Figma's revenue jumps 41%, but that's not enough to lift the stock

By Britney Nguyen

Figma's stock falls more than 14% after hours

Figma, led by CEO Dylan Field, swung to a profit in the second quarter.

Shares of Figma Inc. fell more than 14% in after-hours trading on Wednesday after the design-software company's first earnings report after its stock-market debut didn't seem to match Wall Street's excitement about it.

Figma's (FIG) Chief Executive Dylan Field also told investors to expect "significant investments" in its AI efforts, even when that might not win over some stakeholders.

"We do plan to take big swings if and when we see opportunities to invest both organically and inorganically," Field said on a call with analysts after the results. "We know this approach won't resonate with everyone, but we believe we have a massive opportunity in front of us and we intend to capture it."

Figma's second-quarter revenue rose 41% year on year to $249.6 million, matching FactSet's consensus.

Figma reported profit of $28.2 million, breakeven on a per-share basis, contrasting with a loss of $827.9 million, or $4.39 a share, in the year-ago quarter. FactSet did not offer enough estimates to form a meaningful profit consensus.

For the third quarter, Figma set guidance between $263 million and $265 million, which would translate to 33% year-over-year growth. The lower end came in above the FactSet consensus for $262 million in the September quarter.

For the current fiscal year, Figma called for revenue between $1.021 billion and $1.025 billion, which was above expectations for $1.022 billion at the midpoint.

Expectations were high for the design-software company, which saw its shares jump 250% from its initial public offering price of $33 on July 31. Figma's stock reached a record close of $142.92 on Aug. 1; it closed Wednesday at $68.13.

The IPO raised more than $1.2 billion. Of the 11 analysts tracked by FactSet that have initiated coverage of Figma, four have a buy rating for the stock. The remaining analysts have issued hold ratings.

Adobe Inc. (ADBE) had tried to acquire Figma starting in 2022, but it gave up on the $20 billion deal in December 2023 after mounting regulatory challenges. Figma is currently sitting at a $32 billion market capitalization.

See more: How Figma's soaring stock made for a historic IPO - and what may come next

On the call with analysts, Figma executives showcased some of the company's recent products, using Figma Slides to go over the numbers and demonstrating Figma Make, which includes artificial intelligence-powered design tools.

The company expects its gross margin, which was 90% for the quarter, to come down in the near term as it invests in long-term opportunities in AI.

Figma has $1.6 billion in cash, it said, which gives it "some flexibility" to invest in areas that it has been exploring, including AI and its sales strategy.

Chief Financial Officer Praveer Melwani said on the call that more than 80% of Figma's customers used two or more of its products in the second quarter, while two-thirds used three or more products.

As of the June quarter, Figma had almost 12,000 paid customers spending more than $10,000 in annual recurring revenue, and more than 1,100 paid customers spending more than $100,000 in ARR, Melwani said.

Last week, Morgan Stanley research analyst Elizabeth Porter initiated coverage of Figma with an $80 price target, and noted its "strong record of innovation, clear market leadership and solid unit economics."

But with a more than 35x enterprise value-to-sales ratio, Porter's team said Figma's "consistent innovation, execution, and durable growth" look well-priced already, leading to an equal-weight rating.

-Britney Nguyen

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09-03-25 1854ET