Shares cratered 15% in after-hours trading to $23.90 after Figma delivered a quarter that topped Wall Street estimates on both revenue and earnings — and the market punished it anyway. The message was blunt: investors will no longer applaud top-line acceleration if the profits aren't keeping pace.
Revenue Crushed Estimates, but the Cost Line Told a Different Story
Revenue surged 48% year-over-year to $370.1 million, well above the $352 million consensus, and adjusted earnings of $0.08 per share doubled the $0.04 estimate. Yet cost of revenue more than doubled to $60.5 million, compressing gross margin to 84% from 89% a year earlier.
Adjusted operating margin fell to 10% from 16% in a single quarter — a pace of erosion that spooked shareholders despite the growth story.
The Company Raised Revenue Guidance but Held Profit Guidance Flat — and That's the Problem
Figma lifted its full-year revenue forecast by $40 million to roughly $1.465 billion, implying ~39% growth, ahead of the 36% analysts had penciled in. But full-year non-GAAP operating income was held at $125–$135 million — about a 9% margin — unchanged even as the revenue target rose, signaling cost pressures are unlikely to ease soon.
In effect, every extra dollar of sales is being fed straight back into the product. Markets read a flat profit forecast beside a rising sales forecast as a warning.
Customers Love the AI Features — That's What Makes This So Expensive
Net dollar retention — a measure of how much existing customers grow their spending — stayed strong at 136%, and more than 80% of its biggest customers are now using AI features weekly. That adoption is precisely what's driving infrastructure costs higher. Total operating expenses nearly doubled to $426.9 million, swinging GAAP results to a $117.3 million operating loss versus a $2 million profit a year ago.
The Broader Market Is Losing Patience With AI Spending Everywhere
The sell-off didn't stop at Figma — shares of Salesforce, ServiceNow, Intuit, and Adobe slipped too, as investors took the results as a fresh sign that AI is squeezing software margins across the board.
With the stock down more than a third since the start of the year, the burden of proof now rests on management to show the spending spree will eventually translate into meaningful profit improvement. Figma has $1.7 billion in cash to fund the bet. Whether the payoff arrives before investor patience runs out is the only question that matters.