Figma, Inc. (FIG) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects strong financial performance with a 40% YoY revenue growth, robust operating and cash flow margins, and a significant increase in customers spending over $1 million. AI investments and international revenue growth are promising, despite some margin impacts. The Q&A highlighted positive sentiment towards Figma's strategic focus on AI and design differentiation, although management was vague on some specifics. The overall outlook is positive, supported by strong metrics and optimistic guidance, suggesting a likely stock price increase in the short term.
Key Financial Performance
Revenue (Q4 2025) $304 million, representing a 40% year-over-year growth. The growth was driven by new product launches, customer acquisition, and expansion.
Revenue (Full Year 2025) $1.056 billion, up 41% year-over-year. Growth was supported by strong customer retention, expansion, and international revenue growth.
Net Dollar Retention Rate (Q4 2025) 136%, an increase of 5 percentage points quarter-over-quarter. This reflects strong customer expansion and engagement.
Gross Retention Rate (Q4 2025) 97%, consistent year-over-year, indicating durable customer relationships.
Operating Margin (Q4 2025) 14%, driven by top-line growth and infrastructure optimization.
Adjusted Free Cash Flow Margin (Q4 2025) 13%, impacted by investments in infrastructure, AI, and a one-time $25 million IP transfer tax payment.
Cash and Marketable Securities (End of 2025) $1.7 billion, reflecting strong cash generation and customer collections.
International Revenue Growth (2025) 45% year-over-year, with international users accounting for 54% of revenue in Q4.
Customers Spending >$1 Million in ARR (2025) 67 customers, growing 68% year-over-year, driven by seat expansions and deeper usage.
Gross Margin (Q4 2025) 86%, stable due to infrastructure optimization despite increased usage of AI features.
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Operating Highlights
Revenue: Delivered $304 million in revenue in Q4 2025, representing a 40% year-over-year growth. Full-year revenue was $1.056 billion, up 41% year-over-year.
Product Expansion: Expanded from 4 to 8 products in 2025 and launched over 200 features, including new AI-native functionality.
AI Integration: Launched integration with Claude Code, enabling seamless transition from code to Figma for design exploration.
Figma Make: Usage surged with weekly active users growing over 70% quarter-over-quarter. Over 50% of paid customers spending more than $100,000 in ARR used Figma Make weekly.
Acquisition: Acquired Weavy (now Figma Weave) to enhance AI-driven creative capabilities, including image, video, and motion generation.
International Revenue: International revenue grew 45% year-over-year, with international users accounting for 54% of Q4 revenue.
Customer Growth: Added 951 net customers spending more than $10,000 in ARR and 143 net customers spending more than $100,000 in ARR in Q4. Customers spending over $1 million in ARR grew 68% year-over-year.
New Markets: Launched operations in India in November 2025.
Operational Efficiency: Achieved a gross margin of 86% in Q4 and 88% for the full year. Non-GAAP operating margin was 14% in Q4 and 12% for the full year.
AI Adoption: Approximately 75% of paid customers with over $10,000 in ARR are consuming AI credits weekly.
Infrastructure Optimization: Reduced cost to serve each user, maintaining stable gross margins.
AI and Product Development: Investing deeply in AI-native workflows and new ways of working. Enhanced AI image editing and vector functionality in Figma Draw.
Customer Engagement: Strengthened relationships with central IT teams and design champions, positioning Figma as a system of record for design and product development.
Partnerships: Collaborated with GitHub to integrate Figma's MCP server and Code Connect for seamless design-engineering workflows.
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Risk or Challenges
Regulatory and Compliance Costs: The company experienced a one-time $25 million IP transfer tax payment related to the acquisition of Weavy, highlighting potential regulatory and compliance cost risks in future acquisitions or operations.
Stock-Based Compensation and Dilution: Stock-based compensation was elevated in 2025 due to IPO-related expenses, performance-based RSU vesting, and equity issued for acquisitions. This could lead to concerns about dilution and long-term compensation management.
Infrastructure and AI Investment Costs: Continued investment in infrastructure and AI led to a sequential decline in adjusted free cash flow in Q4, indicating potential financial strain from high capital expenditures.
International Revenue Disparity: While international users represent 85% of monthly active users, they only account for 54% of revenue, suggesting challenges in monetizing international markets effectively.
Seasonality in Operating Income: The company anticipates seasonality in operating income, particularly in Q2 due to the annual user conference, Config, which could impact quarterly financial performance.
AI Monetization Uncertainty: The shift to monetizing both seats and AI credits in March introduces uncertainty in revenue projections, as customer consumption behavior and adoption rates are still evolving.
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Guidance & Outlook
Revenue Projections: For Q1 2026, revenue is expected to range between $315 million and $317 million, implying 38% growth at the midpoint. For the full year 2026, revenue is anticipated to be between $1.366 billion and $1.374 billion, implying 30% growth at the midpoint.
AI Adoption and Monetization: Approximately 75% of paid customers with over $10,000 in ARR are consuming AI credits weekly, with adoption continuing to ramp. Starting in March 2026, the company will monetize both seats and credits, which is not reflected in historical revenue results.
Operating Income and Margins: Full-year 2026 non-GAAP operating income is expected to be between $100 million and $110 million, representing an 8% operating margin at the midpoint. Investments in AI and inference, as well as team and go-to-market expansion, are planned.
Adjusted Free Cash Flow: Adjusted free cash flow is expected to be relatively consistent with non-GAAP operating profit for the full year 2026.
International Expansion: Continued investment in international markets is planned, building on 45% year-over-year growth in international revenue in 2025.
AI-Native Workflows: The company is investing deeply in defining new AI-native workflows to support customers adapting to new ways of working.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is Dylan Field's perspective on the emergence of agentic layer offerings like Claude Cowork and OpenClaw and their impact on UI/UX?
A:Dylan Field believes that while agentic layers are emerging, humans will continue to use software and require visual interfaces to understand, audit, and trust processes. He sees new interaction paradigms emerging, such as agents working alongside humans, which will require thoughtful design. He emphasizes that design and craft will remain differentiators in a world where coding is no longer a constraint.
Q:How is Figma benchmarking the range of outcomes from credit monetization post-March 2026?
A:Praveer Melwani explained that Figma has embedded AI credits across its product suite, with 75% of its 10,000+ customers consuming credits weekly. The company is refining its guidance based on observed seat adoption and usage trends, with opportunities to overperform as they introduce new surfaces and enforce seat limits.
Q:What user types are being observed with Figma Make, and could this lead to seat expansion?
A:Dylan Field noted that Figma Make is attracting new user types, such as product managers and UX researchers. He sees opportunities to expand use cases and reach more personas, which could lead to seat expansion.
Q:What is the commentary on free cash flow guidance and its drivers?
A:Praveer Melwani stated that the free cash flow guidance reflects investments in AI features and the introduction of AI credits. The guidance accounts for the ramp-up of AI features and the monetization of AI credits, which will offset some margin impacts over time.
Q:What is the competitive landscape in the prototyping space, and how is Figma addressing it?
A:Dylan Field highlighted the integration of Figma Make with Figma Design as a key differentiator. Over 80% of full-seat users of Make also use Design, and Figma is focusing on unifying these surfaces and enabling round-tripping between code and design to stand out in the competitive landscape.
Q:What are the implications of Figma adoption on customer design and labor budgets?
A:Dylan Field observed that responsibilities are blurring across roles like design, engineering, and product management. Non-designers are increasingly engaging in design tasks, and Figma is elevating conversations to IT to access broader budgets. Praveer Melwani added that Figma is pitching its platform to a wider audience, including product managers.
Q:What is the opportunity for deeper partnerships with AI-native companies like Anthropic?
A:Dylan Field stated that Figma is focused on integrating well with model providers and ensuring that as models improve, Figma also improves. While deeper partnerships and joint product development are possibilities, the primary focus is on enhancing the round trip between code and design.
Q:How is Figma preparing for the hybrid model of subscription and consumption?
A:Praveer Melwani explained that Figma has been studying usage and utilization behavior, observing a parallel distribution of credit consumption. The company offers AI add-ons as additional consumption packs or pay-as-you-go options, aiming to balance predictability and flexibility.
Q:What are the drivers behind the FY 2026 operating income guidance?
A:Praveer Melwani attributed the guidance to investments in AI features, which impact gross margins and operating income. Dylan Field emphasized the importance of investing in AI to capture future opportunities.
Q:What is the update on Figma's other products like Draw, Buzz, and Sites?
A:Dylan Field reported promising early traction for Draw, Buzz, and Sites. For example, a MAG-7 customer used Figma Buzz to produce over 5,000 assets across 30 countries. Figma is focusing on workflows that take users from design to production.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the financial impact of AI investments and the exact contribution of Figma Make to growth. They also did not provide clear guidance on gross margins for FY 2026 or specific numbers for the adoption of products like Draw, Buzz, and Sites.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI image
AI workflow
Cisco
Code Connect
Figma MCP
Figma Weave
Figma tool
Flexport
GitHub Figma
NVIDIA
UI
agent
app Figma
challenge
code Figma
code canvas
composition
custom
design engineering
design production
diagram
editing capability
foundation
hand sketch
hour
keynote
manipulation
picture
place
problem
robot
solution
state
team design
team speed
terminal
token
week AI
work Figma
FIG Transcript
Figma, Inc. (FIG) Q4 2025 Earnings Call Transcript
Positive2-18
The earnings call reflects strong financial performance with a 40% YoY revenue growth, robust operating and cash flow margins, and a significant increase in customers spending over $1 million. AI investments and international revenue growth are promising, despite some margin impacts. The Q&A highlighted positive sentiment towards Figma's strategic focus on AI and design differentiation, although management was vague on some specifics. The overall outlook is positive, supported by strong metrics and optimistic guidance, suggesting a likely stock price increase in the short term.
Figma, Inc. (FIG) Q3 2025 Earnings Call Transcript
Positive11-5
The earnings call summary and Q&A indicate strong financial performance, with significant revenue growth and increased customer adoption. Despite some margin compression due to AI investments, the company maintains strong liquidity and operating margins. The Q&A highlights positive analyst sentiment towards product adoption and strategic initiatives, though there are some uncertainties regarding monetization. Overall, the positive guidance, strong customer growth, and strategic investments in AI and product development suggest a positive stock price movement in the short term.
Figma, Inc. (FIG) Q2 2025 Earnings Call Transcript
Unknown9-5
The earnings call summary shows strong financial performance with growth in customer base and reduced marketing costs, but concerns about anticipated margin compression and early product monetization. The Q&A reveals positive sentiment for new products but lacks concrete data, suggesting potential but uncertain outcomes. The overall sentiment is balanced, leading to a neutral prediction.
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