Shares of Figma Inc. fell more than 13% in after-hours trading following the release of its first quarterly earnings report since going public in July 2023. The graphic design software provider reported a breakeven earnings per share of zero cents for the quarter ending on June 30, 2023, significantly below the anticipated 18 cents per share expected by analysts.
Despite this disappointing earnings figure, Figma’s revenue for the quarter reached $249.6 million, which represents a robust 41% increase year-over-year. Analysts had projected a revenue figure of $228.2 million, indicating that while the earnings fell short, the company’s sales performance exceeded expectations.
As of the end of the quarter, Figma had a total of 11,096 paid customers generating over $10,000 in annual recurring revenue. Additionally, it reported 1,119 customers whose annual recurring revenue surpassed $100,000. Loyalty among its customer base was underscored by a net dollar retention rate of 129%.
Figma’s net income for the quarter stood at $28.2 million, and the company maintained a strong financial position with $1.6 billion in cash, cash equivalents, and marketable securities. This financial cushion positions the company well for future growth and innovation.
Innovations and Future Outlook
During the quarter, Figma introduced four new products aimed at enhancing user experience. These included Figma Make, designed for artificial intelligence-powered prototyping; Figma Draw, which allows for richer visual expression; Figma Sites, enabling users to publish designs as live websites; and Figma Buzz, a tool for creating marketing assets.
Additionally, Figma launched the Dev Mode MCP Server, a new offering that streamlines developer workflows by integrating context from design systems into language model-generated code. The company also hosted its annual user conference, Config, which serves as a vital platform for community engagement, customer relationship building, and product development.
In the earnings release, Dylan Field, co-founder and chief executive officer of Figma, stated, “We delivered record revenue in Q2 as we continued to innovate with the launch of four new products. Looking ahead, we’re excited to keep building for our customers and help define the next era of digital products and experiences. Design is more important than ever and we have so much more to build.”
For the upcoming third quarter, Figma anticipates revenue between $263 million and $265 million. The company projects full-year revenue to fall between $1.021 billion and $1.025 billion, reflecting ongoing growth despite the current challenges in exceeding profit expectations.
