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Figma, Inc. Class A (FIG)
NYSE:FIG
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Figma, Inc. Class A
(NYSE:FIG)
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Rating:59Neutral
Price Target:
$28.00
▲(3.09% Upside)
Action:ReiteratedDate:02/26/26
The score is driven mainly by mixed financial performance: excellent growth and gross margins plus improved 2025 cash flow, but overshadowed by very large recent GAAP losses and volatility. The earnings call was a notable positive with raised guidance and strong retention, while technical signals are mixed and valuation is constrained by negative earnings and no dividend.
Positive Factors
Revenue acceleration & high gross margins
Figma’s 2025 revenue re-accelerated ~40% with sustained very high gross margins (82%–91%), creating durable operating leverage. High gross margins support long-term scalability of product-led growth, enabling reinvestment in R&D and AI while preserving the potential for improving operating profitability over time.
Platform adoption & strong retention
A 131% net dollar retention and broad multi-product adoption (70% use 3+ products) indicate durable customer stickiness and cross-sell capacity. This platform momentum reduces churn risk and raises lifetime value, supporting predictable recurring revenue and sustainable growth beyond one-time wins.
Improved cash generation
After a prior trough, Figma generated positive operating cash flow ($251M) and free cash flow ($246M) in 2025, improving liquidity and funding optionality. Consistent positive FCF can support continued product investment, acquisitions, and balance-sheet resilience if maintained over coming quarters.
Negative Factors
Very large GAAP losses
The magnitude and persistence of recent GAAP losses materially weaken returns and signal structural profitability challenges. Large accounting losses can constrain reinvestment capacity, complicate capital allocation, and raise the risk of dilution or the need for financing if cash generation falters relative to losses.
Volatile cash conversion
Cash generation has been inconsistent, and 2025 operating cash covered only ~1/3 of the GAAP net loss, revealing conversion risk. Persistent volatility reduces confidence in using FCF to fund growth or absorb shocks, meaning strategic plans may depend on maintaining elevated cash generation levels.
Margin pressure from AI & SBC
Investments in AI (e.g., Figma Make) raise ongoing cost-to-serve and weigh on gross margins; coupled with heavy stock-based comp and expected near-term FCF margin pressure, this can compress structural profitability. If AI costs persist, margin recovery may be delayed despite revenue growth.
Figma, Inc. Class A (FIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.17B
Dividend YieldN/A
Average Volume (3M)10.99M
Price to Earnings (P/E)―
Beta (1Y)-0.53
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees1,646
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.08
Shares Outstanding441,125,340
10 Day Avg. Volume16,879,258
30 Day Avg. Volume10,990,531
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)12.64
Price to Sales (P/S)18.09
P/FCF Ratio77.56
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue12.40
Enterprise Value/Gross Profit15.04
Enterprise Value/Ebitda-10.46
Forecast
1Y Price Target
$40.25Price Target Upside48.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)0.26
Revenue Forecast (FY)$1.30B
Figma, Inc. Class A Business Overview & Revenue Model
Company DescriptionFigma, Inc. develops a browser-based tool for designing user interfaces that helps design and development teams build various products. The company offers Figma Design, a collaborative design tool for teams that explore ideas and gather feedback, build realistic prototypes, and streamline product development with design systems; Dev Mode to inspect designs and translate them into code without changing the design file; FigJam to define ideas, align on decisions, and move work forwardall in one place; and Figma Slides, a presentation tool built for designers and their teams. It also provides Figma Draw to create expressive designs with illustration tools; Figma Buzz that publishes brand templates to create social media assets, display ads, one-pagers, and others; Figma Sites to design, prototype, and publish; and Figma Make, an AI tool to design and prompt way to a functional prototype. The company was incorporated in 2012 and is headquartered in San Francisco, California.
How the Company Makes Moneynull
Figma, Inc. Class A Earnings Call Summary
Earnings Call Date:Mar 18, 2026
(Q4-2025)
| Next Earnings Date:Jun 18, 2026
Earnings Call Sentiment Positive
The call conveyed strong commercial momentum and product/AI traction: robust top-line growth (Q4 revenue +40% YoY, FY revenue +41% YoY), excellent retention (NDR 136%), rapid adoption of Figma Make and AI features, a large cash balance and meaningful enterprise expansion. Offsetting this optimism, management signaled deliberate margin compression and lower operating margins in 2026 to accelerate AI and infrastructure investments, a sequential decline in adjusted FCF driven in part by a one-time $25M tax, elevated stock-based compensation in 2025, and some near-term uncertainty as the business transitions to a hybrid seats-plus-credits monetization model. Overall, the highlights around growth, retention, product velocity and AI adoption materially outweigh the near-term margin and predictability concerns.Q4-2025 Updates
Positive Updates
Record Quarterly and Annual Revenue Growth
Q4 revenue of $304 million, up 40% year-over-year and above the high end of guidance; full-year 2025 revenue of $1.056 billion, up 41% year-over-year and also above the high end of guidance.
Strong Retention and Expansion Metrics
Net Dollar Retention for customers > $10k ARR reached 136%, up 5 percentage points quarter-over-quarter (highest in ten quarters); Gross Retention for the same cohort remained robust at 97%.
Healthy Profitability and Cash Generation (Non-GAAP)
Q4 non-GAAP operating margin of 14% and adjusted free cash flow (FCF) margin of 13% with Q4 adjusted FCF of $38 million; full-year non-GAAP operating income of $130 million (12% operating margin); ended year with $1.7 billion in cash, cash equivalents and marketable securities.
Customer Adds and Large Account Expansion
Added 951 net customers spending > $10k ARR in Q4 and 143 net customers spending > $100k ARR; the > $100k tier grew 46% year-over-year and the > $1M ARR cohort grew to 67 customers, up 68% year-over-year.
Rapid Product & AI Momentum
Expanded from 4 to 8 products in 2025 and launched over 200 features including AI-native functionality; AI image editing updates were used over 10 million times within weeks of a December 2025 update.
Figma Make Adoption and Cross-Functional Use
Figma Make weekly active users grew over 70% quarter-over-quarter; over 50% of paid customers spending > $100k ARR used Make weekly; nearly 60% of Make files in 2025 were created by non-designers, and 80%+ of full-seat Make weekly active users also used Figma Design.
International Growth
International revenue grew 45% year-over-year; international users were ~85% of MAU and accounted for 54% of Q4 revenue; launched in India in November 2025.
Platform & Partner Momentum (Dev Mode / MCP Integrations)
Dev Mode MCP and Code Connect driving stronger design-to-code workflows with partners like GitHub; announced Claude Code-to-Figma integration to enable code→canvas→code round trips, reflecting deeper platform integrations.
Negative Updates
Guided Margin Compression in 2026
Full-year 2026 non-GAAP operating income guidance of $100M–$110M implies an operating margin of ~8% at the midpoint (management noted ~7.7% midpoint in discussion), down from 12% in 2025, reflecting accelerated AI and infrastructure investments.
Sequential Decline in Adjusted Free Cash Flow and One-Time Tax
Adjusted Free Cash Flow declined sequentially in Q4 driven by infrastructure and AI investments, timing of vendor payments, and a one-time $25 million IP transfer tax related to the Weavy acquisition (partially offset by strong collections).
Elevated Stock-Based Compensation and Dilution Concerns
Stock-based compensation was elevated in 2025 due to IPO-related recognition, performance RSU vesting, ESPP launch and acquisition equity; management characterized many items as largely one-time but acknowledged dilution and noted improvement as revenue scales.
Revenue Mix & Predictability Risk from New Consumption Model
Beginning in March 2026 the model shifts to monetize both seats and AI credits; ~75% of paid customers > $10k ARR were consuming credits weekly, but management flagged the hybrid seat+credits model will require monitoring and refinement and could add volatility to revenue predictability.
Early-Stage Products and Competitive/Adoption Unknowns
Several newer products (Draw, Buzz, Sites) remain early in their lifecycle with limited public usage metrics; competition and product consolidation in prototyping and agentic workflows were discussed as areas to monitor.
Company Guidance
Figma guided Q1 2026 revenue of $315–$317 million (implying ~38% y/y growth at the midpoint) and full‑year 2026 revenue of $1.366–$1.374 billion (implying ~30% y/y growth at the midpoint); it expects full‑year non‑GAAP operating income of $100–$110 million (about an 8% non‑GAAP operating margin at the midpoint) and said adjusted free cash flow should be roughly consistent with non‑GAAP operating profit for the year. Management noted seasonality (Config historically pressures Q2), will not provide quarterly operating‑income guidance, plans to accelerate AI and inference investment, and in March will shift to a hybrid monetization model of seats plus consumption credits (historical results don’t reflect credits); today ~75% of paid customers >$10k ARR consume AI credits weekly, and the company expects its non‑GAAP tax rate to remain ~14.5% in 2026 while it refines assumptions as customer consumption evolves.Figma, Inc. Class A Financial Statement Overview
Summary
Strong 2025 revenue re-acceleration (+40.4%) and very high gross margins (82%–91%) are positives, supported by low leverage. However, GAAP profitability deteriorated sharply with very large losses in 2024–2025, and cash-flow history is volatile despite improved 2025 operating/FCF.Income Statement
Revenue growth re-accelerated sharply in 2025 (+40.4% vs. ~0.5% in 2024), and gross margins are very strong (82%–91%), which supports long-term operating leverage. However, profitability deteriorated materially: net margin swung from +56.6% (2023) to deeply negative in 2024–2025 (about -98% and -118%, respectively), with very large operating losses in both 2024 and 2025. Overall, strong top-line and gross profit profile is outweighed by the magnitude and persistence of losses in the last two years.32
Negative
Balance Sheet
Leverage is low, with debt-to-equity remaining modest (~0.01–0.04) and equity sizable ($1.51B in 2025), which provides financial flexibility. The main weakness is returns: return on equity moved from positive in 2023 (~27%) to meaningfully negative in 2024–2025 (about -55% to -83%), reflecting the earnings drawdown. Also, 2025 shows total assets reported as negative, which is unusual and raises data-quality or classification concerns, tempering confidence in balance-sheet trend analysis.68
Positive
Cash Flow
Cash generation improved materially in 2025 with positive operating cash flow ($251M) and positive free cash flow ($246M), up ~20.6% year over year, following negative operating/free cash flow in 2024. That said, cash flow has been volatile (very strong in 2023, negative in 2024, positive again in 2025), and the ability of operating cash flow to cover accounting losses in 2025 is limited (operating cash flow is only about one-third of the net loss), indicating profitability and cash conversion are not yet consistently aligned.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 1.06B | 749.01M | 504.87M |
| Gross Profit | 870.26M | 661.50M | 460.37M |
| EBITDA | -1.27B | -869.74M | -64.96M |
| Net Income | -1.25B | -732.12M | 285.86M |
Balance Sheet | |||
| Total Assets | 2.35B | 1.79B | 1.60B |
| Cash, Cash Equivalents and Short-Term Investments | 1.66B | 1.46B | 1.42B |
| Total Debt | 114.32M | 28.77M | 14.60M |
| Total Liabilities | 837.57M | 469.10M | 558.77M |
| Stockholders Equity | 1.51B | 1.32B | 1.04B |
Cash Flow | |||
| Free Cash Flow | 246.24M | -69.14M | 1.04B |
| Operating Cash Flow | 250.68M | -61.72M | 1.05B |
| Investing Cash Flow | -371.41M | -784.26M | -57.34M |
| Financing Cash Flow | 43.34M | 62.45M | 0.00 |
Figma, Inc. Class A Risk Analysis
Figma, Inc. Class A disclosed 61 risk factors in its most recent earnings report. Figma, Inc. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Figma, Inc. Class A Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $103.39B | 14.24 | 62.31% | ― | 10.53% | 34.24% | |
64 Neutral | $589.76M | 5.56 | 77.23% | ― | 7.01% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $14.17B | -15.27 | -92.27% | ― | ― | ― | |
59 Neutral | $340.55M | -15.25 | -22.88% | ― | 13.09% | 32.34% |
* Technology Sector Average
FIG
Figma, Inc. Class A
27.16
-94.84
-77.74%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.