Figure Technology Solutions, Inc. (FIGR)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 16, 2026 (the “2025 Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the section titled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report and “Risk Factors” in our 2025 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. U.S. Dollars appearing in tables are presented in thousands unless otherwise indicated. In each table where “n.m.” appears, management has deemed the percentage calculation not meaningful.

Business Overview

Figure is building the future of capital markets using blockchain-based technology. Financial services have historically been and are still trust-based markets, which require intermediation. Large institutional companies have been built around this. Blockchain-based technology has the power to distill these multi-party marketplaces down to just two: buyer and seller.

Blockchain can do more than disrupt existing markets. By taking historically illiquid assets, such as loans, and putting these assets and their performance history on-chain, blockchain is able to bring liquidity to historically static markets. That liquidity, coupled with the ability to achieve true digital perfection and control, opens previously inaccessible financing opportunities.

We believe there are three core benefits blockchain delivers to the capital markets. The first is transactional: the reduction of audit, quality control, third-party review and other expenses. The second is liquidity: the ability to support 24x7, real-time bilateral marketplaces. The third is financing: the democratization of capital access through programmable smart contracts that enable peer-to-peer funding and real time loan perfection.

Figure’s proprietary technology powers next-generation lending, trading and investing activities in areas such as consumer credit and digital assets. Our application of the blockchain ledger allows us to better serve our end-customers, increase speed and efficiency, and enhance standardization and liquidity. Using our technology, we continue to develop dynamic, vertically-integrated marketplaces.

Reclassifications and Immaterial Error Corrections

The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to certain voluntary reclassifications, a voluntary change in accounting principle, and immaterial error corrections made to the previously reported Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025. These items include changes in the presentation of marketable securities income and customer deposit liability activity within the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, a change in accounting principle for payment stablecoins, and a correction to the presentation of retained beneficial interests in loan securitizations within the Condensed Consolidated Statements of Cash Flows. See “Note 2—Summary of Significant Accounting Policies” in the Condensed Consolidated Financial Statements for further detail. In addition, the Management’s Discussion and Analysis of Financial Condition and Results of Operations may have other immaterial corrections and reclassifications that management has deemed necessary to conform prior period presentation to current period presentation for comparability.

Recent Developments

Proposed Acquisition of Kiavi, Inc.

On June 10, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), to acquire Kiavi, Inc., a Delaware corporation (“Kiavi”), a market leading AI-powered lending platform for residential real estate investors used to buy, renovate, and resell properties.

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Under the terms of the Merger Agreement, at the closing of the Merger (the “Closing”), we will pay an aggregate of approximately $532.4 million in cash to Kiavi equity holders, subject to customary purchase price adjustments set forth in the Merger Agreement, including for Kiavi's cash, indebtedness, transaction expenses, operating net working capital, and warehouse working capital.

On July 14, 2026, we closed a private offering of $600.0 million principal amount of 8.500% Senior Notes due 2031 (the “Notes”). The net proceeds from the offering were $586.5 million. We intend to utilize the net proceeds from the offering to fund the cash consideration payable in connection with the proposed acquisition of Kiavi, as well as for general corporate purposes and to pay fees and expenses related to the Notes. The completion of the offering was not conditioned on the completion of the Kiavi acquisition and if the Kiavi acquisition is not completed, the net proceeds will be used for general corporate purposes.

Concurrently with, and as a result of the issuance of the Notes, we terminated the Bridge Loan Facility that was entered into concurrent with the Merger Agreement. Refer to “Note 14—Subsequent Events” in the Condensed Consolidated Financial Statements for further information regarding the issuance of the senior notes.

The obligation to consummate the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of a number of customary closing conditions set forth in the Merger Agreement. In addition, the obligation of us to consummate the Merger is subject to the satisfaction or waiver of certain additional conditions, including the completion of a pre-closing restructuring, the contemporaneous closing of the sale of a subsidiary of Kiavi to a newly formed joint venture between the Company and a third party immediately prior to the Merger, and obtaining certain governmental and regulatory licenses and approvals. The Merger Agreement contains representations, warranties and covenants that are customary for a transaction of this nature.

The Merger Agreement contains mutual termination rights for Kiavi and Figure under certain conditions, as defined in the Merger Agreement. The Merger Agreement also contains a termination right for us if Kiavi has not delivered the Requisite Stockholder Consent (as defined in the Merger Agreement) to us prior to the date specified in the Merger Agreement. Under the Merger Agreement, we may be required to pay a termination fee to Kiavi of $25.0 million if the Merger Agreement is terminated by us under certain conditions, as defined in the Merger Agreement.

Key Operating Metrics

We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because they are used to measure and model the performance of companies similar to us using similar metrics.

The following tables set forth key performance measures that we use to evaluate our business for the three months ended June 30, 2026 and 2025:

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(A)Ecosystem Volume consists of Consumer Loan Marketplace Volume and Digital Asset Marketplace Volume.

(B)We define Consumer Loan Marketplace Volume as the total U.S. dollar equivalent value of originations of HELOCs, DSCR, and personal loans on our LOS, as well as the volume of third-party loans traded on Figure Connect. We believe this measure is an indication of our scale and represents a potential revenue opportunity from the technology used for consumer credit loan originations.

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(C)We define Partner-branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our partners’ brands. Partner-branded volume is inclusive of Figure Connect Volume.

(D)We define Figure-branded Volume as the total U.S. dollar equivalent value of loans originated using our LOS under our brand.

(E)We define Digital Asset Marketplace Volume as the total U.S. dollar equivalent value of matched trades transacted between a buyer and seller through Figure Exchange. We believe this measure is an indication of our scale and represents a potential opportunity for our digital asset offering.

(F)We define Figure Connect Volume as the total U.S. dollar equivalent value of Consumer Loan Marketplace Volume originated by third-party sellers through our Figure Connect marketplace. We believe this measure is a reflection of the underlying growth of our Figure Connect ecosystem.

(G)Net Take Rate is derived from the sum of ecosystem and technology fees, origination fees, gain on sale of loans, net and gain on servicing asset, net from our Condensed Consolidated Statements of Operations. These items represent revenue generated from Figure-branded and Partner-branded volume. Valuation changes in fair value of mortgage servicing rights, which we believe are not indicative of operating performance, and marketing expenses in our operating expenses are deducted. This net amount is divided by overall consumer loan marketplace volume for that period.

(H)For definitions of Adjusted Net Revenue and Adjusted EBITDA and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”

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(A)We define YLDS in Circulation as the total U.S. dollar equivalent value of unsecured face-amount certificates solely backed by the assets of Figure Certificate Company (FCC), which is the issuer of the certificates. This is reported as an end of period outstanding balance.

(B)We define Matched Offers as the U.S. dollar equiva

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. U.S. Dollars appearing in tables are presented in thousands unless otherwise indicated. A discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is included in our final prospectus dated September 10, 2025, filed with the SEC on September 11, 2025 pursuant to Rule 424(b) of the Securities Act (the “Prospectus”), under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

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Executive Overview

Figure is building the future of capital markets using blockchain-based technology. Financial services have historically been and are still trust-based markets, which require intermediation. Large institutional companies have been built around this. Blockchain-based technology has the power to distill these multi-party marketplaces down to just two: buyer and seller.

Blockchain can do more than disrupt existing markets. By taking historically illiquid assets, such as loans, and putting these assets and their performance history on-chain, blockchain can bring liquidity to markets that have never had such. That liquidity, coupled with the ability to achieve true digital perfection and control, opens financing opportunities that were not accessible before.

We believe in three core benefits blockchain delivers to the capital markets. The first is transactional: the reduction of audit, quality control, third-party review and other expenses. The second is liquidity: the ability to support 24x7, real-time bilateral marketplaces. The third is financing: the democratization of capital access through programmable smart contracts that enable peer-to-peer funding and real time loan perfection.

Figure’s proprietary technology powers next-generation lending, trading and investing activities in areas such as consumer credit and digital assets. Our application of the blockchain ledger allows us to better serve our end-customers, improve speed and efficiency, and enhance standardization and liquidity. Using our technology, we continue to develop dynamic, vertically-integrated marketplaces.

Recent Developments

Reorganization

Prior to a change in corporate structure on March 18, 2024, the consolidated financial statements were under the former parent company, Figure Technologies, Inc. ("FT"). On March 18, 2024, FT, FT Intermediate, Inc. (“FTI”), and Figure Markets Holdings, Inc. (“FMH”) and other entities under common control consummated a reorganization (the “Reorganization”) whereby FT contributed assets and liabilities to FTI and subsequently, FT consummated a reverse merger with a subsidiary of FTI. Each outstanding share of common stock of FT converted into one share of common stock of FTI, whereby FTI (a) contributed assets and liabilities applicable to the FMH business and (b) 100% of the equity interest to FT's successor. FT then ratably distributed 74.1% of FMHs' common stock to third-party shareholders and 25.9% to related parties in exchange for their FTI common stock.

As a result of the Reorganization, there were two affiliated corporations under common control. Each of the following two corporations was owned either directly or indirectly by its controlling shareholder, Michael Cagney (“Controlling Party”):

•FTI was formed on March 18, 2024 as a Delaware corporation and primarily operates through its wholly-owned subsidiary, Figure Lending Corp. (“Lending”). Lending offers Figure Connect which generates ecosystem and technology fees, and originates, sells, and securitizes home equity line of credit (“HELOC”) loans that it services.

•FMH was formed on January 25, 2024 as a Delaware corporation. FMH utilized blockchain technology to develop an exchange for digital assets and credit, with new product offerings including providing interest-bearing stablecoin deposits.

In May 2025, both FTS and FMH redomiciled from the State of Delaware to the State of Nevada.

Recombination

On August 29, 2025 (“Recombination Date”), FTI and FMH recombined the businesses through a series of transactions (the “Recombination”) and FMH became a wholly-owned subsidiary of FTI. Approximately five outstanding shares of FMH common or preferred stock, options, or warrants converted into one share of common or preferred stock, options, or warrants of FTI (“Conversion Rate”). Upon the consummation of the Recombination, FTI changed its name to Figure Technology Solutions, Inc.

The Recombination was a reorganization of entities under common control as FTI and FMH were owned, either directly or indirectly, by the Controlling Party before and after the Recombination. As a result, the Recombination is accounted for in a manner similar to a pooling of interests with the assets and liabilities of the parties to the Recombination carried over at their historical amounts. Therefore, the accompanying Consolidated Financial Statements have been retrospectively recast to reflect the results as if FTI and FMH were a single consolidated entity as of the earliest period presented.

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IPO

On September 12, 2025, the Company completed its IPO, in which the Company issued and sold 36,225,000 shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $25.00 per share. The IPO resulted in net proceeds to the Company of $663.4 million after deducting the underwriting discounts and commissions.

In connection with the IPO, all shares of outstanding convertible preferred stock, including 2,010,410 shares of Series E preferred stock issued upon the exercise of outstanding warrants, automatically converted to 113,910,905 shares of Class A common stock, and a total of 39,393,047 shares of our Class A common stock held by the Controlling Party and his permitted transferees were converted into an equivalent number of shares of Class B common stock, of which 1,500,000 shares were subsequently converted back to Class A and sold in connection with the IPO.

OPEN Launch

In February 2026, we launched On-Chain Public Equity Network (“OPEN”), a blockchain-based network designed to modernize the infrastructure that supports the issuance, trading, custody and lending of public equity securities.

OPEN enables companies to issue their equity natively on the Provenance Blockchain and make it available for secondary market trading on our ATS. OPEN is designed to reduce reliance on traditional centralized market infrastructure and provide new capabilities for public companies and shareholders. These capabilities are anticipated to include lower costs and capital requirements compared to existing clearing and settlement models, greater access to trading through self-custody and self-settlement mechanisms that can reduce the need for custodial intermediaries, portfolio margining across digital and tokenized assets.

We aim to support frictionless two-way exchangeability between our securities issued on OPEN and our listed Class A common stock, a capability that we expect to make available to future OPEN issuers. This exchangeability is intended to promote liquidity and prices near par between blockchain securities and securities listed on national exchanges.

Blockchain Common Stock Offering

In February 2026, the Company successfully completed a secondary public offering of 4,375,000 shares of its Series A Blockchain Common Stock ("Blockchain Stock"). The selling stockholders in the offering agreed to sell 4,687,500 shares of Class A common stock to the underwriters. The Company did not raise proceeds through this offering. In conjunction with the offering, the Company repurchased 312,500 of our Class A common stock, subsequently held in treasury, that were subject to the offering at an aggregate amount of approximately $10 million at $32.00 per share.

The Blockchain Stock is a new class of equity security that trades exclusively on the Company’s ATS, allowing for trading 24 hours per day, 7 days per week. The Blockchain Stock provides the ability for holders to lend their stock transparently and utilize cross-asset collateralization through DeFi protocols. The offering served as the foundational launch of OPEN.

Share Repurchase Program

On February 25, 2026, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to $200 million of its Class A and Blockchain common stock over the next 12 months subject to market conditions, contractual restrictions and other factors.

Repurchases under the program may be made from time to time in the open market, through privately negotiated transactions, accelerated share repurchase transactions, or by other means in accordance with applicable securities laws and regulations. The timing, number of shares repurchased, and prices paid will depend on market conditions, share price, trading volume, corporate considerations, and other factors. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization.

This program does not obligate the Company to acquire any particular amount of stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion.

Key Operating Metrics

We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions. We believe that the presentation of such metrics is useful to

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our investors and counterparties because they are used to measure and model the performance of companies similar to us using similar metrics.

The following tables set forth key performance measures that we use to evaluate our business for the years ended December 31, 2025 and 2024:

_______________

(1)Ecosystem Volume consists of Consumer Loan Marketplace Volume and Digital Asset Marketplace Volume.

(2)We define Consumer Loan Marketplace Volume as the total U.S. dollar equivalent value of originations of HELOCs, DSCR,and

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