Figure Technology Solutions (NASDAQ:FIGR) reported a 135% increase in third-quarter loan marketplace volume and expanded its share repurchase authorization to $400 million as its acquisition of Kiavi added new lending products to the platform.
The company processed $5.8 billion in marketplace volume during the quarter, including approximately $670 million from Kiavi after the acquisition closed on Sept. 1. Excluding Kiavi, volume was $5.1 billion, up 107% from a year earlier and toward the upper half of Figure’s previous guidance range.
Net income was $89 million, compared with $90 million a year earlier, when results included a $31 million one-time tax benefit. Adjusted EBITDA rose 91% to $164 million, and the adjusted EBITDA margin expanded to 58% from 55%.
Chief Executive Officer Michael Tannenbaum said the company would begin buying shares under the expanded authorization the day after the call. Figure had previously approved a $200 million plan but had not implemented it in the open market, he said.
Kiavi Adds Lending Products
Kiavi gives Figure access to residential transition loans, which finance professional investors who renovate properties, and debt service coverage ratio loans for rental-property owners. Tannenbaum estimated that the two products represent an addressable market of more than $200 billion.
Kiavi’s residential transition loan volume was approximately $600 million in September, while its debt service coverage ratio loan volume was about $60 million, he said. Figure plans to make Kiavi’s technology available to its existing and new partners.
As part of the transaction, Sixth Street bought the Kiavi balance sheet and became an originator of the assets, while Figure provides the platform. Sixth Street also committed to a forward flow arrangement and to using Figure’s marketplace, securitization shelf and Prime platform for the loans, Tannenbaum said.
Figure has onboarded 12 existing partners to Kiavi products and has more than 30 in the pipeline, according to Tannenbaum. Chief Financial Officer Macrina Kgil said the company had actioned $30 million of its $35 million run-rate cost synergy target at closing, with the remainder expected to be actioned over the following 12 months.
Fourth-Quarter Outlook and Margins
Figure forecast fourth-quarter marketplace volume of $6.2 billion to $6.7 billion, including a full quarter of Kiavi, and a combined gross take rate of 3.1% to 3.4%. Kgil said the company typically experiences a 10% to 15% sequential decline in volume from the third quarter to the fourth because of seasonal patterns in its lending products.
Kgil cautioned that seasonality and the first full quarter of Kiavi expenses would weigh on adjusted EBITDA margin. Figure expects $18 million to $23 million in incremental adjusted expenses in the fourth quarter compared with the third quarter, which included one month of Kiavi overhead. Kiavi had operated at or below a 40% adjusted EBITDA margin before the acquisition, she said.
Figure expects margins to improve in 2027 as seasonal pressures ease and revenue synergies and operating leverage develop. Its medium-term adjusted EBITDA margin target remains 60%.
The company is shifting its disclosures toward gross take rate and contribution margin as more activity moves through its capital-light Figure Connect platform. Connect accounted for 74% of total volume, including Kiavi, up from 46% a year earlier. Ecosystem and technology fees represented roughly 40% of revenue and more than tripled from a year earlier, Kgil said.
For the next six to 12 months, Figure expects gross take rates of 1.5% to 2% on shorter-duration residential transition loans and 2.9% to 3.4% on Connect home equity lines of credit. Kgil said Figure would provide more contribution-margin detail on its next earnings call.
Partners and Capital Markets
Figure ended the quarter with 612 standalone partners, or 894 including Kiavi’s broker partners. Tannenbaum said partners that were on the platform a year earlier generated more than 40% additional volume in the latest quarter.
The company processed $2.7 billion of loan sales and completed eight securitizations during the quarter. It also added AAA buyers including New York Life and Nationwide Insurance, Tannenbaum said. He said Figure and its partners can evaluate both whole-loan sales and securitizations when deciding how to place loans with investors.
Figure’s cash and cash equivalents stood at $1.59 billion after the Kiavi acquisition. Kgil said the company raised $600 million of rated unsecured debt during the quarter and was closing a $465 million revolving credit facility during the month of the call.
Blockchain and New Technology
Executive Chairman and Co-Founder Mike Cagney discussed Navra, a separate company he recently launched to address institutional barriers to using blockchain wallets. Cagney said Figure owns 10% of Navra and could benefit if the venture brings more capital on-chain to finance Figure loans. He said he remains full-time at Figure.
Figure is also rolling out a loan officer assistant developed with Sierra. Tannenbaum said the tool had produced a 29% increase in funded dollars per loan approval and had been involved in roughly $260 million of funded loans in its first few months. The assistant is live with wholesale lending partners, with a broader partner rollout expected shortly, he said.
About Figure Technology Solutions (NASDAQ:FIGR)
Figure Technology Solutions is a financial technology company that develops blockchain-based platforms for lending and capital markets. Its technology is designed to digitize and streamline financial transactions, including loan origination and the trading of financial assets. The company’s offerings include home equity financing and technology for financial institutions and other lending partners. Figure also operates digital marketplaces and provides services supporting the issuance and transfer of assets on the Provenance Blockchain.
