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Figma, Inc. Class A Common Stock
Our verdict on Figma, Inc. Class A Common Stock isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
While G&A expenses spiked in the current quarter due to IPO-related stock-based compensation (135% of revenue), management reiterated the long-term target that these expenses will decrease as a percentage of revenue as the business scales. (1 in progress, 1 missed across 2 tracked commitments)
“However, we anticipate that general and administrative expenses will decrease as a percentage of revenue over time, although these expenses may fluctuate as a percentage of our revenue from period-to-period depending on the timing of these expenses.”
Figma is enforcing AI credit limits and introducing flexible incremental usage options, including pay-as-you-go models.
“In March 2026, we began enforcing AI credit limits and introduced flexible options for incremental usage, including monthly AI credit add‑ons to existing subscriptions or usage billed under a pay‑as‑you‑go model.”
Plan to continue investing significant resources to develop and launch new products, services, and AI functionality. — target: Significant resources
“We intend to continue investing significant resources to develop and launch new products, services, features, and functionality, including enhancements to our platform’s accessibility.”
Management expects sales and marketing expenses to increase in absolute dollars as they scale the go-to-market organization. (+3 more commitments)
“Over time, we expect that our sales and marketing expenses will increase in absolute dollars relative to our sales and marketing expenses prior to 2025, as our business grows and we continue to scale our go-to-market organization.”
Figma has committed to a minimum purchase of $50.0 million in services from a third-party provider through May 2027. — target: $50.0 million
“On May 6, 2026, the Company entered into a binding agreement with a third-party provider pursuant to which the Company committed to purchase a minimum of $50.0 million in services through May 31, 2027.”
See the full cited Management analysis of Figma, Inc. Class A Common Stock
How durable is the business?
Figma is aggressively expanding its platform to capture more of the product development workflow, launching four new products (Sites, Make, Buzz, Draw) in 2025 to deepen the network effect between designers and adjacent roles like developers and marketers. (1 expanding)
“In 2025, we doubled our product portfolio with the launch of four new products: Figma Sites, Figma Make, Figma Buzz, and Figma Draw.”
Revenue grew 38% YoY to $274.2M for the quarter, though gross margin contracted significantly to 69% from 91% due to a one-time $975.7M stock-based compensation charge related to the IPO and increased AI infrastructure costs. (2 expanding)
“Revenue $ 274,173 $ 198,639... Gross profit 190,289 179,936”
Revenue grew 41% YoY to $249.6 million for the quarter, driven by a 31% increase in customers with >$10k ARR. Gross margin expanded to 89% from 78% in the prior year period, largely due to a significant reduction in stock-based compensation following a one-time release in 2024. (2 expanding across 1 engine)
“Revenue $ 333,439... Revenue increased by $105.2 million, or 46%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.”
Figma is expanding its network effect by moving beyond designers to developers and marketers. Non-designers now make up two-thirds of monthly active users, and the company is launching new products like 'Dev Mode' and 'Figma Buzz' to capture these adjacent workflows. (2 expanding)
“Historically, a significant portion of our revenue growth has been derived from organic growth that occurs within organizations when new users decide to use our platform based on word-of-mouth recommendations”
The Net Dollar Retention Rate remains strong at 129%, though it has slightly ticked down from 130% in the prior year, indicating continued high stickiness and expansion within the existing customer base. (1 stable, 2 expanding)
“Net Dollar Retention Rate 139 %... We believe that Net Dollar Retention Rate is an important metric as it measures our ability to both retain our existing customers and grow within our customer base.”
See the full cited Business Model analysis of Figma, Inc. Class A Common Stock
Where does growth come from?
The company's ability to expand within its existing customer base is accelerating, with Net Dollar Retention (NDR) rising from 132% to 139% over the last year, indicating that existing customers are finding significantly more value and increasing their spend. (1 accelerating across 1 signal)
“Net Dollar Retention Rate 139% [as of March 31, 2026] ... 132% [as of March 31, 2025]”
The company maintains a steady, untapped liquidity position with a $500 million revolving credit facility, providing a significant buffer for strategic growth or acquisitions. (1 steady across 1 signal, 2 leading indicators)
“On June 27, 2025, the Company entered into a credit agreement ... which provides for a revolving credit facility of up to $500.0 million ... total available borrowing capacity under the Revolving Credit Facility was $500.0 million as of March 31, 2026.”
The company is transitioning its monetization strategy by introducing AI-specific billing, moving from a pure subscription model to one that includes usage-based AI credits.
“In March 2026, we began enforcing AI credit limits and introduced flexible options for incremental usage, including monthly AI credit add-ons to existing subscriptions or usage billed under a pay-as-you-go model.”
Figma has aggressively expanded its product suite beyond design into website publishing, marketing asset creation, and specialized drawing tools to capture more of the digital product lifecycle.
“In 2025, we doubled our product portfolio with the launch of four new products: Figma Make, Figma Sites, Figma Buzz, and Figma Draw.”
Net Dollar Retention Rate (NDR) — a measure of how much existing customers increase their spending — remains very strong but showed a slight 100 basis point dip year-over-year. (2 steady across 2 signals)
“Paid Customers with more than $100,000 in ARR 1,525 [as of March 31, 2026] ... increased by 48% ... as of March 31, 2026 compared to the prior year.”
See the full cited Future Growth analysis of Figma, Inc. Class A Common Stock
What could break the thesis?
Infrastructure and hosting costs are rising due to AI inference and model training, though overall cost of revenue decreased year-over-year due to a massive one-time stock-based compensation charge in the prior year. Management explicitly warns that AI investments will negatively impact gross and operating margins in the short term. (4 intensifying, 1 high-severity)
“Cost of revenue increased by $49.2 million, or 253%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to a $33.7 million increase in technical infrastructure and hosting costs relating to AI”
The company implemented significant changes to pricing and packaging in March 2025, including administrator-only seat upgrades. Management admits this may inhibit seat growth and make forecasting revenue more difficult. (1 intensifying, 1 stable, 2 emerging, 1 high-severity)
“following our enforcement of AI credit limits starting in March 2026, we observed elevated customer support volume, instances of customer dissatisfaction expressed through public and social channels, and reduced usage by certain customers.”
Following the IPO on August 1, 2025, Dylan Field's voting power has increased to approximately 73.4% (up from 72.3% previously noted), further solidifying his absolute control over the company's strategic direction and potential sale. (5 intensifying, 2 high-severity)
“As of March 31, 2026, Mr. Field held approximately 72.3% of the voting power of our outstanding capital stock... As a result, Mr. Field is able to control matters submitted to our stockholders for approval”
While the massive $858M charge from the prior year (due to a specific RSU release) has passed, the company recognized a one-time cumulative expense of $975.7 million upon the IPO completion in August 2025. This indicates continued massive dilution and non-cash expense pressure. (4 intensifying)
“The non-cash charges primarily consisted of $169.0 million of stock-based compensation expense, net of amounts capitalized”
Net Dollar Retention Rate (NDR) has declined from 139% in previous assessments to 131% as of September 30, 2025, indicating a slowdown in expansion within the existing customer base. (1 intensifying)
“Net Dollar Retention Rate 139 %... we expect our Net Dollar Retention Rate to fluctuate or decline in the future as a result of a number of factors such as the growing level of our revenue base”
See the full cited Risk analysis of Figma, Inc. Class A Common Stock
Figma, Inc. Class A Common Stock analysis by filing period
Read the full thesis on Figma, Inc. Class A Common Stock
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