Figure Technology Solutions Pursues IPO On Profitable Growth

Summary Figure Technology Solutions, Inc. is growing revenue and has achieved profitability, leveraging blockchain to innovate in consumer credit and digital lending. The company is expanding beyond HELOCs into new asset classes and DeFi, but this growth will require substantial new capital from the IPO. Despite strong industry tailwinds, risks include revenue concentration in HELOCs, partner concentration, and exposure to crypto asset volatility. FIGR may raise as much as $400 million in its IPO and the IPO market has been strong for crypto-oriented companies. Figure Technology Is Growing Quickly And Profitably Figure Technology Solutions, Inc. ( FIGR ) has filed to raise $100 million in an IPO of its Class A common stock, according to SEC S-1 registration information . FIGR has combined blockchain technologies and faster processes to improve consumer credit options and management. The company is growing revenue and doing so profitably, but has ambitious and likely costly plans to broaden and expand into other markets and offerings, requiring significant new capital to execute. I’ll provide a final opinion when we learn more IPO details. What Does Figure Do? New York, NY-based Figure Technology Solutions, Inc. was founded to develop its Provenance Blockchain to track and monitor various types of consumer loans in the United States. Management is led by Chief Executive Officer Mr. Michael Tannenbaum, who has been with the firm since 2024 and was previously an executive at Brex, a financial services company and previous to that, held leadership roles at SoFi Technologies ( SOFI ). The company's primary offerings include: Loan origination - LOS Home equity loans Electronic marketplace - Figure Connect Stablecoin - YLDS DART - Digital Asset Registry Technologies Democratized Prime - DeFi lending marketplace. The company generates revenue from a variety of sources, as shown in the pie charts below: SEC Figure has booked fair market value investment of $688 million as of June 30, 2025 from investors, including 10T Holdings, Morgan Creek Digital, DCM Ventures, DST Global, Ribbit Capital, RPM Ventures, Jump Crypto, Pantera Capital, Lightspeed and others. Sales and Marketing expenses as a percentage of total revenue have generally trended lower as revenues have risen, as the figures below indicate: Sales & Marketing Expenses vs. Revenue Period Percentage Six Mos. Ended June 30, 2025 16.8% 2024 16.3% 2023 25.2% (Source - SEC.) The Sales and Marketing efficiency multiple, i.e., how many dollars of additional revenue are produced from each dollar of Sales and Marketing expense, fell to 1.1x in the most recent reporting period, as shown in the table below: Sales & Marketing Efficiency Rate Period Multiple Six Mos. Ended June 30, 2025 1.1 2024 2.4 (Source - SEC.) What Is Figure’s Market? According to a 2025 market research report by Grand View Research, the global market for digital lending platforms was an estimated $10.6 billion in 2024 and is forecasted to reach $44.5 billion by 2030. This represents a projected CAGR of 27.7% from 2025 to 2030, a very high rate of growth. The primary factors driving this expected growth are improved offerings, increasing demand by consumers, compliance with local regulations, and increased regulatory clarity. Also, the chart below shows the global digital lending market's historical and projected future growth trajectory through 2030 by region: Grand View Research Major competitive vendors or other industry players include the following firms: SoFi ( SOFI ) Upstart ( UPST ) OppFi ( OPFI ) LendingClub ( LC ) Coinbase ( COIN ) Ledn Traditional financial incumbents. The firm seeks financing partners, loan acquirers and consumers seeking loans via a combination of online, partnerships and targeted other media. Figure has more than 180 lending and servicing licenses, 48 money transmitter licenses and is an SEC-registered broker-dealer "with authority to operate an ATS" (Alternative Trading System). I’ve prepared a thumbnail SWOT analysis for Figure: Strengths Proprietary L1 blockchain loan origination system, large and growing ecosystem of partners, market leader in non-bank HELOC lending. Weaknesses HELOC origination revenue concentration, new initiatives only producing small revenue, changing regulatory environment creates compliance costs. Opportunities Expansion of its Figure Connect marketplace into adjacent loan markets, stablecoin market growth, joint venture with Sixth Street brings liquidity, expansion of DeFi lending. Threats Competitive pressures, exposure to interest rate cycles, partner concentration. Figure’s Recent Financial Results The firm’s recent financial performance is summarized as shown below: Growing topline revenue, although at a decelerating growth rate. Increasing operating profit and operating margin. A swing to net income and cash flow from operations. Below are major financial results from the firm’s current registration statement: Total Revenue Period Total Revenue % Variance vs. Prior Six Mos. Ended June 30, 2025 $ 190,587,000 22.2% 2024 $ 340,885,000 62.7% 2023 $ 209,549,000 Operating Profit (Loss) Period Operating Profit (Loss) Operating Margin Six Mos. Ended June 30, 2025 $ 35,796,000 18.8% 2024 $ 9,235,000 2.7% 2023 $ (49,438,000) -23.6% Net Income (Loss) Period Net Income (Loss) Net Margin Six Mos. Ended June 30, 2025 $ 29,122,000 15.3% 2024 $ 17,214,000 5.0% 2023 $ (47,935,000) -22.9% Cash Flow From Operations Period Cash Flow From Operations Six Mos. Ended June 30, 2025 $ 62,210,000 2024 $ (136,015,000) 2023 $ (28,868,000) (Glossary Of Terms.) (Source - SEC.) As of June 30, 2025, Figure had $531.5 million in cash, equivalents and digital assets and $869 million in total liabilities. The company has generated free cash flow for the twelve months ended June 30, 2025, of negative ($40.3 million). Figure’s IPO Plan FIGR intends to sell shares of Class A common stock in an IPO that may reach $400 million in size. No existing or possibly new shareholders have yet indicated an interest in acquiring additional shares, at least as described in the initial S-1 filing. Class A stockholders will receive one vote per share. Class B shares will each have ten (10) votes per share and the company will be considered a "controlled company" immediately post-IPO, by Nasdaq’s rules. Company, shareholder and executive lock-ups will be for the typical 180 days after the effective date of the prospectus, subject to certain exclusions. According to Figure’s most recent regulatory filing, it plans to use the net proceeds as follows: We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time. (Source - SEC.) The firm’s presentation of the company roadshow is not available yet. Pertaining to potential legal exposure, leadership said the company is not subject to any legal claims that it believes would have a material adverse effect on its financial condition or operations. Listed underwriters of the IPO are Goldman Sachs, Jefferies, and BofA Securities. Figure Is Growing Quickly And Now Profitably Figure is seeking public investment to fund its general growth initiatives. The company’s financials have produced increasing topline revenue, although at a decelerating growth rate, growing operating profit and operating margin and a swing to net income and cash flow from operations. Free cash flow for the twelve months ended June 30, 2025, was negative ($40.3 million). Sales and Marketing expenses as a percentage of total revenue has trended lower as revenue has grown, but its Sales and Marketing efficiency multiple fell to 1.1x in the most recent reporting period. The firm currently plans to pay zero dividends and will likely keep any future earnings for its growth plans and working capital needs. FIGR’s trailing twelve-month capital spending history shows it has continued to spend on capital expenditures despite negative operating cash flow. The firm’s growth strategy includes expanding its efforts within the HELOC market, broadening its offerings to focus on other asset classes (auto, personal, student loans), scaling its Figure Connect marketplace, and growing its Figure Exchange and stablecoin offerings. The market opportunity for digital lending is large and expected to grow rapidly in the coming years, so Figure enjoys a strong industry growth dynamic in its favor. Risks to the company’s outlook as a public firm include its ‘emerging growth company’ status, which enables management to provide less information to shareholders. Also, it holds cryptocurrency assets on its balance sheet, which can subject the company to volatility as they are marked to market in each reporting period. FIGR has product concentration risks with its HELOC offerings accounting for 75% of total revenue in H1 2025. Its top 10 origination partners accounted for 57% of original volume in the first half of 2025. While Figure Technology Solutions, Inc. is producing profitable growth, it will likely need to spend significantly to expand and broaden that growth into its other initiatives. When we learn more about the management’s pricing and valuation expectations, I’ll provide a final opinion. Expected IPO Pricing Date: To be announced