Q3 2026 earnings call, Thursday, November 12, 2026

Q4 guide points to a seasonal step-down, lower margins and a lower take rate

Figure reported another quarter of triple-digit stand-alone growth, but the fourth-quarter outlook carries several headwinds. The company guided Q4 loan marketplace volume to $6.2 billion to $6.7 billion and a combined gross take rate of 3.1% to 3.4%. CFO Macrina Kgil said the company expects the typical seasonal decline of 10% to 15% sequentially from November through February, and that she expects results "somewhere down the middle" of the range. Last year's Q4 was an exception, helped by IPO tailwinds and the addition of several large partners. A return to seasonal norms would produce lower sequential volume from both Figure and Kiavi and, in turn, a lower adjusted EBITDA margin.

Kgil said Q4 will also carry an incremental $18 million to $23 million of adjusted expenses versus Q3, reflecting the first full quarter of legacy Kiavi overhead. Kiavi ran at or below a 40% adjusted EBITDA margin before the deal, and the company now expects near-term margin to decline below the Figure stand-alone trajectory. Management expects revenue synergies and operating leverage to lift margin back toward the 60% medium-term target in 2027. Asked by Piper Sandler whether the guide includes any cushion for rates beyond seasonality, CEO Michael Tannenbaum acknowledged that rate volatility has "some near-term impact in the funnel," while saying the platform's ability to reprice loans constantly is a benefit.

Third-quarter results: volume doubled, margin expanded to 58%

Loan marketplace volume reached $5.8 billion including one month of Kiavi, up 135% year-over-year as reported. Stand-alone volume was $5.1 billion, up 107% and in the upper half of the $4.8 billion to $5.2 billion guided range. Kiavi contributed about $670 million in September. Adjusted EBITDA was $164 million, up 91%, with margin of 58% versus 55% a year ago. Net income was $89 million, flat year-over-year, because the year-ago period included a one-time $31 million tax benefit. Net take rate was 3.7% on a stand-alone basis and 3.5% including Kiavi, which Kgil said would be reported on that basis for the final time.

Figure Connect, the capital-light marketplace channel, represented 74% of volume including Kiavi, up from 65% last quarter and 46% a year ago. It was 72% of stand-alone volume. Ecosystem and technology fees are now roughly 40% of revenue and have more than tripled in a year. Partner count rose to 612 on a stand-alone basis and 894 including Kiavi's broker partners. Partners that were with Figure in Q3 2025 are doing more than 40% more volume this quarter. The company now has more than 20 active depository partners and more than 150 SMB partners, with the SMB business crossing $500 million in run-rate volume.

Shift to gross take rate and a lower take rate range

Management is changing its disclosure framework, moving from net take rate to gross take rate and, from the next call, leading with contribution margin. Kgil guided gross take rate on shorter-duration residential transition loans to 1.5% to 2%, and on longer-duration Connect HELOCs to 2.9% to 3.4% over the next 6 to 12 months. Analysts at KBW pressed on this as a decline from recent trends. Tannenbaum said the range reflects expected large "whale" partners hitting lower volume tiers quickly, as well as banks that may keep some production on balance sheet and would not pay the same pricing. He stressed that pricing is not driven by negotiated partner rates and that the Connect-only take rate has been steady in recent quarters.

Piper Sandler asked for contribution margin by product to support the view that a 3% Connect dollar can be as profitable as a 6% balance sheet dollar. Kgil declined to provide specifics until next quarter, saying the company wants to see Kiavi season, but said contribution margin "does need to be higher than our adjusted EBITDA margin in the medium term." Tannenbaum framed the trade-off plainly: "Judge us by our volume growth, our platform traction, our ecosystem and our bottom line."

Kiavi adds RTL and DSCR, with Sixth Street taking the balance sheet

The Kiavi acquisition closed September 1, ahead of schedule, and adds about $8 billion of annual volume plus two new asset classes, residential transition loans and debt service coverage ratio loans, which management sizes at a $200 billion-plus addressable market. Kiavi's RTL business did roughly $600 million of volume in September and its DSCR business about $60 million. Tannenbaum said Kiavi's RTL underwriting has produced only about 50 basis points of annual losses over a 13-year history. Kiavi's platform represents about 50 basis points of the national purchase mortgage market, which management sees as expertise for its product road map.

In RTL, Sixth Street bought the balance sheet and is now an originator, with Figure providing the rails. Sixth Street committed to a forward flow and to using Figure's marketplace, securitization shelf and prime platform. Tannenbaum said Sixth Street will eventually be one of many originators on the technology. Management expects an under 4-year unlevered payback and called the deal materially accretive. Cost synergies of $30 million of the $35 million run-rate target have been actioned, with the remainder over the next 12 months. One-time M&A and restructuring costs totaled $22 million across Q2 and Q3. Kiavi had $100 million of adjusted EBITDA before joining Figure, though Kgil declined to guide to its future EBITDA. Kiavi historically grew volume 25% to 35% annually, excluding revenue synergies.

On the product timeline, Figure will offer DSCR on a broker basis to existing customers later this quarter and a full white-label Connect option next quarter. Tannenbaum said the DSCR product was built entirely agentically, closes loans in 2 to 3 weeks and could be faster with Figure's property verification. Twelve existing partners have been onboarded for Kiavi products, with more than 30 in the pipeline. In answer to Needham, Tannenbaum said the 4-year payback assumed a record-low housing inventory environment, so any market improvement would be upside.

$400 million buyback begins tomorrow

Figure announced an expanded $400 million share repurchase plan, up from an earlier $200 million authorization that had not been executed in the open market, with purchases starting November 13 under a 10b5-1 plan. Tannenbaum said the stock has traded below its IPO price despite more than 100% annual volume growth, and described the shares as attractive at current levels. He said the company will be opportunistic on repurchases beyond the initial program while also weighing organic growth and acquisitions. The company ended the quarter with $1.59 billion of cash, raised $600 million of rated unsecured debt in Q3 and expects to close a $465 million revolving credit facility this month. Kgil said roughly 50% of adjusted EBITDA converts to cash inflow after taxes and interest.

Rates: a funnel headwind, but a sales tailwind

Tannenbaum acknowledged that higher rates hurt partners' funnels because marginal consumers are less likely to borrow. However, because Figure is more than 80% B2B, he said the environment is helping the sales motion, since prospects want HELOCs as borrowers avoid refinancing low existing rates. He described the approach as "polite persistence." HELOCs fund in a median of 10 days versus about 45 days for other lenders, which lets partners reprice quickly. Figure also hedges loans held on balance sheet for a few weeks before sale. Credit quality was described as stable across the first three quarters.

Capital markets: AAA demand and a prefunded securitization

Figure processed $2.7 billion of loan sales and executed 8 securitizations in Q3, adding AAA buyers including New York Life and Nationwide. Tannenbaum said the company has done about 20 securitizations to date, is in the market again with recent strong AAA prints, and sees no friction in shifting between whole loan sales and securitization. He pointed to prefunded securitizations as evidence of demand, saying Figure is "the only nongovernment agency that's been ever able to pull something like that off." In response to Goldman Sachs, he said Kiavi brought new investors, including at least a couple of hedge funds, and that foreign demand has grown. The stablecoin YLDS now has 28 marketplace participants for settlement. Prime ended the quarter with lender supply of $825 million and matched offers of $588 million, including about $200 million of third-party borrow. Prime economics are roughly 50 basis points, with additional ecosystem fees from securitizations and whole loan sales on third-party assets.

Agentic loan assistant lifts funded dollars per approval by 29%

Figure and Sierra jointly developed an agentic loan officer assistant that has shown a 29% increase in funded dollars per loan approval. About $260 million of loans have funded where Sierra is involved, and the agent is live with wholesale partners with full rollout coming. Tannenbaum said prospects cite it as among their highest-priority buying criteria. He contrasted it with mortgage SaaS that has not lowered origination costs, which he said have reached $12,000 per loan, and said the agent was trained on conversion rather than call volume, using Figure's standardized marketplace data.

2027 as the year of the upsell, and a bigger partner pipeline

More than 40% of this year's growth came from existing customers, and Tannenbaum labeled 2027 "the year of the upsell," driven by Kiavi products and a push into purchase lending. Partners had more than $500 billion of originations in 2025 per HMDA data. Figure works with 10 of the top 20 independent mortgage banks but not many of the top 10, and the pipeline now includes some of the largest mortgage companies and banks, larger than any current partner. He said no SMB originator has yet been brought onto Connect, which he called significant white space. In auto, Figure has a lighthouse partnership with Agora, with a securitization planned in the coming months, and existing whole loan investors that also buy auto. He cited Flagstar as a reference account for depositories, noting that depository sales cycles are slower.

Cagney's Navra and on-chain financing

Executive Chairman Mike Cagney addressed his new company Navra, saying he remains full time at Figure and that Navra builds a wallet and custody solution that has to live outside Figure so other issuers adopt it. Figure owns a 10% stake. He said Figure's warehouses cost SOFR plus 250 while the Street funds them at roughly SOFR plus 15, and that roughly $600 million of HELOCs are financed on chain at SOFR plus 120. Figure plans to launch an on-chain AAA ABS issuance this month. Cagney estimated about $6.5 billion of stablecoin available to borrow across the top 5 DeFi protocols versus upwards of $2.5 billion a month of assets Figure puts on chain, meaning Figure could consume available capital in months. He said Figure does not rely on DeFi for growth or margins today, and called it an interest expense advantage.

G&A reflects deal costs and SOX

In response to Texas Capital, Kgil said G&A includes the $22 million of Kiavi-related M&A costs, largely legal and accounting, plus stable executive stock compensation, and that new SOX controls add professional fees. She said the company will keep looking at optimization in its second year as a public company.