S-1/A: Figure Tech Solutions IPO: Blockchain-Powered Finance

Figure Technology Solutions, Inc. files for an IPO to offer 26.6M Class A shares, aiming to expand its profitable blockchain-based lending and digital asset marketplaces.

Summary

• Figure Technology Solutions, Inc. (FTS) is pursuing an Initial Public Offering (IPO) of its Class A common stock, with an estimated price range of $20.00 to $22.00 per share.
• The company is offering 26,645,296 shares of Class A common stock, and selling stockholders are offering an additional 4,854,704 shares. Underwriters have an option to purchase up to 4,725,000 more Class A shares from the company.
• FTS will list its Class A common stock on the Nasdaq Stock Market under the symbol "FIGR".
• The company operates a dual-class common stock structure, with Class A shares having one vote and Class B shares having ten votes. Co-founder Michael Cagney and his permitted transferees will hold approximately 68.6% of the total voting power post-offering, making FTS a controlled company.
• FTS leverages proprietary blockchain-based technology for next-generation lending, trading, and investing in consumer credit and digital assets.
• The company reported net income of $29 million and Adjusted EBITDA of $83 million for the six months ended June 30, 2025.
• For the year ended December 31, 2024, FTS achieved net income of $20 million and Adjusted EBITDA of $101 million.
• The company's Loan Origination System (LOS) has reduced the median time to fund a home equity loan to 10 days (from an industry median of 42 days) and lowered the average production cost per loan to $730 (from an industry average of $11,230 in Q4 2024).
• Figure Connect, a blockchain-powered electronic marketplace launched in June 2024, transacted approximately $1.3 billion in HELOC volume by third parties within its first 12 months.
• The DART platform, a lien and eNote registry built on Provenance Blockchain, was utilized by 80% of loans originated through the LOS for the six months ended June 30, 2025, up from 2% in 2024.
• Figure Exchange, a digital asset marketplace launched in August 2024, has facilitated over $1 billion in trading volume without significant marketing efforts.
• YLDS, an SEC-registered interest-bearing stablecoin, was launched in February 2025 and had approximately $4 million outstanding as of June 30, 2025.
• FTS holds over 180 lending and servicing licenses, 48 money transmitter licenses, and is an SEC-registered broker-dealer with ATS authority.

Sentiment

Score: 8

Explanation: Figure Technology Solutions demonstrates strong financial growth, achieving profitability in recent periods, and significant adoption of its innovative blockchain-based financial technology platforms. Its market positioning in consumer lending and digital assets, coupled with a robust regulatory framework, indicates substantial future potential. While inherent risks associated with a rapidly evolving industry, reliance on key products, and the challenges of being a public company warrant a balanced but optimistic outlook.

Positives

• Achieved profitability with net income of $29 million and Adjusted EBITDA of $83 million for the six months ended June 30, 2025, reversing a net loss of $13 million in the prior year period.
• Significantly reduced median home equity loan funding time to 10 days, compared to an industry median of approximately 42 days.
• Lowered average production cost per loan to approximately $730 for 2024, a substantial reduction from the mortgage industry average of $11,230.
• Figure Connect marketplace rapidly scaled, transacting approximately $1.3 billion in HELOC volume by third parties within its first 12 months of launch.
• DART platform adoption for loan originations increased dramatically from 2% in 2024 to 80% in the first half of 2025, indicating strong internal integration and efficiency gains.
• Figure Exchange facilitated over $1 billion in trading volume since its August 2024 launch without meaningful marketing efforts, demonstrating strong product-market fit.
• YLDS, an SEC-registered interest-bearing stablecoin, offers a unique and compliant value proposition in the stablecoin market, which is largely non-yielding.
• Established a robust regulatory and licensing apparatus, including over 180 lending and servicing licenses, 48 money transmitter licenses, and SEC-registered broker-dealer/ATS authority, providing a competitive moat.
• Maintained high partner retention (93% of 2023 partners in 2024) and experienced 185% net volume retention in 2024, indicating strong partner satisfaction and growth.
• Figure's originated loans exhibit low loss rates of less than 1% of volume as of June 30, 2025, significantly better than the 6% typically assumed by rating agencies for similar securitizations.
• Reduced third-party review expenses for securitizations by as much as 80% due to standardized, blockchain-based processes.
• Formed a joint venture, Fig SIX Mortgage LLC, with Sixth Street Partners to enhance liquidity for HELOC loans on Figure Connect, backed by a total commitment of $210.5 million.
• The modular technology stack is designed for expansion across various asset classes, enabling future growth beyond current offerings.
• Led by an experienced management team with a track record of innovation in financial services and technology.

Negatives

• The company has a history of net losses and may not maintain profitability in the future as it invests in growth and public company operations.
• Substantially all revenue is currently derived from the HELOC product, making the company highly susceptible to fluctuations in the HELOC market.
• There is significant partner concentration, with the top 10 partners contributing 57% of origination volume in H1 2025 and 52% in FY 2024, posing a risk if these relationships deteriorate.
• Reliance on third-party vendors for critical services and data introduces risks if these vendors fail, provide inaccurate data, or experience disruptions.
• The business is significantly impacted by interest rates, which can adversely affect loan demand, the fair value of loans, and servicing rights.
• Digital assets-secured personal loans are exposed to the high volatility of digital asset markets, potentially leading to margin calls, borrower defaults, and financial losses.
• The use of remote online notaries, automated valuation models (AVMs), and digital lien data in the Loan Origination System (LOS) may expose the company to greater risk of loss if these methods are legally challenged or found ineffective.
• The adoption and growth of blockchain technology in primary and secondary loan markets are still in early stages, and slower-than-expected acceptance could adversely affect the business.
• The digital asset industry is highly innovative, rapidly evolving, and intensely competitive, with new entrants and technologies potentially rendering current products obsolete.
• Negative publicity or unfavorable media coverage, even if inaccurate, could harm the company's reputation and reduce platform usage.
• The company's success depends on retaining key management and attracting qualified personnel, which is challenging in a competitive talent market.
• Operations are exposed to risks from natural disasters, power outages, telecommunications failures, public health crises, war, terrorism, and cyberattacks.
• The company may need additional capital in the future, and there is no assurance that financing will be available on favorable terms or at all.
• Growing through future acquisitions or strategic investments may be difficult due to competition, integration challenges, and regulatory risks.
• A significant portion of Figure Exchange's trading volume is concentrated among a small number of institutional customers (top seven accounted for 95% in H1 2025).
• Revenue from Figure Exchange is concentrated in Bitcoin, Ether, and HASH, making it vulnerable to price declines in these specific digital assets.
• Reliance on third-party custodial service providers for digital asset collateral presents risks of loss due to operational or cybersecurity failures.
• Vulnerabilities in smart contracts or shifts in their fundamental acceptance could adversely affect the business.
• Reliance on external financial and tax advisors in a novel industry means advice may be wrong or inaccurate, leading to compliance issues.
• Redemption, pricing, and regulatory risks associated with stablecoins could adversely affect the business.
• Difficulty in obtaining and maintaining banking relationships in the digital asset space could disrupt operations and lead to regulatory non-compliance.
• The dual-class stock structure concentrates voting control with pre-IPO stockholders, limiting the ability of new investors to influence corporate matters and potentially depressing the Class A stock price.
• There has been no prior public market for Class A common stock, and an active trading market may not develop, making it difficult for investors to sell shares.
• The market price of Class A common stock is expected to be volatile.
• Quarterly results are likely to fluctuate due to various factors, making period-to-period comparisons less meaningful.
• As an emerging growth company, the company may utilize reduced disclosure requirements, which could make its Class A common stock less attractive to some investors.
• Identified material weaknesses in internal control over financial reporting as of December 31, 2024, which could impair accurate financial reporting.
• The Recombination may be subject to challenge under federal and state fraudulent transfer laws and Nevada corporate law.
• Difficulties in reintegrating FMH operations or realizing expected benefits from the Recombination could adversely affect financial performance.
• The Recombination may implicate notice and approval requirements from regulators that the company may not be able to comply with.

Risks

• We have a history of losses, we may not be able to maintain profitability in the future, and there is no assurance that our revenue and business model will be successful.
• If we fail to effectively manage our growth, our business, financial condition, and results of operations could be adversely affected.
• Our revenue growth rate and financial performance in prior years may not be indicative of future performance.
• Our limited operating history makes it difficult to evaluate our current business and prospects and may increase the risk of your investment.
• Substantially all of our revenue is derived from our HELOC product, and we are thus particularly susceptible to fluctuations in the HELOC market. Our current product offerings may also not be sufficiently broad to attract and retain partners.
• Our success and ability to develop our lending business depend on retaining and expanding our reach through both our Figure-branded and Partner-branded strategies. If we or our partners fail to add new customers, our business, financial condition, and results of operations could be adversely affected.
• We have significant partner concentration, with a limited number of partners accounting for a substantial portion of our loan originations.
• Our growth depends, in part, on the success of our strategic relationships to attract potential customers for our HELOC products on other products, and our ability to grow our business depends on our ability to continue these relationships.
• If we do not compete effectively in our target markets, our business, financial condition, and results of operations could be adversely affected.
• We expect to introduce and develop new products and services, and if these products or services are not successful or we are unable to manage the related risks, our business, financial condition, and results of operations could be adversely affected.
• If we cannot keep pace with rapid digital asset industry changes to provide new and innovative products and services, the use of our products and services, and consequently our net revenue, could decline, which could adversely impact our business, financial condition, and results of operations.
• Negative publicity and unfavorable media coverage could adversely affect our business, financial condition, and results of operations.
• We rely on our management team and will require additional key personnel to grow our business, and the loss of key management members or key employees, or an inability to hire key personnel, could adversely affect our business, financial condition, and results of operations.
• Our business is subject to the risks of natural disasters, power outages, telecommunications failures, public health crises and similar events, and to interruptions by human-made problems such as war, terrorism, cyberattacks and other actions, which may impact the demand for our products or our customers ability to repay their loans.
• The use of blockchain technology in the primary and secondary loan markets is still in relatively early stages of growth, and if these markets do not continue to accept our blockchain-supported platform, or if these markets accept our platform more slowly than we expect, or if the markets for our platform fail to grow as large as we expect, our business, financial condition, and results of operations could be adversely affected.
• The future development and growth of the digital asset market is subject to a variety of factors that are difficult to predict and evaluate. If the digital asset market does not grow as we expect, our business, financial condition, and results of operations could be adversely affected.
• We may need additional capital, and we cannot be certain that additional financing will be available on favorable terms, or at all.
• To the extent that we seek to grow through future acquisitions or other strategic investments or alliances, we may not be able to do so effectively.
• If loans originated by us or through our platform and purchased by us do not perform, or significantly underperform, we may incur financial losses on the loans we hold on our balance sheet, which could adversely affect our business, financial condition, and results of operations, as well as result in the loss of confidence of our funding sources.
• Increases in borrower default rates on loans could make us and our loans less attractive to loan purchasers, lenders under warehouse credit facilities and investors in securitizations, which may adversely affect our access to financing and our business, financial condition, and results of operations.
• Our HELOCs and other loans we make, such as digital assets-secured personal loans, are subject to federal, state and local laws that regulate various aspects of lending, including disclosures, interest rates and other charges, and if we exceed applicable limitations on interest, loan charges, and other fees or fail to provide required disclosures, our business, financial condition, and results of operations could be significantly adversely affected, including but not limited to, through litigation (including damages), investigation, enforcement and other regulatory and legal action and penalties.
• If a court or regulator determines that our HELOCs cannot be characterized as a fixed-rate extension of open-end credit under the Truth in Lending Act (TILA) or state law, we would be subject to the more prescriptive closed-end mortgage laws and rules, as well as laws and rules applicable to variable-rate HELOCs, which would have a material adverse effect on our business, financial condition, and results of operations.
• Borrowers may prepay a loan at any time without penalty, which could reduce our servicing fees and deter our partners and loan purchasers from investing in our loans.
• The management and security of digital assets collateral presents risk of potential loss of the collateral and attendant legal and reputational consequences.
• Declines in the value of the collateral for our digital assets-secured loans can lead to margin calls, affecting borrowers ability to manage their loans, exposes us to the financial, legal, and reputational risks associated with potential system failures, data inaccuracies, and cybersecurity threats, and potentially leading to financial losses for us.
• Our loan underwriting processes rely on automation and on data from third-party vendors, and, if that data is inaccurate or if the technology supporting that automation fails or is deployed incorrectly, our business may suffer losses due to poor loan performance or loss of customers or loan purchasers on the secondary market.
• If we do not make accurate credit and pricing decisions or effectively forecast our loss rates, our business, financial condition, and results of operations could be adversely affected.
• We rely upon the accuracy and completeness of information about borrowers, and any misrepresented information or fraud could adversely affect our financial condition and reputation.
• While we take precautions to prevent borrower identity fraud, our borrowers have been, and may again be, subject to identity fraud, which may adversely affect the performance of the loans facilitated through our platform.
• Our underwriting may not accurately predict the likelihood of default for all loans, which could result in substantial losses that adversely affect our business, financial condition, and results of operations.
• The unique features of our LOS, including reliance on online notaries, AVMs, and lien data may expose us to a greater risk of loss, which could harm our partners and investor relationships and our business, financial condition, and results of operations.
• We primarily utilize a gain-on-sale origination model and, consequently, our business is affected by the cost and availability of funding in the capital markets.
• We rely on our warehouse credit facilities to fund loans, including HELOCs, and otherwise operate our business. If one or more of such facilities is terminated or otherwise becomes unavailable for us to use, we may be unable to find replacement financing at commercially favorable terms, or at all, which could adversely affect our business.
• Our securitizations, whole loan sales, and warehouse credit facilities expose us to certain risks, and we can provide no assurance that we will be able to access the securitization markets, continue our whole loan sales, renew our existing warehouse credit facilities, or obtain new warehouse credit facilities in the future. This may result in a reduction in our HELOC funding capital or require us to seek more costly financing for our platform.
• In connection with our loan funding programs, we make representations and warranties concerning the loans sold, and if such representations and warranties are not accurate when made, we could be required to repurchase the applicable loans or indemnify the purchaser.
• We sell a significant percentage of our loans to a concentrated number of loan purchasers on the secondary market, and the loss of one or more significant purchasers could adversely affect our business, financial condition, and results of operations.
• Our counterparties may terminate our servicing rights pursuant to servicing agreements under which we conduct servicing activities.
• Failure of vendors to perform their contractual agreements embedded in our products and services and our failure to effectively oversee vendor operations could adversely affect our business, financial condition, and results of operations.
• Our business is significantly impacted by interest rates. Changes in prevailing interest rates or U.S. monetary policies that affect interest rates could adversely affect our business, financial condition, and results of operations.
• Our business, financial condition, and results of operations could be adversely affected by the financial markets, digital asset markets, fiscal, monetary, and regulatory policies, and economic conditions generally.
• Figure Exchange's results of operations have and will fluctuate, including due to the highly volatile nature of digital assets.
• Our loan financing and selling strategy exposes us to interest rate volatility risk.
• Technology disruptions or failures in, and cyberattacks or other breaches or incidents relating to, our operational, security or fraud-detection systems or infrastructure, or those of third parties with whom we do business, could disrupt our business, cause legal or reputational harm, and adversely affect our business, financial condition, and results of operations.
• The collection, processing, use, storage, sharing, disclosure, and transmission of personal information could give rise to liabilities as a result of federal, state and international laws and regulations, as well as our failure to adhere to the privacy and data security practices that we articulate to our customers.
• Any significant system interruption or delays could result in a potential loss of customers and adversely affect us and our ability to provide services, which could adversely affect our business, financial condition, and results of operations.
• If our technology suffers from errors or attacks, our business operations could be negatively affected, which may have an adverse effect on our business, financial condition, and results of operations.
• Our use of blockchain technology, artificial intelligence, machine learning and other similar tools could adversely affect our products and services, harm our reputation, or cause us to incur liability resulting from harm to individuals or violation of laws and regulations or contracts to which we are a party.
• Our business, financial condition, and results of operations could be adversely affected if we fail to adequately maintain, protect and enforce our intellectual property and proprietary rights or face allegations that our product offerings or conduct infringes on the intellectual property rights of third parties.
• One or more of our competitors, or other third parties, may obtain patents or other protections covering technology competitive with or critical to the operation of our products, services, and technology.
• Our software contains third-party open source software components, which could subject our proprietary software to general release, restrict our ability to sell our products and subject us to possible litigation, claims or proceedings.
• We are subject to or facilitate compliance with a variety of federal, state, and local laws, including those related to lending and mortgages, money transmission, consumer protection and loan financings.
• Our marketing practices involving relationships with third parties may expose us to risks of alleged Real Estate Settlement Procedures Act (RESPA) violations.
• Our acceptance of various payment methods exposes us to evolving rules, regulations, and compliance requirements. Non-compliance may adversely affect our business, financial condition and results of operations.
• Our failure to comply with financial services regulatory obligations could damage our reputation, result in regulatory action against us, and adversely affect our business.
• If we were deemed to be an investment company under the Investment Company Act, applicable restrictions could make it impractical for us to continue our businesses as contemplated and could have a material adverse effect on our businesses.
• Our business model and structure give rise to certain conflicts of interest, which if not appropriately addressed, could result in violations of fiduciary duties to our clients.
• The digital asset economy is novel. As a result, policymakers are just beginning to consider what a regulatory regime for digital assets would look like and the elements that would serve as the foundation for such a regime. This less developed consideration of digital assets may harm our ability to effectively react to proposed legislation and regulation of digital assets or digital asset platforms adverse to our business.
• Our failure to comply with trade compliance and economic sanctions laws and regulations of the United States and applicable international jurisdictions could materially adversely affect our reputation and results of operations.
• If we do not obtain and maintain the appropriate state licenses, we will not be allowed to produce or service loans or provide other services in some states, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
• Litigation, regulatory actions, and compliance issues could subject us to significant fines, penalties, judgments, remediation costs, negative publicity, changes to our business model, and requirements resulting in increased expenses.
• Our compliance and risk management policies, procedures and techniques may not be sufficient to identify all of the financial, legal, regulatory, and other risks to which we are exposed, and failure to identify and address such risks could adversely affect our business, financial condition, and results of operations.
• Changes in applicable laws and regulations, as well as changes in government enforcement policies and priorities, could materially increase our operating costs and negatively impact our ability to offer certain products or the terms and conditions upon which they are offered, and ability to compete, which could have a material adverse effect on our business, financial condition, and results of operations.
• Our origination and servicing policies and procedures, as well as other policies and procedures covering certain aspects of our business, are subject to examination by our regulators, and the results of these examinations may require substantial financial resources to remediate or make changes to our business practices.
• The regulatory regime governing blockchain technologies is uncertain, and new regulations or policies may alter our business practices with respect to blockchain or could adversely impact our business.
• The characterization of HASH as a security may subject us to operational changes, litigation, and significant liability under applicable securities laws, which could have a material adverse effect on our business, financial condition, and results of operations.
• Our use of Provenance Blockchain subjects us to reputational risk that could adversely affect our business, and the failure to maintain blockchain-related activities in our operations could have a significant adverse effect on our growth, the operational and cost efficiencies anticipated from the use of our platform, and the marketability of our platform.
• Challenges to DART could materially and adversely affect our business, financial condition, and results of operations.
• Regulatory agencies and consumer advocacy groups have been aggressive in asserting claims that the practices of lenders and loan servicers result in a disparate impact on or unfair treatment of protected classes. We could suffer reputational damage and could be fined or otherwise penalized if our practices are found to have a discriminatory effect or to be unfair.
• Certain transactions in digital assets may constitute retail commodity transactions subject to regulation by the CFTC as futures contracts. If digital asset transactions we facilitate are deemed to be such retail commodity transactions, we would be subject to additional regulatory requirements, licenses and approvals, and potentially face regulatory enforcement, civil liability, and significant increased compliance and operational costs.
• Particular digital assets or transactions therein could be deemed commodity interests (e.g., futures, options, swaps) or security-based swaps subject to regulation by the CFTC or SEC, respectively. If a digital asset that we facilitate trading in is deemed a commodity interest or a security-based swap, we would be subject to additional regulatory requirements, registrations and approvals, and potentially face regulatory enforcement, civil liability, and significant increased compliance and operational costs.
• The requirements of being a public company may strain our resources, divert managements attention, and affect our ability to attract and retain qualified board members.
• We have identified material weaknesses in our internal control over financial reporting. If we fail to remedy these material weaknesses, experience additional material weaknesses in the future or otherwise fail to continue to design, implement and maintain effective internal control over financial reporting, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our Class A common stock.
• Changes in tax laws and examinations by tax authorities could have a material adverse effect on our business, financial condition, and results of operations.
• Our ability to use our deferred tax assets to offset future taxable income may be subject to certain limitations, which could adversely affect our result of operations.
• Tax authorities may successfully assert that we should have collected or in the future should collect sales and use, gross receipts, value added, digital services or similar taxes and may successfully impose additional obligations on us, and any such assessments or obligations could adversely affect our business, financial condition, and results of operations.
• Significant changes or developments in U.S. laws or policies, including changes in U.S. trade policies and tariffs and the reaction of other countries thereto, may have a material adverse effect on our business, financial condition, and results of operations.
• If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our business, financial condition, and results of operations could be adversely affected.
• Changes in accounting principles generally accepted in the United States may cause financial reporting fluctuations and could adversely affect our results of operations.
• Failure to comply with anti-bribery, anti-corruption and other similar laws could subject us to penalties and other adverse consequences.
• Figure is required to comply with laws related to anti-money laundering and counter-terrorist financing.
• Federal and state fraudulent transfer laws and Nevada corporate law may permit a court to void the Recombination, which would adversely affect our financial condition and our results of operations.
• We may experience difficulties in reintegrating the operations of FMH back into our business or we may experience challenges in realizing expected benefits of the Recombination.
• We may be subject to notice and approval requirements that are implicated by the Recombination and with which we may not be able to comply with.
• The dual-class structure of our common stock will have the effect of concentrating voting control with those stockholders who held our common stock prior to the completion of this offering, which will limit your ability to affect the outcome of key transactions, including a change in control, and it may depress the trading price of our Class A common stock.
• We do not know whether an active market will develop for our Class A common stock or what the market price of our Class A common stock will be, and, as a result, it may be difficult for you to sell your shares of our Class A common stock.
• Participation in this offering by Duquesne Family Office LLC could reduce the public float for our shares of Class A common stock.
• The market price of our Class A common stock may be volatile, and you could lose all or part of your investment.
• Our quarterly results are likely to fluctuate and as a result may adversely affect the trading price of our Class A common stock.
• If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business, or our market, or if they adversely change their recommendations regarding our Class A common stock, the trading price or trading volume of our Class A common stock could decline.
• We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
• We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors.
• We have elected to take advantage of the controlled company exemption to the corporate governance rules for NASDAQ-listed companies, which could make our Class A common stock less attractive to some investors or otherwise adversely affect our stock price.
• Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress the price of our Class A common stock.
• We do not intend to pay cash dividends on our common stock for the foreseeable future.
• Our amended and restated articles of incorporation and amended and restated bylaws will designate a state or federal court located within the State of Nevada as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
• Nevada law and provisions in our amended and restated articles of incorporation and bylaws might delay, discourage, or prevent a change of control of our company or changes in our management, thereby depressing the market price of our Class A common stock.
• A change of control of our company could result in an assignment of our investment advisory agreements and the termination of the investment management agreement in place with FCC.
• You may be diluted by the future issuance of additional common stock in connection with our equity incentive plans, acquisitions or otherwise.

Future Outlook

The company expects its costs to increase as it grows and operates as a public entity, but aims to systematically expand transaction volume and enter new financial markets by leveraging blockchain technology. It plans to onboard new origination partners, increase engagement with existing ones, and boost on-chain loan production. Future product expansion includes DSCR, personal, and student loans. Figure Connect volume is projected to grow through new loan buyers and the 'Figure Certified' program, targeted for Q4 2025. The company will also drive YLDS adoption and continue to innovate its technology stack, with Digital Asset Cross-Collateralization anticipated by the end of 2025. The HELOC market is expected to remain strong, and the company anticipates a decreasing impact of interest rates on its business over time. R&D costs are expected to increase in absolute terms but decline as a percentage of total revenue.

Management Comments

• "Figure is building the future of capital markets using blockchain-based technology."
• "Our application of the blockchain ledger allows us to better serve our end-customers, improve speed and efficiency, and enhance standardization and liquidity."
• "Our technology significantly reduces complexity and increases speed for market participants across the application, underwriting, funding and subsequent capital markets processes."
• "We believe that we have established a regulatory and licensing apparatus which sets us apart from our competitors and enables us to continue expanding our diverse product offering."
• "We believe that our technology innovation has revolutionized the loan origination process from application through approval to funding."
• "Our LOS ensures a uniform underwriting process that helps generate standardized assets with enhanced transparency around collateral composition."
• "We believe this results in a homogeneous population of loans that are underwritten to consistent, well-defined rules using the same scalable processes and technology."
• "Our aim with Figure Connect is to enhance liquidity for loans originated on our LOS, and we believe the Guarantor Vehicle will significantly advance this goal."
• "We believe that on-chain digital real-world assets continue to represent a greenfield of opportunity of significant scale."
• "Figure has created YLDS to solve this by designing a digitally native blockchain-based stablecoin that is registered as a security with the SEC and offers a yield to token holders, which we believe should result in an uptick in adoption as compared to non-yielding stablecoins."
• "Our vision is to create a one-stop, vertically integrated capital markets trading platform for consumer assets."
• "We firmly believe that developing cutting-edge technology is a core competency that allows for future growth."
• "We believe our highly experienced leadership team and our culture of creativity and innovation give us a long-term, sustainable competitive advantage."
• "We believe the HELOC market will remain strong, as historically high housing values coupled with a historically low sales market have led consumers to search for ways to utilize the untapped equity in their homes."
• "We expect the impact of rates on our business to decrease."

Industry Context

The capital markets infrastructure is currently fragmented, relying on legacy systems and antiquated, manual processes, leading to inefficiencies and limited liquidity. The consumer credit market faces significant friction, with challenging and outdated funding mechanisms. While private credit capital has grown substantially (17% CAGR to $1 trillion by 2023, estimated $3 trillion by 2028), access remains difficult for originators. Blockchain technology is in early stages of real-world adoption, with less than 1% of real-world assets on-chain as of April 2025, presenting a significant growth opportunity. The stablecoin market, projected to reach $5 trillion by 2030, currently sees only 4% of its $275 billion in circulation yielding interest, highlighting a gap Figure aims to fill with YLDS. The consumer lending and digital asset industries are highly competitive and dynamic, with new technologies and entrants. Increased regulatory clarity in digital assets may encourage more traditional financial institutions to enter, intensifying competition. Figure's extensive licensing and compliance efforts aim to differentiate it from less regulated competitors.

Comparison to Industry Standards

• Figure's Loan Origination System (LOS) reduces the median time to fund a home equity loan to 10 days, significantly faster than the industry median of approximately 42 days.
• The average production cost per loan for Figure was approximately $730 for 2024, which is substantially lower than the mortgage industry average of $11,230 for Q4 2024 (Mortgage Bankers Association data).
• Figure's originated loans had loss rates of less than 1% of volume as of June 30, 2025, which is well below the 6% rating agencies typically assume for securitizations of similar loan products.
• Figure achieved the #1 market share in the non-bank HELOC lending market in 2024, as reported by Home Equity Lending News.
• Figure-sponsored securitizations utilize a sample-based review approach (approximately 20% of loans reviewed) for third-party review expenses, reducing costs by as much as 80% compared to a sample of 2025 securitizations that reviewed 100% of their loan pool.
• YLDS, Figure's SEC-registered stablecoin, offers a yield to token holders, differentiating it from most stablecoins in circulation, where only 4% of the $275 billion market yielded interest as of June 30, 2025 (CoinGecko).
• Democratized Prime's loan-to-value thresholds (currently 90%) are reflective of advance rates commonly seen in traditional warehouse financing, serving as a blockchain-based alternative.

Management Changes

Corporate Governance

Legal Proceedings

• The company is or may become involved in various disputes, litigation, arbitration, and regulatory inquiry and investigation matters that arise in the ordinary course of business.
• Management believes there are no known actions or threats that would result in a material adverse effect on the company's financial condition, results of operations, or cash flows.
• The company is subject to inquiries by government entities, though none are currently believed to result in a material adverse effect.

Related Party Transactions

• **Transactions with Figure Technologies, LLC (FT) and Figure Markets Holdings, Inc. (FMH)**:
• Prior to the March 2024 Separation, Figure Lending Corp. (FLC) received $18 million (2024), $55 million (2023), and $70 million (2022) in services from FT and its affiliates.
• Prior to the Separation, FLC provided $3 million (2022) in services to FT and its affiliates.
• Prior to the Separation, FT made capital contributions to FLC of $6 million (2024), $114 million (2023), and $1 million (2022).
• Prior to the Separation, FLC made distributions to FT of $39 million (2024), $301 million (2023), and $142 million (2022).
• The Tax Matters Agreement with FMH was terminated due to the August 29, 2025 Recombination.
• The Transition Services Agreement between FLC and FMH terminated as of December 31, 2024.
• **Transactions with Figure REIT Inc.**:
• FLC sold loans to Figure REIT: $124 million (H1 2025), $99 million (2024), $22 million (2023), and $100 million (2022).
• FLC recorded net gains on these sales: $6 million (H1 2025), $3 million (2024), $0.2 million (2023), and $3 million (2022).
• Figure REIT contributed loans to FLC securitizations: $201 million (H1 2025), $43 million (2024), and $57 million (2023).
• Figure REIT and FL LLC entered into Right of First Refusal agreements on September 13, 2024, and December 20, 2024, for HELOC purchases.
• **Transactions with Figure Markets Credit LLC (FMC LLC)**:
• FL LLC entered into Purchase and Servicing Agreements with FMC LLC on March 1, 2024, for Crypto-Backed Loans.
• FL LLC originated, sold, and serviced Crypto-Backed Loans: $18 million (H1 2025) and $22 million (2024).
• FL LLC entered into a Loan and Security Agreement with FMC LFV LLC on January 2, 2025, to warehouse Crypto-Backed Loans (facility limit $25 million, matured March 28, 2025).
• FLC entered into a Figure Connect Exclusivity and Fee Letter Agreement with FMC LLC on January 2, 2025.
• **Transactions with Provenance Foundation**:
• Ms. Ou, a co-founder and director, serves as the Executive Director of the Provenance Foundation.
• FT entered into a term note with Provenance Foundation, with an outstanding balance of $9.7 million (H1 2025), $9.4 million (2024), $7.3 million (2023), and $4 million (2022). Interest accrued: $0.4 million (H1 2025), $0.8 million (2024), $0.5 million (2023), and $0.2 million (2022). A $0.8 million repayment was made in August 2024.
• Figure Certificate Company (FCC) entered into a Services Agreement with Provenance Foundation in February 2025 for HASH gas fees.
• Under an Expense Reimbursement Agreement (July 12, 2022), Provenance Foundation reimbursed Figure $0.2 million (H1 2025), $18 thousand (2024), $72 thousand (2023), and $118 thousand (2022) for services.
• **Transactions with Reflow Services LLC**:
• Figure holds a 17.3% interest in Reflow, contributed by Mr. Cagney.
• Figure received profit distributions from Reflow: $0.9 million (2024), $0.5 million (2023), and $0.2 million (2022). No distributions in H1 2025.
• Under a shared services agreement, Reflow paid Figure $0.6 million (2024), $0.3 million (2023), and $1 million (2022). No payments in H1 2025.
• **Transactions with SOL Opportunity Fund L.P. (Domestic Solana Fund)**:
• Figure holds a 4.8% interest in the Domestic Solana Fund, which is managed by Figure Investment Advisors, LLC.
• **Transactions with Executive Officers and Directors**:
• Michael Tannenbaum: Employment letter agreement (April 2024) with an initial annual base salary of $375,000 (increased to $450,000 effective April 26, 2025), 100% target annual bonus, and guaranteed quarterly bonuses for the first year. Granted 4,587,350 stock options and 4,587,350 RSUs.
• Macrina Kgil: Offer letter (October 30, 2024) for CFO role effective December 2, 2024, with an annual base salary of $450,000, 33% target quarterly bonus, and a $125,000 sign-on bonus. Granted 675,000 stock options and 675,000 RSUs.
• Todd Stevens: Offer letter (October 27, 2023) for Chief Capital Officer effective November 13, 2023, with an annual base salary of $275,000 (target quarterly bonus increased to 100% of base salary effective April 1, 2025), and 50% target annual bonus. Granted 275,000 stock options. Issued a DSCR loan of $120.7 thousand on May 8, 2025, which was repaid in full on August 15, 2025.
• Michael Cagney: Granted 4,559,904 Class B stock options on March 20, 2024, for transition services. Will receive a Founder Retention Award (options and RSUs equal to 4% of outstanding Class A/B stock) upon IPO completion.
• Travel costs for executive officers and directors, including Mr. Cagney, were $0.4 million (H1 2025), $2 million (2024), $1 million (2023), and $2 million (2022).
• Indemnification agreements are expected to be entered into with each executive officer and director.

Stakeholder Impact

• **Shareholders**: Potential for dilution from future equity issuances. Concentrated voting control by Michael Cagney limits the influence of new investors. The market price of Class A common stock is expected to be volatile. No cash dividends are intended for the foreseeable future. Exclusive forum provisions may limit legal recourse for certain disputes.
• **Employees**: Benefit from equity incentive plans (2018 Plan, FMH Plan, 2025 Plan, ESPP) designed to attract, motivate, and retain talent. Executive officers receive competitive compensation packages, including base salary, bonuses, and equity awards. The Founder Retention Award for Michael Cagney aims to secure key leadership. Employees also have access to health and welfare plans and a 401(k) retirement savings plan.
• **Customers (Borrowers)**: Benefit from faster loan approvals and funding (median 10 days for HELOCs) and lower production costs ($730 per loan). The platform offers automated income verification, AVMs, digital lien matching, and remote closings. HELOCs provide an alternative to personal loans or credit cards. However, customers with digital asset-secured loans face risks from digital asset market volatility.
• **Partners (Mortgage Originators, Servicers, Banks, Credit Unions)**: Gain access to a turnkey Loan Origination System (LOS) with minimal upfront investment, enabling fully automated and end-to-end solutions for their customers. Figure Connect marketplace provides enhanced liquidity and capital markets execution certainty for loan distribution. Partners can deepen relationships with existing customers and expand their target markets. High partner retention and net volume retention indicate strong value proposition.
• **Loan Purchasers and Securitization Investors**: Benefit from enhanced investor reporting and distribution capabilities through the Provenance Blockchain. Access to a marketplace of homogeneous, standardized collateral. Attractive risk-adjusted returns, with Figure's originated loans having loss rates of less than 1%. The company's history of issuing rated HELOC securitizations (15 securitizations totaling $4.5 billion since April 2023, with AAA ratings) improves liquidity and marketability.
• **Regulatory Bodies**: The company maintains extensive licenses (over 180 lending/servicing, 48 money transmitter) and operates as an SEC-registered broker-dealer with ATS authority, demonstrating a commitment to proactive regulatory compliance. This positions the company to navigate evolving regulatory landscapes in financial services and digital assets, though it remains subject to ongoing scrutiny and potential changes in laws.

Next Steps

• Complete the Initial Public Offering (IPO) and list Class A common stock on NASDAQ under the symbol "FIGR".
• Continue to onboard new origination partners and increase penetration with existing partners.
• Expand monthly on-chain loan production volume.
• Introduce additional consumer lending products, such as DSCR loans, personal loans, and student loans.
• Expand Figure Connect transaction volume by onboarding new loan buyers and replicating initiatives like the joint venture with Sixth Street Partners.
• Launch the "Figure Certified" program by the fourth quarter of 2025 to integrate third-party homogeneous assets into the ecosystem.
• Drive YLDS adoption through an institutional sales team and retail marketing efforts.
• Continue to innovate on the technology stack, developing new products and capabilities to streamline underwriting, enhance loan registration, and optimize trading efficiency.
• Make the Digital Asset Cross-Collateralization feature available to users by the end of 2025.
• Encourage warehouse lenders and loan buyers to utilize YLDS on Figure Connect and Figure Exchange.
• FCC may seek additional Layer 1 blockchains for YLDS through amendments to its registration statement.
• Allow Warehouse Facilities 1, 3, and 7 to mature and extend the maturity of REIT in 2025.
• Comply with SEC cybersecurity disclosure rules for public companies, starting with the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
• Continue to assess the realizability of deferred tax assets in future periods.

Key Dates

Recommendation

Figure Technology Solutions demonstrates strong financial growth, achieving profitability in recent periods, and significant adoption of its innovative blockchain-based financial technology platforms. Its market positioning in consumer lending and digital assets, coupled with a robust regulatory framework, indicates substantial future potential. While inherent risks associated with a rapidly evolving industry, reliance on key products, and the challenges of being a public company warrant a balanced but optimistic outlook. The current profitability and growth trajectory, coupled with a unique technological moat, make it an attractive investment for long-term growth-oriented investors.

Keywords

Blockchain Technology, Fintech, Lending, Digital Assets, Home Equity Loans, IPO, Capital Markets, SEC Filing, Financial Services, Regulated Company, Provenance Blockchain, Figure Connect, DART, Figure Exchange, YLDS Stablecoin, HELOC, Loan Origination System, Asset Tokenization, Corporate Governance, Risk Management