Why Figure Technology Solutions Stock Dived by Almost 26% Today
Key Points
The fintech's fourth-quarter bottom line wasn't nearly as high as the market expected.
It did, however, post significant gains in both revenue and profitability.
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Investors obviously didn't figure a significant bottom-line miss was in the cards for Figure Technology Solutions' (NASDAQ: FIGR) final quarter of 2025. That's a key reason they traded out of the next-generation fintech company's stock on Friday. As a result, it declined by a steep 25%-plus that day.
Business on the blockchain
Figure, which harnesses blockchain technology to automate mortgage and home equity loan services, unveiled its fourth-quarter and full-year results after market close Thursday. The quarter saw the company earn net revenue of just under $160 million, nearly 91% higher year over year. Growth in net income according to generally accepted accounting principles (GAAP) rose even more robustly, by nearly threefold to over $15 million, or $0.06 per share.
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That meant a mixed quarter for Figure, as the consensus analyst net revenue estimate was under $158 million. However, the company whiffed notably on profitability, since those pundits were collectively modeling GAAP net income of $0.15 per share.
In the earnings release, management attributed the gains chiefly to a more than doubling in volume of its consumer loan marketplace business, to $2.7 billion. A major factor in this was the take-up of its Figure Connect blockchain-native platform that brings loan originators and institutional investors together. Figure Connect's volume rose to $1.5 billion from only $8 million in the year-ago period.
Figure on Figure
Figure also announced that its board of directors had authorized a share repurchase program of up to $200 million worth of its class A and blockchain common stock. The program expires Feb. 27, 2027.
I like the innovative approach of this company, and I believe moving cumbersome processes like mortgage loan sales to institutional investors has great potential for success. I wouldn't be so quick to sell out of Figure just because it fell short of last quarter's profitability expectations.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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