tl;dr
Figma's stock dropped 14% after its first earnings report since its July IPO, despite beating revenue expectations and posting a rare profit. The company reported $249.6 million in revenue, a 41% increase year-over-year, and breakeven earnings per share. However, concerns remain about its long-ter...
**Figma’s Earnings Report: A Tale of Growth, AI Ambitions, and a Stock Slide**
Figma’s stock took a 14% nosedive in extended trading after its first earnings report since its July IPO, leaving investors scratching their heads. While the company narrowly beat revenue expectations and posted a rare profit, the numbers didn’t quite quell concerns about its long-term trajectory. Let’s unpack what’s driving the mixed reaction—and why Figma’s future might hinge on AI, customer retention, and a little-known Bitcoin bet.
**A Surprising Win, But Not Enough**
Figma’s second-quarter results were a mixed bag. Earnings per share hit breakeven, and revenue of $249.6 million edged past the $248.8 million LSEG consensus. That’s a 41% jump from the same period last year, thanks in part to its push for Dev Mode, a tool that lets developers implement designs created by Figma users. But the company’s net income of $846,000—a stark contrast to a $827.9 million loss in Q2 2024—was more of a technical victory than a celebration. Adjusted operating income of $11.5 million fell within its prior estimate of $9 million to $12 million, but the numbers didn’t spark much enthusiasm.
**AI, Acquisitions, and the Road Ahead**
Figma isn’t resting on its laurels. It recently launched Figma Make, an AI-powered tool that generates app and website designs from user descriptions, and Figma Sites, which turns designs into live websites. The company also acquired vector graphics startup Modyfi and content management system firm Payload, signaling its intent to expand beyond design.
Yet, the AI angle has investors wary. Figma hasn’t started charging for AI features yet, but it’s already factoring in the costs. “We plan on letting customers know they can purchase additional AI credits in the future,” CFO Praveer Melwani said during a call with analysts. Meanwhile, CEO Dylan Field insists AI won’t replace designers—it’ll amplify their value. “The more software becomes easier to build with AI, the more people will see that human touch is needed,” he argued, noting Figma’s own use of “vibe-coding” tools.
**Retention Rates and the Lockup Labyrinth**
Figma’s 129% net retention rate—down slightly from 132% in Q1—shows it’s holding onto customers, but not growing them as aggressively. With 1,119 customers spending over $100,000 annually, the company’s focus on upselling is clear. Still, the stock’s plunge suggests investors are skeptical about sustaining this momentum.
Complicating matters is the impending expiration of stock lockups. By September 4, 25% of some employees’ shares will be free to trade, potentially flooding the market. Half of Figma’s Class A shareholders have agreed to extend their lockups until August 2026, but the uncertainty could linger.
**A Bitcoin Bet, But Not a Bitcoin Play**
Figma’s $90.8 million in Bitcoin ETF holdings has sparked curiosity. “We’re not trying to be Michael Saylor here,” Field quipped, referencing the Bitcoin evangelist. The company’s cash reserves of $1.6 billion include a modest Bitcoin stake, but it’s framing the move as part of a “diversified treasury strategy,” not a speculative play.
**What’s Next?**
Figma’s third-quarter revenue forecast of $263 million to $265 million (33% growth) and full-year revenue target of $1.02 billion (37% growth) suggest optimism. But with AI disrupting the design space and lockups looming, the company’s ability to balance innovation with profitability will be key.
As Figma’s stock rebounds from its IPO high of $115.50 to its current $68.13, one question lingers: Can the design software giant turn its AI ambitions into a sustainable edge—or will it face the same challenges as other tech companies grappling with the future of work?
What do you think? Is Figma’s AI strategy a game-changer, or a risky gamble? Let us know in the comments.