@milkroaddaily•hace 16 minutos
$FIGR charged less on every loan last quarter than it did a year ago, and somehow made more money on each (save this).
In Q2, the fee Figure kept on each dollar of loan volume fell to 3.6% from 4.0%, while the adjusted EBITDA margin went the other way, 54.6% against 47.2% a year ago, with net income up 192% to $87 million.
The price of the service falling while profitability rises is a rare occurrence in marketplace businesses.
Here's what's driving it:
Figure Connect is the product where outside lenders bring their own borrowers, and it just hit 65% of marketplace volume against 42% a year ago. Figure never pays to acquire those borrowers because the partner already did, so it can charge them less while still keeping more of what it charges.
Operations and processing ran at 67 basis points of loan volume against 79 basis points a year ago. Volume was $4.26 billion in the quarter, up 132%, net revenue came in at $226 million against a $207 million consensus, and diluted earnings were $0.35 against the $0.23 analysts had going in.
According to the release, 489 lenders now originate on Figure's system, 102 of them added in the quarter, and whichever mortgage bank or fintech wins the borrower, that loan still gets recorded, funded and traded across Figure's rails.
Keep in mind that credit is an underwriting business rather than a technology business, and none of this has been through a full default cycle. A defaulted home equity loan moves through the same courts on the same timeline no matter where the lien was recorded, and tokenizing it changes none of that.
What does change is the cost of moving the loan and the number of buyers who can bid for it, and S&P and Moody's have already put AAA on Figure securitizations.
Figure guided Q3 volume to $4.8 to $5.2 billion, so from here, Figure just needs the partner share to keep climbing while the cost of each loan continues to fall.
Milk Road PRO members are already well aware of Figure, Our PRO analyst @m0xt_ has been building a position in $FIGR for 6 months now.
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