Shares of Figma traded higher on Thursday, but were well short of the initial surge following earnings.
The stock was up by as much as 15% after the bell on Wednesday, when the design software maker reported fourth-quarter results that beat analysts’ expectations and offered rosy guidance.
Figma’s revenue grew 40% year over year to $303.8 million during the period. It reported a net loss of $226.6 million, or 44 cents per share, compared with net income of $33.1 million, or 15 cents per share, in the fourth quarter of 2024.
The company expects to report $315 million to $317 million in first-quarter revenue, which implies 38% year-over-year growth. Analysts polled by LSEG were expecting $292 million.
Analysts at Bank of America said Figma’s fourth-quarter results were solid, and its guidance took center stage. They said all key growth drivers are “very much in place” at the company, but it could still face some headwinds because of broader market uncertainty.
“Figma’s AI monetization timetable is certainly on track, though Figma shares could remain under pressure until a tangible revenue disclosure, given the bearish sentiment on apps generally,” the analysts wrote in a Wednesday note.
In recent months, investors have grown worried about artificial intelligence’s potential to disrupt software companies, sparking a massive sell-off in the sector. Shares of the iShares Expanded Tech-Software Sector ETF are down more than 20% year to date.
Figma, which was caught up in the sell-off, has been working to build AI into its products. The company announced a partnership with the AI startup Anthropic on Tuesday.
Figma one-year stock chart.
“If you look at software, not only is it not going away, there’s going to be way more of it than ever before,” Figma CEO Dylan Field said in a Wednesday interview.
He did note, however, that the market is “potentially increasingly competitive.”
Analysts at Morgan Stanley said even Figma’s “best in class growth rates” couldn’t insulate shares from the “rising tide of investor concerns around the disruptive impacts of GenAI.”
They said the company’s fourth-quarter results suggest it is a strong participant in the AI innovation cycle, and not a company at risk of disruption.
The analysts pointed to rising usage of Figma’s AI-based tooling, broadening partnerships with AI companies and competitive monetization avenues.
“Bottom line, we come out of the Q4 print feeling better about Figma’s expanding solution portfolio and positioning in an AI world, and with shares having pulled back considerably we see a much more
attractive risk/reward in the shares,” the analysts wrote in a note Thursday.
— CNBC’s Jordan Novet contributed to this report
