Figure Technology Solutions, Inc. Class A Common Stock Q4 FY2025 earnings call

• Focus on scaling marketplace through FigureConnect, with over half of consumer loan marketplace volume transacted through Connect in Q4.
• Product expansion into mortgage adjacent verticals, including adding third-party auto finance assets via partnership with Agora Data, SMB loans, and growth in First Lean mortgages.
• Blockchain ecosystem expansion, with Democratize Prime showing nearly 10x quarter-over-quarter growth, yields showing significant adoption, and launch of Open, a blockchain native share class.
• AI integration in customer service, property title review, and underwriting workflows to fuel growth and reduce costs.

Consumer loan marketplace volume reached $2.7 billion in Q4, up 131% year-over-year. Adjusted net revenue was $158 million, up 106% year-over-year. Gap net income was $15 million with a margin of 9.4%. Adjusted EBITDA was $81.3 million, up ~426% year-over-year. Democratize Prime ended the quarter with a balance of $206 million and yield ended at $328 million. First Lean represents ~19% of originations, up from 12% a year ago.

• Near to medium-term net take rate range expected to be between 3.5% to 4%, taking into account product mix, marketplace participation, and capital market conditions.
• Medium-term goal for adjusted EBITDA margin is above 60%.
• Board authorized a $200 million share repurchase program reflecting confidence in the long-term opportunity.

A recent security incident involving a phishing attack affecting loan inquiry records and limited customer accounts. However, the incident is not expected to have a material impact on financial results. Forward-looking statements involve substantial risks and uncertainties due to factors beyond the company's control.

Q: About the Agora partnership, frame the opportunity and upside?

A: Agora partnership offers entrance into massive auto finance sector, opportunity for democratized prime and Figure Connect upsell, massive opportunity across capital light products.

Q: On loan origination partner ads, where from and leading indicator of volume growth?

A: Primary motions include license approach (independent mortgage banks, depositories) and non-licensed approach (SMB channel, fintech, real estate), indicative of strong volume growth in 2026.

Q: On Agora partnership monetization, specifics?

A: Pure margin, 50 bps estimate for democratized prime fees, anticipate upside, Figure Connect impact and securitization sponsor fee consideration, net take rate range accounts for auto loan types.

Q: On take rate change, structural change?

A: Product mix change with addition of auto and first lean products causing take rate range shift, larger first lien loans have different take rate dynamics but higher profit dollars due to same unit costs.

Q: On ramp up of new originating partners, time to scale?

A: Roughly 3 months for core first and second lien HELOC, new products and upsell contribute to go-to-market motion.

Q: On seasonality in first quarter and securitization process?

A: Seasonality in November-February, securitization for HELOCs had AAA rating helping gain on sale premium, newer products take months to gather size for securitization, auto product sold through whole loans, securitization fee-based process.

Q: On private credit and crypto-backed loans?

A: No change in demand for Figure loans, private credit jitters on commercial loans not affecting, crypto-backed loans have zero losses with easy liquidation due to Bitcoin market.