Figma(FIG) - 2025 Q2 - Quarterly Results

Executive Summary 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 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][3] - The company launched four new products and continued investing in AI to expand its platform[2][3] - Net Dollar Retention Rate reached 129%, indicating deepening customer investment in the Figma platform[3] Financial Highlights and Outlook 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 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 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 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 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 Figma demonstrated strong product innovation, customer engagement, and strategic acquisitions in Q2, further solidifying its market position and platform capabilities Product Innovation and Development 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] - Released Figma's Dev Mode MCP server to accelerate developer workflows by bringing design system context into LLM-generated code[6] Customer Metrics and Engagement 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] Strategic Acquisitions 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] - Acquired Payload, a leading headless content management system and developer application framework[7] Corporate Events 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] - Increased sales and marketing expenses during the Config conference impacted Figma's operating profit[6] Shareholder Information 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 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 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] - 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][13] Stockholder Extended Lock-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] 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 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 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] - The platform aims to make the entire design and product development process more collaborative, efficient, and enjoyable[18] Forward-Looking Statements 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] - These statements are based on current information and assumptions, subject to various risks and uncertainties, and actual results may differ materially from expectations[20] - Figma undertakes no obligation to update or revise any forward-looking statements, except as required by law[20] Non-GAAP Financial Measures 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] - 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][22] - 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][24] Certain Definitions 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] - 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] - 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] Condensed Consolidated Financial Statements (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 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 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 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 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 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] Non-GAAP Operating Expenses Reconciliation 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] Non-GAAP Operating Income and Margin Reconciliation 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] Non-GAAP Net Income Reconciliation 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] Free Cash Flow Reconciliation 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] - Adjusted free cash flow further considers transaction costs related to the Adobe merger termination and estimated income taxes[43] Investor and Media Contacts This section provides essential contact information for investor relations and media inquiries Contact Information This section provides contact details for Figma's investor relations and media inquiries - Investor contact email: ir@figma.com[46] - Media contact email: press@figma.com[46]