sale are included in our results of operations as net fair value adjustments.
Interest income
We earn interest income primarily from the following sources:
•Loans - We accrue interest income on loans we hold based on the UPB outstanding at contractual interest rates. We place loans on nonaccrual status when they become 90 days past due (30 days past due for collateralized personal loans) or when we doubt full recovery of interest and principal. Loans are considered past due when contractually required principal or interest payments have not been made on the due dates. When a loan is placed on nonaccrual status, the accrued and unpaid interest is reversed as a reduction of interest income and accrued interest receivable. Interest income is subsequently recognized only to the extent cash payments are received or when the loan has been placed back in accrual status. Loans are restored to accrual status when the loan becomes current and we expect repayment of the remaining contractual principal and interest. We also recognize cash received on nonaccrual loans as interest income after all contractual principal is repaid.
•Cash and Cash Equivalents - We accrue interest income monthly for cash held at depository institutions and investments in short-term instruments, such as money-market funds and U.S. Treasury Bills, and through repurchase agreements that are collateralized by U.S. Treasury Bills.
Gain on servicing asset, net
We routinely sell HELOCs, and in the past we have also sold personal loans, mortgage loans and Figure Pay credit loans, with servicing rights retained. Figure Pay credit loans are short duration, installment loans that consumers can use at their discretion. Loan servicing activities include account maintenance, collections, processing payments from customers, and distributions to third-party loan owners. During each reporting period, a servicing asset is recognized when the benefits of servicing are determined to be greater than adequate compensation for the servicing activities that we perform, and conversely, a servicing liability is recognized if the benefits of servicing are determined to be less than adequate compensation for the servicing activities that we perform. We carry servicing assets at fair value. Any changes in the fair value are included in our results of operations as net fair value adjustments. These gains are recognized through both our Figure-branded and Partner-branded channels.
Marketable securities income, net
We recognize interest income on the debt securities we hold where we expect to collect all contractual cash flows, and the debt security cannot be contractually prepaid in such a way that we would not recover substantially all of our recorded investment, based on the stated coupon rate and the outstanding principal amount of the debt security. We recognize interest income on beneficial interests based on the investment's accretable yield, which represents the difference between the expected undiscounted cash flows and the carrying value of the investment. We recognize the accretable yield as interest income on a prospective level yield basis over the life of the expected cash flows. Changes in the amount or timing of actual or expected cash flows may change the accretable yield, and we adjust interest income recognized in future periods using a recalculated level yield applied to the then-current carrying value. Increases (decreases) in the amount of cash flows or acceleration (deceleration) of cash flows, in isolation, generally increase (decrease) the interest income recognized in future periods. We carry marketable securities at fair value. Any changes in the fair value are included in our results of operations as net fair value adjustments.
Other revenue
Other revenue primarily consists of gains (losses) on the Company's investments in certain entities and fees earned on marketing services provided for partners.
Operating Expenses
Operating expenses consist of general and administrative, technology and product development, operations and processing, sales and marketing, and interest expenses.
General and administrative
General and administrative expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation, for legal and compliance, finance and accounting, human resources and facilities teams; professional services fees; facilities and travel expenses.
Technology and product development
Technology and product development expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation, for our product, engineering, and design team, which is responsible for maintenance, bug fixes and software updates among others, as well as the costs of systems and tools used by these personnel.
Operations and processing
Operations and processing expenses primarily consist of payroll and other personnel-related costs, including stock-based compensation for personnel engaged in onboarding, loan servicing, customer support and other related operational teams. These expenses also include the costs of third-party systems and tools we use as part of the loan origination process, including information verification, fraud detection, and payment processing activities.
Sales and marketing
Sales and marketing expenses primarily consist of costs incurred across various advertising channels, including expenses associated with advertising campaigns, and building overall brand awareness. Sales and marketing expenses also include payroll and other personnel-related costs, including stock-based compensation expense, for our sales and marketing personnel.
Interest expense
Interest expense consists of the costs we incur on our borrowings, amortization of fees, and other costs associated with our debt obligations. It also includes interest accrued and paid to holders of YLDS in the form of additional YLDS, in addition to interest accrued and paid to Democratized Prime lenders.
Other expense
We have contractual agreements with loan buyers to repurchase loans under certain circumstances, including in the event of borrower delinquencies within the first 30 to 90 days of loan origination. We record a loss on those loans based on the fair value at the date on which we identify the repurchase obligation.
Other income (expense), net
Other income (expense), net includes unrealized and realized gains (losses) resulting from transactions of certain digital assets, litigation settlements, adjustments to equity and non-equity method investments, foreign exchange rate gains (losses) and other non-income based state and local taxes.
Results of Operations
Condensed Consolidated Statements of Operations
The following table sets forth our Condensed Consolidated Statements of Operations for the periods presented:
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Net revenue:
Ecosystem and technology fees $ 72,865 $ 28,141 $ 44,724 158.9 % $ 120,171 $ 43,754 $ 76,417 174.7 %
Servicing fees 11,303 7,464 3,839 51.4 21,128 14,655 6,473 44.2
Interest income(A)
22,809 11,966 10,843 90.6 42,185 23,190 18,995 81.9
Origination fees 26,346 16,250 10,096 62.1 49,476 28,727 20,749 72.2
Gain on sale of loans, net(A)
57,572 36,312 21,260 58.5 106,928 66,104 40,824 61.8
Gain on servicing asset, net 29,093 1,844 27,249 n.m. 41,960 2,170 39,790 n.m.
Marketable securities income, net(A)
3,971 4,066 (95) (2.3) 7,631 11,679 (4,048) (34.7)
Other revenue 1,629 34 1,595 n.m. 3,116 308 2,808 911.7
Total net revenue 225,588 106,077 119,511 112.7 392,595 190,587 202,008 106.0
Expenses:
General and administrative 51,428 16,397 35,031 213.6 97,023 35,237 61,786 175.3
Technology and product development 15,551 16,018 (467) (2.9) 31,156 33,434 (2,278) (6.8)
Operations and processing 28,914 14,448 14,466 100.1 50,361 27,126 23,235 85.7
Sales and marketing 30,738 16,966 13,772 81.2 56,221 31,933 24,288 76.1
Interest expense 19,670 12,376 7,294 58.9 36,559 23,348 13,211 56.6
Other expense 1,550 2,148 (598) (27.8) 1,597 3,713 (2,116) (57.0)
Total expenses 147,851 78,353 69,498 88.7 272,917 154,791 118,126 76.3
Operating income 77,737 27,724 50,013 180.4 119,678 35,796 83,882 234.3
Other income (expense), net 5,251 5,627 (376) (6.7) 1,412 (1,828) 3,240 177.2
Income before income taxes 82,988 33,351 49,637 148.8 121,090 33,968 87,122 256.5
Income tax (benefit) provision (4,448) 3,357 (7,805) (232.5) (11,393) 4,587 (15,980) (348.4)
Net income 87,436 29,994 57,442 191.5 132,483 29,381 103,102 350.9
Net (loss) income attributable to noncontrolling interests in consolidated subsidiaries (10) 52 (62) (119.2) 92 259 (167) (64.5)
Net income attributable to Figure Technology Solutions, Inc. $ 87,446 $ 29,942 $ 57,504 192.1 % $ 132,391 $ 29,122 $ 103,269 354.6 %
Net Revenue
Ecosystem and technology fees
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Technology offering fees $ 29,176 $ 10,855 $ 18,321 168.8 % $ 46,472 $ 18,750 $ 27,722 147.9 %
Ecosystem fees 36,768 14,938 21,830 146.1 61,187 20,150 41,037 203.7
Program fees 6,921 2,348 4,573 194.8 12,512 4,854 7,658 157.8
Total ecosystem and technology fees $ 72,865 $ 28,141 $ 44,724 158.9 % $ 120,171 $ 43,754 $ 76,417 174.7 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Ecosystem and technology fees increased $44.7 million, or 158.9%, primarily due to growth of 261.7% in Figure Connect Volume, as well as a $4.6 million increase in program fees due to a $1.4 billion increase in the volume of securitizations for which we earn program fees. Our ecosystem fees are based on a sliding scale that decreases as higher volume tiers are reached, resulting in lower fee rates as an individual partner's origination volume increases.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Ecosystem and technology fees increased $76.4 million, or 174.7%, primarily due to growth of 252.3% in Figure Connect Volume, as well as a $7.7 million increase in program fees due to a $2.3 billion increase in the volume of securitizations for which we earn program fees. Our ecosystem fees are based on a sliding scale that decreases as higher volume tiers are reached, resulting in lower fee rates as an individual partners origination volume increases.
Servicing fees
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Servicing fees increased $3.8 million, or 51.4%, driven by a $6.8 billion, or 73.9%, increase in the weighted average unpaid principal balance of HELOC loans serviced, rising to $16.0 billion at June 30, 2026, from $9.2 billion at June 30, 2025, partially offset by a decrease of 5 basis points in the weighted average servicing fee rate from 33 basis points to 28 basis points.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Servicing fees increased $6.5 million, or 44.2%, due to a $6.2 billion, or 69.4%, increase in the weighted average unpaid principal balance of HELOC loans serviced, rising to $15.1 billion at June 30, 2026, from $8.9 billion at June 30, 2025, partially offset by a decrease of 5 basis points in the weighted average servicing fee rate from 33 basis points to 28 basis points.
Interest income
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Interest income increased $10.8 million, or 90.6%, primarily due to a $5.5 million increase in interest earned on cash balances, as well as a $3.7 million increase in interest earned on HELOCs.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Interest income increased $19.0 million, or 81.9%, primarily due to a $11.3 million increase in interest earned on cash balances, as well as a $5.9 million increase in interest earned on HELOCs.
Origination fees
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Origination fees increased $10.1 million, or 62.1%, primarily due to a 38.7% increase in overall volume of transactions for which we earn origination fees, as well as higher weighted average origination fees driven by a change in mix driven by Figure-branded volume growing 68.2% year over year, for which we earn higher origination fees relative to Partner-branded volume.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Origination fees increased $20.7 million, or 72.2%, primarily due to a 41.8% increase in overall volume of transactions for which we earn origination fees, as well as higher weighted average origination fees driven by a change in mix driven by Figure-branded volume growing 81.4% year over year, for which we earn higher origination fees relative to Partner-branded volume.
Gain on sale of loans, net
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Realized gain (loss):
Whole loan sales $ 54,033 $ 29,419 $ 24,614 83.7 % $ 97,475 $ 47,601 $ 49,874 104.8 %
Securitized loans - 13,431 (13,431) (100.0) - 19,454 (19,454) (100.0)
Derivatives 5,654 (1,827) 7,481 409.5 7,273 (3,127) 10,400 332.6
59,687 41,023 18,664 45.5 104,748 63,928 40,820 63.9
Unrealized gain (loss):
Loans 2,795 (5,039) 7,834 155.5 4,744 5,224 (480) (9.2)
Derivatives (4,910) 328 (5,238) n.m. (2,564) (3,048) 484 15.9
(2,115) (4,711) 2,596 55.1 2,180 2,176 4 0.2
Total gain on sale of loans, net $ 57,572 $ 36,312 $ 21,260 58.5 % $ 106,928 $ 66,104 $ 40,824 61.8 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Gain on sale of loans, net, increased $21.3 million, or 58.5%, primarily due to a $11.2 million increase in the realized gains on whole loan and securitized loan sales, driven by an increase in the UPB of loans sold from $1.1 billion to $2.5 billion, together with a 4.9% decrease in the weighted average price of loans sold for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Additionally, there was a $7.8 million increase in the fair value of loans not yet sold during three months ended June 30, 2026 compared to the three months ended June 30, 2025. Due to changes in rates impacting our derivative positions, we recognized realized gains on our derivatives of $5.7 million and unrealized losses of $4.9 million for the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Gain on sale of loans, net, increased $40.8 million, or 61.8%, due to a $30.4 million increase in the total realized gains on whole loan and securitized loan sales, driven by an increase in the UPB of loans sold from $2.4 billion to $4.3 billion, an increase of $1.9 billion period over period, together with a 3.8% decrease in the weighted average price of loans sold. Additionally, there was a $0.5 million decrease in the fair value of loans not yet sold offset by an increase in unrealized derivatives during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Due to changes in rates impacting our derivative positions, we recognized realized gains on our derivatives of $7.3 million and unrealized losses of $2.6 million during the six months ended June 30, 2026
Gain on servicing asset, net
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages) 2026 2025 $ % 2026 2025 $ %
Additions $ 31,807 $ 14,811 $ 16,996 114.8 % $ 52,159 $ 25,080 $ 27,079 108.0 %
Realization of cash flows (11,109) (7,119) (3,990) (56.0) (19,778) (12,359) (7,419) (60.0)
Change in valuation inputs and assumptions 8,395 (5,848) 14,243 243.6 % 9,579 (10,551) 20,130 190.8 %
Total gain on servicing asset, net $ 29,093 $ 1,844 $ 27,249 n.m. $ 41,960 $ 2,170 $ 39,790 n.m.
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Gain on servicing asset, net increased $27.2 million, primarily due to a $17.0 million increase in new servicing assets retained on the increase of UPB of loans sold from $1.1 billion to $2.5 billion for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, as well as a $14.2 million increase resulting from changes in valuation inputs and assumptions, driven by an increasing rate environment in the current period compared to a decreasing rate environment in the prior period. Partially offsetting, there was a $4.0 million change due to the realization of cash flows derived from a larger servicing portfolio during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Gain on servicing asset, net increased $39.8 million, primarily due to a $27.1 million increase in new servicing assets retained on the increase of UPB of loans sold from $2.4 billion to $4.3 billion for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, as well as a $20.1 million increase resulting from changes in valuation inputs and assumptions, driven by an increasing rate environment in the current period compared to a decreasing rate environment in the prior period. Partially offsetting, there was a $7.4 million change due to the realization of cash flows derived from a larger servicing portfolio during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Marketable securities income, net
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Marketable securities income, net remained flat for the three months ended June 30, 2026, compared to three months ended June 30, 2025 as the change in fair value of the marketable securities we held was offset by an increase in interest income on the marketable securities we held.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Marketable securities income, net decreased $4.0 million, or 34.7%, primarily due to a $7.0 million decrease in recognized change in fair value of the marketable securities we held, partially offset by an $2.9 million increase in interest income on the marketable securities we held.
Other revenue
Other revenue is immaterial overall and components of other revenue did not materially change as fees, and the net assets on which we charge those fees, were consistent during the three and six months ended June 30, 2026 and 2025. The growth in other revenue is representative of the overall growth in Figure.
Figure-branded revenue
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Ecosystem and technology fees $ 1,175 $ 541 $ 634 117.2 % $ 2,402 $ 1,128 $ 1,274 112.9 %
Origination fees 23,533 14,090 9,443 67.0 44,208 24,772 19,436 78.5
Gain on sale of loans, net 25,425 12,508 12,917 103.3 45,179 22,590 22,589 100.0
Total Figure-branded net revenue $ 50,133 $ 27,139 $ 22,994 84.7 % $ 91,789 $ 48,490 $ 43,299 89.3 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Figure-branded net revenue increased $23.0 million, or 84.7%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This was primarily due to a $12.9 million or 103.3% increase in gain on sale of loans as a result of an increase in the UPB of loans sold and fair value of loans not sold yet. Additionally, there was a $9.4 million, or 67.0%, increase in Figure-branded origination fees as a result of a 68.2% increase in Figure-branded volume.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Figure-branded net revenue increased $43.3 million, or 89.3%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This was primarily due to a $22.5 million or 99.6% increase in gain on sale of loans as a result of an increase in the UPB of loans sold and a $19.4 million, or 78.5%, increase in Figure-branded origination fees as a result of an 81.4% increase in Figure-branded volume.
Partner-branded revenue
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Ecosystem and technology fees $ 71,690 $ 27,600 $ 44,090 159.7 % $ 117,769 $ 42,626 $ 75,143 176.3 %
Origination fees 2,813 2,160 653 30.2 5,268 3,955 1,313 33.2
Gain on sale of loans, net 32,147 23,804 8,343 35.0 61,749 43,514 18,235 41.9
Total Partner-branded net revenue $ 106,650 $ 53,564 $ 53,086 99.1 % $ 184,786 $ 90,095 $ 94,691 105.1 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Partner-branded net revenue increased $53.1 million, or 99.1%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily attributable to ecosystem and technology fees, which increased by $44.1 million, or 159.8%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This was primarily due to an increase in volume transacted on our Connect platform. Additionally, Partner-branded gain on sale of loans, net increased by $8.3 million, or 35.0%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, as a result of a 151% increase in Partner-branded volume, offset by a transition towards ecosystem and technology fee revenue as Partners transition to Connect.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Partner-branded net revenue increased $94.7 million, or 105.1%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to ecosystem and technology fees, which increased by $75.1 million, or 176.3%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This was primarily due to an increase in volume transacted on our Connect platform. Additionally, Partner-branded gain on sale of loans, net increased by $18.2 million, or 41.9%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, as a result of a 136% increase in Partner-branded volume, offset by a transition towards ecosystem and technology fee revenue as Partners transition to Connect.
Operating Expenses
General and administrative
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Compensation and benefits $ 8,717 $ 6,557 $ 2,160 32.9 % $ 16,788 $ 13,058 $ 3,730 28.6 %
Stock-based compensation expense 23,567 1,795 21,772 n.m. 47,041 3,521 43,520 n.m.
Professional services 11,850 3,649 8,201 224.7 20,020 9,610 10,410 108.3
Other expense 7,294 4,396 2,898 65.9 13,174 9,048 4,126 45.6
Total general and administrative expense $ 51,428 $ 16,397 $ 35,031 213.6 % $ 97,023 $ 35,237 $ 61,786 175.3 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
General and administrative expense increased $35.0 million, or 213.6%. This primarily consisted of an increase in stock-based compensation expense of $21.8 million, due to the recognition of expense for stock-based compensation awards that satisfied the liquidity condition in connection with the IPO, additional grants associated with the IPO, and an increase in grants in the current year due to increased headcount. Professional services increased $8.2 million, or 224.7%, primarily due to an increase in legal and accounting fees.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
General and administrative expense increased $61.8 million, or 175.3%. This primarily consisted of an increase in stock-based compensation expense of $43.5 million, due to the recognition of expense for stock-based compensation awards that satisfied the liquidity condition in connection with the IPO, additional grants associated with the IPO, and an increase in grants in the current year due to increased headcount. Professional services increased $10.4 million, or 108.3%, primarily due to an increase in legal and accounting fees.
Technology and product development
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Compensation and benefits $ 5,974 $ 5,889 $ 85 1.4 % $ 11,479 $ 13,195 $ (1,716) (13.0) %
Stock-based compensation expense 1,453 3,278 (1,825) (55.7) 3,294 6,737 (3,443) (51.1)
Amortization 4,269 4,134 135 3.3 8,981 8,077 904 11.2
Software 3,231 2,678 553 20.6 6,350 5,260 1,090 20.7
Other expense 624 39 585 n.m. 1,052 165 887 537.6
Total technology and product development expense $ 15,551 $ 16,018 $ (467) (2.9) % $ 31,156 $ 33,434 $ (2,278) (6.8) %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Technology and product development expense decreased $0.5 million, or 2.9%, primarily due to a $1.8 million decrease in stock-based compensation expense related to services exchanged for the issuance of warrants in the prior year which were fully earned in the prior year and therefore had no impact in the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Technology and product development expense decreased $2.3 million, or 6.8%, primarily due to a $3.4 million decrease in stock-based compensation expense from prior year expense related to services exchanged for the issuance of warrants in the prior year which were fully earned in the prior year and therefore had no expense in the six months ended June 30, 2026. Additionally, compensation and benefits decreased driven by a decline in cost per employee, offset by an increase in software costs driven by cloud compute and storage costs.
Operations and processing
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Compensation and benefits $ 8,794 $ 5,350 $ 3,444 64.4 % $ 16,649 $ 10,269 $ 6,380 62.1 %
Stock-based compensation expense 180 148 32 21.6 332 225 107 47.6
Processing fees 19,940 8,950 10,990 122.8 33,380 16,632 16,748 100.7
Total operations and processing expense $ 28,914 $ 14,448 $ 14,466 100.1 % $ 50,361 $ 27,126 $ 23,235 85.7 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Operations and processing expense increased $14.5 million, or 100.1%, primarily due to an $11.0 million increase in processing fees due to a 131.7% increase in Consumer Loan Marketplace Volume. Additionally, compensation and benefits increased $3.4 million, or 64.4%, primarily due to a 43.7% increase in average headcount driven by the increase in Consumer Loan Marketplace volume.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Operations and processing expense increased $23.2 million, or 85.7%, primarily due to a $16.7 million increase in processing fees due to a 123.6% increase in Consumer Loan Marketplace Volume. Additionally, compensation and benefits increased $6.4 million, or 62.1%, primarily due to a 49.3% increase in average headcount.
Sales and marketing
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Compensation and benefits $ 4,472 $ 2,079 $ 2,393 115.1 % $ 7,882 $ 3,856 $ 4,026 104.4 %
Stock-based compensation expense 898 103 795 771.8 1,309 182 1,127 619.2
Advertising and other expense 25,368 14,784 10,584 71.6 47,030 27,895 19,135 68.6
Total sales and marketing expense $ 30,738 $ 16,966 $ 13,772 81.2 % $ 56,221 $ 31,933 $ 24,288 76.1 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Sales and marketing expense increased $13.8 million, or 81.2%, primarily due to a $10.6 million increase in advertising and other expense driven by a 68.2% increase in Figure-branded volume, as well as a $2.4 million increase in compensation and benefits primarily due to a 117.1% increase in average headcount.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Sales and marketing expense increased $24.3 million, or 76.1%, primarily due to a $19.1 million increase in advertising and other expense driven by an 81.4% increase in Figure-branded volume, as well as a $4.0 million increase in compensation and benefits primarily due to a 93.9% increase in average headcount.
Interest expense
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Interest expense increased $7.3 million, or 58.9%, primarily due to a $7.3 million increase in interest expense related to Democratized Prime and a $3.2 million increase related to the Retained Interest Facility warehouse, offset by a $2.1 million decrease in warehouse facilities and a $1.9 million decrease in interest on our MSR Facility.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Interest expense increased $13.2 million, or 56.6%, primarily due to a $14.0 million increase in interest expense related to Democratized Prime, a $4.9 million increase related to the Retained Interest Facility warehouse, and a $2.1 million increase in interest related to YLDS holdings, offset by a $6.3 million decrease in warehouse facilities and a $1.9 million decrease in interest on our MSR Facility.
Other income (expense), net
Three Months Ended June 30, Change Six Months Ended June 30, Change
(In thousands, except percentages)
2026 2025 $ % 2026 2025 $ %
Change in fair value of digital assets held $ (870) $ 2,064 $ (2,934) (142.2) % $ (5,000) $ (5,718) $ 718 12.6 %
Changes in value of fund investment (116) - (116) n.m. (769) - (769) n.m.
Staking rewards and realized gains 718 2,314 (1,596) (69.0) 1,315 4,156 (2,841) (68.4)
Other 5,519 1,249 4,270 341.9 5,866 (266) 6,132 n.m.
Total other income (expense), net $ 5,251 $ 5,627 $ (376) (6.7) % $ 1,412 $ (1,828) $ 3,240 177.2 %
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Other income (expense), net decreased $0.4 million, or 6.7%, primarily driven by a $2.9 million decrease in the change in fair value of digital assets held and a $1.6 million decrease in staking rewards and gain on sale and usage of digital assets, partially offset by a $4.3 million increase in Other, largely due to a $5.9 million gain recognized on the disposal of our equity-method investment in Reflow Services, LLC, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Other income (expense), net increased $3.2 million, or 177.2%, primarily driven by a $6.1 million increase in Other, largely due to a $5.9 million gain recognized on the disposal of our equity-method investment in Reflow Services, LLC in May 2026, along with a $0.7 million increase in the change in fair value of digital assets held, partially offset by a $0.8 million decrease in the change in value of fund investments, and a $2.8 million decrease in staking rewards and gain on sale and usage of digital assets, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Income Tax Provision
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Income tax expense decreased by $7.8 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The benefit for income taxes includes U.S. federal, state and local taxes. The effective tax rate for the three months ended June 30, 2026 was approximately (5.4)%, compared to 10.1% for the three months ended June 30, 2025. The effective tax rate differed from the U.S. federal statutory rate of 21.0% for the three months ended June 30, 2026 primarily due to discrete excess tax benefits associated with stock-based compensation during the period. The effective tax rate differed from the U.S. federal statutory rate for the three months ended June 30, 2025 of 21.0% primarily due to state tax expense attributable to FT Intermediate, Inc. filed on standalone basis, while Figure Markets Holdings, Inc. losses were not realizable prior to the Recombination.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Income tax expense decreased by $16.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The benefit for income taxes includes U.S. federal, state and local taxes. The effective tax rate for the six months ended June 30, 2026 was approximately (9.4)%, compared to 13.5% for the six months ended June 30, 2025. The effective tax rate differed from the U.S. federal statutory rate of 21.0% for the six months ended June 30, 2026 primarily due to discrete excess tax benefits associated with stock-based compensation during the period. The effective tax rate differed from the U.S. federal statutory rate for the six months ended June 30, 2025 of 21.0% primarily due to state tax expense attributable to FT Intermediate, Inc. filed on standalone basis, while Figure Markets Holdings, Inc. losses were not realizable prior to the Recombination.
Noncontrolling Interests in Consolidated Subsidiaries
Third-party investors hold interests in entities that we consolidate, and to whom we allocate the net income or loss of those entities. During the three and six months ended June 30, 2026 and 2025, we allocated aggregate net income or loss to those third-party investors.
Changes in Financial Position
The following table sets forth a summary of selected line items from our Condensed Consolidated Balance Sheets for the periods indicated, and the changes between such periods. These selected line items have been prepared on the same basis as our Condensed Consolidated Financial Statements. In the opinion of management, the financial information set forth in the table below reflects all normal recurring adjustments necessary for the fair statement of changes in the selected line items for these periods. The following selected line items should be read together with our Condensed Consolidated Financial Statements and related notes.
(In thousands, except percentages)
June 30, 2026 December 31, 2025 $ Change % Change
ASSETS
Current assets:
Cash and cash equivalents $ 1,437,511 $ 1,198,141 $ 239,370 20.0 %
Restricted cash 95,887 68,637 27,250 39.7
Loans held for sale, at fair value 597,400 404,337 193,063 47.7
Digital assets 62,185 96,558 (34,373) (35.6)
Accounts receivable, net 88,527 52,016 36,511 70.2
Loan servicing asset, at fair value 155,024 113,064 41,960 37.1
Marketable securities, at fair value 354,007 273,151 80,856 29.6
Digital assets, non-current 1,311 3,644 (2,333) (64.0)
LIABILITIES
Current liabilities:
Payables to third-party loan owners $ 506,686 $ 383,772 $ 122,914 32.0 %
Debt, current 222,505 160,959 61,546 38.2
Debt, current to related parties 424,640 166,135 258,505 155.6
Other current liabilities 73,078 105,642 (32,564) (30.8)
Debt, non-current 315,850 230,143 85,707 37.2
Assets
Cash, cash equivalents and restricted cash
Cash and cash equivalents increased by $239.4 million, or 20.0%, as of June 30, 2026 compared to December 31, 2025, and restricted cash increased $27.3 million, or 39.7%. Refer to "-Liquidity and Capital Resources-Cash Flows" for the drivers in the change of cash, cash equivalents and restricted cash provided by operating, investing and financing activities during the period.
Loans held for sale, at fair value
Loans held for sale, at fair value increased by $193.1 million, or 47.7%, as of June 30, 2026 compared to December 31, 2025, primarily due to originations of $2.7 billion and purchases of $2.4 billion offset by loan sales, net of repurchases, of $4.5 billion and principal payments of $395.2 million. We generally hold loans for a short period of time and the timing of loan sales and securitizations may impact the amounts carried at each period-end. Typically, the loan volumes we experience include seasonal variation that impact the growth of loans on our balance sheet during a fiscal year.
Digital assets, current and non-current
Digital assets, current and non-current, decreased $36.7 million, or 36.6%, as of June 30, 2026 compared to December 31, 2025, which represents the fair value change in digital assets we hold for sale and the gross change of digital assets we hold as collateral. We recognize offsetting liabilities and changes for digital assets held as collateral and do not record any net assets, gains, or losses thereon unless we are unable to liquidate collateral timely and are otherwise unable to collect amounts owed. We have not experienced any such losses to date.
Digital assets held as collateral, gross of offsetting liabilities, decreased $31.4 million as of June 30, 2026 compared to December 31, 2025 due to a decrease of $27.8 million in Bitcoin holdings as a result of decreases in both the quantity and price of Bitcoin, and a $3.7 million decrease in Ethereum holdings due to a decrease in both the quantity and price of Ethereum.
Digital assets held at fair value decreased $5.4 million as of June 30, 2026 compared to December 31, 2025 due to a $3.9 million decrease in the fair value of Solana holdings, a $1.0 million decrease in the fair value of digital assets held in our
liquidity pools and a $0.8 million decrease in the fair value of United States Dollar Tether holdings, partially offset by immaterial increases in the fair value of other digital assets.
See "Note 3-Investments" in the Condensed Consolidated Financial Statements for further discussion on digital assets.
Accounts receivable, net
Accounts receivable, net increased $36.5 million, or 70.2%, as of June 30, 2026 compared to December 31, 2025, primarily driven by a $16.8 million increase in other accounts receivable and trade accounts receivable increased $13.8 million driven by an overall increase in Partner-branded volume. Management continues to monitor customer credit exposure and collection trends.
Loan servicing asset, at fair value
Loan servicing asset, at fair value, increased $42.0 million, or 37.1%, as of June 30, 2026 compared to December 31, 2025, reflecting a $52.2 million increase in the value of servicing rights retained during the six months ended June 30, 2026, and a $9.6 million increase in the estimated fair value of servicing assets held based upon changes in valuation assumptions, partially offset by a $19.8 million decrease in servicing fee collections. See "Note 4-Servicing" in the Condensed Consolidated Financial Statements for further discussion on loan servicing assets.
Marketable securities, at fair value
Marketable securities, at fair value increased $80.9 million, or 29.6%, as of June 30, 2026 compared to December 31, 2025, primarily due to an increase in the volume of new securitizations in which Figure Lending LLC acts as a sponsor of the transaction. The consolidated subsidiary is required to retain 5% of the total value of marketable securities issued as a result of the transaction, as described further in "Note 2-Summary of Significant Accounting Policies," in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The increase in marketable securities retained are partially offset by the scheduled paydown of collateralized loans backing marketable securities held during the period.
Liabilities
Payables to third-party loan owners
Payables to third-party loan owners increased $122.9 million, or 32.0%, as of June 30, 2026 compared to December 31, 2025, due to an increase in our servicing portfolio. The overall balance may fluctuate based on timing of collections and payments to third-party loan owners.
Debt, current and non-current
Total debt, current and non-current, including related party debt, increased by $405.8 million, or 72.8%, as of June 30, 2026 compared to December 31, 2025, primarily due to an increase of $278.1 million in debt at fair value as a result of the growth in YLDS at FCC and Democratized Prime as well as an $85.7 million increase in non-current debt related to the increase in marketable securities.
Other current liabilities
Other current liabilities decreased $32.6 million, or 30.8%, as of June 30, 2026 compared to December 31, 2025, primarily due to lower crypto collateral balances, reflecting declines in both quantity and price of crypto assets held, as well as reduced platform liabilities. These decreases were partially offset by growth in loan-related payables, consistent with higher loan volume, and a modest increase in other liabilities.
Liquidity and Capital Resources
Sources and Uses of Funds
We maintain a capital-efficient model by utilizing a diverse set of funding sources. When we originate a loan directly or purchase a loan originated by our origination partners, we often utilize warehouse credit facilities with certain lenders to finance our lending activities or loan purchases. We sell the loans we originate or purchase from our origination partners to whole loan buyers and securitization investors through Figure Connect, and earn servicing fees from continuing to act as the servicer on the loans. We proactively manage the allocation of loans on our platform across various funding channels based on several factors including, but not limited to, internal risk limits and policies, capital market conditions and channel economics. Our excess funding capacity and long-term relationships with a diverse group of existing funding
partners help provide flexibility as we optimize our funding to support the growth in loan volume. For those loans sold through Figure Connect, we also collect fees as a source of funds. Our principal sources of liquidity are cash and cash equivalents, digital assets, available for sale securities, available capacity from warehouse and revolving credit facilities, securitization trusts, forward flow loan sale arrangements, and cash flows from our operations.
As of June 30, 2026, we had $1.4 billion in cash and cash equivalents, $95.9 million in restricted cash, $42.4 million in digital assets, excluding digital assets held as collateral, and $2.0 billion in available debt capacity, excluding purchase commitments from third-party loan buyers. As of December 31, 2025, we had $1.2 billion in cash and cash equivalents, $68.6 million in restricted cash, $47.6 million in digital assets held, excluding digital assets held as collateral, and $1.8 billion in available debt capacity, excluding purchase commitments from third-party loan buyers. Our restricted cash primarily relates to cash held by us on behalf of third-party loan sellers or buyers that represent collection of principal and interest from loan borrowers that we remit to those third parties as servicer of those loans.
Based on our current business plan and revenue prospects, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, and our available debt capacity will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next 12 months from the date of this Quarterly Report. Beyond the next 12 months, we expect our long-term liquidity needs to consist primarily of working capital requirements and ongoing investments to support growth. We intend to maintain a strong liquidity position to provide flexibility to pursue strategic opportunities and manage potential variability in operating cash flows. As a result, we do not currently expect to require additional external financing to support our business operations over the long term, although we may from time to time enter into or expand credit facilities to enhance our liquidity position or fund growth initiatives.
Other Funding Sources
In connection with asset-backed securitizations, we sponsor and establish trusts (deemed to be VIEs) to ultimately purchase loans facilitated by our platform. Securities issued from our asset-backed securitizations are senior or subordinated, based on the waterfall criteria of loan payments to each security class. The subordinated residual interests issued from these transactions are first to absorb credit losses in accordance with the waterfall criteria. We consolidate securitization VIEs when we are deemed to be the primary beneficiary and therefore have the power to direct the activities that most significantly affect the VIEs' economic performance and a variable interest that could potentially be significant to the VIE. Where we consolidate the securitization trusts, if any, the loans held in the securitization trusts are included in loans held for investment, and the notes sold to third-party investors are recorded in notes issued by securitization trusts in the consolidated balance sheets. We did not consolidate any securitization VIEs at June 30, 2026 or December 31, 2025. Refer to "Note 9-Variable Interest Entities" in the Condensed Consolidated Financial Statements for further details.
Debt Obligations
Warehouse Credit Facilities
We fund substantially all of the loans we close on a short-term basis primarily through our warehouse credit facilities and from our operations. Loan production activities generally require short-term liquidity in excess of amounts generated by our operations. The loans we originate are financed through several warehouse credit facilities. Our borrowings are in turn generally repaid with the proceeds we receive from loan sales. We maintain warehouse credit facilities with separate third-party lenders through FL LLC, Figure Markets Credit LLC, and their subsidiaries. Our warehouse credit facilities are primarily in the form of master repurchase agreements and loan participation agreements. Loans financed under these facilities are generally financed at approximately 80% to 100% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan). Loans financed at less than 100% of the principal balance require us to fund the balance from cash generated from our operations. Once closed, the underlying loan that is held for sale is pledged as collateral for the borrowing or advance that was made under our warehouse credit facilities. In most cases, the loans will remain in one of the warehouse credit facilities for only a short time, generally less than one month, until the loans are sold. During the time the loans are held for sale, we earn interest income from the customer on the underlying loan. This income is partially offset by the interest and fees we pay due to borrowings from the warehouse credit facilities.
Borrowing capacity of committed debt facilities as of June 30, 2026 include the following:
June 30, 2026
(In thousands) Final Stated Maturity Borrowing Capacity Balance Outstanding Available Financing
Funding Debt:
Warehouse Facility 1 May 2027 $ 100,000 $ 2,500 $ 97,500
Warehouse Facility 2 January 2027 335,300 884 334,416
Warehouse Facility 5 July 2026 300,000 6,190 293,810
Warehouse Facility 6 June 2027 300,000 66,123 233,877
Warehouse Facility 7 October 2027 250,000 29,263 220,737
Retained Interest Facility Various 500,000 317,664 182,336
Bridge Loan Facility June 2027 600,000 - 600,000
$ 2,385,300 $ 422,624 $ 1,962,676
Refer to "Note 6-Debt" in the Condensed Consolidated Financial Statements for further details on our Warehouse Facilities, and borrowing capacity.
Other than as noted above, our warehouse credit facilities bear floating interest rates, are payable on a monthly basis, and contain certain financial covenants, such as minimum tangible net worth, minimum liquidity, maximum leverage ratios, required range of net income or loss during specified periods, and periodic financial reporting requirements. Failure to comply with these covenants may result in an acceleration of payment on outstanding principal and accrued interest. As of June 30, 2026 and December 31, 2025, we were in compliance with the applicable covenants under each of our warehouse credit facilities. Our future capital requirements will depend on many factors, including, but not limited to, our continued access to debt facilities on terms that are favorable to us, our growth, our ability to attract and retain customers, the continuing market acceptance of our offerings, the timing and extent of spending to support our efforts to develop our platform and the expansion of sales and marketing activities. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. From time to time, we may explore additional financing sources and means to lower our cost of capital, which could include equity, equity-linked, and debt financing. We cannot assure you that any additional financing will be available to us on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted.
Pending Acquisition and Related Financing Activities
On June 10, 2026, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), to acquire Kiavi.
Concurrently with the execution of the Merger Agreement, we entered into a commitment letter with Bank of America, N.A., BofA Securities, Inc. and Barclays Bank PLC, pursuant to which Bank of America, N.A. and Barclays Bank PLC committed, subject to the satisfaction of customary conditions, to provide us with a 364-day bridge loan facility in an aggregate principal amount not to exceed $600.0 million. As of June 30, 2026, there were no outstanding borrowings under the Bridge Loan Facility.
On July 14, 2026, we closed on a private offering of $600.0 million principal amount of 8.500% Senior Notes due 2031. The net proceeds from the offering were $586.5 million. Concurrently with, and as a result of the issuance of the Senior Notes, the Company terminated the Bridge Loan Facility effective July 14, 2026. If the Kiavi acquisition does not close, the proceeds from the Notes will be used for general corporate purposes. Interest payments for the Notes are due semi-annually in arrears on January 31 and July 31 of each year, beginning on January 31, 2027. The Notes will mature on July 31, 2031, unless earlier repurchased or redeemed.
Refer to "Note 10-Commitments and Contingencies" for more information regarding the proposed acquisition of Kiavi and "Note 14-Subsequent Events" in the Condensed Consolidated Financial Statements for further details on the Senior Note issuance.
Cash Flows
The following table summarizes our consolidated cash flows for the periods indicated:
Six Months Ended June 30,
(In thousands)
2026 2025
Net cash (used in) provided by operating activities $ (72,969) $ 76,089
Net cash used in investing activities (75,261) (29,680)
Net cash provided by financing activities 414,850 50,720
Net Cash from Operating Activities
Net cash used in operating activities was $73.0 million for the six months ended June 30, 2026, which consisted of negative working capital adjustments of $114.0 million and non-cash adjustments of $91.4 million, partially offset by net income of $132.5 million. The working capital adjustments were driven by originations of loans held for sale of $2.7 billion and purchases of loans held for sale of $2.4 billion, partially offset by proceeds from loan sales, net of repurchases of $4.6 billion and principal payments on loans held for sale of $389.0 million. Additionally, working capital adjustments were negatively impacted by changes in accounts receivable of $37.9 million, partially offset by positive impacts from accounts payable and other liabilities of $42.0 million. The non-cash adjustments were primarily driven by gain on sale of loans, net, of $106.9 million, gains on servicing assets, net, of $42.0 million, partially offset by $52.0 million in stock based compensation, net.
Net cash provided by operating activities was $76.1 million for the six months ended June 30, 2025, which consisted of net income of $29.4 million, working capital adjustments of $91.0 million, partially offset by non-cash adjustments of $44.3 million. The working capital adjustments were driven by proceeds from loan sales, net of repurchases of $2.7 billion and principal payments on loans held for sale of $209.5 million, partially offset by originations of loans held for sale of $1.5 billion and purchases of loans held for sale of $1.3 billion. The non-cash adjustments were primarily driven by gain on sale of loans, net, of $66.1 million, and gains on servicing assets, net, of $2.2 million, which were offset by non-cash add backs of $8.1 million in amortization of internally developed software, services exchanged for the issuance of warrants of $5.4 million, $5.3 million in stock based compensation, and losses on repurchased loans of $3.7 million.
Net Cash from Investing Activities
Net cash used in investing activities was $75.3 million for the six months ended June 30, 2026, primarily due to $128.0 million in purchases of marketable securities, $13.0 million in partner prefunding, $12.7 million in capitalization of internally developed software, and $11.7 million related to the deconsolidation of a subsidiary, partially offset by $44.0 million of partner prefunding repayments, $36.6 million of principal payments on marketable securities, and $7.3 million of realized gains on futures.
Net cash used in investing activities was $29.7 million for the six months ended June 30, 2025, primarily due to $36.2 million in purchases of marketable securities, $9.9 million in capitalization of internally developed software costs and $2.2 million in purchases of digital assets, partially offset by $19.1 million of principal payments on marketable securities and $3.1 million of proceeds from digital asset sales.
Net Cash from Financing Activities
Net cash provided by financing activities was $414.9 million for the six months ended June 30, 2026, during which we received total proceeds from debt of $4.9 billion, partially offset by $4.6 billion related to total principal payments on debt. Additionally, financing activities were impacted by $121.5 million in proceeds from servicing activity on behalf of third-party loan owners and $23.8 million in proceeds from stock option exercises, partially offset by $18.1 million in taxes paid related to net share settlement of equity awards and $9.7 million in common stock repurchases.
Net cash provided by financing activities was $50.7 million for the six months ended June 30, 2025, during which we received proceeds from debt of $2.5 billion, partially offset by $2.5 billion related to principal payments on debt. Additionally, financing activities were impacted by $67.9 million in proceeds from servicing activity on behalf of third-party loan owners.
Other Changes in Financial Position
Noncontrolling interest in consolidated subsidiaries was $27 thousand at June 30, 2026, a decrease of $8.4 million from December 31, 2025, primarily due to the deconsolidation of Figure REIT, Inc. in March 2026. For further information on
the deconsolidation, see "Note 7-Equity-Noncontrolling Interests in Consolidated Subsidiaries", in the Condensed Consolidated Financial Statements.
Other Factors Affecting Liquidity and Capital Resources
Operating Lease Obligations
Our operating lease obligations consist of our lease of real property from third parties under noncancellable operating leases, including the lease of its current office spaces. Operating lease expense for our office space was $0.7 million and $1.3 million for the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.3 million for the three and six months ended June 30, 2025, respectively. Our office leases are scheduled to expire between 2026 and 2031.
Available Liquidity and Capital Resources
As of June 30, 2026, our cash, cash equivalents, and restricted cash was $1.5 billion, which included $487.5 million of cash held for the benefit of third parties. As of December 31, 2025, our cash, cash equivalents, and restricted cash was $1.3 billion, which included $364.9 million of cash held for the benefit of third parties. The restricted cash held by us primarily relates to cash held by us on behalf of third-party loan sellers or buyers that represent collection of principal and interest from loan borrowers that we remit to those third parties as servicer of those loans.
Issuer Purchases of Equity Securities
In connection with Figure's secondary public offering in February 2026, the Company utilized approximately $10 million of cash on hand to repurchase 312,500 shares of its Class A common stock from the underwriters at the public offering price of $32.00 (the "Share Repurchase"). The shares acquired in the Share Repurchase are held in treasury. The completion of this transaction resulted in an approximately $10 million reduction in cash and cash equivalents and a corresponding increase in treasury stock, with no net impact on the total number of common shares outstanding.
On February 25, 2026, the Company's Board of Directors authorized a Share Repurchase Program under which the Company may repurchase up to $200 million of its Class A common stock and Blockchain common stock over the next 12 months subject to market conditions, contractual restrictions and other factors.
Repurchases under the Share Repurchase Program may be made from time to time in the open market, through privately negotiated transactions, accelerated share repurchase transactions, or by other means in accordance with applicable securities laws and regulations. The timing, number of shares repurchased, and prices paid will depend on market conditions, share price, trading volume, corporate considerations, and other factors. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization.

This Share Repurchase Program does not obligate the Company to acquire any particular amount of stock and the program may be extended, modified, suspended or discontinued at any time at the Company's discretion.
As of June 30, 2026, Figure repurchased no shares and has $200.0 million remaining authorized under the repurchase program.
Non-GAAP Financial Measures
In order to better help understand our financial performance, we use several key performance metrics that should be viewed independently of GAAP items, as these metrics are not intended to be combined with those items. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP.
Adjusted Net Revenue
Adjusted Net Revenue is a non-GAAP financial measure used by our management to evaluate operating performance. Accordingly, we believe this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, Adjusted Net Revenue provides a useful measure for period-to-period comparisons of our business, as it removes the effect of a non-cash, non-realized adjustment that is included in net revenue. Adjusted Net Revenue is defined as net revenue excluding the change in
fair value of MSR and change in fair value of marketable securities associated with changes in our estimates that management has determined are not reflective of our operating performance, and net of interest paid to holders of YLDS.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures used by our management to evaluate operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, these measures provide useful information for period-to-period comparisons of our business, as it removes the effect of certain non-cash items, variable charges, non-recurring items, unrealized gains or losses or other similar non-cash items that are included in net income or expenses associated with the early stages of the business that are expected to ultimately terminate, pursuant to the terms of certain existing contractual arrangements or expected to continue at levels materially below the historical level, or that otherwise do not contribute directly to management's evaluation of its operating results. Adjusted EBITDA is defined as net income excluding interest expense incurred in connection with our debt obligations other than debt associated with our funding of loans held for sale, income taxes, amortization and depreciation expense, stock-based compensation expense, non-cash changes in certain financial instruments, and other items that management has determined are not reflective of our ongoing operating performance. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by adjusted net revenue. The most directly comparable GAAP measure is net income margin (calculated as net income divided by total net revenue).
The Company added valuation changes in the fair value of marketable securities and YLDS funding costs to its definition of Adjusted Net Revenue, and valuation changes in the fair value of marketable securities, to its definition of Adjusted EBITDA effective March 31, 2026. Additionally, the Company added acquisition-related costs to its definition of Adjusted EBITDA effective June 30, 2026.
Management excludes period-to-period changes in the fair value of marketable securities from Adjusted Net Revenue and Adjusted EBITDA because they reflect non-cash, unrealized mark-to-market fluctuations driven by external market factors, including changes in discount rates, prepayment speeds, and credit spreads, that are not reflective of the Company's underlying operating performance.
The Company's economic benefit from YLDS is the 35 basis point spread it retains on outstanding balances, regardless of the total amount of YLDS in circulation. Management therefore presents YLDS-related interest expense net of associated interest income within Adjusted Net Revenue, as it believes this net spread is the most meaningful measure of the YLDS's contribution to operating performance.
The following table presents a reconciliation of net revenue to adjusted net revenue, net income to adjusted EBITDA, and net income margin to adjusted EBITDA margin for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, Six Months Ended June 30,
(In thousands)
2026 2025 2026 2025
Total net revenue $ 225,588 $ 106,077 $ 392,595 $ 190,587
Adjusted for:
Valuation changes in fair value of MSRs (8,395) 5,848 (9,579) 10,551
Valuation changes in fair value of marketable securities(A)
2,195 - 4,663 (2,231)
YLDS funding costs(A)
(943) (30) (2,391) (30)
Adjusted net revenue $ 218,445 $ 111,895 $ 385,288 $ 198,877
Net income $ 87,436 $ 29,994 $ 132,483 $ 29,381
Adjusted for:
Valuation changes in fair value of MSRs (8,395) 5,848 (9,579) 10,551
Valuation changes in fair value of marketable securities(A)
2,195 - 4,663 (2,231)
Change in fair value of digital assets and related investments 1,068 (2,671) 5,851 7,291
Services exchanged for issuance of warrants - 2,477 - 5,404
Registration costs 842 328 3,160 1,847
Acquisition-related costs (A)
4,676 - 4,676 -
Restructuring costs 2 2,225 28 2,983
Stock-based compensation expense 26,098 2,847 51,976 5,261
Amortization of internally developed software costs 4,352 4,134 8,981 8,077
Non-funding interest expense 5,553 4,327 11,146 8,059
Income tax (benefit) provision (4,448) 3,357 (11,393) 4,587
Adjusted EBITDA $ 119,379 $ 52,866 $ 201,992 $ 81,210
Net income margin 38.8 % 28.3 % 33.7 % 15.4 %
Adjusted EBITDA margin 54.6 % 47.2 % 52.4 % 40.8 %
(A) The Company added valuation changes in the fair value of marketable securities and YLDS funding costs to its definition of Adjusted Net Revenue, and valuation changes in the fair value of marketable securities to its definition of Adjusted EBITDA effective March 31, 2026. Additionally, the Company added acquisition-related costs to the definition of Adjusted EBITDA effective June 30, 2026. These adjustments have been applied retrospectively to all periods presented.
Critical Accounting Estimates
Our Condensed Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our Condensed Consolidated Financial Statements. We evaluate our estimates and assumptions on an ongoing basis. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. Our significant accounting policies are described in Item 8, "Financial Statements and Supplementary Data," and "Note 2-Summary of Significant Accounting Policies," in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates during the three and six months ended June 30, 2026, as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
Recent Accounting Pronouncements
See "Note 2-Summary of Significant Accounting Policies" to our Condensed Consolidated Financial Statements for recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position.
Figure Technology Solutions Inc. published this content on August 14, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 14, 2026 at 18:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]