Shares of Figma Inc. plunged 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 company reported breakeven earnings per share of zero cents for the quarter ending on June 30, 2023, significantly missing analysts’ expectations of 18 cents per share.
Despite a year-over-year revenue increase of 41% to $249.6 million, the results were disappointing compared to the anticipated revenue of $228.2 million. The performance has raised concerns among investors about the company’s profitability trajectory after its initial public offering.
As of the end of the quarter, Figma reported having 11,096 paid customers contributing over $10,000 in annual recurring revenue, along with 1,119 customers generating annual recurring revenue of $100,000 or more. The company noted a strong customer retention rate, boasting a net dollar retention rate of 129%.
Figma’s net income for the quarter was $28.2 million. The company also reported having $1.6 billion in cash, cash equivalents, and marketable securities at the end of June, providing a solid financial foundation moving forward.
Product Launches and Future Outlook
During the quarter, Figma launched four new products aimed at enhancing its offerings: Figma Make, which incorporates artificial intelligence for prototyping; Figma Draw, designed for richer visual expression; Figma Sites, enabling the publication of designs as live websites; and Figma Buzz, focused on creating marketing assets. Additionally, Figma introduced the Dev Mode MCP Server, which streamlines developer workflows by integrating context from design systems into large language model-generated code.
Figma also hosted its annual user conference, Config, which the company describes as a crucial investment in community engagement, customer relationships, and product momentum.
In a statement regarding the earnings release, Dylan Field, co-founder and chief executive officer of Figma, emphasized the company’s commitment to innovation: “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.”
Figma is forecasting revenue of between $263 million and $265 million for the third quarter, and expects to achieve full-year revenue between $1.021 billion and $1.025 billion. As the company navigates its post-IPO landscape, its ability to meet these projections will be closely monitored by investors and analysts alike.