# Figure Markets Pivots From Lender To Blockchain Marketplace

**Podcast:** The Milk Road Show
**Published:** 2026-08-14

## Transcript

You know, maybe we need one or two more quarters to see that the growth is actually sustainable and the numbers are improving.
Those numbers will really explode.
Figure Markets just posted their Q2 earnings and really blew people away.
But what is driving this growth and what do investors need to know about all this?
Hello and welcome to The Milk Road Show, the podcast that knows that it always pays to figure out what's going on in the markets.
I'm your host, John Gill, and today is Friday, August 14th.
And today we are joined by one of our favorite analysts here at Milk Road, Martin.
He is going to break down everything that you need to know about figure markets.
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Martin, how are you today?
Hello, John.
Thanks for having me.
Yes, I'm doing great.
I'm really excited to talk to you.
You have been tweeting up a storm about figure markets, so I thought it'd be a good opportunity to catch up with you about everything going on there.
Let's start with the basics.
What is figure and what do we need to know about this business?
Yeah, good question.
I think there are a lot of companies that are doing sort of a transition or a...
I don't want to say exactly a pivot of their business, but, you know, Figure was at some point seen as a crypto company.
And now it's leveraging blockchain.
I'll get into it.
But it's more becoming a traditional finance operator rather than, you know, lender using blockchains.
So let me start with the story how Figure actually started.
I might share the screen.
Yes.
So figure started as the HELOC lender.
So you can think of it as you might own some property and, you know, that property represents some value.
And so you might want to take some loan against it.
So that's what HELOC is.
And figure, actually figure out a much better way to provide people those loans and they were able to leverage AI to drive the cost down from, you know, traditionally those costs per loan are about 11,000 to originate these loans and FIGURE was able to reduce the cost significantly 90% and their costs are below 1,000.
That's what happens when you build your proprietary software which is able to do all the steps in between just online you don't need to send any persons anywhere and it's pretty quick actually so normally in that industry it takes around 40 days to originate these loans but on figure you can get these heeled loans in five to seven days so that was the huge big unlock and that's what their main product offering, that's how they started.
Now, is that clear?
Yeah.
So a HELOC loan, for those listening who don't know what a HELOC loan is, it's a home equity line of credit.
And what Martin is saying is that they were able to use technology like blockchain, AI, and other things to deliver these to the market much faster and much cheaper.
Is that about the gist of it there?
Yes, exactly.
Okay, cool.
Okay.
I think it's also like a lot of people are wealthy, but just on paper.
Because imagine you own a building, it has a lot of value, but you know, it's in that building and you don't want to sell your building.
So this is the way for you to get some value back that you can use.
So you don't need to sell it, but you can get some money.
So a lot of people are actually using it.
And the trend in the yield market was actually down only since the financial crisis.
these past few years, it's starting to grow again.
So that's a good tailwind.
And that's the market that, you know, figure is now leading in the US.
Okay, so this is a picture of how figure started.
And I think you said that they're transitioning or expanding their business.
Tell us about that.
Yes, because in this model, it required figure to, you know, they had to do a campaign to acquire a user who might be interested in getting this loan.
And then they had to onboard that user.
And like, you know, it was pretty time consuming for a figure to like figure this out.
But once you build the whole process, the whole software to do this, the next question you might like I would say it's a logical consequence of when you build something like this.
What if we offer all this, all this infrastructure, everything that we have built to everyone else?
So it's just not us, but everyone else can actually come in and originate their loans on our platform.
That's actually a smarter way to do it to scale, because if you don't do it, you are limited by your own balance sheet.
So, you know, let's say you have I don't know, let's say $100 million.
So you can only fund a certain amount of these Helogues until your funds run out.
But if you invite third parties that can also originate loans on your platform, and because you have that proprietary software and because it's all powered by blockchains, so you do not have as many intermediaries and the costs of these whole transactions are down drastically.
That's how you get all these partners really interested in this.
And actually, Figure, during this Q2 earnings call, they said that the partners that joined Figure are actually now originating almost three times more HELOCs than they were before.
So that's only showing that, okay, once you use Figure to help you originate these loans, that software is better and it's driving more adoption and usage.
That's what you want to see.
And here's another chart I want to share.
It's this one on the left side.
Because before, you can see on the left side, there's a consumer loan volume.
And before, the blue part, that was the part where the loans were originated by figure.
But now, as they are inviting more people to come in, you can see that the green part is actually growing and increasing.
And so that's what you want to see.
And so...
That's what Wall Street is still not getting because they are still thinking, okay, figure is still just a specialty lender.
But it's not a case anymore because today or like in Q2, 65% of those volumes were from third parties, not from figure.
So it should be repriced because it's not a lender.
It's becoming a marketplace or an exchange.
But that's the opportunity in the market.
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Okay, so for our listeners who aren't able to see what Martin has pulled up here, what he's showing is a breakdown of consumer loan volume split.
And in Q1 of 2025, the chart is showing that 65% of the loans were figure branded and intermediated.
And then 35% was from something called Figure Connect.
But by Q2 of 2026, where we are today, that Figure Connect is 65% and the figure branded one is down to 35%.
So it's exactly flipped there.
And Martin, I think what I'm hearing you saying is Figure Connect is a marketplace where other third parties are coming to figure to originate loans and so that their business is scaling because other people are coming to originate.
Is that what you're telling us here?
Exactly.
You can also see the numbers on the right chart, right?
So those are the partners that are coming to figure and you see that it's growing.
Right.
It's gone from 144 to 498 today, from Q1 2025 to Q2 2026.
So this is enormous growth.
Yes, it is.
But now, if we can talk about their Q2 earnings for a second, you can see all the numbers were just great.
They beat all the expectations.
And now Wall Street is...
just trying to understand what is going on, how is it possible that they are growing over 100% year over year.
But there is one red number here on this chart, and that's the take rate.
Take rate is something like when you see the volumes that they generate on their marketplace, take rate is just revenue.
How much of that revenue is coming out of this total volume?
And it's going down.
People don't really like it, but I think it's a wrong view on that company because right now, when you are expanding into a platform or into a marketplace that's inviting third party consumers, you are not having almost any cost associated with anyone else originating your loan on your platform.
And so...
Yes, it might generate less revenue and the take rate might go down, but your contribution margins or your margins, how much of that revenue is contributing to your profits is actually increasing.
And that's the whole point.
And if you go and listen their Q2 earnings call, two analysts were asking pretty much the same question.
And I feel like...
Nobody can really get their heads around like why the net take rate is going down.
So the reason number one is that the figure connects the share of the third party originated loans is increasing.
So it's logical to expect that the net take rates will go down.
And also management guided that they think that it will keep falling down, but it's okay.
But then during that call, They also said that there is one more important thing, and that is that if you are a partner and you are using Figure Connect, your pricing is based on the volumes.
So what is also happening is that some of these partners are actually growing volumes a lot, and so they are getting a sort of a cheaper price because it's based on the volumes that they generate.
So it's pretty much telling me.
okay, if you are successful, if you like our business, if you use it more, we will give you better pricing.
I think they have like three tires.
And that's okay.
That's what, you know, like a lot of companies do this.
And so it means that both companies are doing well because they are increasing their volumes.
They like what Figure is doing.
And also like the more volume they generate, the better results, right?
So it's a win-win.
So I think that...
the whole take that all the whole argument that okay numbers are great but they take rates are down and it's a bad thing for figure it's not really the case and you need to understand that and once you do then like you just change the view and like wow This is really something.
The thing that stood out to me in the analysis that I've seen you writing for our pro community about figure markets in the way you explained this exact concept here is that, yes, the take rate is going down, but it's really a reflection of the market rewarding figure and more business coming to figure.
And the way that you, I think, showed that was that the profit that figure is making is growing faster than the revenue, meaning that they're making more money from every dollar of business that they're doing, right?
Is that the thing you wanted to get across here?
Exactly.
You can see it here.
The revenues grew 95% year over year, while their EBITDA grew 126%.
So it means that, you know, for every one single dollar of revenue, they are making like more profits.
And so that's the operating leverage.
That's what I love here.
And that's what people really need to think about.
Do not look at the tech rates.
look at these numbers because they are showing you what's really important.
Okay, so that means that the net revenue, adjusted net revenue for Q2 of 2026 was 218 million.
The adjusted EBITDA is 119 million, but adjusted EBITDA is growing faster than the adjusted revenue, which means they're making more profit for every dollar of business.
Exactly.
Right.
Okay, cool.
Yeah.
Really helpful.
Yeah, I think it's easy for people to lose that when they just see the take rate going down.
Exactly.
Yeah, yeah, it is.
And there's one more thing I want to like highlight here.
You know, rule of 40, it's, it's pretty much telling you how much of the, you know, companies in real estate, how quickly they grow, and what are their margins.
And so you can compare, you know, companies across, you know, S&P 500 to see how their revenues are growing and the next number is their margins.
And you can see that figure is like figure rule of 40 is actually rule 168.
You can see that there are not many companies in the market that are growing that fast with you know so high margins.
So I think this is really exceptional company.
and if you really understand what is going on and you see that because the good thing they if you have business on the blockchains you can see the numbers pretty much in real time so we already know the numbers from july and again the the growth that we are seeing over 100 year over year is we can see also in july so now team guidance for q3 is again keep growing like over 100% and we can already see the numbers on chain that are supporting that guidance.
So I'm getting a lot of positive signals.
And I think the only remaining thing is that all the Wall Street needs to catch up and to really understand what is going on.
And once they do, I think we will see upside revisions in their reports and forecasts and that will drive.
more attention, more investors, and I think the stock will reprice.
Okay, could you just back up a little bit and tell us what is the rule of 40 and why has FIGURE gotten a rule of 40 score of 167?
Yeah, the rule of 40 is pretty much saying that the company needs to grow their revenue year over year and they also need to ideally have high margins.
So those are the two numbers.
So a lot of companies would love to have rule of 40 at least at 40 because it means like, okay, your revenue start growing and or your margins are really high.
And ideally you want both, right?
And so if we look at figure and we just said that figure was growing, like revenue was growing 100% or something.
Let me actually find it.
Yeah.
Revenue was actually growing like 95% and their EBITDA margins are 55%.
So maybe this number is not exactly correct, but we are at the range of 150, 160.
So still pretty good numbers here.
And I think that piece of information, just that rule of 40, actually 150 or plus, whatever the right number here is, that might just this number itself could attract more people because I see that people are now wow so this is growing faster than volunteer and it's actually better than Nvidia and so you know that's what I see on Twitter like my Twitter is now full of figure bulls all of a sudden nobody was talking about figure you know a couple months ago and now it's actually a good thing because that's what you you really want to do you have a really really good business And I think management did a really good job on the call yesterday where they were trying to transparently explain and answer everything.
Again, a lot of answers about the take rate.
And then you need to see the community or the people being really interested in this stock.
And I think it's starting to happen.
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Yeah, and I think that the thing that stands out to me is this stat in this tweet, that this puts them, this rule of 40 score puts them ahead of every company in the S&P 500 except for NVIDIA and Micron.
So they're beating Palantir, Apple, Google on these metrics in terms of their growth, their performance, and their margins.
They're basically in a class by themselves with just Micron and NVIDIA as competitors.
That is huge.
Does that surprise you to see a figure in that category?
You mean why they are growing so much?
Yeah, I mean, like, relative to these other businesses that nobody is beating them except on these metrics, except for Micron and Nvidia, that I wouldn't have guessed figure would have been the third name on the list there.
Is that surprising to you?
Or were you kind of expecting this for months?
Because you've been in this position for a long time, haven't you?
Yes, but I think it's just proving my thesis that what they are doing is really working and there is interest.
I think people are trying to make investing way too complex than it really is.
Once you build something that people want to use, you will find your users.
And now they really nail it and they figure out how to issue these helux on the blockchain and how to leverage blockchain technology on top of the software that's leveraging AI a lot.
And so once you do it, you have got a good product.
And so it's not surprising that all the people, all the partners coming in are then using your product.
So I think this growth is actually sustainable.
And because they also acquired a new company in Q2, that's going to bring like double their volumes, probably in Q4 this year.
So I think it will just, you know, make the flywheel even stronger.
And yeah, I'm pretty confident that the growth is sustainable and we are going to see.
couple next quarters growing at very, very high rates.
Okay, I want to ask about how Figure is using blockchain in their product.
But before we do that, is there anything else about their Q2 earnings that you want to highlight or call out?
Or have we kind of covered most of the takeaways for you from that?
Yeah, I think I covered it all.
Okay, well then tell us a little bit more about the technology aspect of this because you said AI and blockchain are a big part of Figures business.
Walk us through what they're doing there and how that's making them grow and do so well in the market here.
So I think there are two parts.
I would say one part that is really growing a lot is that whatever they are doing, they are using blockchain rails.
So it means that...
you can skip all the intermediaries and it's just making the whole process more efficient and you can see all the information on the blockchains.
And so people really start to learn more about the blockchains and what the benefits of blockchains are.
And I think FIGURE is demonstrating just that to everyone who is using it.
That's the first part.
It's sort of a hidden part of their business.
But then they have, I don't want to call it second part, but it's sort of a business that is more for retail users.
And actually, I can show screen again.
I have to say, I think the recent push from the team was like, they don't necessarily want to, you know, promote them as a crypto company because there are obvious reasons, right?
And so, but This type of business is also interesting.
So today, if I have, you know, Metamask wallet or just a crypto wallet with some money, I can go to their website and I can actually lend them my money and they will give me some returns.
And I can, I have a couple of walls here so I can choose which one I want to use and I can see the estimated earnings and that's the sort of a retail facing part of their business.
But you can see here, you know, lending supply here is just hundreds of millions.
This one is the biggest one because that's the HELOC, that's their core origin product, right?
And then they have some crypto bank loans, but those are not really getting any traction.
You can see it's pretty small here and also small million businesses.
So I think they started this initiation a couple years ago.
I think it was a red call at the time.
But, you know, it feels like they wanted to diversify and sort of learn what is going to work for them.
And right now, I think that the institutional marketplace for their loans is really what's working.
And that's what their main focus is right now.
And they don't only have these democratized prime.
They also have open, which is...
I hold my figure on interactive brokers, but I could actually use their program called Open and bring my stocks here and I could actually lend them and get some interest.
I don't see it here.
Yeah, it lend in Democratized Prime.
I think you can lend those shares right here and get some decent yield.
And they also have a stable coin, which is called YLDS and you can earn some, you know, interest here as well on top of that.
It's using US treasuries on the back end so it generates some yield from that and then they keep a small portion of that.
But like overall this part of their business is I think not even 2% of the whole revenue.
So this part that we are looking at here right now is very small.
I think it's a good call option for the business but what makes me really bullish is that the other part of the business.
Gotcha.
Okay.
So what I'm hearing you say is that they have brought effectively DeFi to a lot of different traditional lending markets, you know, home equity, lend credit, automobile, other kinds of prime lending, and basically brought the two together so that they, like individuals, retail users who have crypto and digital assets.
can come and contribute liquidity to figure and benefit from this as well.
But also institutions or maybe traditional borrowers are also trusting figure because they've sort of abstracted away the crypto aspect of this on the back end and kind of like brought these two together.
Is that kind of the advantage that you're seeing figure in the marketplace and what they're offering?
It is.
Yes.
Gotcha.
Okay.
Do you think that that's a model that a lot of other people are going to start to copy?
And like, do you think they're going to see competition who are like, you know, me tooing this business in a way or like, or do you think that there's like a strong moat around what figure is built here?
Well, I think if you have that combination of, you know, a good software that will let you underwrite in couple days, and you know, you don't need any other people to be involved in the whole process of approving your your loan, then it's a it's a big improvement.
And then also if you are able to run your infrastructure on the blockchains.
It's just a huge cost benefits that you have and that's really hard for anyone else to get at the same time.
And because here what really matters for the financial products like this is that right now they are, I would say, probably the only one that's doing this on-chain and like eventually the part that they are able to underwrite within a couple of days using AI.
I think eventually this might be commoditized and everyone will be able to do it.
It's just a matter of time.
But the blockchain aspect is not that trivial.
You cannot just copy paste the blockchain and just, you know, all of a sudden have blockchain integrations and all your partners onboard it on that.
And on top of that, the biggest note for financial services is always the liquidity and now they are starting to there they keep growing and it just means that there is going to be more and more liquidity and that's the flywheel right so we see more people coming in more partners coming in they are generating more loans so i can go there i can refund some loan or i can buy some loan and it just creates that flywheel that it's really hard to replicate anywhere else.
Do you know which blockchain they're building on?
Are they on an Ethereum L2 or Solana?
It's called Provenance.
Ah, okay.
Is that a proprietary one?
No, I don't think so.
I think anyone can go and use that blockchain.
So it's not a closed one.
Is it an Ethereum L2?
I'm not familiar.
I've heard of Provenance blockchain, but I don't recall what ecosystem it's in.
I'm not sure which one is it.
I think maybe Avalanche, but I'm not sure to be honest.
Okay, well, look at that.
Okay, well, I'll look into that too.
Yeah, I think that there are a lot of enterprises that are building their own Avalanche subnet, and nobody knows it's an Avalanche subnet.
So that's something I'll have to look into more.
Okay, Martin, let's talk.
Sorry, yeah, go ahead.
Sorry, it's actually on Cosmos.
Oh, okay, cool.
All right, well, there's a lot that came out of Cosmos.
Yeah, right, right, right.
Okay, interesting.
I think the last question I had around this is how you're thinking about this for your own portfolio.
Because I think you've been in position in figure for a while.
You've been bullish on them for a while.
Are you adding to your position here?
Do you have a price target in mind?
What is your outlook on the stock here?
I remain bullish.
I probably don't want to add more to my position as I already have pretty decent position right now.
I think the target...
If you look at the Wall Street median targets, I think it's something around $50.
And right now we are at $30.
You know, maybe we need one or two more quarters to see that the growth is actually sustainable and the numbers are improving.
And then once Kiawe hits the P&L in Q4 probably, then like those numbers will really explode.
And so my...
sort of base case is that I will probably hold this one for like two or three more quarters because that I think that's the time timeline, reasonable timeline for the stock to reprice.
I think I agree with most of these estimates that a figure could hit 50 bucks and maybe even higher.
It depends, but If it hits 50 bucks, I will probably sell some part of that.
But it depends if the numbers just keep growing up.
And I see that the growth is not going to slow down in time soon.
We see the tailwind that the broader market of Helox is improving.
And now they are bringing more other markets to their business.
So they are diversifying a little bit.
And so they are not as sensitive to interest rates and stuff like that.
I might be holding even longer.
So it's hard to say, to be honest.
I don't like to give price predictions or something like that because if they finally hit 50 bucks, but their business just keeps growing up.
And so at that point, I might view figure as a reasonable price, I'm not going to sell when it's still reasonable price.
I might sell when I see that it's trading at quite expensive multiples.
And I might be like, okay, I think this is getting way too overheated.
I might want to trim my position or sell completely, but we are quite far from that levels.
Okay.
So if anybody wants to follow Martin's exact moves and track how he's playing the markets here, you can join us at Milkroad Pro.
The link is in the description to do that.
Martin, if people want to follow the research you're doing on figure and other investments that you're interested in, where can we send people to find more of you and your work online?
What's your X handle?
Where can they find you?
Yeah, either you can follow me on Twitter.
I'm M0XT underscore, or you can join Milkroad Pro.
And I share a lot of my takes and views and updates on not just figure, but like all my positions on Milkroad platform.
So you can definitely join as well.
Well, Martin, thank you so much for being here.
I know our audience is going to love this.
I really appreciate you coming on the Milkroad show to share all of this with us.
And yeah, thanks so much for being here.
Thank you.
It was fun.
And thank you all for joining us.
I hope you all learned something today.
There's a lot of alpha in this one.
I'm going to have to take a closer look at Vigia myself.
But until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of The Milk Road Show.
Thanks for being here, everyone.
Bye.
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