Figma beats revenue estimates as AI costs pressure margins

By Amara Osei

Figma reported third-quarter revenue of $391.4 million on Wednesday, up 43% from a year earlier, while shares of Figma (FIG) fell 6% in after-hours trading. Adjusted earnings per share reached 10 cents. Wall Street analysts had expected revenue of $377 million and adjusted EPS of 5 cents.

The operating beat did not settle the stock’s central debate: investors were weighing faster AI adoption against the cost of serving it. Figma said its investments in proprietary models and agents were driving usage, while the expense of delivering those features was rising with adoption. The result was a strong operating quarter paired with a negative market reaction.

What does the earnings beat show?

Figma’s full-stack design solutions are “increasingly powered by our first-party model and native to the way teams design and build with AI,” Figma CEO and co-founder Dylan Field said in the earnings release. “This is Figma’s opportunity and what we believe will fuel our next phase of growth.”

The strategy was gaining traction in Figma’s proprietary AI tools, according to the earnings report. The company’s AI agent, a design assistant that can run complex tasks, became generally available in early October. CFO Praveer Melwani told MarketWatch that credit consumption had surged with its introduction, and he said the pace and iteration were starting to pick up.

Melwani said 65% of accounts generating more than $10,000 in annual recurring revenue used the automated Figma agent weekly. The CFO also said more than 80% were actively burning through AI credits. Those figures showed rapid agent adoption among larger accounts, but they also identified the customer cohort driving Figma’s rising AI expense.

How are AI costs changing Figma’s economics?

Powering that growth required significant upfront AI investment, Melwani said. Adjusted gross margin fell to 82% from 85% in the preceding quarter, Figma reported. The measure tracks the revenue Figma retained after the direct costs of making its products, so the sequential decline showed those costs taking a larger share.

Free-cash-flow margin declined to 11% from 14% in the prior quarter, according to Figma. The metric gauges how much actual cash the business keeps from every dollar of sales. The two margin contractions put a measurable cost on Figma’s effort to turn rapid AI usage into a larger revenue base.

Management nevertheless views the elevated spending as a significant investment in the business’s long-term health. Figma lifted its full-year revenue outlook to roughly $1.5 billion, citing product momentum and improvements in AI cost efficiencies. The forecast pairs higher near-term infrastructure spending with management’s expectation that improving AI efficiency will support a larger revenue base.

What must Figma deliver in the fourth quarter?

Management projects fourth-quarter revenue of $402.0 million to $404.0 million. At the midpoint, the range implies 33% growth, and it topped the $391 million FactSet consensus. The outlook calls for continued expansion despite the margin pressure created by the AI buildout.

Figma works with a range of AI models while steadily increasing usage of its own. From July through the end of October, the company more than doubled the share of work powered by its own model, according to the earnings report. Figma said it has been growing internal-model usage to deliver fast and affordable results.

Melwani said the models Figma is developing are much smaller in nature, allowing the company to be more efficient. That matters because Figma’s agent was already pushing customers to consume AI credits at a high rate. The company’s own-model strategy combines those efficiency claims with a rising share of work powered by proprietary technology.

The near-term test is whether those efficiency gains can restrain credit consumption without slowing adoption. Figma enters the fourth quarter targeting $402.0 million to $404.0 million of revenue.

Investors will assess whether an 82% adjusted gross margin can hold after the AI buildout. Delivering the revenue guide would support the roughly $1.5 billion full-year outlook, but the margin path will determine whether AI growth creates durable value or absorbs more cash.