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.
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.
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.