On Wednesday, September 3, Figma released its first earnings report since going public in July, bringing with it a significant change in tide.
The collaborative design software platform had an incredible initial public offering (IPO), which saw its stock price rise 250%. In contrast, Figma’s shares (NYSE: FIG) have now plunged about 15% in after-hours and premarket trading on Thursday.
So, what brought Figma’s stock down?
Revenue-wise, the company grew 41% year-over-year (YOY), reaching $249.6 million. The figure beat Wall Street’s predicted $248.8 million, according to consensus estimates cited by CNBC.
The company also announced a series of new products, including Figma Make, an AI-powered design tool, and Figma Sites, which lets users publish websites from the platform.
‘Significant investments in our AI efforts’
In an earnings call, Figma cofounder and CEO Dylan Field noted how AI growth might negatively impact profits.
“You should expect to see significant investments in our AI efforts because we believe AI will be critical to how software development workflows evolve moving forward,” Field said. “This means that we expect margins to come down in the near term as we invest in the long term.”
Another consideration for the drop in share price might stem from their availability. When the stock market closes on Thursday, September 4, the lockup period will end for 25% of shares owned by employees. This change means that a significant number of shares will enter the public market, potentially diluting the existing shares’ worth.
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