Figure Reports Q2 Revenue Surge, Net Take Rate Holds

Figure Technology Solutions announced a significant increase in its second-quarter financial performance, reporting a 192% rise in net income to $87.4 million, up from $30 million in the same quarter last year. Net revenue saw a substantial jump of 113% year over year, reaching $225.6 million. The company's consumer loan marketplace volume more than doubled, increasing by 132% to $4.3 billion in the second quarter compared to the previous year. This volume growth exceeded the high end of Figure's second-quarter guidance by 4%, according to Keefe, Bruyette & Woods (KBW). Adjusted net revenue also experienced robust growth, increasing 95% year over year to $218.4 million, surpassing KBW's estimate of 93% growth and the consensus estimate of 86%. Despite these strong top-line results, adjusted EBITDA was reported at $119.4 million, which was slightly below KBW's estimate of $121 million but above the consensus estimate of $110.4 million. Figure's net take rate remained stable at 3.6% for the quarter. During the company's earnings call, CEO Michael Tannenbaum attributed the net take rate performance to three primary factors. Firstly, he noted that an increasing number of Figure's largest partners are now engaging directly with Figure Connect, a dynamic that benefits the business overall but comes at the expense of the take rate. Tannenbaum acknowledged that this acceleration was faster than initially anticipated when the company provided its initial take rate range. Secondly, a meaningful rise in interest rates during the quarter negatively impacted the company's gain on sale, consequently affecting the take rate. Thirdly, Tannenbaum pointed to the growth in first-lien loan volume, which typically carries a lower take rate. He highlighted a threefold year-over-year increase in first-lien volume during the quarter. As Figure continues to expand its origination volumes for first-lien loans, Tannenbaum indicated that this trend is likely to exert a modest headwind on the net take rate metric over time. Tannenbaum described the second quarter as Figure's "strongest ever" and reported that application volumes had surpassed $1 billion per week for the first time in early July, indicating continued momentum into the third quarter. Figure Technology Solutions operates a consumer loan marketplace, facilitating loan origination and securitization.