Shares of Figma slid 4.3% to $22.20 on March 24, extending a brutal week-long decline of 19% as investors brace for the company's Q4 2025 earnings report tomorrow. The selloff reflects deepening anxiety over whether Figma can sustain the growth rates that justified its September 2024 IPO pricing. Important update: My search results reveal that the Q4 2025 earnings report referenced in the prompt was already released on February 18, 2026—not scheduled for March 25. Here is the briefing based on actual current market conditions:

Figma Beat Expectations Last Month. So Why Has the Stock Lost a Third of Its Value?

Shares of Figma dropped another 4.3% to $22.20 on March 24, extending a punishing 19% decline over just five trading sessions. The stock now trades well below its original IPO price of $33 per share , and is down 36.9% year to date . The irony: Figma's February earnings report was, by most measures, a blowout.

• The Numbers Were Strong—But the Market Doesn't Care

Figma beat estimates on both lines: adjusted earnings of $0.08 per share (vs. $0.07 expected) on revenue of $303.8 million (vs. $293.15 expected), with revenue growing 40% year over year.

Net Dollar Retention—a measure of how much more existing customers spend each year—rose to 136% , up five points quarter-over-quarter, the highest in ten quarters. Yet the post-earnings bounce has fully evaporated. Investors are looking past the rearview mirror and worrying about what's ahead.

• Growth Is Set to Slow, and Profits Are Getting Squeezed

Figma guided full-year 2026 revenue to $1.37 billion, implying roughly 30% growth—a sharp deceleration from 40%. Worse, the company expects 2026 non-GAAP operating income of just $100–$110 million, an 8% margin, as it pours money into AI and sales teams. That's a big step down from Q4's 14% margin. For shareholders, this means Figma is choosing to spend aggressively right when markets are punishing unprofitable growth stocks.

• Google Just Showed Up With a Free Rival

Figma's slide intensified after Google released a free AI-powered design product called Stitch, which lets users create designs from text prompts.

Shares dropped 12% in two days on the news.

For a company that charges subscriptions, a free tool from a tech giant with massive reach could pressure Figma to rethink pricing or speed up its own AI roadmap.

• The Fine Print on That Impressive Retention Number

Figma's 136% retention rate only measures customers spending over $10,000 a year, systematically excluding anyone who churned below that threshold—plus 97.5% of all paying customers.

Analysts estimate the true company-wide retention is 15–20 points lower, around 115–120%—still strong, but a different story than the headline suggests.

At a price-to-sales ratio of roughly 12x on decelerating growth, Figma's stock is caught between genuinely impressive product momentum and a market unwilling to pay up for it.