Figma Earnings Preview – Stock Under Pressure Into The Print (FIG)

Figma reports earnings after market close, off the back of a terrible start to life in public markets. The quarter provides the first test of whether management’s “big swings” investment posture can sustain mid-30s growth on a $1B+ run-rate without extending the timeline to profitability.

Consensus sits at $293M revenue and $0.07 adjusted EPS, essentially in line with the company’s own guidance midpoint of $292M-$294M, creating a setup where forward commentary on AI monetization and 2026 margin trajectory will matter more than the reported numbers.

Figma’s stock price (NYSE: FIG) sits 79% from its closing price on IPO day, making it what analysts describe as a “broken IPO.” That collapse reflects investor concern that Figma’s aggressive expansion into AI-powered design tools, including partnerships with OpenAI and Google’s Gemini 3 Pro, is pressuring margins without yet demonstrating durable monetization.

Management explicitly signaled “near-term margin compression” on the Q2 call and reiterated significant investment in AI on the Q3 call, framing the current period as one where the company is accepting efficiency drag to fund product expansion.

The market’s tolerance for that trade-off depends on whether retention metrics and AI product adoption continue to improve, or whether the investment cycle extends without clear progress on operating leverage.

The Q4 result will determine whether Figma can stabilize revenue growth around the 35% level while providing a credible path to margin improvement in 2026. A beat on revenue combined with strong retention metrics and constructive AI adoption commentary would support the bull case that the stock has overcorrected.

A miss, or guidance that signals incremental AI spend without quantified monetization timelines, would reinforce the bear case that the company is sacrificing profitability to defend against competitive pressure from Adobe and AI-native design platforms.

Consensus Estimates

Consensus revenue of $293M sits at the midpoint of management’s own Q4 guidance range, eliminating any buffer for a beat based on the reported number alone. The estimate has remained unchanged over the past 30 days, suggesting analysts are waiting for the result and forward commentary rather than adjusting expectations ahead of the print. The 35% YoY growth rate implied by the $293M figure represents continued deceleration from 46% in Q1 2025, 41% in Q2, and 38% in Q3, making the Q4 result a test of whether the slowdown stabilizes or accelerates.

Management Guidance and Commentary

“This was the best quarter in Figma’s history. We still have the flexibility to keep investing as we chase more growth.”

CEO Dylan Field’s Q3 commentary framed the quarter as an execution win while reiterating the company’s commitment to continued investment. That combination of confidence in current performance and signaling of incremental spend is consistent with management’s broader messaging that Figma is in an investment phase where near-term margin pressure is acceptable in exchange for long-term product expansion and market position.

“We’re experiencing near-term margin compression due to higher costs from rolling out new products. We expect this pressure to ease once the tools start generating meaningful revenue.”

CFO Praveer Melwani’s Q2 commentary explicitly acknowledged margin pressure and tied it to the product expansion cycle, including launches of Figma Make, Draw, Sites, and Buzz. That framing matters because it establishes the company’s expectation that margin improvement is contingent on AI product monetization rather than cost discipline.

Figma’s design platform serves over 13 million users globally as the company expands into AI-powered tools.

Analyst Price Targets & Ratings

Wall Street remains cautiously optimistic despite the stock’s decline, with 72% of analysts rating shares a Buy or Strong Buy. The consensus target of $45.00 implies nearly 100% upside from current levels, reflecting analyst belief that the current valuation overshoots to the downside relative to the company’s long-term prospects.

Sector & Peer Comparison

Figma’s negative 88.7% profit margin stands in sharp contrast to Adobe’s 27.3% and Autodesk’s 18.6%, reflecting the company’s current investment phase and lack of GAAP profitability. The absence of a P/E ratio or forward P/E underscores the market’s difficulty in valuing Figma on traditional earnings multiples, forcing investors to focus on revenue growth and the path to profitability rather than current earnings power.

Earnings Track Record

Figma has beaten or met consensus estimates in both quarters since going public, with an average surprise of 51.9% driven primarily by the Q3 result where adjusted EPS of $0.10 doubled the $0.05 consensus. The 100% beat rate establishes a baseline expectation that the company can execute on the reported numbers, but the stock’s reaction to those results reveals that forward guidance matters more than the quarterly beat.

Figma’s AI product suite includes Make, Draw, Sites, and Buzz, with partnerships spanning OpenAI and Google.

Post-Earnings Price Movement History

The limited two-quarter history reveals a clear pattern: the magnitude of the EPS beat correlates with positive price action, but forward guidance determines the direction. Q3’s 100% EPS beat and raised full-year revenue guidance produced a 5% after-hours gain, while Q2’s in-line result combined with commentary about investment and slowing growth produced a 14% after-hours decline despite revenue essentially meeting expectations.

Expected Move & Implied Volatility

The options market is pricing a 12.5% move in either direction, implying a range of $19.71 to $25.35 based on the current $22.53 price. Implied volatility of 68% sits at the 82nd percentile of its historical range, indicating options traders are pricing elevated uncertainty relative to the stock’s typical volatility profile.

What to Watch

Key Metrics to Watch

The Q4 result will determine whether Figma’s AI investment cycle is producing measurable returns in the form of customer retention, product adoption, and a credible path to profitability, or whether the company is sacrificing margins to defend against competitive pressure without clear monetization timelines.

The stock’s 79% decline from peak has created a setup where forward guidance quality matters more than the reported numbers, making management’s commentary on 2026 revenue growth and margin trajectory the primary catalyst for post-earnings price action.