Figma's stock soars as AI earnings momentum helps ease investors' doubts

By Christine Ji and Hannah Pedone

Figma's revenue grows 40% in the fourth quarter as net dollar retention rate increases to 136%

Figma is investing in AI, but that spending could weigh on margins in 2026.

Defying fears that artificial intelligence could cannibalize the software sector, Figma achieved record revenue in its latest quarter as its customer growth and sales accelerated.

Shares of Figma (FIG) soared about 16% in after-hours trading Wednesday. Revenue for the fourth quarter came out to $304 million, growing 40% from a year before and beating the FactSet consensus of $293 million. Figma reported adjusted earnings of 8 cents a share, in line with analysts' projections.

"2025 was a massive year for us," CEO and co-founder Dylan Field told MarketWatch. "We're shipping products faster than ever." In 2025, Figma expanded from four to eight products and launched over 200 features, he added.

The company reported a net dollar retention rate of 136% for customers with annual recurring revenue of $10,000 or more, a 5-percentage-point increase from the previous quarter. Figma closed the year with 67 paid customers contributing over $1 million in ARR, up 68% from a year ago.

Figma, along with other software stocks, has gotten swept up in a sector-wide selloff that's intensified in recent weeks due to investors' fears about AI applications that could harm incumbent businesses. Its shares have fallen 34% so far this year and are down 83% from their all-time high achieved shortly after the company's initial public offering last July.

Against this backdrop, Figma is doubling down on its AI offerings to provide a comprehensive product-development platform. On Tuesday, the company announced a new integration with Anthropic's Claude Code that allows users to seamlessly turn their code into editable Figma designs.

"We're headed toward a world where code is no longer the bottleneck and value is moving the stack towards design," Field said. "You can see it in terms of how many more people are creating software and how many more people are involved in the design process."

Figma also said that it will be rolling out a new monetization model beginning in March that combines seat-based pricing with AI credit consumption. Figma had not previously charged users on a consumption basis.

The company issued full-year revenue guidance between $1.366 billion and $1.374 billion, representing 30% year-over-year growth and surpassing Wall Street's projections of $1.287 billion. But the company's increased AI investment is expected to weigh on margins, as integrating third-party models like Claude leads to rising infrastructure and inference costs. Field said that Figma expects 2026 non-GAAP operating margin of 8% at the midpoint, down from 14% in the fourth quarter and 12% in 2025 overall.

However, Field pointed out that the the company's AI investments are critical to Figma's long-term growth. He also highlighted that improvements in infrastructure optimization reduced Figma's cost to serve each user and led to stable gross margins quarter over quarter.

Figma CFO Praveer Melwani said in prepared remarks shared with MarketWatch that while adjusted free cash flow declined in the fourth quarter due to increased AI investment, he remains confident in the company's ability to increase cash flow going forward.

And Field told MarketWatch that Figma's new pricing model will also contribute to the company's long-term profitability. "As we move to a world of monetizing those credits, we expect that that will be an offset as well," he said.

See more: Software ate the world. Now, Wall Street is worried AI will eat software.

-Christine Ji -Hannah Pedone

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02-18-26 2022ET