FIG: Figma Stock Slides 5% After Earnings as AI Growth Comes With a Bigger Bill

Revenue jumps 43% and guidance rises, but pressure on margins leaves investors scrutinizing the cost of turning AI adoption into profit.

📉 Earnings beat fails to lift the shares

• Figma shares FIG fell roughly 5% in late after-hours trading Wednesday, reversing most of their 5.2% regular-session gain.
• Stronger sales and higher guidance weren’t enough to sustain the rally, with investors focusing on profitability. The design platform delivered growth; the stock wanted a cleaner picture on costs.
• Third-quarter revenue climbed 43% to $391.4 million, exceeding the top of Figma’s own forecast by $16.4 million. Adjusted earnings reached $0.10 a share, above analyst expectations.
• The margin figures supplied the disappointment. Adjusted gross margin — the revenue remaining after delivery costs, with certain expenses excluded — fell to 82% from 85% in the previous quarter. Free-cash-flow margin also declined to 11% from 14%.

🤖 AI adoption grows, efficiency matters more

• AI usage is becoming widespread among larger customers. By October’s end, 65% of accounts generating more than $10,000 in annual recurring revenue used Figma’s agent weekly, while over 80% consumed AI credits.
• Figma is shifting more work to its own design model to control costs. Management said its share of work more than doubled from July through October. CFO Praveer Melwani described benefits including faster responses and greater efficiency, making the technology an important part of the margin-improvement plan.
• Existing customers continue to expand their spending. Net dollar retention reached 131%, measuring revenue from the same customer group after upgrades, downgrades and departures.
• Figma also counted 1,717 customers generating over $100,000 in annual recurring revenue, more than 450 above the year-earlier total.

🔎 Higher guidance sets the next benchmark

• Figma raised its full-year revenue outlook to nearly $1.5 billion, a $33 million increase at the midpoint. It also lifted adjusted operating-income guidance to $158 million–$163 million. Management expects an 11% adjusted operating margin, up from its previous 9% forecast.
• Fourth-quarter revenue guidance implies growth slowing to roughly 33%, with sales forecast at $402 million to $404 million. That remains substantial expansion, but it puts the durability of customer spending under scrutiny after the third quarter’s 43% increase.
• The gap between adjusted and reported profitability needs to be addressed. Figma recorded an $81.3 million net loss under standard accounting rules, versus $53.7 million in adjusted net income.