Figma delivers strong revenue growth outlook, easing Wall Street's AI disruption fears

Figma Gives Strong Growth Outlook, Easing AI Disruption Fears

Figma Inc. gave an annual revenue outlook that topped estimates, potentially easing broad Wall Street anxiety that the creative software company's business is threatened by the emergence of rival artificial intelligence products. The shares jumped in extended trading. Sales will be about $1.37 billion in 2026, the San Francisco-based company said Wednesday in a statementBloomberg Terminal. Analysts, on average, projected $1.29 billion, according to data compiled by Bloomberg. Figma is known for making software used to design applications and website interfaces. It has worked to expand its suite of software, including a generative AI tool called Figma Make, which creates app interfaces and code from prompts. Weekly users of the tool grew 70% in the fourth quarter, Chief Executive Officer Dylan Field said in remarks prepared for a conference call after the results were released. The application software industry as a whole has been rocked by fears of competition from AI, with investors fleeing from some of the biggest enterprise companies such as Salesforce Inc. and ServiceNow Inc. The shares rose more than 10% in extended trading after closing at $24.19 in New York. The company's stock has declined steadily since its blockbuster public offering in July 2025, which saw the shares pop 250% on the first day of trading. As of Wednesday's close, the stock was about 25% below the $33-a-share IPO price. "Like with the rest of software, investors are grappling with the defensibility of Figma's moat against AI-native competitors or the potential for general AI efficiencies to weigh on seats," wrote Billy Fitzsimmons, an analyst at Piper Sandler, referring to the number of a customer's paid users. Fourth-quarter revenue increased 40% to $303.8 million, the company said. Profit, excluding some items, was 8 cents a share. Wall Street analysts, on average, estimated earnings of 7 cents a share on revenue of $293.1 million. Net dollar retention rate -- a metric of spending by existing customers -- was 136%, topping projections. This indicator is watched by investors as a signal of whether customers are adopting new tools offered by Figma, and thus expanding their spending with the company. It represents an increase from 131% reported in the previous quarter.

Figma jumps as AI push boosts software design spending

Feb 19 (Reuters) - Shares of Figma (FIG.N), opens new tab rose around 14% before the bell on Thursday as investors cheered the software design provider's strong revenue forecasts and commentary around its artificial intelligence ambitions. Figma has become a popular choice for design among diverse groups, including enterprises and freelancers, as it allows users to execute every step of the creative process - from ideation and brainstorming to coding and shipping - on a single platform. To grow its foothold in a highly competitive market, Figma has embedded AI into its platform to attract more users - a strategy also employed by larger rival Adobe (ADBE.O), opens new tab, as they tussle for customer dollars. Figma on Wednesday forecast 2026 revenue of between $1.36 billion and $1.37 billion, compared with estimates of $1.29 billion, according to data compiled by LSEG. Starting in March this year, the company will also shift to a hybrid monetization model by selling AI credits. "We will begin enforcing credit limits ... for power users that go over those embedded credit limits, we'll be selling add-ons," Figma's chief financial officer Praveer Melwani told Reuters in an interview on Wednesday. However, investments in AI and business operations, and stock-based compensation are pushing up overall costs. Executives have previously said that AI spend will weigh on gross margins. If current gains hold, Figma is set to add over $1.7 billion to its market value. Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

With Figma stock down 80% post-IPO, investors cheer solid customer growth, ties to Anthropic and OpenAI | Fortune

SaaS-pocalypse. SaaS-mageddon. Those are just a few of the clever software-as-a-service portmanteaus being tossed around as investors debate a massive selloff in the sector that has vaporized roughly $1 trillion in valuations from recent highs, with more than $285 billion in market value wiped out in February alone. On Wednesday, it was cloud-based design platform Figma's turn to announce its fourth quarter 2025 earnings results to a market primed to search for signs of a continuing SaaS-nado. Investors were ready to pummel the stock after Figma saw a more than 80% tumble since an IPO last year that saw its price surge above $140 before sinking about $23. The Q4 headline numbers told a positive story with revenue of $303.8 million, up 40% year-over-year and an acceleration from the 38% posted in the third quarter. Net dollar retention rate -- a measure of how much existing clients are spending -- hit 136%, the highest it's been in 10 quarters. Plus, the $12 billion design company crossed the $1 billion annual revenue threshold for the first time ever, wrapping up 2025 with roughly $1.1 billion. The fourth quarter saw Figma's best performance ever of net new revenue. "2025 was a massive year for us," said Figma chief financial officer Praveer Melwani in an interview before the announcement. "There's a lot of momentum, and if you zero in on the quarter specifically, growth accelerated from Q3 to Q4." In after-hours trading following the earnings release, the stock traded up 15%. Quarter-over-quarter acceleration -- versus deceleration -- will be a key sticking point for the market in Figma's numbers and the story it tells about them. Giants such as Intuit, Microsoft, Oracle, and Salesforce have tumbled, and in recent weeks Amazon, Alphabet, Meta, and Microsoft have all announced significant increases in capital expenditures that have served to crush free cash flow numbers and bog down expected growth. Figma's adjusted free cash flow margin, which investors use to gauge how much of each revenue dollar can eventually flow to profit, fell from 41% in the first quarter to 24% in Q2, to 18% in Q3, to 13% in Q4. Gross margin slid from roughly 92% earlier this year to 86% in Q4, with the shrink attributed to the cost of running AI inference at scale. In prepared remarks, Melwani attributed the Q4 free cash flow decline to "continued investment in infrastructure and AI, changes in the timing of vendor payments, and a one-time $25 million IP transfer tax." The latter is tied to Figma's $200 million acquisition of AI-imaging startup Weavy, which has since been rebranded to Figma Weave. Melwani said the company "remains confident in the long-term cash generating profile of the business" and pointed to stabilization in gross margins over the past two quarters. Q3 held at 86%, which was the same in Q4, although weekly active users of Figma's prototyping tool, Figma Make, rose 70%. "Improvements in infrastructure optimization reduced our cost to serve each user," he said. Another critical pressure test will come next month when Figma plans to switch on its consumption-based pricing per seat, which is how it is planning to monetize AI usage. Figma has allowed customers to try out its offerings to get individual users and teams acquainted and investors are watching closely to ensure AI investments are translating into revenue growth. In an interview, Melwani laid out a two-pronged approach. First, embedded credits across all seat types, including starter and free users, will get them started on the AI offerings -- and Figma hopes they'll engage deeply with the tools. Second, once March rolls around and the consumption limits kick in, users on the platform that exceed the limits will have to purchase an add-on pack, said Melwani. He said the right signals are all there. Some 75% of paid customers with more than $10,000 in annual recurring revenue (ARR) are now bingeing AI credits on a weekly basis. More than half of Figma's paid customers above $100,000 in ARR are using Figma Make every week, he said. Figma is betting that usage will convert into revenue that offsets the infrastructure costs. "We'll slowly start to transition to include some consumption and as you do that, you'll start to see an offset," said Melwani. Figma will still need to convince investors that even though its profitability seems to be creeping in the wrong direction, it will eventually catch up with its top line. Another bright spot comes from the company partnering -- and explaining those partnerships -- with Anthropic and OpenAI at a time when investors want to understand how firms are working with marquee AI firms rather than against them. Figma announced a partnership with Claude Code on Feb. 17, and works with OpenAI through a ChatGPT and FigJam integration. Figma wrapped up Q4 with 67 customers spending more than $1 million annually, up 68% year-over-year, which is a cohort Melwani said the company doesn't often flag. "We've done a lot of work to make sure what we've built is scalable for enterprise," he said. "That's translated into accelerated growth."

Figma crosses $1 billion in revenue - but it's who's doing the designing that matters

Figma has crossed a significant milestone this quarter, with full year 2025 revenue coming in at $1.056 billion, up 41% year-on-year. The fourth quarter was also the company's strongest yet, with $303.8 million in revenue, representing a 40% year-on-year growth rate that actually accelerated from the previous quarter. The company ended the year with $1.7 billion in cash and marketable securities, a non-GAAP operating margin of 14% for the quarter, and 67 customers spending more than a million dollars annually - up 68% year-on-year. These are, by any measure, strong numbers. The doomed Adobe acquisition that overshadowed Figma for the better part of two years is firmly in the rear view mirror and the IPO is done. The question now is, what kind of company Figma becomes at scale? Is this a company that captures mid sized orgs and lone rangers, or does it have relevance in the enterprise? A closer look at the earnings data and there are clues about how companies are making use of Figma's AI design tools... Of all the files created in Figma Make last year - the company's text prompt AI design tool - nearly 60% were created by non-designers. Not product designers, not UX professionals, but developers, product managers, marketers, and others who would not traditionally describe themselves as doing design work. That's quite an interesting figure and it's one that tells about what's actually happening inside Figma's enterprise customer base. CEO Dylan Field said on the earnings call: I think it's not really the roles blurring, more the responsibilities blurring between roles... People are feeling the need to be more generalist. And so I think that it's hard to split in a very accurate way because so many people that are non-designers by title are starting to really engage with design tasks. That's a diplomatic framing, but the implications are that the old model of discrete handoffs between design, engineering, and product management - with design as a separate department that work passes through - is starting to look like a legacy approach in organisations that are experimenting. There was a Flexport story outlined in the earnings call that illustrates this pretty effectively. The logistics company ran a company-wide hackathon with its top 150 leaders, giving teams 24 hours to prototype solutions to real business problems using Figma Make. One winning team rebuilt the factory onboarding flow - a longstanding operational problem - with Field noting that idea is now shipping to customers within weeks. Another team processed customer call transcripts using AI and fed that data into Make to automatically generate custom supply chain diagrams for the sales team. What's clear is that this is an example of a company changing how it solves operational problems, with design tooling at the centre of the process. Field noted that the Flexport CEO told his team that the groups doing this kind of rapid prototyping are the ones performing best. The adoption numbers also seem to back this up. Over 50% of paid customers spending more than $100,000 in ARR were building in Make on a weekly basis by the end of Q4, up from 30% at the start of the year. Weekly active users of Make grew more than 70% quarter-on-quarter. And over 80% of Make's weekly active users on full seats also used Figma Design in the same period - meaning this is additive platform adoption, not one product cannibalizing another. What's also becoming clearer is that Figma's ambition extends well beyond design tooling into the broader software development workflow. The Claude Code to Figma integration, launched the day before the earnings call, allows developers working in Claude Code to send UI work directly to the Figma canvas as editable design layers. Teams can explore alternatives and iterate together, and when direction is agreed, designs flow back into code via Figma's MCP server. The GitHub partnership also offers some evidence of what this looks like at enterprise scale. GitHub uses Figma's MCP server and Code Connect to surface production design system code directly within Figma, linking each component to its canonical implementation. Their design system spans more than 7,400 design tokens and tens of thousands of lines of code. Field noted on the call that what previously required hours of back-and-forth between design and engineering can now move forward in minutes. One may wonder where the lines are between what Figma does and what an AI coding tool like Claude Code does, and it's a question investors raised directly on the call. Field argued that design is inherently non-verifiable, unlike code, which means human judgment and design craft become more important as AI takes on more of the coding work, not less. Whether that framing holds as the technology develops is an open question, but it seems to be translating into solid numbers for Figma. Figma is also visibly changing who it sells to inside its customers. CFO Praveer Melwani noted on the call that the company is increasingly engaging central IT teams rather than purely design champions, and demand for the Governance Plus add-on is growing as enterprises focus on security, compliance, and centralised management. A top-ten global bank in the Q4 highlights grew its developer seat count by 69%. A transatlantic airline made a multiyear platform commitment spanning booking, loyalty, and internal tools for crew and airport staff. These suggest that platform decisions are being made, not departmental ones. On pricing, enterprise buyers should be aware that from March 2026, Figma shifts from a pure seat-based model to a hybrid of seats and AI credit consumption. By the end of Q4, 75% of paid customers spending more than $10,000 in ARR were already consuming AI credits weekly. Melwani was candid about the change and said: We'll plan to refine our assumptions in the months ahead, as we continue to both learn from customer consumption behavior, and drive further AI adoption around new feature releases. This March is when our model will shift to monetizing both seats and credits, a dynamic that is not reflected in our historical revenue results. This is a reasonable thing to say, but enterprise procurement teams would be wise to have that conversation with their Figma account teams before the next renewal cycle forces it. When Figma Make launched, my instinct was that it was primarily interesting as a prototyping tool - something that would be useful for design teams looking to move faster. The 60% non-designer figure shifts that framing. If the majority of the activity in Make is coming from people who don't identify as designers, then Figma is doing something more significant than expanding a design tool's feature set. It's inserting itself into a broader question about how cross-functional teams build and ship software. The enterprise traction is real, but as we know, when it comes to enterprise adoption at scale, governance, control and auditability are what ultimately determine staying power. The speed at which Figma Make can deliver tangible outcomes means proliferation is easy -- perhaps deceptively so. What will matter is whether organisations can track what's being built, tie it to measurable change, and put the right guardrails around a tool that, by design, puts production-ready output within reach of almost anyone.

Figma stock climbs on 40% revenue growth and surging Figma Make adoption - SiliconANGLE

Figma stock climbs on 40% revenue growth and surging Figma Make adoption Shares in Figma Inc. were up more than 14% in after-hours trading today after the graphic design software provider impressed investors with earnings and revenue beats in its fiscal 2025 fourth quarter and provided forward guidance ahead of expectations. For the quarter that ended on Dec. 31, Figma reported adjusted earnings per share of eight cents, up from six cents per share in the same quarter of 2024, on revenue of $303.8 million, up an impressive 40% year-over-year. Both figures were ahead of the seven cents per share and revenue of $293.15 million expected by analysts. Figma ended the quarter with 13,861 paying customers with more than $10,000 in annual recurring revenue, 1,405 customers with more than $100,000 in annual recurring revenue and 67 customers with more than $1 million in annual recurring revenue. Those customers are also sticking around, with the company having a 136% net dollar retention rate. Customer growth was key to Figma's strong figures, with weekly active users of Figma Make, the company's artificial intelligence-powered feature that lets users generate editable user interface designs and prototypes from natural-language prompts, growing more than 70% quarter-over-quarter, with more than half of paid customers with more than $100,000 in annual recurring revenue building in Figma Make on a weekly basis through the quarter. Business highlights in the quarter included expanded functionality and broader availability of Figma Make, including support for experimental models Gemini 3 Pro and Claude Opus 4.6. The company introduced Make Connectors that allow users to pull contextual data from external platforms such as Atlassian, GitHub, Notion and Linear when building apps or prototypes and released a new Claude Code to Figma integration that imports user interfaces generated in Claude Code directly into Figma's infinite canvas as fully editable layers. Figma also launched three new AI-powered image editing tools for precision editing inside the canvas and acquired AI design startup Weavy Inc., now rebranded as Figma Weave, combining multiple leading AI models with professional-grade editing tools in a browser-based environment. For the full year, Figma reported diluted adjusted earnings per share of 30 cents, up from 25 cents per share in 2024, on revenue of $1.056 billion, up 41% year-over-year. "2025 was a massive year for Figma and the fourth quarter was our best quarter yet," said Dylan Field, co-founder and chief executive officer of Figma, in the company's earnings release. "Our accelerated revenue and customer growth going into 2026 reflect design's power and Figma's essential place at the center of the product development stack." Looking forward, Figma says that it expects revenue of $315 million to $317 million in its fiscal 2026 first quarter, healthily ahead of the $292.5 million expected by analysts. For the full year, the company expects revenue of $1.366 billion to $1.374 billion, ahead of an expected outlook of $1.286 billion.

Figma paints 'pretty picture' as new products propel revenue growth: analysts

Figma's (FIG) fourth-quarter results and guidance demonstrated surging growth, stabilizing growth margins, and solid traction with new artificial intelligence tools. Shares had increased 8% during pre-market trading on Thursday. "Revenue (+40% YoY), Non-GAAP gross margins (86.2%), and Non-GAAP operating margins (14.5%) all came in above consensus," said RBC Figma's growth benefits from increased AI tool usage, integration of new AI-native features, and rising adoption by paying customers consuming AI credits. Margin stability was due to infrastructure optimization, contributing to lower costs per user, and top-line outperformance offsetting increased investments. New products and refined pricing/packaging are driving multi-product adoption, increased seat expansion, and providing a mid-single-digit benefit to revenue outlook.

Figma Trades at 9x Sales as Growth Stays Near 40% and AI Usage Ramps | Investing.com UK

Figma Inc changes hands around $25-26 today, up about 5% on the session after jumping 15-16% on earnings. The stock is still almost 35% down year-to-date, sits roughly 80% below its post-IPO high near $125, and trades under its $33 IPO price. Market cap is about $12.3-13.8 billion, depending on which print you use, against an all-cash balance of roughly $1.6-1.7 billion and no debt, so effective enterprise value is close to $12 billion. At the company's own 2026 revenue guide of $1.366-1.374 billion, you're paying roughly 8.8-9.0x forward EV/sales for a business still growing close to 30-40% a year. RBC Capital now pins a $31 target on the stock (cut from $38) with a "Sector Perform" stance, leaving about 20-25% implied upside from the mid-$20s. Piper Sandler keeps an "Overweight" with a $35 target. Wall Street overall sits around Buy / strong Hold, while some Seeking Alpha voices are openly accumulating on this drawdown, arguing the multiple has reset far more than the business has. Latest quarter: revenue hit $303.8 million, up 40% year on year, beating consensus near $293 million. Adjusted EPS landed at $0.08 versus $0.06-0.07 expected. Non-GAAP gross margin came in at roughly 86-86.2%, which is elite SaaS territory. Non-GAAP operating margin printed about 14-15%, versus mid-teens in prior periods, still comfortably positive while the company spends into AI and go-to-market. For Q1 2026, management guides revenue of $315-317 million, about 38% growth and well ahead of the roughly $292 million the street had in its models. For full-year 2026, guidance sits at $1.366-1.374 billion, implying 29-30% annual growth versus consensus around 22-24%. On profitability, Figma targets $100-110 million in non-GAAP operating income for 2026, which is ~8% margin, down from about 12% in 2025. That guide is deliberately conservative. The company already demonstrated 14-15% operating margin in the latest quarter and generated free-cash-flow margins in the mid-teens, supported by strong growth in deferred revenue and a pre-paid enterprise mix. Even on the guided numbers, Figma still clears the Rule of 40 with ~30% growth plus high-single-digit to low-teens margins. Figma now runs at over $1.0-1.05 billion of annual revenue with hyper-growth dynamics. Q4 customer metrics were the real tell: Net dollar retention hit 136%, up from 131% in the prior quarter, meaning the average existing customer is spending about 36% more than a year ago. Gross revenue retention sits around 97%, so almost all churn is offset by expansion. The company counts roughly 13,861 paying customers over $10,000 in ARR, up 32% year on year. Accounts above $100,000 in ARR reached about 1,405, growing 46% year on year and adding more than 150 such customers sequentially. Top-tier accounts above $1 million in ARR stand at 67, up from just over 40 in early fiscal 2025. This is the pattern of a platform embedding deeply into larger organizations. Figma is already used by around 95% of the Fortune 500, but penetration within each enterprise is far from saturated; the expansion is coming from more seats, more teams, and more products per logo rather than just new logos at the edge. The growth acceleration is being driven by AI, not threatened by it. Figma Make, the AI design engine, converts natural-language prompts into functional UI mocks and even code scaffolds. Weekly active users on Make jumped more than 70% quarter-on-quarter. More than half of customers with over $100,000 in ARR are using Make every week. That is not an experimental toy; that is already part of the production workflow для big design and product teams. From March, Figma will enforce AI credit limits per account and introduce paid AI tiers. Professional, Organization and Enterprise plans will include different credit bands; once customers burn through bundled credits, they either step up to higher-tier contracts or buy extra credits on a subscription or pay-as-you-go basis. The company hasn't quantified the incremental revenue yet, but structurally this shifts a material slice of revenue from pure seat-based to usage-linked, which historically has expanded wallet share in similar SaaS names. On the product side, Figma is integrating multiple front-line models: Figma Make uses models from Anthropic and Google Gemini to power prompt-to-prototype flows. New Make Connectors pull context from systems like Atlassian, GitHub, Notion and Linear straight into the design canvas, tightening the loop between product specs, code and UX. Figma shipped three new AI-power image-editing tools for fine-grained edits inside the canvas. The acquisition of AI design startup Weavy (roughly $200 million) - now rebranded as "Figma Weave" - brings advanced image and video generation and workflow tools under the same browser-based umbrella. The AI stack now spans content generation, layout, explanation, code alignment and collaboration in one environment instead of a mess of disconnected tools. Market concern sits in one place: the idea that agentic products like Anthropic's Claude Cowork will cannibalize demand for collaborative design software and compress seat counts across the industry. That fear has driven a 58-77% drawdown from peak levels in FIG, even though Figma's actual numbers have accelerated. The reality: Figma's core is multi-player collaboration - multiple humans editing the same file, commenting, iterating and shipping. Claude Cowork focuses on agentic task automation: a single user delegating work to an AI agent across files and tools. In practice, teams are already running Claude and Figma together - using Claude to generate or refactor code and assets, then using Figma to orchestrate design reviews, align stakeholders and finalize UX. Figma's real moat is the combination of collaboration primitives (multi-user canvas, comments, branches, FigJam workshops), design-to-dev handoff, and the AI layer that now explains and refactors layouts for non-technical colleagues. That's why AI systems themselves routinely recommend Figma as the default for deep UI/UX work. On top of that, the company is deliberately expanding beyond the "designer silo": Buzz and Draw for social and illustration assets Figma Make and MCP Server to bridge design context with code Management pegs addressable market around $33 billion, far above classic design software estimates, because they're going after the entire product-development stack: designers, engineers, product managers, marketers and even UX researchers. Competition is real. Adobe's XD is effectively in maintenance mode but still present. Canva pushes hard into pros from the bottom-up. New AI-native tools like Framer and Vercel's VO nibble at slices of the workflow. The difference is that Figma is already at >1 billion revenue, still growing high-30s to 40%, and dominating collaborative UX in the Fortune 500 while the rest are filling niches. Sector-wide rotation out of enterprise software has amplified the downside. Software baskets trade at roughly 30% discounts to their long-term EV/sales averages and more than 50% below peak multiples, while Figma now trades near 9x forward sales. Peers with similar or slower growth - Cloudflare, Shopify, Snowflake, Axon - usually command higher or similar multiples with comparable or weaker net-retention profiles. Balance sheet is straightforward: roughly $1.6-1.7 billion in cash, zero debt, solid positive free cash flow. Last reported free-cash-flow margin sat around the mid-teens, ahead of non-GAAP operating margin because of strong growth in deferred revenue and multi-year enterprise deals. Stock-based compensation is meaningful post-IPO, with fully diluted share count around 490-495 million vs ~472 million non-GAAP basic. Dilution is manageable at this stage, but the evolution over the next 6-8 quarters matters for per-share math. A mid-teens free-cash-flow yield on revenue, not equity Rule-of-40 score north of 50 (≈30% growth + mid-teens FCF margin) For a company delivering 40% current growth, 136% net retention, 86% gross margins and a credible roadmap to extract more revenue per customer via AI credits and higher-tier plans, that multiple is not demanding. If growth trends even normalize down toward 25% with margins drifting into high-teens, the valuation quickly collapses into the mid-single-digit EV/sales bucket where slower, less differentiated SaaS names trade. Risk side is clear: Heavy software sector rotation can keep the multiple compressed. Anthropic and other AI tools can erode pieces of the workflow if Figma's product execution slips. Guided operating margin for 2026 is soft at ~8%, so any cost blow-out would hurt the Rule-of-40 story. IPO-era SBC keeps some pressure on per-share metrics. AI is clearly driving more usage and product breadth, not less. Valuation sits around 9x forward sales with mid-teens FCF and a fortress balance sheet. Putting it together, the setup is bullish. At current levels around the mid-$20s, Figma Stock (NYSE:FIG) looks like a Buy on a multi-year view, with upside coming from any normalization in software sentiment or proof that AI-driven usage pricing lifts growth above the already-strong 29-30% guide.

Figma earnings on deck as AI monetization debate intensifies By Investing.com

Figma Inc. reports fourth-quarter results Wednesday after the market close, with investors focused squarely on whether the design-software company's artificial-intelligence strategy can reverse a punishing stock decline and prove out new revenue streams. Analysts expect earnings of 6 cents a share for the quarter ended December, down from 10 cents in the prior quarter. EPS estimates have risen 5.62% over the past 60 days but remained flat over the past week. The company hasn't provided revenue guidance for the period. Figma's stock trades at approximately $23, down roughly 85% from its 52-week high of $142.92 reached in August, swept up in the broader selloff of software-as-a-service companies that some traders have dubbed the "SaaSpocalypse." Anthropic's AI products have been at the center of concerns about software disruption, with the iShares software ETF falling into bear market territory. Analysts rate the stock a Buy with a mean price target of $52.11, implying 126% upside from current levels. However, sentiment is mixed, with seven of 10 analysts maintaining Hold ratings. Recent price-target cuts from Piper Sandler and Morgan Stanley reflect caution about near-term valuation, even as firms acknowledge Figma's competitive strengths. What Investors Are Watching The central question is whether Figma can monetize its AI investments, particularly through Figma Make, the prompt-to-app tool launched in May 2025. Goldman Sachs analyst Gabriela Borges, who initiated coverage with a Neutral rating, noted that the company sees "new revenue streams from AI (Figma Make)" as part of its long-term opportunity. Stifel analyst Parker Lane echoed this focus, writing that "the role of AI in the creative and design spaces and Figma's ability to capitalize on and monetize its own solutions like Make will remain a key component of the debate." Investors will also watch for updates on wallet-share expansion within large accounts. Figma's customers generating more than $10,000 in annual recurring revenue increased 45% to 10,517 in 2024, a metric that signals the company's ability to upsell beyond its core design tool. The timing is notable: Just a day before earnings, Figma announced a partnership with Anthropic launching "Code to Canvas," which converts AI-generated code into editable designs. The move reflects Figma's bet that AI coding tools haven't eliminated the need for design refinement -- but it also raises questions about whether the company risks building infrastructure for workflows it no longer controls. Figma's platform has expanded beyond designers, with non-designers now representing two-thirds of monthly active users. Whether that broader reach translates into durable revenue growth amid AI disruption will shape the market's view of the stock's path forward. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Figma jumps after strong results and AI-driven outlook

Figma's shares surged 16% in after-hours trading on Wednesday, buoyed by better-than-expected quarterly results and a robust outlook for 2026. Q4 EPS came in at $0.08, versus $0.07 expected, while revenue reached $303.8m, well above the $293.15m forecast. Revenue rose 40% y-o-y, despite a net loss of $226.6m, notably due to investments in AI infrastructure. For Q1 2026, Figma expects revenue of between $315m and $317m, up 38% y-o-y. For the full year, the company is targeting revenue of between $1.366bn and $1.374bn, compared with a consensus of $1.29bn, and operating income of between $100m and $110m. The announcements come amid broad skepticism towards software stocks, weakened by the rise of generative AI, even as Figma is seeking to capitalize on that shift. Listed in July, Figma is banking on its Figma Make tool, which can generate prototypes from natural-language instructions, in partnership with Anthropic and Google. Over half of its strategic customers are already actively using the tool. The group plans to monetize usage from March, through monthly caps on AI credits and dedicated subscriptions. Despite a 70% increase in weekly active users of Figma Make, it's gross margin held steady at 86%, helped by optimization of infrastructure costs. A strategic partnership has also been struck with ServiceNow to turn Figma designs into enterprise applications.