Figma reported a 43% revenue jump to $391.4 million in the third quarter, driven by strong AI tool adoption. Despite this growth, the stock fell by roughly 8% as profit margins slightly missed expectations. The company remains optimistic, raising its full-year revenue guidance to nearly $1.5 billion.
Figma shares dropped by approximately 8% following the release of its third-quarter financial results. While the company achieved a strong 43% increase in revenue to $391.4 million, beating expectations, investor reaction focused on profit margins that landed slightly below what the market had anticipated. This reaction highlights how sensitive the market currently is to the costs associated with the aggressive AI expansion strategy.
The core of the company's current financial story is a transition toward proprietary AI technology. Figma is moving away from third-party solutions to build its own design models. Management explained that this shift is intended to lower latency and improve service quality in the long run. However, this move requires significant upfront investment in computing power and infrastructure, which is placing pressure on gross margins. The company reported a GAAP gross margin of 80%, which, while high, did not meet the higher expectations set by some analysts.
Despite the margin concerns, the company showed significant progress in its monetization strategy. Figma has found success with its credit-based pricing model, where enterprise clients buy AI credits to use on the platform. With over 80% of large enterprise clients now using these AI credits weekly, the company is successfully embedding its AI features into the daily workflows of its users. This high engagement is a key factor in why management remains confident despite the current cost pressures.
Looking ahead, the company has raised its fiscal 2026 revenue guidance to a range of $1.497 billion to $1.499 billion. It also increased its target for adjusted operating income to $163 million. Management believes these investments in AI will act as a support for profitability over the next eighteen months.
For investors, the primary monitorable in the coming quarters will be the balance between top-line growth and margin stability. While the company is growing its revenue rapidly, the market will likely watch closely to see if the cost of its AI infrastructure starts to stabilize or if it continues to weigh on profitability. Additionally, the company faces rising competition from other AI-focused design tools, which could force it to maintain high spending to keep its competitive edge. Investors will likely look for signs that the proprietary AI technology is effectively lowering costs as planned, rather than just adding to the spending burden.