Figma shares jumped as much as 20% in extended trading on Wednesday after the design software maker reported robust results and quarterly guidance than Wall Street had predicted.
Here's how the company did in comparison with LSEG consensus:
- 8 cents adjusted vs. 7 cents expected
- Revenue: $303.8 million vs. $293.15 million expected
Figma's revenue grew 40% year over year in the fourth quarter, according to a statement. The company had a net loss of $226.6 million, or 44 cents per share, compared with net income of $33.1 million, or 15 cents per share, in the fourth quarter of 2024.
Management called for $315 million to $317 million in first-quarter revenue, which implies 38% growth. Analysts polled by LSEG were expecting $292 million.
For 2026, Figma sees $100 million to $110 million in adjusted operating income on $1.366 billion to $1.374 billion in revenue, which would suggest 30% revenue growth. The LSEG revenue consensus was $1.29 billion.
Lately, investors have become more concerned that generative artificial intelligence products could weaken the growth prospects of software companies. As of Wednesday's close, Figma shares were down about 35% year to date, while the iShares Expanded Tech-Software Sector Exchange-Traded Fund has slipped 22%. The S&P 500 index has gained almost 1% in the same period.
"If you look at software, not only is it not going away. There's going to be way more of it than ever before," Figma's co-founder and CEO, Dylan Field, said in a Wednesday interview. But he said the market is "potentially increasingly competitive."
The company, which went public in July, wants to ensure it can benefit as people turn to AI products for design. The Figma Make tool allows people to type in a few words and have AI models from Anthropic and Google interpret the information to craft app prototypes. More than half of customers spending over $100,000 in annualized revenue had people using Figma Make every week during the quarter, according to the statement.
Figma managed to lower the cost of running the Make service for end users by optimizing its computing infrastructure, Praveer Melwani, the company's finance chief, is set to tell analysts on Wednesday. The company's adjusted gross margin stayed put at 86%, despite that Figma Make weekly active users increased 70% from the third quarter.
Soon Figma will be bringing in more revenue from AI adoption. In March, it will start enforcing monthly AI credit limits for different types of account holders. Clients will pay based on monthly usage or sign up for AI credit subscriptions, according to a blog post from December.
Also during the quarter, Figma announced a collaboration with ServiceNow to convert designs into applications for large companies to adopt.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is developing news. Please check back for updates.
