Figma stock plunged 16% in after-hours trading on Wednesday despite delivering a strong earnings beat in the second quarter, as surging artificial intelligence and research-and-development costs triggered a sharp margin compression that alarmed investors.
The design software company reported Q2 revenue of $370.1 million, up 48% year over year and beating Wall Street’s consensus estimate of $352 million, while adjusted earnings per share of $0.08 topped the expected $0.04, according to Quartz. Yet the market focused on the cost side of the ledger: operating expenses nearly doubled to $426.9 million from $219.7 million a year earlier, swinging Figma to a GAAP operating loss of $117.3 million compared with operating income of $2.1 million in the same quarter of 2025.
Cost of revenue more than doubled year over year to $60.5 million, and GAAP gross margin contracted to 84% from 89%, Quartz reported. On a non-GAAP basis, adjusted operating margin fell to 10% from 16% in a single quarter—a shift that reflected heavy investment in AI infrastructure and product development.
Figma’s first full quarter monetizing AI credits showed strong customer adoption: more than 80% of paid customers with more than $10,000 in annual recurring revenue were consuming AI credits weekly as of June 30, and over 50% were using the Figma agent—a first-party AI feature launched in June—on a weekly basis. Net dollar retention held steady at 136%, indicating customer expansion despite the broader market environment.
Yet the company’s own guidance signaled a growth deceleration that compounded investor concerns. Figma projected third-quarter revenue of $373 million to $375 million, implying 36% year-over-year growth at the midpoint, down from the 48% pace achieved in Q2. The company did raise its full-year 2026 revenue target to between $1.463 billion and $1.467 billion, a $40 million increase from prior guidance, but kept its full-year non-GAAP operating income outlook flat at $125 million to $135 million—effectively signaling that all incremental revenue would flow back into product investment.
CFO Praveer Melwani framed the heavy spending as strategic. “We want to make sure that we’re really investing on the new product side to ensure we can create durable modes of growth over the long term,” he told Reuters, according to The Next Web. Yet markets interpreted flat profit guidance alongside rising sales as a warning sign—a pattern that has become familiar across enterprise software. Shares of Salesforce, ServiceNow, Intuit, and Adobe also slipped following Figma’s results, as investors took the data as fresh evidence that AI infrastructure costs are squeezing margins across the sector.
The timing of executive departures added to the negative sentiment. On the earnings call, CEO Dylan Field announced that Chief Marketing Officer Sheila Vashee and Chief Product Officer Yuhki Yamashita were both leaving the company, according to The Information—a departure that struck observers as awkward given Figma’s bet-the-company pivot to AI products.
Figma’s stock has now declined roughly a quarter this year, a sharp reversal from the rebound its first-quarter earnings report sparked in May. The company’s challenge mirrors a broader tension in high-growth software: investors reward strong top-line growth and customer retention, but punish any signal that AI spending is outpacing margin expansion.
Sources
- Quartz — Q2 revenue, earnings beat, cost of revenue doubling, gross margin contraction, operating expenses, GAAP operating loss, adjusted EPS beat
- The Next Web — Operating expense details, adjusted operating margin compression, guidance implications, CFO commentary on investment strategy, executive departures, sector-wide margin squeeze
- Reuters — Operating loss figures, CFO statement on AI investment priorities
