Financial Results Q2 2025 September 3, 2025 Dylan Field CEO + Co-Founder Safe Harbor Disclaimer Q2 2025 This presentation contains "forward-looking statements" within the meaning of applicable securities laws. All statements other than statements of historical fact could be deemed to be forward-looking, including, but not limited to, statements regarding our guidance and future financial performance, market demand, product development, growth prospects, business strategies and plans, ability to attract and ...

Core Insights - Figma shares surged 229% after raising $1.2 billion in its IPO, valuing the company above $20 billion, which was higher than a previously planned merger with Adobe [1] - Following its IPO, Figma's shares dropped 13% after reporting its first earnings, with revenue increasing 41% year-over-year in Q2 [2] - The company reported a net income of $846,000, a significant improvement from a loss of $827.9 million in Q2 2024, and adjusted operating income of $11.5 million [3] Financial Performance - Figma forecasts Q3 revenue between $263 million and $265 million, indicating approximately 33% growth at the midpoint, surpassing LSEG consensus of $256.8 million [3] - For the full year, Figma anticipates adjusted operating income between $88 million and $98 million, with total revenue projected to exceed $1.02 billion, reflecting about 37% growth and above the LSEG consensus of $1.01 billion [4] Product Development - In Q2, Figma launched Figma Make, an AI tool for app and website design, and Figma Sites, which converts designs into functional websites [5] - The company also acquired Modyfi, a vector graphics startup, and Payload, a content management system startup [5] Market Position and Strategy - Figma's co-founder and CEO stated that the role of designers is becoming more critical despite concerns about AI displacing jobs, emphasizing the need for a human touch in software development [6][7] - The company reported a net retention rate of 129%, slightly down from 132% in Q1, indicating strong expansion with existing customers [7] Stock Performance and Lock-Up Period - Figma's stock closed at $68.13 after pricing at $33 during its IPO, with an initial surge to $115.50 [9] - A lock-up period for 25% of employee stock will expire on September 4, while over half of Figma's Class A stock will have an extended lock-up until August 2026 [8]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Figma achieved record revenue in Q2 FY2025, growing 41% year-over-year, launched four new products, and continued AI investment, demonstrating strong business and design value with a 129% net dollar retention rate [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Figma achieved record revenue in Q2 FY2025, growing 41% year-over-year, launched four new products, and continued AI investment, demonstrating strong business and design value with a 129% net dollar retention rate - Figma achieved record revenue in Q2 FY2025, growing **41% year-over-year**[1](index=1&type=chunk)[3](index=3&type=chunk) - The company launched four new products and continued investing in AI to expand its platform[2](index=2&type=chunk)[3](index=3&type=chunk) - Net Dollar Retention Rate reached **129%**, indicating deepening customer investment in the Figma platform[3](index=3&type=chunk) [Financial Highlights and Outlook](index=1&type=section&id=Financial%20Highlights%20and%20Outlook) Figma reported significant financial growth in Q2 FY2025 with strong revenue and positive operating profit, providing optimistic guidance for Q3 and the full fiscal year [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Figma achieved significant financial growth in Q2 FY2025, with revenue increasing 41% year-over-year to $249.6 million, reporting positive GAAP and non-GAAP operating profit and margins, and strong cash flow 2025 Fiscal Second Quarter Key Financial Data | Metric | Amount (Millions USD) | YoY Growth | Margin | Non-GAAP Amount (Millions USD) | Non-GAAP Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 249.6 | 41% | - | - | - | | Operating Profit | 2.1 | - | 1% | 11.5 | 5% | | Net Cash from Operating Activities | 62.5 | - | 25% | - | - | | Adjusted Free Cash Flow | 60.6 | - | 24% | - | - | | Net Income | 28.2 | - | - | 19.8 | - | | Cash, Cash Equivalents, and Marketable Securities | 1,600.0 | - | - | - | - | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Figma provided financial guidance for Q3 and full-year FY2025, projecting continued revenue growth and an expected range for full-year non-GAAP operating profit [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) The company expects Q3 FY2025 revenue to be between $263 million and $265 million, with a midpoint year-over-year growth of 33% 2025 Fiscal Third Quarter Financial Guidance | Metric | Range (Millions USD) | Midpoint YoY Growth | | :--- | :--- | :--- | | Revenue | 263.0 - 265.0 | 33% | [Full Year 2025 Outlook](index=2&type=section&id=Full%20Year%202025%20Outlook) Figma projects full-year FY2025 revenue between $1.021 billion and $1.025 billion, with a midpoint year-over-year growth of 37%, and non-GAAP operating profit between $88 million and $98 million 2025 Fiscal Full Year Financial Guidance | Metric | Range (Millions USD) | Midpoint YoY Growth | | :--- | :--- | :--- | | Revenue | 1,021.0 - 1,025.0 | 37% | | Non-GAAP Operating Profit | 88.0 - 98.0 | - | [Business and Operational Highlights](index=1&type=section&id=Business%20and%20Operational%20Highlights) Figma demonstrated strong product innovation, customer engagement, and strategic acquisitions in Q2, further solidifying its market position and platform capabilities [Product Innovation and Development](index=1&type=section&id=Product%20Innovation%20and%20Development) Figma significantly expanded its product line in Q2, launching four new products, including AI-driven prototyping tools, and released Dev Mode MCP servers to accelerate developer workflows - Launched four new products: Figma Make (AI-driven prototyping), Figma Draw (visual expression), Figma Sites (publishing live website designs), and Figma Buzz (creating marketing assets)[6](index=6&type=chunk) - Released Figma's Dev Mode MCP server to accelerate developer workflows by bringing design system context into LLM-generated code[6](index=6&type=chunk) [Customer Metrics and Engagement](index=1&type=section&id=Customer%20Metrics%20and%20Engagement) Figma demonstrated strong customer growth and retention, particularly among high-value clients, with high multi-product usage indicating strong platform stickiness Second Quarter 2025 Customer Metrics | Metric | Quantity | | :--- | :--- | | Net Dollar Retention Rate (Customers with ARR ≥ $10,000) | 129% | | Paying Customers (ARR ≥ $10,000) | 11,906 | | Paying Customers (ARR ≥ $100,000) | 1,119 | - Over **80%** of Figma customers used two or more products, and **two-thirds** used three or more products[6](index=6&type=chunk) [Strategic Acquisitions](index=2&type=section&id=Strategic%20Acquisitions) Figma completed two strategic acquisitions in Q2, Modyfi and Payload, aimed at enhancing its motion, animation, vector tools, and headless CMS and application framework capabilities - Acquired Modyfi to support Figma's work in motion, animation, and vector tools[7](index=7&type=chunk) - Acquired Payload, a leading headless content management system and developer application framework[7](index=7&type=chunk) [Corporate Events](index=1&type=section&id=Corporate%20Events) Figma successfully hosted its annual user conference, Config, a significant investment in community, customer relations, and product development, which impacted operating profit this quarter - Figma hosted its annual user conference, Config, a significant investment in community, customer relationships, and product momentum[6](index=6&type=chunk) - Increased sales and marketing expenses during the Config conference impacted Figma's operating profit[6](index=6&type=chunk) [Shareholder Information](index=2&type=section&id=Shareholder%20Information) Figma provided details on lock-up agreements, including early release conditions for employees and an extended lock-up plan for major shareholders, impacting future stock availability [Lock-Up Agreements](index=2&type=section&id=Lock-Up%20Agreements) Figma disclosed early release conditions and expected dates for IPO-related lock-up agreements, along with extended lock-up agreements with major shareholders and their phased release plans [Early Lock-Up Release](index=2&type=section&id=Early%20Lock-Up%20Release) The lock-up for 25% of eligible securities held by certain employees and service providers is expected to be released at market open on September 5, 2025, subject to specific closing price conditions for Figma Class A common stock - The lock-up for **25%** of eligible securities (held by certain employees and service providers) is expected to be released at market open on **September 5, 2025**[14](index=14&type=chunk) - Release conditions require Figma Class A common stock's closing price to be more than **25% above the IPO price** for at least five out of ten consecutive trading days, with at least one trading day occurring after the Q2 2025 earnings release[11](index=11&type=chunk)[13](index=13&type=chunk) [Stockholder Extended Lock-Up](index=3&type=section&id=Stockholder%20Extended%20Lock-Up) Shareholders holding approximately 54.1% of outstanding Class A common stock have agreed to extend lock-up until August 31, 2026, with a phased release plan tied to future quarterly and annual earnings release dates - Shareholders holding approximately **54.1%** of outstanding Class A common stock have entered into extended lock-up agreements until **August 31, 2026**[15](index=15&type=chunk) Phased Release Plan for Extended Lock-Up Shares | Release Date | Percentage of Shares Released | Approximate Shares (Millions) | | :--- | :--- | :--- | | After Q3 2025 Earnings Release | 17.5% | 38.9 | | After Q4 2025 Earnings Release | Additional 20% | 44.4 | | After Q1 2026 Earnings Release | Additional 27.5% | 61.1 | | After Q2 2026 Earnings Release or August 31, 2026 (whichever is earlier) | Remaining Portion | 77.7 | [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) This section provides essential company information, including Figma's mission, forward-looking statement caveats, definitions of non-GAAP financial measures, and key business metric definitions [About Figma](index=4&type=section&id=About%20Figma) Founded in 2012, Figma has evolved into a connected, AI-driven platform that helps teams transform ideas into digital products and experiences, making the entire design and product development process more collaborative, efficient, and enjoyable - Figma is an **AI-driven platform** that helps teams transform ideas into digital products and experiences[18](index=18&type=chunk) - The platform aims to make the entire design and product development process more collaborative, efficient, and enjoyable[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding Figma's future operating results, financial condition, business strategy, and plans, which are based on current information and assumptions, subject to risks and uncertainties that may cause actual results to differ materially - Forward-looking statements cover Figma's future operating results, financial condition, business strategy, and plans, including financial outlook for Q3 and full-year FY2025[19](index=19&type=chunk) - These statements are based on current information and assumptions, subject to various risks and uncertainties, and actual results may differ materially from expectations[20](index=20&type=chunk) - Figma undertakes no obligation to update or revise any forward-looking statements, except as required by law[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Figma uses non-GAAP financial measures to assess its financial position and operating performance, excluding stock-based compensation, acquisition-related amortization, Adobe merger termination costs, and other non-recurring expenses, to provide a more consistent view of financial performance - Non-GAAP financial measures include free cash flow, adjusted free cash flow, non-GAAP gross profit, non-GAAP operating profit, and non-GAAP net income[21](index=21&type=chunk) - These metrics primarily exclude non-recurring items such as stock-based compensation expense, amortization of acquired intangible assets, transaction costs related to the Adobe merger termination, employer payroll taxes, and 2024 tender offer transaction costs[21](index=21&type=chunk)[22](index=22&type=chunk) - Management believes non-GAAP metrics aid in evaluating ongoing operations and internal planning but emphasizes they should not substitute GAAP financial information and have inherent limitations[23](index=23&type=chunk)[24](index=24&type=chunk) [Certain Definitions](index=5&type=section&id=Certain%20Definitions) This section provides definitions for key business metrics used in Figma's financial reporting, including Annual Recurring Revenue (ARR), paying customers, and Net Dollar Retention Rate, which help understand the company's customer growth and revenue model - Annual Recurring Revenue (ARR) is defined as the annualized value of Figma's active customer agreements as of the measurement date, assuming agreements expiring in the next twelve months renew under existing terms[26](index=26&type=chunk) - Paying customers are defined as customer accounts with an active paid subscription, billed separately, as of the last day of the applicable measurement period[27](index=27&type=chunk) - Net Dollar Retention Rate is calculated by comparing ARR from paying customers with ARR greater than $10,000 from twelve months prior, reflecting customer expansion, contraction, and churn[29](index=29&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) This section presents Figma's GAAP financial statements, including statements of operations, balance sheets, and cash flows, providing a comprehensive view of the company's financial position and performance [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Figma's condensed consolidated statements of operations show Q2 FY2025 revenue of $249.6 million, a 41% year-over-year increase, with gross profit of $221.8 million, operating profit of $2.1 million, and net income of $28.2 million Condensed Consolidated Statements of Operations Summary (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 249,640 | 177,198 | 477,839 | 333,427 | | Gross Profit | 221,751 | 137,640 | 430,498 | 281,079 | | Operating Income (Loss) | 2,076 | (894,287) | 41,825 | (881,766) | | Net Income (Loss) | 28,227 | (827,854) | 73,109 | (814,329) | | Net Income (Loss) Per Share, Basic and Diluted | 0 | (4.39) | 0.10 | (4.53) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Figma's total assets increased to $2.0347 billion from $1.7931 billion on December 31, 2024, with cash and cash equivalents rising to $621.6 million, total liabilities at $607.4 million, and total stockholders' equity at $1.4272 billion Condensed Consolidated Balance Sheets Summary (As of June 30, 2025) | Metric (Thousands USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 621,619 | 486,954 | | Marketable Securities | 971,719 | 970,883 | | Total Assets | 2,034,663 | 1,793,148 | | Deferred Revenue | 433,147 | 381,363 | | Total Liabilities | 607,449 | 469,095 | | Total Stockholders' Equity | 1,427,214 | 1,324,053 | [Condensed Consolidated Statements of Cash Flow](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) In Q2 FY2025, Figma generated $62.5 million in net cash from operating activities, used $74.8 million in investing activities, and provided $15.4 million from financing activities, with total cash, cash equivalents, and restricted cash at period-end reaching $632.4 million Condensed Consolidated Statements of Cash Flow Summary (Q2 2025) | Cash Flow Type (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 62,455 | (178,243) | 159,632 | (196,382) | | Net Cash from Investing Activities | (74,826) | (173,216) | (33,575) | (509,846) | | Net Cash from Financing Activities | 15,445 | 21,860 | 15,784 | 21,900 | | Cash, Cash Equivalents, and Restricted Cash—End of Period | 632,426 | 589,781 | 632,426 | 589,781 | [Reconciliation of GAAP to Non-GAAP Results](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) This section provides detailed reconciliations of Figma's GAAP financial measures to non-GAAP metrics, offering a clearer view of underlying operational performance by adjusting for specific non-recurring and non-cash items [Non-GAAP Gross Profit and Margin Reconciliation](index=10&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Margin%20Reconciliation) Figma provides a reconciliation of GAAP gross profit and margin to non-GAAP metrics, with key adjustments including stock-based compensation, amortization of capitalized internal-use software development costs, acquired intangible asset amortization, and employer payroll taxes related to RSU releases and tender offers Gross Profit and Margin Reconciliation (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | | :--- | :--- | :--- | | GAAP Gross Profit | 221,751 | 137,640 | | Non-GAAP Gross Profit | 223,954 | 163,179 | | GAAP Gross Margin | 89% | 78% | | Non-GAAP Gross Margin | 90% | 92% | - Key adjustments include stock-based compensation expense, amortization of stock-based compensation in capitalized internal-use software development costs, amortization of acquired intangible assets, and employer payroll taxes related to 2024 RSU releases and tender offers[39](index=39&type=chunk) [Non-GAAP Operating Expenses Reconciliation](index=10&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) This section reconciles GAAP operating expenses (R&D, Sales & Marketing, G&A) to non-GAAP metrics, primarily excluding stock-based compensation, Adobe merger termination costs, employer payroll taxes, acquired intangible asset amortization, and 2024 tender offer transaction costs Operating Expenses Reconciliation (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | | :--- | :--- | :--- | | GAAP Research and Development Expense | 83,052 | 535,676 | | Non-GAAP Research and Development Expense | 77,113 | 53,707 | | GAAP Sales and Marketing Expense | 97,701 | 276,246 | | Non-GAAP Sales and Marketing Expense | 97,056 | 81,813 | | GAAP General and Administrative Expense | 38,922 | 220,005 | | Non-GAAP General and Administrative Expense | 38,313 | 22,779 | - Key adjustments include stock-based compensation expense, transaction costs related to the Adobe merger termination, employer payroll taxes, amortization of acquired intangible assets, and 2024 tender offer transaction costs[39](index=39&type=chunk) [Non-GAAP Operating Income and Margin Reconciliation](index=10&type=section&id=Non-GAAP%20Operating%20Income%20and%20Margin%20Reconciliation) Figma's GAAP operating income was $2.1 million with a 1% margin in Q2 2025, which, after various non-GAAP adjustments, resulted in a non-GAAP operating income of $11.5 million and a non-GAAP operating margin of 5% Operating Income and Margin Reconciliation (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | | :--- | :--- | :--- | | GAAP Operating Income (Loss) | 2,076 | (894,287) | | Non-GAAP Operating Income | 11,472 | 4,880 | | GAAP Operating Margin | 1% | (505)% | | Non-GAAP Operating Margin | 5% | 3% | - Adjustments include stock-based compensation expense, amortization of stock-based compensation in capitalized internal-use software development costs, transaction costs related to the Adobe merger termination, employer payroll taxes, amortization of acquired intangible assets, and 2024 tender offer transaction costs[39](index=39&type=chunk) [Non-GAAP Net Income Reconciliation](index=11&type=section&id=Non-GAAP%20Net%20Income%20Reconciliation) Figma's GAAP net income was $28.2 million in Q2 2025, which, after non-GAAP adjustments for stock-based compensation, transaction costs, employer payroll taxes, acquired intangible asset amortization, equity investment gains/losses, and income tax effects, resulted in a non-GAAP net income of $19.8 million Net Income Reconciliation (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | | :--- | :--- | :--- | | GAAP Net Income (Loss) | 28,227 | (827,854) | | Non-GAAP Net Income (Loss) | 19,783 | 14,275 | - Key adjustments include stock-based compensation expense, amortization of stock-based compensation in capitalized internal-use software development costs, transaction costs related to the Adobe merger termination, employer payroll taxes, 2024 tender offer transaction costs, amortization of acquired intangible assets, net gain/loss on equity investments, and income tax effects of non-GAAP adjustments[41](index=41&type=chunk) [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) Figma reconciles GAAP cash flow from operating activities to free cash flow and adjusted free cash flow, reporting net cash from operating activities of $62.5 million, free cash flow of $60.6 million, and adjusted free cash flow of $60.6 million in Q2 2025 Free Cash Flow Reconciliation (Q2 2025) | Metric (Thousands USD) | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 62,455 | (178,243) | | Free Cash Flow | 60,603 | (179,812) | | Adjusted Free Cash Flow | 60,603 | 6,127 | | Operating Cash Flow Margin | 25% | (101)% | | Free Cash Flow Margin | 24% | (102)% | | Adjusted Free Cash Flow Margin | 24% | 4% | - Free cash flow is derived from net cash from operating activities by subtracting capital expenditures and capitalized internal-use software development costs[43](index=43&type=chunk) - Adjusted free cash flow further considers transaction costs related to the Adobe merger termination and estimated income taxes[43](index=43&type=chunk) [Investor and Media Contacts](index=13&type=section&id=Investor%20and%20Media%20Contacts) This section provides essential contact information for investor relations and media inquiries [Contact Information](index=13&type=section&id=Contact%20Information) This section provides contact details for Figma's investor relations and media inquiries - Investor contact email: ir@figma.com[46](index=46&type=chunk) - Media contact email: press@figma.com[46](index=46&type=chunk)

Shares of the cloud software stock pulled back after an initial pop.After skyrocketing on its opening day of trading on July 31, Figma (FIG 1.40%) gave back some of those early gains last month as the software stock searched for equilibrium following the year's biggest initial public offering (IPO).According to data from S&P Global Market Intelligence, the stock finished the month down 39%. As you can see from the chart below, it tumbled early in the month as it pulled back from the initial frenzy, and shar ...

Core Viewpoint - Figma's IPO has generated significant interest, with an initial offering price of $33 per share, highlighting its disruptive cloud-based design collaboration platform that has transformed product design processes [1][3] Company Overview - Figma operates a cloud-based design collaboration tool that integrates workflows among designers, product managers, and engineers, enhancing team collaboration and efficiency [3] - The platform's "Google Docs-style" collaboration allows real-time editing and feedback, significantly reducing the time from concept to execution [3] Financial Performance - Figma has demonstrated exponential revenue growth in recent years, maintaining a healthy gross margin due to its "Product-Led Growth" strategy, where users start with free trials and convert to paid subscriptions [4] - Despite high growth, Figma is currently operating at a loss due to substantial investments in marketing, R&D, and administration, raising questions about its future profitability [4] Market Potential - The digital transformation trend presents a vast market opportunity for Figma, as efficient design collaboration is essential across various sectors, including software development and marketing [4] - Figma's user retention is strong, as transitioning design processes to its platform incurs high switching costs, leading to predictable annual recurring revenue (ARR) [4][5] Competitive Landscape - Figma's high IPO valuation reflects market expectations for its future growth, with its stock price recently dropping to around $70 per share, indicating the need for sustained performance to justify its valuation [7] - Competition from major players like Adobe poses a significant threat, as they have extensive user bases and resources that could impact Figma's market position [7] Economic Environment - The current macroeconomic climate, characterized by rising interest rates and slowing growth, may lead companies to cut software budgets, potentially affecting Figma's customer acquisition [7] Investment Outlook - Figma is viewed as a company with disruptive technology and strong growth potential, but its high initial valuation suggests that investors should approach with cautious optimism [8] - A more rational investment strategy may involve considering Figma as a growth asset within a diversified portfolio, focusing on long-term growth rather than short-term gains [8]

Core Viewpoint - Figma, a new player in the global software industry, has received cautious ratings from Wall Street analysts due to its high valuation, with most analysts giving neutral or market-perform ratings instead of optimistic buy ratings [1][6]. Group 1: Company Overview - Figma is a cloud-based collaborative design and product development platform, with core products including Figma Design, FigJam, and Dev Mode [3]. - The company went public in late July 2023, with an initial offering price of $33 per share, which quickly surged to over $100 on its debut [2]. - Figma's potential market size is estimated at approximately $26 billion, indicating a low penetration rate and significant growth runway [3][8]. Group 2: Product and Technology - Figma's platform integrates AI models across its core functionalities, enhancing efficiency and collaboration without fully automating processes [4][6]. - Recent product launches, such as Figma Make and FigJam AI, embed generative AI tools into various design and development processes, expanding the software's capabilities [5]. Group 3: Market Sentiment and Analyst Ratings - Analysts from RBC Capital Markets and Morgan Stanley have expressed high regard for Figma's product offerings and customer base but remain cautious due to its elevated valuation [6][7]. - RBC's initial target price for Figma is $75, suggesting a modest upside of 7% from current levels, while Morgan Stanley's target is $80, indicating a potential 14% increase [7]. - Other firms, including Bank of America and Goldman Sachs, have also issued neutral ratings, with target prices ranging from $48 to $85, reflecting concerns over high valuation and market conditions [8][9].

Summary of Figma Inc. (FIG) Conference Call Company Overview - **Company**: Figma Inc. (FIG) - **Market Cap**: $45.6 billion - **Enterprise Value**: $43.9 billion - **Price Target**: $48 with a Neutral rating initiated by Goldman Sachs Core Industry Insights - **Industry**: Software Design and Product Development - **Market Dynamics**: - Anticipated creation of over 1 billion new applications by 2028, indicating a significant growth opportunity for design tools like Figma [1][41] - Global software spending projected to grow at a CAGR of 12% from 2024 to 2029 [41][46] Key Points and Arguments 1. **Generational Design Tool**: Figma is positioned as a generational design tool evolving into an end-to-end product development platform, leveraging real-time collaborative web-based technology [1][15] 2. **User Base Expansion**: Two-thirds of Figma's 13 million Monthly Active Users (MAUs) are non-designers, indicating a broadening user base beyond traditional design roles [1][22] 3. **Revenue Growth Projections**: - Expected revenue growth from $749 million in 2024 to $1.469 billion by 2027, with a total revenue growth rate of 48.4% in 2024 [2][11] - EBITDA projected to grow from $134.7 million in 2024 to $146.1 million in 2027 [2][11] 4. **AI Integration**: Figma's AI capabilities (Figma Make) are seen as a long-term growth opportunity, although current monetization potential remains unproven [1][16] 5. **Product Portfolio Expansion**: New products like Dev Mode, Figma Slides, and Figma Buzz are expected to drive adoption among a wider range of personas involved in product development [1][15][41] 6. **Valuation Concerns**: Current valuation levels are viewed as relatively full, with a balanced risk/reward profile until visibility around revenue durability improves [1][19] Financial Metrics - **Revenue Estimates**: - 2024: $749 million - 2025: $1.014 billion - 2026: $1.232 billion - 2027: $1.469 billion [2][11] - **EBITDA Estimates**: - 2024: $134.7 million - 2025: $105.2 million - 2026: $115.7 million - 2027: $146.1 million [2][11] - **EPS Estimates**: - 2024: $0.72 - 2025: $0.31 - 2026: $0.21 - 2027: $0.25 [2][11] Additional Insights - **Competitive Advantage**: Figma's multiplayer architecture and web-based platform differentiate it from legacy design tools, enabling real-time collaboration and integration across various workflows [1][15][30] - **Market Position**: Figma holds a leading market position in collaborative design, addressing a total addressable market (TAM) of $33 billion [1][17] - **User Engagement**: High engagement metrics with a Gross Dollar Retention (GDR) of 96% and Net Dollar Retention (NDR) of 132% for customers with over $10,000 in annual recurring revenue [17][19] Conclusion Figma is well-positioned to capitalize on the growing demand for design tools in an increasingly software-driven world. However, the company faces challenges in demonstrating the monetization potential of its newer products and AI capabilities. The current valuation suggests a cautious approach until further evidence of revenue growth and profitability emerges.

Core Viewpoint - Figma's stock has experienced significant volatility since its IPO, initially soaring to over $120 per share but currently trading around $70, raising questions about its investment potential [1][2]. Financial Performance - Figma generated $821 million in revenue over the past 12 months, with a growth rate of 46% and a gross margin of 91%, indicating strong financial health and potential for future profitability [6]. Market Position and Competition - Figma is a direct competitor to Adobe, which attempted to acquire the company for $20 billion in 2022, but the deal fell through due to regulatory concerns [4]. - A notable statistic is that 78% of the Forbes 2000 companies use Figma, but this also implies that only 22% of large companies remain as potential customers, presenting a growth challenge [7]. Growth Strategy - To sustain growth, Figma will need to develop new products and upsell to existing customers, a strategy that has been successful for other companies [8]. - The current stock price is high, trading at approximately 35 times sales, which may deter long-term investors until further growth plans are communicated [9]. Management Communication - Upcoming management discussions, particularly the first conference call on September 3, will be crucial for outlining Figma's growth strategy and addressing investor concerns [10].

Group 1 - Morgan Stanley has assigned a "hold" rating to the cloud collaboration design platform Figma with a target price of $80 [1]

Core Viewpoint - Piper Sandler initiates coverage on Figma (FIG.US) with an "Overweight" rating and a target price of $85, highlighting the company's strong growth potential and early-stage platform development [1] Group 1: Financial Performance - Figma's preliminary annual recurring revenue for Q2 is approaching $1 billion, indicating robust growth [1] - The company is projected to exceed $3 billion in annual revenue by 2030, with free cash flow margins expected to expand beyond 30% [1] Group 2: Market Position and Strategy - Figma is in the early stages of building an end-to-end platform aimed at helping businesses convert creative ideas into digital products [1] - The company has multiple growth drivers, including a new pricing strategy implemented in March 2023, which raised prices by 20%-33% [1] - Figma has a significant user base with 25 million monthly visitors and 13 million active users, presenting a strong potential for converting free users to paid subscriptions [1] Group 3: Competitive Landscape - Figma competes with companies like Adobe (ADBE.US) and is leveraging AI solutions to capitalize on industry opportunities [1][2] - The analyst notes that while ambitious new products may temporarily pressure profit margins, they will lay a stronger foundation for long-term growth [2]