Core Insights - Figma and Atlassian are key players in the collaboration software market, with Figma focusing on design collaboration and Atlassian on project management and team productivity [1][2] Industry Overview - The global enterprise collaboration market was valued at $54.67 billion in 2024 and is projected to reach $107.03 billion by 2030, growing at a CAGR of 12.1% from 2025 to 2030 [2] Figma (FIG) Analysis - Figma is integrating AI into its workflows, notably through the launch of Figma Make, which allows users to create prototypes and web apps using text prompts. By the end of September, about 30% of customers spending over $100,000 in annual recurring revenues were using Figma Make weekly [3] - As of September 30, 2025, Figma had 12,910 paid customers with over $10,000 in annual recurring revenues and 1,262 customers with over $100,000 in ARR. The net dollar retention for paid customers with more than $10,000 in ARR increased to 131%, up 2 percentage points sequentially [4] - Figma announced a partnership with OpenAI to launch the Figma App for ChatGPT, enabling users to convert conversations into diagrams and charts that can be shared and edited in Figma [5] Atlassian (TEAM) Analysis - Atlassian is enhancing its collaboration software with generative AI features, collaborating with OpenAI to improve Confluence, Jira Service Management, and other programs [6] - The company has signed over 500 customers spending more than $1 million annually, indicating strong enterprise penetration, particularly among Fortune 500 companies and leading banks [7] - In August 2025, Atlassian announced a multi-year partnership with Google Cloud to integrate its AI-powered teamwork platform onto Google's AI-optimized infrastructure [8] - In the first quarter of fiscal 2026, Atlassian integrated AI into its platform, with over 3.5 million monthly active users leveraging AI-powered tools, showing a growth of more than 50% since the last quarter [9] Stock Performance - In the past month, FIG shares have decreased by 35.4%, while TEAM shares have lost 10.9%. The performance difference is attributed to the rising demand for remote working tools and digital transformation [11] - FIG shares are currently trading at a forward Price/Sales ratio of 11.33X, higher than TEAM's 5.71X, indicating that both stocks are overvalued [14] Earnings Estimates - The Zacks Consensus Estimate for FIG's 2025 earnings is 41 cents per share, reflecting a 26.8% increase over the past 30 days and a year-over-year increase of 110.96% [16] - The Zacks Consensus Estimate for TEAM's fiscal 2026 earnings is $4.70 per share, which has increased by 12.9% over the past 30 days, indicating a year-over-year increase of 27.72% [16] Conclusion - Both Figma and Atlassian are positioned to benefit from the growing collaboration market, but Atlassian currently shows greater upside potential due to deeper enterprise penetration and stronger AI adoption [19] - Figma's growth prospects are considered modest, and its investments in AI-powered products may negatively impact margin expansion in the near term [19] - Atlassian holds a Zacks Rank 2 (Buy), while Figma has a Zacks Rank 3 (Hold), suggesting a stronger investment case for Atlassian [20]

Core Viewpoint - Figma's stock has experienced a significant decline of over 30% in the past month despite strong growth metrics, raising questions about whether the market has overreacted or if the decline is justified [1][2]. Company Performance - Figma's revenue for 2024 reached $749 million, marking a 48% increase from the previous year [2]. - The company projects revenue for 2025 to be around $1.04 billion, indicating a year-over-year growth of 40% [3]. - Figma's software facilitates collaboration on design projects, contributing to its impressive growth [2]. Impact of AI - AI is seen as a growth opportunity for Figma, with the introduction of Figma Make allowing users to create polished applications from ideas [4]. - The partnership with ChatGPT enhances Figma's offerings by enabling users to generate diagrams through chatbot conversations [4]. Financial Metrics - In the third quarter, Figma reported a net loss of just under $1.1 billion against quarterly revenue of $274 million, primarily due to one-time stock-based compensation expenses of $975.7 million [5]. - On an adjusted basis, Figma exceeded analysts' expectations with earnings per share of $0.10, compared to the anticipated $0.05 [5]. - The company posted a slim profit of just under $1 million attributable to shareholders in the second quarter, but incurred significant losses before and after that [6]. Market Valuation - Figma's stock trades at a forward price-to-earnings multiple of nearly 100, which is under scrutiny in the current market environment [7]. - As of the latest data, Figma's market cap was approximately $17 billion, suggesting a lower valuation compared to the $20 billion Adobe was willing to pay in 2022 [9].

Core Insights - Figma is experiencing significant growth due to an expanding clientele and a focus on AI-native workflows and product innovation [1][3] - The introduction of Figma Make, an AI-powered tool, has contributed to increased customer engagement, with 30% of high-spending customers using it weekly [2][4] Customer Growth and Retention - In Q3 2025, Figma added over 90,000 paid teams, reaching a total of 540,000 paid customers, driven by new product adoption [3][9] - As of September 30, 2025, Figma had 12,910 customers with over $10,000 in annual recurring revenue (ARR) and 1,262 customers with over $100,000 in ARR [4][9] - The net dollar retention rate for customers with over $10,000 in ARR increased to 131%, reflecting strong customer adoption of new products [4][9] Competitive Landscape - Figma faces intense competition from Adobe and Atlassian, both of which are enhancing their AI capabilities and expanding their customer bases [5][6] - Adobe's partnership with Google Cloud aims to integrate advanced AI models into its creative ecosystem, enhancing its offerings [5] - Atlassian's collaboration with Google Cloud focuses on integrating generative AI features into its software, which is expected to drive revenue growth [6] Stock Performance and Valuation - Figma's stock has declined by 50.4% over the past three months, contrasting with a 10.9% increase in the broader Zacks Computer & Technology sector [7] - The forward 12-month Price/Sales ratio for Figma is 12.17X, significantly higher than the sector average of 6.63X, indicating a premium valuation [10] - The Zacks Consensus Estimate for Figma's 2025 earnings is 41 cents per share, reflecting a 110.96% increase from the previous year [12]

Core Insights - Figma (FIG) shares have decreased by 31.6% over the past month, significantly underperforming the Zacks Computer and Technology sector's return of 3.3% and the Zacks Internet Software industry's decline of 7.7% [1][9] - The company's investments in AI-powered products, such as Figma Make, have led to increased costs, negatively impacting gross margins [2][20] - Despite the share price decline, Figma is experiencing strong client growth, with a net dollar retention rate of 131% for paid customers with over $10,000 in annual recurring revenues (ARR) [7][9] Financial Performance - As of September 30, 2025, Figma had 12,910 paid customers with more than $10,000 in ARR and 1,262 customers with over $100,000 in ARR [5] - The Zacks Consensus Estimate for Figma's 2025 earnings is 33 cents per share, reflecting a 108.80% year-over-year increase [14] - Figma expects revenues for 2025 to be between $1.044 billion and $1.046 billion, indicating a 40% year-over-year growth at the midpoint [15] Product and Client Expansion - Figma's expanding portfolio, including the launch of Figma Make, has been a significant growth driver, with approximately 30% of high-spending customers using the tool weekly by the end of September [6][11] - The company added over 90,000 paid teams in just two quarters, bringing the total to 540,000 paid customers [11] - Figma reported a 27% quarter-over-quarter increase in customers signing multiyear agreements, highlighting its growing role in design and product development [12] Competitive Landscape - Figma faces stiff competition from companies like Adobe and Autodesk, which are also expanding their AI-driven revenue bases [16][20] - Atlassian is enhancing its collaboration software with generative AI features, which may impact Figma's market position [17] Valuation - Figma shares are currently trading at a premium, with a forward 12-month Price/Sales ratio of 14.61X, indicating potential overvaluation [18][20]

Figma’s Wall Street debut on July 31 opened at $85 and soared to $142.92 the very next day. For early investors, it looked like a masterpiece in motion. But the shine didn’t last long. Concerns over its lofty valuation and whispers of a tech bubble sent FIG stock sliding. A lukewarm Q2 report didn’t help steady the lines.Figma’s AI capabilities now help users design, code, and build web apps faster, turning the platform into a one-stop solution for modern digital creation. Its business model centers on team ...

Equity Research 6 November 2025 | 12:02AM PST Figma Inc. (FIG) Encouraged by Strong Results and Promising Signs of AI Momentum - F3Q25 Results FIG 12m Price Target: $54.00 Price: $44.01 Upside: 22.7% We reiterate our Neutral rating and raise our PT to $54 following F3Q25 results that beat Consensus across Revenue (+4%), GM (+150bps), OpM (+590bps), while FCFM came-in at 18% (vs. 5% GSe). The stock is indicated +4% AH, reflecting solid outperformance and +2% raise to F25 Revenue guide, coupled with compellin ...

Financial Data and Key Metrics Changes - Figma reported Q3 revenue of $274 million, representing a 38% year-over-year growth and crossing a $1 billion annual revenue run rate, marking the best quarter in the company's history [5][21][30] - The non-GAAP operating margin was 12%, with an adjusted free cash flow margin of 18% for the quarter [6][28] - The gross profit for Q3 was $237 million, resulting in a gross margin of 86% [25] Business Line Data and Key Metrics Changes - The net dollar retention rate increased by two percentage points to 131%, driven by faster customer adoption of new products [6][24] - Figma ended Q3 with 540,000 total paid customers, up from nearly 450,000 at the end of Q1, adding over 90,000 paid teams in just two quarters [23] - More than 70% of customers were using three or more products, indicating strong multi-product adoption [23] Market Data and Key Metrics Changes - International revenue grew approximately 42% during Q3, outpacing domestic growth [80] - The company is seeing broader interest in its Governance Plus add-on across various sectors, indicating a growing market presence [24] Company Strategy and Development Direction - Figma is focused on building AI-native workflows and investing in product innovation to maintain long-term market leadership [22][29] - The company aims to enhance interoperability across its products, making it easier for users to transition between different stages of the design process [63] - The acquisition of Weavy is expected to enhance Figma's platform by integrating AI model outputs with professional editing tools [19][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, raising revenue and operating income guidance for Q4 and the full fiscal year due to strong business performance [30] - The company is committed to investing in AI and product development, even at the cost of near-term margins, to build a robust long-term platform [10][29] Other Important Information - Figma launched over 50 new features in Q3, enhancing product capabilities and customer workflows [7][8] - The company is actively integrating with other platforms, including ChatGPT, to expand its functionality and user engagement [17][74] Q&A Session Summary Question: Insights on Weavy's integration and its impact on user base - Management highlighted that Weavy allows for a modular approach to using AI model outputs, enhancing the creative process and potentially expanding the user base [36][38] Question: Tangible results from Figma Make and its adoption - Figma Make is driving high engagement among new personas, allowing for faster validation of ideas and increased production capabilities [42][45] Question: Strength in new paid customers and market dynamics - The growth in new paid customers is balanced across international and domestic markets, with international revenue growing slightly faster [80][81] Question: Future expectations for net dollar retention - Management expects continued strength in net dollar retention due to the platform's appeal and the successful rollout of new products [75][76] Question: Impact of OpenAI integration on Figma's business - The integration with OpenAI is still in early stages, but management is optimistic about its potential to enhance user experience and drive engagement [73][74]

Financial Data and Key Metrics Changes - Figma reported Q3 revenue of $274 million, representing a record 38% year-over-year growth and exceeding guidance [5][22][30] - The annual revenue run rate surpassed $1 billion, marking a significant milestone for the company [5][22] - Non-GAAP operating margin was 12%, with adjusted free cash flow margin at 18% for the quarter [6][28][30] - Gross profit for Q3 was $237 million, resulting in a gross margin of 86% [25] Business Line Data and Key Metrics Changes - Figma Make adoption contributed to a total of 540,000 paid customers, up from nearly 450,000 at the end of Q1, adding over 90,000 paid teams in just two quarters [23] - Net dollar retention increased by 2 percentage points to 131%, driven by faster customer adoption of new products [6][24] - Over 70% of customers are using three or more products, indicating strong multi-product adoption [23][49] Market Data and Key Metrics Changes - International revenue grew approximately 42% during Q3, outpacing domestic growth [81] - The company is strategically investing in international markets to enhance growth [81] Company Strategy and Development Direction - Figma is focused on long-term growth, emphasizing product innovation and differentiation, particularly in AI-native workflows [22][30] - The company aims to enhance interoperability across its products, positioning itself as the system of record for design and product development [6][30] - The acquisition of Weavy is expected to expand Figma's capabilities in AI and creative production [19][20] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of design as a differentiator in the market, especially with the rise of AI [5][20] - The company raised its revenue and operating income outlook for Q4 and the full fiscal year, reflecting strong business momentum [30] Other Important Information - Figma launched over 50 new features in Q3, enhancing product velocity and customer engagement [7][8] - The company is investing heavily in AI, with a focus on building AI-native workflows and partnerships [10][19] Q&A Session Summary Question: Insights on Weavy's integration and its impact on the design platform - Management expressed excitement about Weavy's integration, emphasizing its potential to enhance the design process and expand the user base [34][36] Question: Tangible results from Figma Make and its adoption trajectory - Management noted high engagement with Figma Make, with 30% of customers spending over $100,000 in ARR using it weekly, and anticipated continued growth in adoption [42][48] Question: Customer acquisition trends and geographic performance - Management indicated balanced growth across international and domestic markets, with international revenue growing faster [80][81] Question: Future impact of OpenAI integration and net dollar retention outlook - Management acknowledged the early stages of the OpenAI integration, with positive user feedback, and expressed confidence in maintaining strong net dollar retention [71][75] Question: Strength in new paid customers and product traction - Management confirmed strong growth in new paid customers across various sectors, with notable traction in new product offerings like Buzz and Draw [82][84]

Financial Data and Key Metrics Changes - Figma reported Q3 revenue of $274 million, representing a record 38% year-over-year growth and surpassing the high end of guidance [4][22] - The annual revenue run rate crossed $1 billion, marking the best sequential net revenue added quarter in the company's history [4][22] - Non-GAAP operating margin was 12%, with adjusted free cash flow margin at 18% for the quarter [5][27] - The company ended Q3 with $1.6 billion in cash, cash equivalents, and marketable securities [5] Business Line Data and Key Metrics Changes - Net dollar retention increased by two percentage points to 131%, driven by faster customer adoption of new products [5][24] - The total number of paid customers rose to 540,000, up from nearly 450,000 at the end of Q1, adding over 90,000 paid teams in just two quarters [23] - More than 70% of customers were using three or more products, indicating strong cross-product engagement [23] Market Data and Key Metrics Changes - International revenue grew approximately 42% during Q3, outpacing domestic growth [53] - The company is seeing broader interest in its Governance Plus add-on across various sectors, not just highly regulated industries [24] Company Strategy and Development Direction - Figma is focusing on building AI-native workflows and investing in product innovation, particularly in AI and M&A [5][22] - The company aims to become the system of record for design and product development, with a strong emphasis on interoperability across its products [8][24] - The acquisition of Weavy is expected to enhance Figma's platform by combining AI models with professional editing tools [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, raising revenue and operating income guidance for the year due to strong business performance [29][30] - The company is committed to long-term growth, balancing investments in innovation with operational efficiency [22][30] Other Important Information - Figma launched over 50 new features in Q3, enhancing product velocity and customer capabilities [7][8] - The company is actively integrating with other platforms, including ChatGPT, to enhance user experience and functionality [19][51] Q&A Session Summary Question: Insights on Weavy's integration and its impact on user base - Management highlighted that Weavy allows for a modular approach to AI model outputs, enhancing the creative process and expanding the user base [32][34] Question: Tangible results from Figma Make and its adoption - Management noted that Figma Make is driving faster design and deployment, with 30% of customers spending over $100,000 in ARR using it weekly [36][40] Question: Strength in new paid customers and market dynamics - The company reported balanced growth across international and domestic markets, with a slight edge in international revenue growth [53] Question: Future expectations for net dollar retention - Management expressed confidence in maintaining strong net dollar retention due to the platform's appeal and new product functionalities [52] Question: Impact of OpenAI integration on business - Management acknowledged early excitement around the ChatGPT integration, particularly for diagramming and flowcharting, but noted that monetization discussions are ongoing [49][50]

Core Insights - Figma, Inc. reported strong third-quarter earnings, surpassing both revenue and earnings estimates, leading to a rise in stock price [1][2] Financial Performance - Quarterly earnings were ten cents per share, exceeding the consensus estimate of five cents [2] - Quarterly revenue reached $274.17 million, beating the Street estimate of $265.21 million by 3.38% [2] Company Highlights - The third quarter was described as the best in Figma's history, achieving an annual revenue run rate of over $1 billion and record revenue [4] - The growth was attributed to investments in AI products, particularly Figma Make and the MCP server, which expanded the customer base [4] Future Outlook - Figma anticipates fourth-quarter revenue between $292 million and $294 million, above the analyst estimate of $282.85 million [5] - The fiscal 2025 revenue outlook has been raised to between $1.044 billion and $1.046 billion, compared to the previous estimate of $1.025 billion [5] Customer Metrics - The Net Dollar Retention Rate for customers with an Annual Recurring Revenue (ARR) of $10,000 or more was 131%, an increase of two percentage points quarter-over-quarter [6] - Figma had 12,910 paid customers with more than $10,000 in ARR as of September 30, 2025, adding over 1,000 in the third quarter [6] - There were 1,262 paid customers with more than $100,000 in ARR, with an addition of over 140 in the third quarter [6]