Figma (FIG.US) reported its fourth-quarter results and updated guidance, with overall performance exceeding market expectations. The company demonstrated accelerated revenue growth, stabilized profitability, and continued growth in user adoption of its artificial intelligence (AI) tools, leading to further improvement in its fundamental business. Boosted by these results, Figma's stock price rose nearly 4% on Thursday, bucking the broader market trend.
In a recent investor report, RBC Capital Markets noted that several of Figma's core financial metrics for the fourth quarter surpassed consensus estimates. Analyst Rishi Jaluria and his team stated that Figma's quarterly revenue grew 40% year-over-year, with non-GAAP gross margin reaching 86.2% and a non-GAAP operating margin of 14.5%. Management attributed the stable gross margin primarily to infrastructure optimizations that reduced per-user costs. The improvement in operating margin was driven by revenue exceeding expectations and stable gross margins, though this was partially offset by continued increased investments. Furthermore, pricing and product mix adjustments are expected to contribute a mid-single-digit positive impact to revenue growth in fiscal year 2025.
Despite the strong performance, RBC maintained its "Sector Perform" rating on Figma but lowered its price target from $38 to $31. The firm also emphasized that Figma is demonstrating positive momentum in multi-product synergy, highlighting long-term opportunities, particularly in the creative design space integrated with AI tools. Product and user data indicate that Figma's AI-related tools are performing exceptionally well. RBC pointed out that in the fourth quarter, over 80% of weekly active users with full seats for Figma Make also used Figma Design. Weekly active users for Figma Make grew more than 70% sequentially, with over half of its customers spending more than $100,000 in Annual Recurring Revenue (ARR) on the product. Additionally, approximately 60% of Figma Make files were created by non-designer users, indicating an expansion of its user base into broader enterprise roles. Management also disclosed that around 75% of paying customers with ARR exceeding $10,000 have begun using AI credits weekly. The company further strengthened its AI-native capabilities by acquiring Weavy and launching Figma Weave, which encompasses image, video, animation, and dynamic content generation and is already integrated with Claude Code. In 2025, Figma expanded its product line from 4 to 8 products, launching over 200 new features throughout the year, many of which are centered around AI.
Separately, J.P. Morgan also acknowledged Figma's execution and technology roadmap but revised its price target downward based on changes in valuation frameworks. Analyst Mark Murphy stated in a report that the firm maintains a "Neutral" rating on Figma but reduced its price target from $60 to $45, citing a significant contraction in valuation multiples for comparable companies. J.P. Morgan believes Figma Make is clearly superior in positioning and functional integration compared to lightweight "ambient programming" products, which face greater challenges in being adopted by large enterprises due to difficulties integrating into workflows and compliance systems.
Over the past year, concerns that AI could disrupt per-seat software licensing business models have weighed on the performance of the broader software sector. For example, the iShares Expanded Tech-Software Sector ETF (IGV.US) declined approximately 24% over the same period. However, Figma's Chief Financial Officer and Treasurer, Praveer Melwani, emphasized during the earnings call that the company continues to achieve seat growth. Melwani stated that the company's outlook is based on sustained positive momentum in the 2025 business, including contributions from new products, seat expansion from new and existing customers, and international market expansion. He also noted that management will continuously adjust assumptions based on actual customer usage and further drive the adoption of AI features. Starting in March of this year, Figma's business model will gradually shift towards monetizing both "seats and AI credits," a change not yet reflected in historical revenue data.
As Figma's largest competitor, Adobe (ADBE.US) saw relatively stable stock performance on Thursday. Market focus remains concentrated on Figma's continued advancements in the AI design tool space and its potential impact on traditional software business models.