Figure (FIGR) Q1 FY26 earnings call: guidance and Q&A

Executive Chairman Mike Cagney detailed Figure's long-term strategy to build a blockchain-native capital market ecosystem across three verticals: debt and structured finance, equity and non-debt digital assets, and capital and financing markets, all unified by YLDS. He emphasized that Figure is not merely a HELOC company but aims for a total overhaul of existing markets, acknowledging this is a multi-year endeavor with massive upside. The ecosystem leverages Connect for whole loan marketplaces, Forge as an intermediary for liquid participation units, and Democratized Prime for financing digital assets.

Figure's consumer loan marketplace (CLM) volume grew over 110% year-over-year to $2.9 billion in Q1 FY26, with March volume alone exceeding $1 billion. Figure Connect, the capital-light marketplace, now accounts for 56% of total volume. The company added 80 new partners, including Flagstar Bank, a large regional depository, which is now the largest bank originator on the platform. This expansion validates the platform's institutional grade and its ability to support complex, large-scale banking operations, especially with proposed regulatory shifts reducing risk weightings for mortgage assets.

Democratized Prime balances grew roughly 80% quarter-over-quarter, with YLDS balances reaching $598 million. The Prime token is now the #1 by TBL on the Camino marketplace, and Figure recently announced its extension into Ethereum via the Morpho protocol, opening up a wider addressable DeFi market. The platform is actively onboarding third-party borrowers, including Agora Auto Assets ($24 million borrowed) and Credibly (a fintech lender for SMBs), with a goal of adding 8-10 originators in 2026. Figure aims for Democratized Prime balances to reach tens to hundreds of billions in the medium term.

First lien volume now accounts for 20% of Figure's total volume, up from 19% last quarter and 14% in Q1 FY25. Figure primarily competes in the small balance loan market, where its average cost to originate is $1,000, significantly lower than the industry average of $11,500. This cost advantage makes Figure highly differentiated and profitable in a market segment that was historically unprofitable or unaddressed by traditional lenders. Management highlighted that much of this growth is greenfield, creating new market opportunities rather than taking share from existing players.

Figure is aggressively integrating AI across its operations to enhance efficiency and automation. The custom AI platform, trained on structured, time-stamped on-chain financial data, has led to a 25% increase in 'story completion' (engineering projects delivered on flat headcount) and a 70% chat containment rate in customer support. AI-enabled validation workflows are also being used for third-party assets on Democratized Prime, helping to build scalable workflows and control frameworks. Further AI-driven improvements are expected to impact operations and processing costs in the second half of 2026.

Figure's platform demonstrated resilience in the private credit market despite industry concerns around retail investor-driven redemptions. In March 2026, over $1.15 billion of whole loan sales were executed on Figure's marketplace. An April 2026 loan auction resulted in a record low spread to the applicable risk-free rate, reflecting strong institutional investor demand for Figure's assets. The company noted increased interest in Figure assets as investors rotate out of leveraged loans, emphasizing the high-quality, diversified consumer assets and strong borrower fundamentals in its marketplace.