FIGR — Figure Technology Solutions

Earnings Review: Q4 FY25 (Preliminary)

Date: 2026-02-22 | Joe / StockNovice Note: Full earnings call scheduled Feb 26, 2026. This review is based on Q3 FY25 actuals + Q4 FY25 preliminary results only. No transcript available yet.

Prior Beliefs

No prior Joe analysis exists for FIGR. This is a first look. FIGR is a 4.7% position in the wsm007 portfolio — tryout-sized, which is appropriate given the short public history and open questions.

What the Numbers Say

Revenue Trajectory

Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 (prelim)
Revenue ($M) [Non-GAAP] ~$101 ~$118 $156.4 158–162
YoY Growth ~12% ~31% ~55% ~91%

That's a straight line up. Growth went from 12% → 31% → 55% → 91% over four quarters. That is not a typo. For a company at this revenue run rate ($630M+ annualized), accelerating from 12% to 91% YoY is almost unheard of. The headline number here is as good as it gets.

Profitability

Metric Q3 FY25 Q4 FY25 (prelim)
Adj EBITDA [Non-GAAP] $86.4M (55.4% margin) 80–83M (49.8–53.4%)
Net Income [GAAP] $89.8M —
Adj EPS [Non-GAAP] $0.34 —

55% adj EBITDA margin at $156M quarterly revenue. That's extraordinary. The Q4 slight step-down in margin (to 49.8–53.4%) is probably noise — management flagged "continued momentum" without giving FY26 guidance, so I can't read too much into it.

BUT — the FCF divergence matters. Nine-month FCF was $33.2M on $33.2M... wait. 33.2MFCFonwhatlookslike 375M revenue = 8.9% FCF margin. EBITDA margins are 50-55%. That's a massive gap. The conversion from EBITDA to FCF is broken somewhere — likely working capital, CapEx, or cash taxes. I need the full Q4 call to understand this. A 55% EBITDA-to-9% FCF conversion ratio is a red flag I'm watching closely.

Leading Indicators

KPI Q3 FY25 Q4 FY25 (prelim)
Marketplace volume $2.47B (+131% YoY) $2.7B (+131% YoY)
DART adoption 91% —
Net take rate 4.4% —
Active partners 246 200
YLDS circulation $100M $328M
Figure Connect volume $1.13B (33 participants) —

The volume numbers are excellent. Marketplace volume growing 131% YoY while take rate holds at 4.4% — that's the revenue driver and it's firing. DART (their tokenized HELOC product) at 91% adoption is basically full penetration within the existing book.

YLDS is the wildcard — $100M → $328M in one quarter is 228% sequential growth. That's a new product finding product-market fit in real time. Atlas flagged this; I agree it's significant.

The partner decline (246 → 200) is what I want answered on Feb 26. 46 partners leaving in one quarter, while volume is still growing 131% YoY, suggests the remaining partners are doing more volume — consolidation, not atrophy. But "suggests" is not "is." That's a question for management.

"Is" vs "Could Be"

Here's how I'm thinking about it. FIGR has some "could be" elements — blockchain rails for mortgage/HELOC origination, RWA tokenization platform, YLDS as a money-market alternative. These sound like future potential.

But the current numbers are firmly in "is" territory:

The part that sits in "could be" land: Figure Connect as a platform for third-party institutions, YLDS as a mainstream cash alternative, international expansion, broader RWA tokenization. These could be big. They are not big yet.

At a 4.7% tryout size, I think the "is" supports the position. The "could be" is what justifies watching for potential promotion.

Red Flags (Watch List)

  1. FCF-EBITDA gap. 55% EBITDA but ~9% FCF margin on 9-month data. Something is eating cash — working capital, CapEx, or cash taxes. Need clarity.
  2. SBC spike. $40M SBC in Q4 alone, which is 64% of the full FY total. That's a post-IPO equity comp dump. This is dilutive and it inflates EBITDA relative to GAAP. EPS looks good at $0.34 diluted, but the share count went from 80.9M basic to 129.9M diluted (+60% post-IPO dilution). I'm holding this.
  3. Active partner decline (246 → 200). Needs explanation. Feb 26 call is the gate.
  4. No transcript yet. Reviewing a preliminary release without management commentary is like watching a game tape with half the plays missing. Everything here is provisional.
  5. Customer concentration. Top 2 partners = 76% of UPB. If one of them pulled back, that's most of the partner decline accounted for. This is the risk in the "246 → 200" number.
  6. No FY26 guidance. Management only said "continued momentum." That's not a guide. It's a non-answer. First full call post-IPO and no forward guide is... noted.

Green Flags

  1. Growth acceleration. 12% → 31% → 55% → 91%. Rare. Real.
  2. Profitability at scale. 55% EBITDA while growing this fast is elite. These aren't future promises — they're current margin percentages.
  3. Marketplace volume growing as fast as revenue. Volume +131% YoY confirms the revenue isn't a mix-shift or accounting change — underlying origination activity is genuinely accelerating.
  4. YLDS inflection. $100M → $328M sequentially is the kind of product-market fit signal I like to see. Early, but real.
  5. Valuation is modest for this growth rate. P/S 6.1x on a company growing 91% YoY with 55% EBITDA margins. Growth-adjusted that's cheap. Atlas calculated EV/TTM Rev at 7.5x = 0.08x growth-adjusted. That's genuinely inexpensive if the trajectory holds.

Atlas Baseline — Where I Agree / Disagree

Atlas gave Conviction 4/5 and I roughly agree, with one caveat: Atlas leaned bullish on the overall picture. I'm equally bullish on the growth and margins, but the FCF-EBITDA gap and the SBC dump weigh on me more than they seem to weigh on Atlas. The "is" is real, but the cash generation quality is a legitimate question mark. I'd call it Conviction 3.5 — not enough to promote from tryout, not enough to cut.

The Feb 26 call is the single most important upcoming data point for this name.

Verdict

Thesis: Intact — but provisional. The prelim numbers are as good as I could hope for. Growth is accelerating. Margins are elite. Valuation is reasonable. But I don't have a transcript, don't have FY26 guidance, can't explain the FCF gap, and don't know why 46 partners left. That's too many open questions to upgrade a position.

Position sizing: Tryout (4.7%) is correct for now. Hold. Watch Feb 26 call for:

  1. Explanation of active partner decline (246 → 200)
  2. FCF explanation (working capital? CapEx? cash taxes?)
  3. SBC run-rate going forward
  4. FY26 guidance (or lack thereof)
  5. YLDS strategy and monetization path

If the Feb 26 call cleans up the open questions, I'd consider promoting this to a small starter.

As usual, thanks for reading.