Figma earnings test AI fears after a two-thirds stock slide

By Amara Osei

Figma’s shares have lost roughly two-thirds of their value since its July 2025 IPO, leaving the design software company near $22, according to Startup Fortune. Figma will report after the market closes on Wednesday, November 4. Startup Fortune described the release as its first full earnings test since downgrades turned the hot IPO into one of 2026’s more awkward growth stocks.

Figma’s guidance calls for $373 million to $375 million in revenue, about 36% growth from $274.2 million a year earlier. StockAnalysis.com analysts model closer to $380 million, while earnings estimates range from a small profit to a loss of $0.22 a share. Startup Fortune said the wide bottom-line range reflects how much stock-based compensation distorts reported earnings.

What broke the IPO premium?

Startup Fortune reported that Figma priced its July 2025 IPO at $33 a share, opened at $85 and closed near $115.50 on day one. The first-day valuation reached about $68 billion, and the stock has since touched a 52-week low of $16.61.

MarketBeat’s compiled average price target fell from roughly $77 in June 2025 to about $30 by August 2026. RBC Capital’s Rishi Jaluria cut his target to $22 after Figma’s Config conference in late June, while Morgan Stanley trimmed its target from $44 to $38 in May. Startup Fortune reported that both firms acknowledged Figma’s growth numbers were fine.

Can another earnings beat stop the sell-off?

Figma beat Wall Street estimates in each of its last two reports, yet shares fell after both. In February, the company topped estimates and the stock dropped nearly 11% that day.

In August, Q2 revenue reached $370.1 million against a $351.52 million estimate, while EPS reached $0.08 versus a $0.04 forecast. Shares fell nearly 15% as operating costs surged and margins compressed.

Morgan Stanley and Piper Sandler had already lowered their targets in May despite 46% revenue growth in the first quarter. Startup Fortune reported that both cited AI competition risk rather than execution.

Why Canva now frames the AI debate

Canva introduced what it called Canva AI 2.0 at its Create event in Los Angeles on April 16. Canva described the repositioning as "a design platform with AI tools" becoming "an AI platform with design tools."

The update centers on a proprietary Canva Design Model built to orchestrate layout, typography and asset libraries from one prompt. Canva also introduced a Memory Library meant to learn a brand’s visual rules over time. Dataconomy reported that the pitch explicitly targeted Adobe and Figma with outputs users could edit directly, not static AI-generated mockups.

Canva’s pitch arrives with scale: the company counts more than 220 million monthly users, by its own account cited in Startup Fortune. Figma said at Config India on October 15 that it had added 20 Model Context Protocol partners, including Notion and Mistral. The announcement came months after Canva’s COO described Canva as an AI platform, not a template library.

Figma has also promoted AI coding agents that edit design files and AI agents integrated into the Figma canvas. Startup Fortune said the earnings numbers will shape how investors score Figma’s response, though they cannot fully settle the product question.

Can Figma keep design work in one file?

Figma shipped Code to Canvas in February. The feature converts code written in AI tools, including Claude Code, back into editable Figma designs, betting that developers and designers will keep meeting in the same file rather than handing work back and forth.

Figma crossed $1 billion in annual recurring revenue last year, and full-year 2025 revenue reached $1.056 billion, up 41% from $749 million in 2024. Startup Fortune called those growth rates genuinely rare for a software company of Figma’s size, even as the market cut its valuation by more than half.

How will Dylan Field’s selling weigh on sentiment?

Co-founder and CEO Dylan Field entered a Rule 10b5-1 trading plan in March 2026 covering up to 1 million shares. He has sold stock under the plan through the year, an arrangement Startup Fortune described as routine founder liquidity.

The selling carries more weight because Figma shares are down double digits from their debut. Startup Fortune’s analysis said the market has moved beyond rewarding headline growth alone.

What will move the stock after the print?

Startup Fortune expects the headline revenue print to carry less weight because Figma has cleared that bar twice. The report may turn instead on management’s comments about AI product adoption, seat growth among highest-paying customers and the company’s answer to Canva.

For investors, the test is whether Figma can convert strong growth into seat gains while holding margins against competitive pressure. A revenue beat alone may not be enough if those operating details disappoint.