Figma, Inc. Quarterly Report
Period Ending: June 30, 2025
Key Financial Metrics:
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Revenue:
- Q2 2025: $249.6 million, up 41% from $177.2 million Q2 2024
- First six months 2025: $477.8 million, up 43% from $333.4 million first half 2024
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Cost of Revenue:
- Q2 2025: $27.9 million, down 29% from $39.6 million Q2 2024
- First six months 2025: $47.3 million, down 10% from $52.3 million
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Gross Profit / Margin:
- Q2 2025: $221.8 million / 89%
- First six months 2025: $430.5 million / 90%
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Net Income (Loss):
- Q2 2025: $28.2 million net income
- Q2 2024: $(827.9) million net loss
- First six months 2025: $73.1 million net income
- First six months 2024: $(814.3) million net loss
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Adjusted Free Cash Flow:
- Q2 2025: $60.6 million (margin: 24%)
- First six months 2025: $155.2 million (margin: 33%)
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Operating Cash:
- June 30, 2025: $621.6 million cash & cash equivalents
- Marketable securities: $971.7 million
- Digital assets: $30.1 million
- Bitcoin ETF investment: $90.8 million
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Deferred Revenue:
- June 30, 2025: $433.1 million (vs. $305.2 million June 2024)
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Key Operating Metrics:
- Paid Customers >$10,000 ARR: 11,906 (vs. 9,071 prior year)
- Paid Customers >$100,000 ARR: 1,119 (vs. 787)
- Net Dollar Retention Rate: 129% (vs. 130%)
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Stockholders’ Equity:
- June 30, 2025: $1,427.2 million (up from $1,324.1 million Dec 31, 2024)
Risks:
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Growth and Scalability Challenges:
- The company’s rapid prior growth may not continue, and effective management of increased customer base and complex deployments is required. As noted, integrating AI capabilities and expanding product offerings increase technical complexity, which may complicate scaling operations.
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Operating Results Volatility:
- The report highlights that operating results fluctuate due to factors including the timing of investments, impacts of AI, macroeconomic conditions (such as wars and global events), and market acceptance of new pricing and billing models.
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Competition and Market Dynamics:
- Intense competition from better-resourced companies, especially in the AI and design tool sectors, poses risk of market share loss. The document points to the challenge of keeping pace with AI developments and the possibility that competitors may integrate AI more quickly or effectively.
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Customer Growth and Retention:
- Long-term growth depends on acquiring new customers and increasing product adoption by existing customers. The company’s ability to convert free users to paying customers and compete in maturing product markets is critical; conversion rates and churn could be impacted by innovation cycle, macroeconomic weakness, and competitive offerings.
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AI-Related Risks:
- Significant investments in generative AI carry risk of legal, reputational, and regulatory outcomes (referenced: potential for AI-generated content to infringe third-party intellectual property and the evolving regulatory environment such as Europe’s AI Act).
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Cloud Hosting and Technology Dependence:
- Figma is reliant on Amazon Web Services for hosting. Disruptions or changes to AWS agreements may impact service availability and costs.
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Data Security and Privacy:
- As a platform handling sensitive customer data, Figma is exposed to cybersecurity threats, breaches, and evolving global data protection laws. Notably, recent AI tools used by malicious actors increase the sophistication of potential attacks.
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Concentration of Voting Power:
- The multi-class voting structure concentrates over 70% of voting power with CEO Dylan Field post-IPO, which may limit other shareholders’ influence on company decisions.
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Integration/Acquisition Risks:
- Recent technology company acquisitions bring integration risk (e.g., April 17, 2025 and April 7, 2025 acquisitions), including technical and personnel challenges, and potential discovery of hidden liabilities.
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Global and Regulatory Risks:
- Expanding internationally introduces exposure to currency fluctuations, differing regulations, localization costs, and data localization requirements (noted as challenges in successfully pricing and collecting revenue in global markets).
Management Discussion and Analysis:
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Abandoned Merger Impact:
- Termination of the Adobe merger in December 2023 resulted in significant one-time operating expenses in 2024, distorting prior-year comparables. The adoption of employee-focused equity releases and a 2024 tender offer increased expenses in that period.
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Operating Leverage and Efficiency Gains:
- The substantial year-over-year decline in operating expenses (R&D down 84%, Sales & Marketing down 65%) is mainly attributed to reduced stock-based compensation and the absence of merger/tender offer transaction costs that occurred in 2024.
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Product and Platform Expansion:
- In 2025, Figma doubled its product offerings (including Figma Sites, Make, Buzz, and AI-driven “Story” and “Research”), broadening addressable market and customer engagement points. AI-driven features are emphasized as a future growth driver—but also as a cost center due to investment needs.
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Revenue Growth Drivers:
- Growth in large enterprise customers (>$100,000 ARR), consistent net dollar retention (129%), and international expansion are cited as core drivers.
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Profitability and Cash Generation:
- Figma swung to profitability and positive free cash flow in 2025 after a loss-driven, expense-heavy 2024. Operating margins (non-GAAP) improved to 11% for the six months ended June 30, 2025 from 7% prior, with Gross Margin holding strong at 90%.
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Post-Period Events:
- Key subsequent events include the July 2025 drawdown ($330.5 million) on a new revolving credit facility (Morgan Stanley), approval of new RSU grants, and completion of the IPO in August 2025 (12.47 million shares issued).
Liquidity and Capital Resources:
- Liquidity is robust, with over $1.6 billion in total cash, marketable securities, and digital assets as of June 30, 2025.
- Deferred revenue and collections from subscription customers remain the largest sources of operating cash.
- The company has ample capacity to fund planned investments, with additional access to a newly established revolving credit facility if needed.
Summary for Investors:
Figma reported strong revenue growth and a transition to profitability in the first half of 2025, benefiting from disciplined cost control and the absence of one-off expenses related to the terminated Adobe merger and equity restructuring in 2024. Key operational strengths are rising enterprise adoption, robust retention, and an expanding platform driven by new AI features.
Investors should note the significant risks associated with rapid scaling, technical and regulatory evolution (especially in AI), and a concentrated voting structure that may limit minority shareholder influence. The transition to public company reporting, competitive headwinds (especially from larger software and AI vendors), and the need for ongoing product innovation also present challenges. Despite these risks, Figma’s strong liquidity position and cash generation provide it with the flexibility to invest for further growth, pursue new markets, and weather macroeconomic uncertainties.
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