Figma's stock dips as investors worry that AI momentum is coming at a high price

By Christine Ji

Figma's investments in AI models and agents are driving usage, but the cost of delivering these features is proving to be expensive

Figma is ramping usage of its first-party AI model.

Figma's third-quarter revenue and earnings beat Wednesday showed that the company's push into its proprietary artificial-intelligence tools is gaining traction.

But investors are reeling from the costs of investing in the technology. Shares of Figma (FIG) fell as much as 6% in after-hours trading before paring most of those losses, ending the extended session down 0.7%.

The company reported revenue of $391.4 million, increasing 43% from a year prior. Adjusted earnings per share came out to 10 cents. Wall Street analysts had been expecting $377 million and 5 cents, respectively.

Figma's full-stack design solutions are "increasingly powered by our first-party model and native to the way teams design and build with AI," Figma CEO and co-founder Dylan Field said in the earnings release. "This is Figma's opportunity and what we believe will fuel our next phase of growth."

Credit consumption has surged with the introduction of Figma's AI agent, a design assistant that can run complex tasks, CFO Praveer Melwani told MarketWatch. Figma's agent became generally available in early October.

"The pace and iteration is really starting to pick up," Melwani said, pointing out that 65% of accounts generating over $10,000 in annual recurring revenue now use the automated Figma agent weekly, with more than 80% actively burning through AI credits.

But powering that growth requires significant upfront AI investment. Adjusted gross margins for the quarter were 82%, down from 85% the quarter before. This measure shows that Figma got less profitable when looking at how much revenue it retained after handling the direct costs of making its products.

For the third quarter, Figma's free-cash-flow margin - a gauge of how much actual cash the business gets to keep from every dollar of sales -was 11%, down sequentially from 14% prior.

Management projected fourth-quarter revenue of $402.0 million to $404.0 million, indicating 33% growth at the midpoint of that range, which topped the $391 million FactSet consensus.

The company views the elevated spending level as a significant investment into the long-term health of the business. Figma lifted its full-year revenue outlook to roughly $1.5 billion, citing its product momentum as well as improvements in AI cost efficiencies.

While Figma works with all sorts of AI models, the company has been growing usage of its own model to deliver fast and affordable results. From July to the end of October, Figma more than doubled the share of work powered by its own model.

"The models that we're developing are much smaller in nature, and so we're able to be a lot more efficient," Melwani said.

-Christine Ji

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11-04-26 2003ET