Figma's AI-Powered Growth: Design Platform Beats Expectations with 38% Revenue Jump
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Figma delivers strong forecast as AI draws in more customers
Design software maker Figma on Wednesday reported stronger-than-expected third-quarter revenue and quarterly revenue guidance. The stock slipped 1% in extended trading. Here's how the company did in comparison with LSEG consensus: * Earnings per share: 10 cents adjusted * Revenue: $274.2 million vs. $265.2 million expected Figma's revenue grew 38% year over year in the third quarter, according to a statement. The company's net loss ballooned to $1.10 billion, or $2.72 per share, from $15.6 million, or 7 cents per share, in the same quarter a year ago. The adjusted earnings per share excluded a major increase in stock-based compensation expense. The company reported an adjusted operating margin of 12%, above StreetAccount's consensus of 6.5%. Some of the growth derives from the adoption of Figma Make, a product that develops app designs using generative artificial intelligence models. About 30% of customers spending over $100,000 in annualized revenue are using Figma Make weekly, CEO and co-founder Dylan Field told CNBC in an interview. "That continues to grow, and overall sort of across the business, Figma Make was a big driver of new customers in Q3," he said.
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Figma exceeds expectations and raises forecasts thanks to AI
In Q3, Figma's revenue reached $274.2m, up 38% and above the expected $265.2m. Adjusted earnings reached 10 cents per share, while its net accounting loss rose to $1.10bn ($2.72 per share), due to post-IPO stock-based compensation. The adjusted operating margin was 12%, compared to a consensus of 6.5% according to StreetAccount. For Q4, Figma is targeting $292m to $294m in revenue, representing expected growth of 35%, above the $283m forecast. AI is driving demand via Figma Make, which generates mockups from text instructions and serves as an acquisition lever. About 30% of customers generating more than $100,000 annually use it weekly, Dylan Field said. The net retention rate for customers spending at least $10,000 rose to 131%, up from 129% in the previous quarter. The number of organizations spending more than $100,000 reached 1,262, up 13% since the end of June. The stock rose just over 6% in after-hours trading on Wednesday.
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Figma reported strong Q3 results with 38% revenue growth, driven significantly by AI adoption through its Figma Make product. The design software company exceeded expectations and raised forecasts as AI features attract more enterprise customers.
Strong Financial Performance Driven by AI Adoption
Design software company Figma delivered impressive third-quarter results, reporting revenue of $274.2 million, representing a 38% year-over-year increase that surpassed analyst expectations of $265.2 million
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. The company also provided optimistic guidance for the fourth quarter, targeting revenue between $292 million and $294 million, which represents expected growth of 35% and exceeds the consensus forecast of $283 million2
.Despite the revenue growth, Figma reported a significant net loss of $1.10 billion, or $2.72 per share, compared to $15.6 million, or 7 cents per share, in the same quarter last year
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. This substantial increase in losses was primarily attributed to post-IPO stock-based compensation expenses. However, the company's adjusted earnings per share reached 10 cents, and the adjusted operating margin of 12% significantly exceeded StreetAccount's consensus of 6.5%2
.AI-Powered Product Drives Customer Growth
A key driver of Figma's growth has been the adoption of Figma Make, an innovative product that leverages generative artificial intelligence models to develop app designs from text instructions
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. CEO and co-founder Dylan Field revealed that approximately 30% of customers generating more than $100,000 in annualized revenue are using Figma Make on a weekly basis, highlighting the product's strong adoption among high-value enterprise clients2
.Field emphasized the significance of AI in driving new customer acquisition, stating that "Figma Make was a big driver of new customers in Q3" and that adoption "continues to grow" across the business
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. This AI-powered feature serves as both a product differentiator and an effective customer acquisition tool, enabling Figma to attract organizations seeking innovative design solutions.Enterprise Segment Shows Robust Momentum
Figma's enterprise segment demonstrated particularly strong performance during the quarter. The number of organizations spending more than $100,000 annually reached 1,262, representing a 13% increase since the end of June
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. This growth in high-value customers indicates the company's success in expanding within the enterprise market and capturing larger deals.Additionally, the net retention rate for customers spending at least $10,000 improved to 131%, up from 129% in the previous quarter
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. This metric demonstrates Figma's ability to expand revenue within its existing customer base, suggesting strong product satisfaction and successful upselling efforts.Related Stories
Market Response and Future Outlook
Despite the strong financial results, Figma's stock initially slipped 1% in extended trading following the earnings announcement
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. However, the stock later recovered and rose just over 6% in after-hours trading on Wednesday, indicating investor confidence in the company's AI-driven growth strategy and future prospects2
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