Quick Read
- Figma’s stock has dropped by 54% over the past year, raising questions about its valuation.
- The company reported a 37% revenue growth in 2025, but its market capitalization remains high at $27 billion.
- AI integration with OpenAI and the success of Figma Make are driving customer acquisition and growth.
- Figma faces challenges in aligning its valuation with financial performance, creating uncertainty for investors.
Figma, a widely celebrated design software company, has been at the forefront of digital product creation. Known for its collaborative tools that cater to product teams, developers, and designers, Figma has earned a reputation as an indispensable platform in the tech industry. However, its journey on the stock market has been anything but smooth. The company’s shares have experienced a sharp decline, falling approximately 54% over the past year, raising questions about its valuation and future prospects.
Figma’s Financial Performance: A Mixed Bag
Despite the steep drop in stock price, Figma has demonstrated notable progress in its financials. For the first two quarters of fiscal 2025, the company reported $478 million in revenue and projected a full-year revenue between $1.021 billion and $1.025 billion. This marks a robust 37% year-over-year growth. Additionally, the company achieved a significant milestone by transitioning from a loss of $4.53 per share in the first half of 2024 to a positive $0.10 per share in the same period of 2025.
While these numbers reflect an improving business model and operational scalability, they are overshadowed by the company’s hefty market capitalization of $27 billion. Such a valuation implies high expectations for sustained double-digit growth, a challenging feat in a competitive market dominated by players like Adobe and Canva.
The Role of AI Integration
One of the most exciting developments for Figma is its integration with artificial intelligence. The company has partnered with OpenAI to enable direct interaction between Figma and ChatGPT, opening new avenues for user engagement. Additionally, Figma Make, a generative AI tool, has become a significant driver of customer acquisition. About 30% of high-spending customers are reportedly using Figma Make weekly, showcasing its growing importance in the company’s ecosystem.
These AI-driven initiatives have the potential to position Figma as a leader in the emerging AI-assisted design landscape. By leveraging AI, Figma aims to enhance its platform’s utility, attract a broader user base, and unlock new monetization opportunities.
Valuation Challenges and Market Sentiment
Despite its innovative strides, Figma faces considerable valuation challenges. Trading at over 25 times its sales projections, the company is under pressure to maintain its growth trajectory or significantly improve profitability. This high valuation has led to skepticism among investors, especially as the broader market becomes more selective in rewarding companies for their potential rather than actual performance.
Moreover, Figma’s net loss in the third quarter of 2025 ballooned to $1.10 billion, highlighting the financial strain of stock-based compensation and other expenses. While the adjusted operating margin of 12% exceeded expectations, the overall financial picture underscores the difficulties of balancing growth and profitability.
Future Prospects: Cautious Optimism
Looking ahead, Figma’s future hinges on its ability to capitalize on its AI integrations, expand its user base, and deliver consistent financial performance. The partnership with OpenAI and the success of Figma Make are promising indicators, but they must translate into sustained revenue growth and profitability to justify the company’s valuation.
For long-term investors, the recent stock price decline could present a buying opportunity, provided they have confidence in Figma’s leadership and strategic direction. However, for others, patience may be prudent as the company navigates its valuation challenges and works to align its financial performance with market expectations.
Figma stands at a crossroads, balancing innovation with financial discipline. While its AI-driven initiatives and collaborative tools position it as a leader in the design software market, the company’s high valuation demands cautious optimism from investors.